Free markets, in the full sense of the phrase, exist only in the minds and imaginations of free-market economists from the Austrian School, such as Ludwig von Mises and Murray Rothbard.
After 131 years, it appears that Eastman Kodak will be declaring Chapter 11 bankruptcy before the end of the month, according to the Wall Street Journal. It is currently seeking to sell off some of its 10,000 patents in order to stave off the inevitable, but the company is burning through its remaining cash reserves and credit lines rapidly. The last time Kodak was profitable was 2007 when its stock traded at $30 a share. On Friday, its last trade was at $0.37 a share. It’s in the process of being de-listed from the New York Stock Exchange, and Moody’s has downgraded the company’s credit to junk status.
Establishment economists and other economic cheerleaders were disappointed to learn that, despite the government’s best efforts to revive the economy through Keynesian interventions and stimuli, the GDP (Gross Domestic Product) for the first quarter of 2011 was half the rate of growth in the last quarter of 2010.
“The debt level of the United States is unsustainable, something has to give,” said the co-author of a new joint report released last week by the National Research Council and the National Academy of Public Administration. The committee that prepared the 268-page study, entitled Choosing the Nation's Fiscal Future, included three former heads of the Congressional Budget Office.
Last week’s announcement that the auto industry could add as many as 167,000 jobs by 2015 merely confirmed what some economists were saying: that lower wages allow car manufacturers to hire more people more profitably. As part of the agreement between the federal government and the unions in 2007, a lower tier of wages was created in order to halt the hemorrhaging of cash the carmakers were experiencing that led to the bailouts. The unions reluctantly agreed to accept the two-tier system, concluding that a lower-paying job was better than none at all.
According to internationally acclaimed author and highly regarded expert Lester Brown (pictured), writing in the January 10 issue of Foreign Policy magazine:
Tonight there will be 219,000 additional mouths to feed at the dinner table, and many of them will be greeted with empty plates.
Another 219,000 will join us tomorrow night.
Eighty-year-old Dottie Bell is a volunteer at the Community Market food bank in Opelika, Alabama, and every day she sees the impact of high food prices on people in her community.
"I'm sure the rising cost of energy is bothering the market," said Fred Dickson, chief investment strategist at D. A. Davidson & Company last week. "I do think the uptick in gasoline prices will have an impact on consumer spending in the next few quarters."
One could scarcely call it an "uptick," with gasoline prices up by $.70 a gallon since the first of the year, and approaching $4 a gallon. The American Automobile Association said at that level consumers "will have to start cutting back to pay their fuel expenses. This could adversely affect restaurants, malls, and entertainment venues that count on people driving to get there."
The first warning about the possible bankruptcy of the town of Vallejo, California, was reported by the Associated Press on February 28, 2008, when Councilwoman Stephanie Gomes said, “Our financial situation is getting worse every single day. No city or private person wants to declare bankruptcy, but if you’re facing insolvency, you have no choice but to seek protection.”
The White House on July 21 extolled the extension of unemployment insurance by the Senate, claiming it was “not only the decent thing to do but one of the most effective ways to boost our economy.” President Obama signed the extension into law immediately, saying that this was “desperately needed assistance to two and a half million Americans who lost their jobs in the recession…Americans who…will finally get the support they need to get back on their feet during these tough economic times.”