Now there was no bread in all
the land; for the famine was very severe, so that the land of Egypt and
the land of Canaan languished because of the famine. And Joseph
gathered up all the money that was found in the land of Egypt and in
the land of Canaan, for the grain which they bought; and Joseph brought
the money into Pharaoh’s house. (1)
So when the money failed in the land of Egypt and in the land of
Canaan, all the Egyptians came to Joseph and said, “Give us bread, for
why should we die in your presence? For the money has failed.”
Then Joseph said, “Give your livestock, and I will give you bread
for your livestock, if the money is gone.” So they brought their
livestock to Joseph, and Joseph gave them bread in exchange for the
horses, the flocks, the cattle of the herds, and for the donkeys. Thus
he fed them with bread in exchange for all their livestock that year.
(2)
When that year had ended, they came to him the next year and said to
him, “We will not hide from my lord that our money is gone; my lord
also has our herds of livestock. There is nothing left in the sight of
my lord but our bodies and our lands. Why should we die before your
eyes, both we and our land? Buy us and our land for bread, and we and
our land will be servants of Pharaoh; give us seed, that we may live
and not die, that the land may not be desolate.” (3)
Then Joseph bought all the land of Egypt for Pharaoh; for every man
of the Egyptians sold his field, because the famine was severe upon
them. So the land became Pharaoh’s. And as for the people, he moved
them into the cities, from one end of the borders of Egypt to the other
end. (4) Only the land of the priests he did not buy; for the priests
had rations allotted to them by Pharaoh, and they ate their rations
which Pharaoh gave them; therefore they did not sell their lands.
Then Joseph said to the people, “Indeed I have bought you and your
land this day for Pharaoh. (5) Look, here is seed for you, and you
shall sow the land. And it shall come to pass in the harvest that you
shall give one-fifth to Pharaoh. Four-fifths shall be your own, as seed
for the field and for your food, for those of your households and as
food for your little ones.” (6)
So they said, “You have saved our lives; let us find favor in the
sight of my lord, and we will be Pharaoh’s servants.” (7) And Joseph
made it a law over the land of Egypt to this day, that Pharaoh should
have one-fifth, except for the land of the priests only, which did not
become Pharaoh’s.
Notes
1) Government will consolidate the money supply during bad times.
2) Government will confiscate personal property during bad times.
3) Government will confiscate real property during bad times.
4) Government will order people where to live during bad times.
5) Government will own you during bad times.
6) Government will tell you what to do during bad times.
7) People will become slaves to a dictator during bad times.
Currency Wars, pages 185-187.
In a famous study written just before the start of
President Obama’s administration, two of Obama’s advisers, Christina
Romer and Jared Bernstein, looked at the multiplier in connection with
the stimulus program. Overall results were hampered by recent challenges in Venezuela,
where Colgate generates about 5% of total sales. Colgate has recently
dealt with a labor slowdown in the country. In addition, the company
warned in February it would take a first-quarter charge of about $120
million because of the recent devaluation of Venezuela's currency.e
proposed 2009 stimulus program. Romer and Berstein estimated the
multiplier at about 1.54 once the new spending was up and running. This
means that for every $100 billion in the Obama spending program, Romer
and Berstein expected to increase by $154 billion. Since the entire
Obama program ended up at $787 billion, the “extra” output just from
doing the stimulus program would amount to $424 billion – the largest
free lunch in history. The purpose of this stimulus was to offset the
effects of the depression that had begun in late 2007 and to save jobs.
The Obama administration ran U.S. fiscal year deficits of over $1.4
trillion in 2009 and $1.2 trillion in 2010. The administration
projected further deficits of $1.6 trillion in 2011 and $1.1 trillion
in 2012 – an astounding total of over $5.4 trillion in just four years.
In order to justify the $787 billion program of extra stimulus in 2009
with deficits of this magnitude, it was critical to show that America
would be worse off without the spending. The evidence for the Keynesian
multiplier had to be rock solid.
It did not take long for the evidence to arrive. One month after the
Romer and Berstein study, another far more rigorous study of the same
spending program was produced by John B. Taylor and John F. Cogan of
Stanford University and their colleagues. Central to the results shown
by Taylor and Cogan is that all of the multipliers are less than one,
meaning that for every dollar of “stimulus” spending, the amount of
goods and services produced by the private sector declines. Taylor and
Cogan employed a more up-to-date multiplier model that has attracted
wider support among economists and uses more realistic assumptions
about the projected path of interest rates and expectations of
consumers in the face of higher tax burdens in the future. The Taylor
and Cogan study put the multiplier effect of the Obama stimulus program
at 0.96 in the early stages but showed it falling rapidly to 0.67 by
the end of 2009 and to .048 by the end of 2010. Their study showed
that, by 2011, for each stimulus dollar spent, private sector output
would fall by almost sixty cents. The Obama stimulus program was
hurting the private sector and therefore handicapping the private
sector’s ability to create jobs.
The Taylor and Cogan study was not the only study to
reach the conclusion that Keynesian multipliers are less than one and
that stimulus programs destroy private sector output. John Taylor had
reached similar conclusions in a separate 1993 study. Empirical support
for Keynesian multipliers of less than one, in certain conditions, was
reported in separate studies by Michael Woodford of Columbia
University, Robert Barro of Harvard and Michael Kumhof of Stanford,
among others. A review of the economic literature shows that the
methods used by Romer and Berstein to support the Obama stimulus
program were outside the mainstream of economic thought and difficult
to support except for ideological reasons.
Two years after the Romer and Bernstein study, the
economic results were in, and they were devastating to their thesis.
Romer and Bernstein had estimated total employment at over 137 million
by the end of 2010. The actual number was only 130 million. They had
estimated GDP would increase 3.7 percent by late 2010; however, it had
barely increased at all. They had also estimated that recession
unemployment would peak at 8 percent; unfortunately, it peaked at 10.1
percent in October 2009. By every measure the economy performed
markedly worse than Romer and Berstein had anticipated using their
version of the Keynesian multiplier. From the start, the Obama stimulus
was little more than an ideological wish list of favored programs and
constituencies dressed up in the academic robes of John Maynard Keynes.
Webmaster note: currency devaluations will lead to company losses, higher unemployment, and the elimination of credit.
Overall results were hampered by recent challenges in Venezuela,
where Colgate generates about 5% of total sales. Colgate has recently
dealt with a labor slowdown in the country. In addition, the company
warned in February it would take a first-quarter charge of about $120
million because of the recent devaluation of Venezuela's currency. The
Wall Street Journal, April 25, 2013.
The company said last month collections in Venezuela had improved and
all revenue from first-quarter work would be recognized. The March 31
statement came two weeks after Schlumberger said it would temporarily
cut activity in the country due to unpaid bills. Schlumberger reported
a $92 million pretax charge for currency value loss in Venezuela. Bloomberg News, April 19, 2013.