Flawed Math Seen in Job Losses Tied to China - WSJ.com
Maybe something is wrong - as in California - where taxes are so high that they discourage business so that a deputy police chief in San Francisco can earn a salary of over $500,000 per year with a 50% pension after 20 years!
I guess the public employee unions don't want to see state and local tax rates as a discouragement to building businesses in the US, so they have to find someone else to blame.
They should clearly look in the mirror!
Sunday, October 31, 2010
Saturday, October 30, 2010
QE2 to Navigate Uncharted Waters - Barrons.com
NET VS. GROSS: QE2 to Navigate Uncharted Waters - Barrons.com
The Fed and Obama would appear to be ignoring the old saying about the 'net' and the 'gross' - wherein it's the 'net' to the investor, entrepreneur, etc. that matters; and, with high taxes and increased risks, the adjusted projected net is clearly not being constrained by (at least) current interest rates.
But, as shown by the poster-state for Obama and Pelosi policies (we are of course talking about California), the indications are clear that businesses are leaving the state and the unemployment rate is notably above the national average.
And, based on weekend poling results, the Democrats may end up staying in power in the state - strongly backed by public employee unions.
Somehow, the tea leaves seem a bit dicey. Here the Republicans had a chance to defeat Barbara Boxer in the Senate (but apparently blew it) and the overspending and high taxes of the state's democrats appear to have been endorsed by the electorate.
The investment picture would appear to be clear for global businesses - i.e. they need to and are being forced to look outside the US (after all, they have to compete for both talent and investment capital on a global basis and they have to be able to competitively price their products; and, these are matters that Democrats seem unable to comprehend).
Even American investors are putting money overseas as they feel they can get higher 'net' returns.
The Fed and Obama would appear to be ignoring the old saying about the 'net' and the 'gross' - wherein it's the 'net' to the investor, entrepreneur, etc. that matters; and, with high taxes and increased risks, the adjusted projected net is clearly not being constrained by (at least) current interest rates.
But, as shown by the poster-state for Obama and Pelosi policies (we are of course talking about California), the indications are clear that businesses are leaving the state and the unemployment rate is notably above the national average.
And, based on weekend poling results, the Democrats may end up staying in power in the state - strongly backed by public employee unions.
Somehow, the tea leaves seem a bit dicey. Here the Republicans had a chance to defeat Barbara Boxer in the Senate (but apparently blew it) and the overspending and high taxes of the state's democrats appear to have been endorsed by the electorate.
The investment picture would appear to be clear for global businesses - i.e. they need to and are being forced to look outside the US (after all, they have to compete for both talent and investment capital on a global basis and they have to be able to competitively price their products; and, these are matters that Democrats seem unable to comprehend).
Even American investors are putting money overseas as they feel they can get higher 'net' returns.
And End to the Great Bond Bull Market - Barrons.com
MEG WHITMAN AS EVIDENCE: And End to the Great Bond Bull Market - Barrons.com
As Meg Whitman has shown in California, one wonders if the Republicans will have the guts to tackle one of the great constraints on growing the old economic pie - i.e. to recognize the US needs a non-putative immigration policy that encourages the best and the brightest to come and stay and work in America at will.
Clearly QE2 hopes to have people invest and do cutting edge work; but, one wonders if it isn't pandering to a union and Administration belief that even with high taxes (especially on investors and business) that America will rebuild factory jobs for those with high school at best educations or technical jobs where the fiscal policies of the US support moving those jobs offshore as well.
Clearly the Democrats don't get what it takes to spur an information-based, leading edge economy; but, do the Republicans? - i.e. nothing much may change in the end.
As Meg Whitman has shown in California, one wonders if the Republicans will have the guts to tackle one of the great constraints on growing the old economic pie - i.e. to recognize the US needs a non-putative immigration policy that encourages the best and the brightest to come and stay and work in America at will.
Clearly QE2 hopes to have people invest and do cutting edge work; but, one wonders if it isn't pandering to a union and Administration belief that even with high taxes (especially on investors and business) that America will rebuild factory jobs for those with high school at best educations or technical jobs where the fiscal policies of the US support moving those jobs offshore as well.
Clearly the Democrats don't get what it takes to spur an information-based, leading edge economy; but, do the Republicans? - i.e. nothing much may change in the end.
Friday, October 29, 2010
Charles W. Kadlec: Gold vs. The Fed: The Record Is Clear - WSJ.com
REWARDS INDIVIDUALS WANT: Charles W. Kadlec: Gold vs. The Fed: The Record Is Clear - WSJ.com
What's the real issue? Is it gold or the amount of money in circulation? I'd say the answer is unequivocally 'No'!
After all, why to people work? They want to get paid for it; and, if government taxes most of the work away, then you work less. And, if by not working, you get free healthcare, food stamps, etc. - then all the more reason not to work.
Why do people create businesses? They certainly don't do it to hand the profits to government if they are successful, but have to bear the losses themselves if they fail.
Why do people save and invest? Yes, for a rainy day or a specific goal in life; but again, they want to know they'll be rewarded for not consuming today so they can consume tomorrow. Again, if the government taxes away the profits or takes too much of them, then people decide not to save, not to take risks, not to invest.
What government doesn't get is that people work hard, invest and create jobs because they want some personal reward at the end of the day.
And, with government unions showing obscene pay and benefits and ever greater tax demands, it's a wonder more businesses aren't moving out of the US!
What's the real issue? Is it gold or the amount of money in circulation? I'd say the answer is unequivocally 'No'!
After all, why to people work? They want to get paid for it; and, if government taxes most of the work away, then you work less. And, if by not working, you get free healthcare, food stamps, etc. - then all the more reason not to work.
Why do people create businesses? They certainly don't do it to hand the profits to government if they are successful, but have to bear the losses themselves if they fail.
Why do people save and invest? Yes, for a rainy day or a specific goal in life; but again, they want to know they'll be rewarded for not consuming today so they can consume tomorrow. Again, if the government taxes away the profits or takes too much of them, then people decide not to save, not to take risks, not to invest.
What government doesn't get is that people work hard, invest and create jobs because they want some personal reward at the end of the day.
And, with government unions showing obscene pay and benefits and ever greater tax demands, it's a wonder more businesses aren't moving out of the US!
Thursday, October 28, 2010
How Not to Prevent Another Greece - WSJ.com
SIMILAR PROBLEMS IN THE US: How Not to Prevent Another Greece - WSJ.com
One can only expect in the US that a return to a pro-growth (assuming growth is wanted) economic policy will probably require several states to go bankrupt and current public employee union benefits to be severely curtailed.
If something along these lines in the US doesn't happen, the country will continue to see a declining, shrinking economy as its financial wherewithal and investment capital is diverted to welfare, Medicare subsidies, Medicaid and generous and early public pensions.
One can only expect in the US that a return to a pro-growth (assuming growth is wanted) economic policy will probably require several states to go bankrupt and current public employee union benefits to be severely curtailed.
If something along these lines in the US doesn't happen, the country will continue to see a declining, shrinking economy as its financial wherewithal and investment capital is diverted to welfare, Medicare subsidies, Medicaid and generous and early public pensions.
Chinese Supercomputer Likely to Prompt Unease in U.S. - WSJ.com
MISPLACED PRIORITIES: Chinese Supercomputer Likely to Prompt Unease in U.S. - WSJ.com
As Zakaria discussed on Bloomberg with Charlie Rose this week, the US isn't investing enough in research.
In fact, the US isn't investing enough period. Zakaria points out that in a democracy like the US, thinking is 'short-term' and consumption oriented - especially when the poor and middle class are able to consume goods and services they don't have to earn or save for.
As a result, the productive part of society is tapped to pay for things they don't benefit from.
Wouldn't it be interesting to have a flat maximum tax rate (personal) of say 15%. If that tax rate doesn't afford fancy Medicaid or other social spending or big benefits under Medicare, then the benefits would have to be cut back?
As it is now, we sacrifice investment for 2 more years on a heart-lung machine for a 95 year old; plus, of course spending $60,000 a year to keep someone in jail, while not letting kids afford college; etc.
As Zakaria discussed on Bloomberg with Charlie Rose this week, the US isn't investing enough in research.
In fact, the US isn't investing enough period. Zakaria points out that in a democracy like the US, thinking is 'short-term' and consumption oriented - especially when the poor and middle class are able to consume goods and services they don't have to earn or save for.
As a result, the productive part of society is tapped to pay for things they don't benefit from.
Wouldn't it be interesting to have a flat maximum tax rate (personal) of say 15%. If that tax rate doesn't afford fancy Medicaid or other social spending or big benefits under Medicare, then the benefits would have to be cut back?
As it is now, we sacrifice investment for 2 more years on a heart-lung machine for a 95 year old; plus, of course spending $60,000 a year to keep someone in jail, while not letting kids afford college; etc.
Not the Time to Hamper Entrepreneurs - WSJ.com
PROCESS VS. PRODUCT: Not the Time to Hamper Entrepreneurs - WSJ.com
Spending time in Europe, one clearly sees the excesses of socialist preferences for process (to protect) vs. product (to grow).
Basel II basically said if you don't want to think, you don't have to. Just keep ... of AAA paper.
Well, we learned 'AAA' wasn't always AAA, nor would it remain so; but, again, those at S&P were also more process-oriented and the right 'i's' were doted and 't's' crossed.
Spending time in Europe, one clearly sees the excesses of socialist preferences for process (to protect) vs. product (to grow).
Basel II basically said if you don't want to think, you don't have to. Just keep ... of AAA paper.
Well, we learned 'AAA' wasn't always AAA, nor would it remain so; but, again, those at S&P were also more process-oriented and the right 'i's' were doted and 't's' crossed.
Wednesday, October 27, 2010
Fed Gears Up for Stimulus - WSJ.com
ZAKARIA: Fed Gears Up for Stimulus - WSJ.com:
"If you want to enjoy an interesting and insightful discussion of what the US should be thinking about, Charlie Rose on Bloomberg had Fareed Zakaria on Tuesday night.
http://www.charlierose.com/view/interview/11261
- Sent using Google Toolbar"
"If you want to enjoy an interesting and insightful discussion of what the US should be thinking about, Charlie Rose on Bloomberg had Fareed Zakaria on Tuesday night.
http://www.charlierose.com/view/interview/11261
- Sent using Google Toolbar"
Monday, October 25, 2010
Cameron Turns to Job Creation - WSJ.com
SOUNDS GOOD, BUT IS IT GOOD?: Cameron Turns to Job Creation - WSJ.com: "You are absolutely right David.
One can't help but think of Bill Gates in the 1970's having to have been picked by some bureaucrats to be successful versus the ideas, wherewithall and ability to do things on his own, as he saw fit.
Government types and union types just don't understand the mindset of creative types or entrepreneurs.
And, as with everything, the bottom line for risk taking is reward; and, this doesn't mean (as you say) high taxes to support the non-working, early retiring, bureaucratically burdensome that feel entitled to the same fruits of production as those who actually work and produce.
It may seem appealing to think that because one is from the UK (or, the same in the US) that you will or should feel committed to building a business there; but, when you pay a 50% tax on what you earn and someone with equal skills and energy pays a 20% or lower tax - then you just can't compete because the low tax payer can accumulate much more capital, much more quickly.
- Sent using Google Toolbar"
One can't help but think of Bill Gates in the 1970's having to have been picked by some bureaucrats to be successful versus the ideas, wherewithall and ability to do things on his own, as he saw fit.
Government types and union types just don't understand the mindset of creative types or entrepreneurs.
And, as with everything, the bottom line for risk taking is reward; and, this doesn't mean (as you say) high taxes to support the non-working, early retiring, bureaucratically burdensome that feel entitled to the same fruits of production as those who actually work and produce.
It may seem appealing to think that because one is from the UK (or, the same in the US) that you will or should feel committed to building a business there; but, when you pay a 50% tax on what you earn and someone with equal skills and energy pays a 20% or lower tax - then you just can't compete because the low tax payer can accumulate much more capital, much more quickly.
- Sent using Google Toolbar"
Sunday, October 24, 2010
U.S. Chamber Chief Slams Democrats on Taxes and Regulation - Barrons.com
THE 'ECONOMIC FAIRY': U.S. Chamber Chief Slams Democrats on Taxes and Regulation - Barrons.com: "- Sent using Google Toolbar"
Somehow the Democrats - Obama, Pelosi, Frank, etc. - seem to remind one of truly economic children.
Instead of believing in the 'tooth fairy', they believe in the 'economic fairy'. And, the results of their economic policies show it!
Somehow the Democrats - Obama, Pelosi, Frank, etc. - seem to remind one of truly economic children.
Instead of believing in the 'tooth fairy', they believe in the 'economic fairy'. And, the results of their economic policies show it!
Saturday, October 23, 2010
Emerging Nations Gain in G-20 Deal - WSJ.com
US HURTING ITSELF AND COMPLAINING ABOUT ASIA: Emerging Nations Gain in G-20 Deal - WSJ.com: "- Sent using Google Toolbar"
Barry writes:
...Whilst all the squabbling is going on in the USA on this side of the world there is no recessions, just massive growth, and it will continue with or without the USA it’s that simple.
Right on Barry!
It is disheartening to say the least to see US politicians think they can tell the world how to run itself to suit US interests which are anti-business, anti-work, anti-investment and pro-handouts, pro-laxiness, pro-non-production, etc.
I don't know if you saw that the deputy police chief in San Francisco makes over $500,000 a year with a 50% retirement benefit after working 20 years. How much of this could be plowed back into productive efforts if not taxed from the economy to pay an outrageous salary and benefit package?
And, when they complain about bankers (who don't get any fancy inflation protected pensions) making $300,000 a year and hoot and howl but say nothing about public union officials (except for Bell, CA where the mayor of the small town was making $800,000), one does wonder!
In fact one doesn't, one is just sick and understands why the US economy is standing still. But the politicians and a lot of the public don't realize they are taking too much from producers and savers and giving too much to non-producers and consumers.
Barry writes:
...Whilst all the squabbling is going on in the USA on this side of the world there is no recessions, just massive growth, and it will continue with or without the USA it’s that simple.
Right on Barry!
It is disheartening to say the least to see US politicians think they can tell the world how to run itself to suit US interests which are anti-business, anti-work, anti-investment and pro-handouts, pro-laxiness, pro-non-production, etc.
I don't know if you saw that the deputy police chief in San Francisco makes over $500,000 a year with a 50% retirement benefit after working 20 years. How much of this could be plowed back into productive efforts if not taxed from the economy to pay an outrageous salary and benefit package?
And, when they complain about bankers (who don't get any fancy inflation protected pensions) making $300,000 a year and hoot and howl but say nothing about public union officials (except for Bell, CA where the mayor of the small town was making $800,000), one does wonder!
In fact one doesn't, one is just sick and understands why the US economy is standing still. But the politicians and a lot of the public don't realize they are taking too much from producers and savers and giving too much to non-producers and consumers.
Thursday, October 21, 2010
Economic News and Analysis: Bernanke, Geithner Tread Carefully on Dollar - WSJ.com
ECONOMIC UTILITY: Economic News and Analysis: Bernanke, Geithner Tread Carefully on Dollar - WSJ.com:
"Tyler you might consider a study of 'economic utility'.
It might lead you to better understand that when government and unions promise benefits that are indirectly paid for, the money for these benefits has to come from somewhere (and the services provided by government will also be relatively more expensive and of a relatively lower quality - but that's another issue).
And, where this money comes from is directly out of workers potential paychecks in increasing the indirect costs of employment. Thus, as a spur to outsourcing and the substitution of equipment for labor, there are fewer jobs in the US.
As the money comes from capital (e.g. higher capital gains and income taxes), then the ability and willingness to take risks and put capital to work is both diminished and more costly. After all, capital is global and when the money goes to pay for foreign oil or interest on government bonds paid to foreigners or to buy inexpensive goods, it's no longer there for the US to spend and invest with.
As the money is taken by government, it is often doled out to favorite government projects - most of which again distort economic utility functions, etc.
You might read some of the insightful articles by Art Laffer to stop blaming the wealthy and see that its the average voter who is screwing themselves by being misled by politicians.
- Sent using Google Toolbar"
"Tyler you might consider a study of 'economic utility'.
It might lead you to better understand that when government and unions promise benefits that are indirectly paid for, the money for these benefits has to come from somewhere (and the services provided by government will also be relatively more expensive and of a relatively lower quality - but that's another issue).
And, where this money comes from is directly out of workers potential paychecks in increasing the indirect costs of employment. Thus, as a spur to outsourcing and the substitution of equipment for labor, there are fewer jobs in the US.
As the money comes from capital (e.g. higher capital gains and income taxes), then the ability and willingness to take risks and put capital to work is both diminished and more costly. After all, capital is global and when the money goes to pay for foreign oil or interest on government bonds paid to foreigners or to buy inexpensive goods, it's no longer there for the US to spend and invest with.
As the money is taken by government, it is often doled out to favorite government projects - most of which again distort economic utility functions, etc.
You might read some of the insightful articles by Art Laffer to stop blaming the wealthy and see that its the average voter who is screwing themselves by being misled by politicians.
- Sent using Google Toolbar"
Tuesday, October 19, 2010
Bondholders Pick a Fight With Banks - WSJ.com
MORTGAGES AND GOVERNMENT BONDS - HOW SIMILAR?: Bondholders Pick a Fight With Banks - WSJ.com: "- Sent using Google Toolbar"
A related question would seem to revolve around US government bonds. How would this work?
Start by considering the fact (not hidden but not highlighted either) that the Fed has been purchasing (or read "injecting") roughly a trillion dollars into the bond market. Not exactly the amount borrowed each year by the Obama Administration (but somewhat close).
Imagine what the cost of borrowing would be to the government should the Fed have not been trying to drive down interest rates?
When the inevitable hits the inevitable and inflation and interest rates go up...and, when investors in longer term treasuries start to see major losses, would a lawsuit against the Fed for distorting the market not be somewhat akin to the buyers of mortgage securities that anyone with half a reflective thought would see had to come to grief?
After all, housing prices can't go up forever far beyond any increase in incomes; and, likewise, there comes a time when interest rates have to go up to reflect more and more demand and at some point an exhaustion of the money to lend or the inflation that comes from an out-of-control printing of new money.
(One can't help but think of how many times in the 17th and 18th centuries the Spanish went BK on their Genoese bankers.)
A related question would seem to revolve around US government bonds. How would this work?
Start by considering the fact (not hidden but not highlighted either) that the Fed has been purchasing (or read "injecting") roughly a trillion dollars into the bond market. Not exactly the amount borrowed each year by the Obama Administration (but somewhat close).
Imagine what the cost of borrowing would be to the government should the Fed have not been trying to drive down interest rates?
When the inevitable hits the inevitable and inflation and interest rates go up...and, when investors in longer term treasuries start to see major losses, would a lawsuit against the Fed for distorting the market not be somewhat akin to the buyers of mortgage securities that anyone with half a reflective thought would see had to come to grief?
After all, housing prices can't go up forever far beyond any increase in incomes; and, likewise, there comes a time when interest rates have to go up to reflect more and more demand and at some point an exhaustion of the money to lend or the inflation that comes from an out-of-control printing of new money.
(One can't help but think of how many times in the 17th and 18th centuries the Spanish went BK on their Genoese bankers.)
Monday, October 18, 2010
Fate of Euro-Zone Economy Splits Optimists From Pessimists - WSJ.com
SOCIALIST DELUSIONS: Fate of Euro-Zone Economy Splits Optimists From Pessimists - WSJ.com: "- Sent using Google Toolbar"
Some how the simplest analogies are omitted as interest groups (let's start with public employee unions in France) struggle for things they want with no understanding of how growth is achieved, let alone basic economic productivity.
As an example, consider the story of a farmer.
The farmer knows he needs to save 10% of his crop each year for seed to plant the next crop. He knows too that if he works hard and either clears some new land (venture capital) or saves up and acquires more land from a neighbor (merger or acquisition), he can produce more.
Likewise, if he doesn't get to keep 10% of his grain, each year he/she will be producing less.
Now take the French unions. They want to retire but have someone else pay for them to not product (maybe from age 60 to say age 90). They don't think they are taking it from their farmer neighbor per se; but, they do expect the equivalent of that farmer to somehow keep producing more and more each year when left with less and less 10%.
Some how the simplest analogies are omitted as interest groups (let's start with public employee unions in France) struggle for things they want with no understanding of how growth is achieved, let alone basic economic productivity.
As an example, consider the story of a farmer.
The farmer knows he needs to save 10% of his crop each year for seed to plant the next crop. He knows too that if he works hard and either clears some new land (venture capital) or saves up and acquires more land from a neighbor (merger or acquisition), he can produce more.
Likewise, if he doesn't get to keep 10% of his grain, each year he/she will be producing less.
Now take the French unions. They want to retire but have someone else pay for them to not product (maybe from age 60 to say age 90). They don't think they are taking it from their farmer neighbor per se; but, they do expect the equivalent of that farmer to somehow keep producing more and more each year when left with less and less 10%.
Monday, October 11, 2010
Wall Street Journal: Market View Should the Fed take more aggressive action to reduce unemployment?
A TWO-FACED POLICY THAT'S ALL WRONG: Wall Street Journal: Market View Should the Fed take more aggressive action to reduce unemployment?: "- Sent using Google Toolbar"
The Feds printing money reminds me of the family that suddenly feels 'rich' because they got another credit card.
The income didn't change, the old credit cards aren't paid off or down, it's just a chance to accumulate more debt.
As well discussed in the media, the cash is likely to flow where the other Fed cash has gone - i.e. outside the US!
When one reads articles on Geitner and the Chinese - the idea is for the Chinese to increase consumption and the US to increase its savings. Help me out here? Is this Fed policy borrowed from what the Chinese are supposed to be doing?
The Feds printing money reminds me of the family that suddenly feels 'rich' because they got another credit card.
The income didn't change, the old credit cards aren't paid off or down, it's just a chance to accumulate more debt.
As well discussed in the media, the cash is likely to flow where the other Fed cash has gone - i.e. outside the US!
When one reads articles on Geitner and the Chinese - the idea is for the Chinese to increase consumption and the US to increase its savings. Help me out here? Is this Fed policy borrowed from what the Chinese are supposed to be doing?
Sunday, October 10, 2010
The Last Thing We Need Is a Global Agreement on Currencies - Barrons.com
CURRENCY ADJUSTMENTS WAY DOWN THE LIST: The Last Thing We Need Is a Global Agreement on Currencies - Barrons.com: "- Sent using Google Toolbar"
Currency adjustments or something else?
What should be the first concern of the US is why business doesn't want to grow in the US?
There are so many causes before you get to low cost outsourcing from China that it makes Americans advocating such currency adjustments look like buffoons or complicitous liars who are afraid to tackle the beliefs of the "entitled" generations that America has spawned from the 1960's onwards.
It's all well and good to think about nice long, leisurely and well funded retirements, but the cost to the US economy is jobs!
And, if one wants to see what's wrong with our welfare policies, take one look at how hardworking immigrants are who come to the US from Mexico are and how many of their kids don't work and may well be into crime!
Currency adjustments or something else?
What should be the first concern of the US is why business doesn't want to grow in the US?
There are so many causes before you get to low cost outsourcing from China that it makes Americans advocating such currency adjustments look like buffoons or complicitous liars who are afraid to tackle the beliefs of the "entitled" generations that America has spawned from the 1960's onwards.
It's all well and good to think about nice long, leisurely and well funded retirements, but the cost to the US economy is jobs!
And, if one wants to see what's wrong with our welfare policies, take one look at how hardworking immigrants are who come to the US from Mexico are and how many of their kids don't work and may well be into crime!
The Last Thing We Need Is a Global Agreement on Currencies - Barrons.com
FOREST AND TREES, SMOKE AND MIRRORS, BUILDING ON SAND: The Last Thing We Need Is a Global Agreement on Currencies - Barrons.com: "- Sent using Google Toolbar"
What the government sadly can't even begin to fathom is to question the policies it has in place (regulatory, tax, pro-union, entitlement, income redistribution, etc.) that inhibit, hold back or outright prevent business growth in the US.
Perhaps its the old problem of the forest and the trees - both Democrats, Republicans and the average American is so close up to the trees that the forest itself can't be embraced.
As with those who foresaw the last bubble (real estate), there are those who are giving out warnings. But, to heed a warning one might have to act; and, to act would run into opprobrium from all those who like things the way they are.
As seen in the latest California budget deal - smoke and mirrors and hope are all that's there. There is no substance - like building on sand (as the old saying goes).
What the government sadly can't even begin to fathom is to question the policies it has in place (regulatory, tax, pro-union, entitlement, income redistribution, etc.) that inhibit, hold back or outright prevent business growth in the US.
Perhaps its the old problem of the forest and the trees - both Democrats, Republicans and the average American is so close up to the trees that the forest itself can't be embraced.
As with those who foresaw the last bubble (real estate), there are those who are giving out warnings. But, to heed a warning one might have to act; and, to act would run into opprobrium from all those who like things the way they are.
As seen in the latest California budget deal - smoke and mirrors and hope are all that's there. There is no substance - like building on sand (as the old saying goes).
Saturday, October 9, 2010
The End of Free Trade? - WSJ.com
The End of Free Trade? - WSJ.com: "
What's missing from this discussion?
1. The expanded money supply in the US is moving out of the US. It's not helping the US economy because of the insidious fiscal, tax and redistributionist policies of the government.
There have been many good discussions of how the dollars printed in America go outside of America to earn a better return.
2. As for tariffs impacting trade, clearly the US has raised immigration barriers, which, in an information society are far more pernicious.
There is clearly a huge swath of the American public that wants a job but can't get one. The barriers to bringing and creating those jobs in America increase by the day; but, few want to talk about the problem because too many sacred cows will be gored - starting with too much government and too many transfer payments which necessitate taxes driving business offshore.
It is clearly more favorable to a business to outsource as much of their production and even R&D into countries where the pressures of unions, anti-business regulation, high taxes, etc. aren't there.
As in the 1930's, per Art Laffer, high taxes had perhaps the most pernicious impact on economic growth.
What is sad is there is so much that could be done to produce jobs in the US - but, the government can't even bare to consider the options.
- Sent using Google Toolbar"
What's missing from this discussion?
1. The expanded money supply in the US is moving out of the US. It's not helping the US economy because of the insidious fiscal, tax and redistributionist policies of the government.
There have been many good discussions of how the dollars printed in America go outside of America to earn a better return.
2. As for tariffs impacting trade, clearly the US has raised immigration barriers, which, in an information society are far more pernicious.
There is clearly a huge swath of the American public that wants a job but can't get one. The barriers to bringing and creating those jobs in America increase by the day; but, few want to talk about the problem because too many sacred cows will be gored - starting with too much government and too many transfer payments which necessitate taxes driving business offshore.
It is clearly more favorable to a business to outsource as much of their production and even R&D into countries where the pressures of unions, anti-business regulation, high taxes, etc. aren't there.
As in the 1930's, per Art Laffer, high taxes had perhaps the most pernicious impact on economic growth.
What is sad is there is so much that could be done to produce jobs in the US - but, the government can't even bare to consider the options.
- Sent using Google Toolbar"
California Finally Passes New Budget - WSJ.com
AN UNTREATED ILLNESS: California Finally Passes New Budget - WSJ.com:
"Sure sounds like the smoke and mirrors of Obama and evidences a total failure to address the fact that too much is being taken out of the economy for social consumption to allow the economy to grow. Stunted growth effectively means no-growth and is a downward spiral.
But, you can't convince a Democrat that growth takes capital and that social consumption needs to be cut back.
As said many times, this is a third inning budget in a nine-inning game and the pain to make changes is just put off. Like an untreated illness, it may all sound good - i.e. the state has a budget - but the continuing failure to treat the spending disease will only make the eventual adjustments that much more difficult.
- Sent using Google Toolbar"
"Sure sounds like the smoke and mirrors of Obama and evidences a total failure to address the fact that too much is being taken out of the economy for social consumption to allow the economy to grow. Stunted growth effectively means no-growth and is a downward spiral.
But, you can't convince a Democrat that growth takes capital and that social consumption needs to be cut back.
As said many times, this is a third inning budget in a nine-inning game and the pain to make changes is just put off. Like an untreated illness, it may all sound good - i.e. the state has a budget - but the continuing failure to treat the spending disease will only make the eventual adjustments that much more difficult.
- Sent using Google Toolbar"
Thursday, October 7, 2010
Higher Yuan May Not Mean More U.S. Jobs - WSJ.com
Higher Yuan May Not Mean More U.S. Jobs - WSJ.com: "
High paid jobs for those who likely didn't even get out of high school to compete with foreign made goods in Walmart is a non-starter!
It's sad how the US is allowing itself to focus on old-line union jobs when it could be having so much brighter a future - albeit with lower taxes to spur investment in the wealth of new economy jobs, a greater emphasis on education (e.g. break up the teachers unions), and less US productivity going to people on welfare and too early retirement.
But, will any of these positive things happen? One does doubt it!
- Sent using Google Toolbar"
High paid jobs for those who likely didn't even get out of high school to compete with foreign made goods in Walmart is a non-starter!
It's sad how the US is allowing itself to focus on old-line union jobs when it could be having so much brighter a future - albeit with lower taxes to spur investment in the wealth of new economy jobs, a greater emphasis on education (e.g. break up the teachers unions), and less US productivity going to people on welfare and too early retirement.
But, will any of these positive things happen? One does doubt it!
- Sent using Google Toolbar"
Wednesday, October 6, 2010
IMF Cuts 2011 Global Growth Prospects - WSJ.com
CREDIT CARD MENTALITY: IMF Cuts 2011 Global Growth Prospects - WSJ.com: "What is the IMF not saying?
Clearly the IMF doesn't want to address the 'entitlement, credit card mentality' of the developed countries. It also doesn't want to confront or address the economic-utility function.
In terms of the entitlement, credit card mentality, the analogy would appear to be the family that thinks its income is sufficient to provide its living standard but is supplementing its income with credit card borrowing. Eventually, if the income doesn't go up a lot or the lifestyle go way down, the family has to go bankrupt. Is there any indication that overspending and overtaxed countries have any hope of either cutting back entitlements or growing their economies? Evidence of a positive outcome would appear to be lacking - they want to raise taxes and, at best, effect the most modest curbs on unions salaries and benefits.
In terms of economic utility, much of the world raises lots of direct and indirect taxes that hold down wages payable to workers - thus the workers have less spendable income on one hand (some say it costs an employer 4-5 $ or euros for every $ or euro paid in salary). Then the governments have sales and VAT taxes which raise the economic costs of goods.
Thus, the economic wherewithall goes down and the economic costs go up - totally shifting the utility function. An example is Portugal where with taxes a car costs about twice what the same vehicle would cost in the US. However salaries are much less. As a result, fewer cars are sold - and, with people changing their cars much less often, the total revenue to the government is substantially less, the economic activity is substantially less than it would be with less up front taxes. But, the government can wean itself from what will now be a 23% VAT on top of an approximate 20% special car tax.
- Sent using Google Toolbar"
Clearly the IMF doesn't want to address the 'entitlement, credit card mentality' of the developed countries. It also doesn't want to confront or address the economic-utility function.
In terms of the entitlement, credit card mentality, the analogy would appear to be the family that thinks its income is sufficient to provide its living standard but is supplementing its income with credit card borrowing. Eventually, if the income doesn't go up a lot or the lifestyle go way down, the family has to go bankrupt. Is there any indication that overspending and overtaxed countries have any hope of either cutting back entitlements or growing their economies? Evidence of a positive outcome would appear to be lacking - they want to raise taxes and, at best, effect the most modest curbs on unions salaries and benefits.
In terms of economic utility, much of the world raises lots of direct and indirect taxes that hold down wages payable to workers - thus the workers have less spendable income on one hand (some say it costs an employer 4-5 $ or euros for every $ or euro paid in salary). Then the governments have sales and VAT taxes which raise the economic costs of goods.
Thus, the economic wherewithall goes down and the economic costs go up - totally shifting the utility function. An example is Portugal where with taxes a car costs about twice what the same vehicle would cost in the US. However salaries are much less. As a result, fewer cars are sold - and, with people changing their cars much less often, the total revenue to the government is substantially less, the economic activity is substantially less than it would be with less up front taxes. But, the government can wean itself from what will now be a 23% VAT on top of an approximate 20% special car tax.
- Sent using Google Toolbar"
Monday, October 4, 2010
Donald Luskin: The Trade and Tax Doomsday Clocks - WSJ.com
THE OLD THIS TIME IT'S DIFFERENT: Donald Luskin: The Trade and Tax Doomsday Clocks - WSJ.com:
"It seems clear from many of the comments to articles in this newspaper that a great many otherwise apparently literate people have no understanding of economics.
They've certainly never heard about 'regression to the mean', 'economic utility', etc.
It doesn't take a genius to see that those countries with too many taxes and too many social benefits are those not thriving or bouncing back out of this recession.
Anyone reading about all of the scientific advances we have in science blogs must wonder why more of them aren't being followed up on to create new jobs.
But then again, as this article points out, society can choose - support what could provide jobs or bleed the wealth of society to support social transfer payments and overpaid union members and entitlement benefits.
Clearly the Dems are among those who believe the same high tax, anti-investment, anti-business attitudes will produce a different result 'this time'.
- Sent using Google Toolbar"
"It seems clear from many of the comments to articles in this newspaper that a great many otherwise apparently literate people have no understanding of economics.
They've certainly never heard about 'regression to the mean', 'economic utility', etc.
It doesn't take a genius to see that those countries with too many taxes and too many social benefits are those not thriving or bouncing back out of this recession.
Anyone reading about all of the scientific advances we have in science blogs must wonder why more of them aren't being followed up on to create new jobs.
But then again, as this article points out, society can choose - support what could provide jobs or bleed the wealth of society to support social transfer payments and overpaid union members and entitlement benefits.
Clearly the Dems are among those who believe the same high tax, anti-investment, anti-business attitudes will produce a different result 'this time'.
- Sent using Google Toolbar"
Saturday, October 2, 2010
Balancing Act - Barrons.com
HONEST NUMBERS AND DISCOUNTING BACK: Balancing Act - Barrons.com: "- Sent using Google Toolbar"
Sitting here in one of the highly overtaxed countries of Europe where the thought or real economic growth or vitality is totally tax constrained, one does wonder whether the old real estate valuation formula might not also be a required part of budgeting?
In other words, to simplify, take a 10-year present value calculation of income (tax receipt) growth, based on the in effect fiscal policies of the country, and discount them back.
For example, the idea of getting Obama's 700 billion from the rich by letting the Bush tax cuts expire is beyond wishful thinking.
Europe is trying to get government deficits down to 3% of GDP - assuming their economies will grow at this rate. Which again is like expecting a prostitute to be a virgin, year-after-year.
To balance the budget you can either have income discounted back from a growing economy or tax the bejesus out of the economy today and forget having anything to add in from the future.
Clearly, the US is going for the Europe route - head-in-the-sand big deficits and no growth.
Sitting here in one of the highly overtaxed countries of Europe where the thought or real economic growth or vitality is totally tax constrained, one does wonder whether the old real estate valuation formula might not also be a required part of budgeting?
In other words, to simplify, take a 10-year present value calculation of income (tax receipt) growth, based on the in effect fiscal policies of the country, and discount them back.
For example, the idea of getting Obama's 700 billion from the rich by letting the Bush tax cuts expire is beyond wishful thinking.
Europe is trying to get government deficits down to 3% of GDP - assuming their economies will grow at this rate. Which again is like expecting a prostitute to be a virgin, year-after-year.
To balance the budget you can either have income discounted back from a growing economy or tax the bejesus out of the economy today and forget having anything to add in from the future.
Clearly, the US is going for the Europe route - head-in-the-sand big deficits and no growth.
Friday, October 1, 2010
The Risks of a Currency War Become Widely Recognized - Barrons.com
GROWTH OPTIONS: The Risks of a Currency War Become Widely Recognized - Barrons.com: "- Sent using Google Toolbar"
Plus of course the lesson from the 30's (see Art Laffer) that higher taxes at the upper income levels also cripple growth has not been learned.
It becomes clearer everyday that one reads a science blog or similar, that the ideas to power this economy forward (i.e. to really grow this economy) are there.
So, the question has to be what is holding it back. This is where everyone has a different point of view.
But, as with Reagan changing the playing field in the 1980's, the "no-growth-possible" philosophy was replaced with a rapidly growing economy. Tax cuts, not increases, were part of this.
Plus of course the lesson from the 30's (see Art Laffer) that higher taxes at the upper income levels also cripple growth has not been learned.
It becomes clearer everyday that one reads a science blog or similar, that the ideas to power this economy forward (i.e. to really grow this economy) are there.
So, the question has to be what is holding it back. This is where everyone has a different point of view.
But, as with Reagan changing the playing field in the 1980's, the "no-growth-possible" philosophy was replaced with a rapidly growing economy. Tax cuts, not increases, were part of this.
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