SURROUNDED BY STOMPING ELEPHANTS AND RHINOS: Obama Proposes Tax Relief for Small Businesses - WSJ.com
Does Obama's suggestions of all these small business support efforts bring to mind the idea of encouraging planting seeds in a field with giant roaming elephants nearby to stomp on anything growing?
There is no discussion of reining in or ring-fencing the giant entitlement elephant that is sucking up some say 85% of the federal budget.
The only solution promulgated to date by the Administration has been higher taxes on the 'rich'. We know the states are going broke due to their union pension and benefit obligations. This is just icing on the cake and maybe a lurking rhino for those states with these problems.
Somehow, these proposed programs (part of the 'sputnik' moment?) seem more like the same failure of the first two years of this administration, where additional entitlements rather than even talking about job creation (or controlling the entitlements) were the focus.
Monday, January 31, 2011
Alan S. Blinder: The Carbon Tax Miracle Cure - WSJ.com
BLIND IS BLINDER: Alan S. Blinder: The Carbon Tax Miracle Cure - WSJ.com
Let's hope Blinder's 'free lunch' gets some exposure to show how weak and counterproductive Democratic economic policies are. (Not that Republican support for ethanol or farm subsidies is any different.)
Supply and demand works to equalize the 'economic utility' values of each member of the economy with the resources available.
Right now we have major distortions in the economy (which Obama's administration has made vastly worse both in extent (entitlements) and future headwinds (higher taxes or inflation to handle the debt). Blinder like Obama believes there is a free lunch - i.e. what you take from one place doesn't hurt another.
As seen in the effective 20% unemployment rate in the US, the 'taking from another' is pretty obvious - we are sacrificing American jobs at the altar of entitlement.
Blinder's plan would shift resources but it would not create resources out of thin air as he postures. Rather, it would reduce the benefits of lower cost energy with overpriced energy.
Reducing carbon dioxide and other pollutants may be important; but, is it 'that' important that it should distort the economy - because, once the price of any item goes up (e.g. energy), there will either be less of other things or their price will rise.
(More and more people are talking about the necessity of dealing with over-spending and under-rewarding, Mark Faber even goes so far (recent Barrons Roundtable) of suggesting a major war.)
Wouldn't it be better to focusing on growing the economic pie with supply/demand pricing rather than all these economic distortions? Blinder will only create more distortion and a smaller economy.
Let's hope Blinder's 'free lunch' gets some exposure to show how weak and counterproductive Democratic economic policies are. (Not that Republican support for ethanol or farm subsidies is any different.)
Supply and demand works to equalize the 'economic utility' values of each member of the economy with the resources available.
Right now we have major distortions in the economy (which Obama's administration has made vastly worse both in extent (entitlements) and future headwinds (higher taxes or inflation to handle the debt). Blinder like Obama believes there is a free lunch - i.e. what you take from one place doesn't hurt another.
As seen in the effective 20% unemployment rate in the US, the 'taking from another' is pretty obvious - we are sacrificing American jobs at the altar of entitlement.
Blinder's plan would shift resources but it would not create resources out of thin air as he postures. Rather, it would reduce the benefits of lower cost energy with overpriced energy.
Reducing carbon dioxide and other pollutants may be important; but, is it 'that' important that it should distort the economy - because, once the price of any item goes up (e.g. energy), there will either be less of other things or their price will rise.
(More and more people are talking about the necessity of dealing with over-spending and under-rewarding, Mark Faber even goes so far (recent Barrons Roundtable) of suggesting a major war.)
Wouldn't it be better to focusing on growing the economic pie with supply/demand pricing rather than all these economic distortions? Blinder will only create more distortion and a smaller economy.
Saturday, January 29, 2011
California, Redevelopment Agencies Face Off Over Funds - WSJ.com
AH WELL, DON'T EXPECT MUCH - SOME CHOICES: California, Redevelopment Agencies Face Off Over Funds - WSJ.com
I can't recall which state was recently cited for having more than 12,000 retirees with pensions of over $100,000 - but I'm sure California is way above this number.
Clearly we'd need fewer police if drugs and prostitution (for example) were legalized. So fewer police, many fewer prison guards (and fewer prisons). How much would this save?
And, then make the teachers union illegal and bring some sanity back to education programs. Many acknowledge that not only would education improve (rationalize special education for example) but costs would go down. How much could be saved here?
Would any of the above sound likely with the unions and liberals in charge? Likely not; thus, things still need to get worse before they can get better.
Maybe a true blowup in the Middle East will at least be distracting with $6 plus gas - since the US doesn't want to develop its own oil reserves (too messy! too risky!, etc.).
I can't recall which state was recently cited for having more than 12,000 retirees with pensions of over $100,000 - but I'm sure California is way above this number.
Clearly we'd need fewer police if drugs and prostitution (for example) were legalized. So fewer police, many fewer prison guards (and fewer prisons). How much would this save?
And, then make the teachers union illegal and bring some sanity back to education programs. Many acknowledge that not only would education improve (rationalize special education for example) but costs would go down. How much could be saved here?
Would any of the above sound likely with the unions and liberals in charge? Likely not; thus, things still need to get worse before they can get better.
Maybe a true blowup in the Middle East will at least be distracting with $6 plus gas - since the US doesn't want to develop its own oil reserves (too messy! too risky!, etc.).
Friday, January 28, 2011
Crisis Report Blames U.S. for Global Financial Meltdown - Barrons.com
PLUS EGYPT: Crisis Report Blames U.S. for Global Financial Meltdown - Barrons.com
I recall the professors at Cornell in the 1960's talking about the importance of 'process' vs. 'product'.
Basel II and now III are clearly emblematic of this effort to avoid critical thinking by turning judgment into a 'process'. Thus, as said, a credit decision was based on the process of taking in what the rating agencies said. Independent, risk-analysis was immaterial; because, the rating agency figures would trump any independent assessment.
Isn't this the same thing going on now with any reasoned thinking having to question the ability to pay the pensions and benefits that the 'entitled' members of developed country societies think they deserve?
And, now we have Egypt. Nothing wrong with having ten kids who just learn to recite the Koran. No other meaningful education; but, deserving/entitled to a job, low cost food, etc.
Hillary wanted us to give Honduras to a Chavez type socialist. Luckily Honduras prevailed against Hillary, Obama and the US. Now they somehow abjure the relationship between Islamic democracy and Islamic theocrats.
Can anyone remember how the liberals supported the overthrow of the Shah of Iran and now we have mullahs making atom bombs?)
Let's watch the price of oil and gold - and, in doing so, not forget to tie any price increases to our Democratic administration in Washington.
I recall the professors at Cornell in the 1960's talking about the importance of 'process' vs. 'product'.
Basel II and now III are clearly emblematic of this effort to avoid critical thinking by turning judgment into a 'process'. Thus, as said, a credit decision was based on the process of taking in what the rating agencies said. Independent, risk-analysis was immaterial; because, the rating agency figures would trump any independent assessment.
Isn't this the same thing going on now with any reasoned thinking having to question the ability to pay the pensions and benefits that the 'entitled' members of developed country societies think they deserve?
And, now we have Egypt. Nothing wrong with having ten kids who just learn to recite the Koran. No other meaningful education; but, deserving/entitled to a job, low cost food, etc.
Hillary wanted us to give Honduras to a Chavez type socialist. Luckily Honduras prevailed against Hillary, Obama and the US. Now they somehow abjure the relationship between Islamic democracy and Islamic theocrats.
Can anyone remember how the liberals supported the overthrow of the Shah of Iran and now we have mullahs making atom bombs?)
Let's watch the price of oil and gold - and, in doing so, not forget to tie any price increases to our Democratic administration in Washington.
BofA Pay Shift Spurs Grumbling in Davos - WSJ.com
REAL vs. PHONY QUESTIONS: BofA Pay Shift Spurs Grumbling in Davos - WSJ.com
If someone isn't worth $5 million, then why isn't there successful competition at a lower pay scale?
It seems as though every week or so banks that pay less are being taken over by the FDIC.
Somehow I can't recall anything in the legislation coming out of Washington (or Europe) to support job creating competition to these banks that are raising such rancor?
And, no one in the public seems to be asking why there isn't a way for more of the unemployed and non-employed to enter the fields of banking (after all this is roughly 21% in the US when all the figures are added up) or why somehow we don't have anyone capable of taking in deposits and making loans and doing so for - even slightly - smaller salaries?
If someone isn't worth $5 million, then why isn't there successful competition at a lower pay scale?
It seems as though every week or so banks that pay less are being taken over by the FDIC.
Somehow I can't recall anything in the legislation coming out of Washington (or Europe) to support job creating competition to these banks that are raising such rancor?
And, no one in the public seems to be asking why there isn't a way for more of the unemployed and non-employed to enter the fields of banking (after all this is roughly 21% in the US when all the figures are added up) or why somehow we don't have anyone capable of taking in deposits and making loans and doing so for - even slightly - smaller salaries?
Thursday, January 27, 2011
Executives Skeptical Obama Can Deliver - WSJ.com
A CREDIT CARD GENERATION WISH BOOK: Executives Skeptical Obama Can Deliver - WSJ.com
The state-of-the-union speech sounded like expanded la-la-land because it first, failed to recognize the extent of the budget deficit (i.e. borrowing $2 out of every $5 spent); and, the fact that raising taxes isn't the answer (which is clearly the Democrats (at a local level too) answer - i.e. get a value-added-tax that can be ratcheted up to produce whatever revenue is necessary to support an entitlement-based, union-centric (i.e. no performance standards) welfare state.
Somehow the image of the overweight housewife/househusband telling her family all she 'wants to do for them', while failing to control her/his diet, being diabetic, not working, being on welfare and being closed to being maxed out on her/his credit cards is what comes to mind upon ruminating on Obama's speech.
The US needs to radically restructure its spending habits. Public employee unions don't get, Obama doesn't get it and they all hope the harbingers of doom are more out-to-lunch than they are.
For some reason the nursery rhyme about the 'golden goose' keeps coming to mind with Obama wielding a hatchet. And, the basic math of 2+2=4 instead of 6 or 8 or whatever we want it to be (based on faith and hope, of course) seem to keep resonating.
I guess we each have to choose and act accordingly. But this article seems to suggest business won't be as interested in investing as the founder of Blackrock stated rather authoritively on Tom Keene's Thursday TV show.
The state-of-the-union speech sounded like expanded la-la-land because it first, failed to recognize the extent of the budget deficit (i.e. borrowing $2 out of every $5 spent); and, the fact that raising taxes isn't the answer (which is clearly the Democrats (at a local level too) answer - i.e. get a value-added-tax that can be ratcheted up to produce whatever revenue is necessary to support an entitlement-based, union-centric (i.e. no performance standards) welfare state.
Somehow the image of the overweight housewife/househusband telling her family all she 'wants to do for them', while failing to control her/his diet, being diabetic, not working, being on welfare and being closed to being maxed out on her/his credit cards is what comes to mind upon ruminating on Obama's speech.
The US needs to radically restructure its spending habits. Public employee unions don't get, Obama doesn't get it and they all hope the harbingers of doom are more out-to-lunch than they are.
For some reason the nursery rhyme about the 'golden goose' keeps coming to mind with Obama wielding a hatchet. And, the basic math of 2+2=4 instead of 6 or 8 or whatever we want it to be (based on faith and hope, of course) seem to keep resonating.
I guess we each have to choose and act accordingly. But this article seems to suggest business won't be as interested in investing as the founder of Blackrock stated rather authoritively on Tom Keene's Thursday TV show.
Stephen Moore: Obama's 'Investment' Charade - WSJ.com
A SOURCE OF FEDERAL SPENDING FACTS: Stephen Moore: Obama's 'Investment' Charade - WSJ.com
Hear, hear on this article.
What clearly was missing in the president's state-of-the-union speech was how the US was going to deal with the fact that 2/5ths of everything the government spends was from borrowed money.
Add in state income taxes and the wealthier residents of many states are already being taxed for more than the maximum 50% that the French pay.
Clearly the politicians are living in Never Never Land - just like the Greeks.
It's good to see this article put down some of the figures related to spending; but, isn't the bottom line that the US is going to have to do some MASSIVE cutting of government spending? And, not just at the Federal level?
After all, what is the average percentage the Federal government is paying now to finance its debt? Isn't it less than 2%?
And, during the 1980's, it was a push to get interest rates on Treasuries down to 8%; and, we're pushing the total Federal accumulated debt to 100%.
Sorry, but doesn't the math suggest we could be using the total current deficit just to pay interest in less than 5 years? (And, lest we avert our eyes from the rates paid by Portugal this month on 10 yr debt - even with aggressive ECB buying. Wasn't it almost 8%?)
Hear, hear on this article.
What clearly was missing in the president's state-of-the-union speech was how the US was going to deal with the fact that 2/5ths of everything the government spends was from borrowed money.
Add in state income taxes and the wealthier residents of many states are already being taxed for more than the maximum 50% that the French pay.
Clearly the politicians are living in Never Never Land - just like the Greeks.
It's good to see this article put down some of the figures related to spending; but, isn't the bottom line that the US is going to have to do some MASSIVE cutting of government spending? And, not just at the Federal level?
After all, what is the average percentage the Federal government is paying now to finance its debt? Isn't it less than 2%?
And, during the 1980's, it was a push to get interest rates on Treasuries down to 8%; and, we're pushing the total Federal accumulated debt to 100%.
Sorry, but doesn't the math suggest we could be using the total current deficit just to pay interest in less than 5 years? (And, lest we avert our eyes from the rates paid by Portugal this month on 10 yr debt - even with aggressive ECB buying. Wasn't it almost 8%?)
Wednesday, January 26, 2011
Greece's Cosseted Classes Fight Reforms - WSJ.com
THINGS IN COMMON WITH THE US: Greece's Cosseted Classes Fight Reforms - WSJ.com
There is certainly a lot in common between these cosseted Greek professions and unions and the public employee and teachers unions in the US (i.e. they have 'no shame'). Similarly the UAW.
What one missed in Obama's State-of-the-Union speech was anything specific (although there was some indirect mention) about reining in the inefficiency and waste and lack of performance or productivity engendered by US unions.
Ron Paul's understanding of the US's economic problems was clearly superior - if only by not pandering to every possible interest group.
There is certainly a lot in common between these cosseted Greek professions and unions and the public employee and teachers unions in the US (i.e. they have 'no shame'). Similarly the UAW.
What one missed in Obama's State-of-the-Union speech was anything specific (although there was some indirect mention) about reining in the inefficiency and waste and lack of performance or productivity engendered by US unions.
Ron Paul's understanding of the US's economic problems was clearly superior - if only by not pandering to every possible interest group.
Monday, January 24, 2011
Yield-Curve Anomaly Suggests, to Some, a U.S. Ratings Downgrade - WSJ.com
THE CREDIT CARD DISEASE: Yield-Curve Anomaly Suggests, to Some, a U.S. Ratings Downgrade - WSJ.com
With Obama's poll ratings going up and, from all the current reporting, he isn't planning to talk about how entitlements (Medicare, Medicaid especially) will have to be cut back, it would seem as though the public wishes to remain blissfully ignorant.
However, blissful ignorance is not the state in which business owners can allow themselves to wallow.
So, when one hears about a president intent on announcing additional spending with almost a 10% budget deficit, one really wonders if the credit card disease hasn't totally taken control of his mental faculties.
With Obama's poll ratings going up and, from all the current reporting, he isn't planning to talk about how entitlements (Medicare, Medicaid especially) will have to be cut back, it would seem as though the public wishes to remain blissfully ignorant.
However, blissful ignorance is not the state in which business owners can allow themselves to wallow.
So, when one hears about a president intent on announcing additional spending with almost a 10% budget deficit, one really wonders if the credit card disease hasn't totally taken control of his mental faculties.
Saturday, January 22, 2011
Home Builders' Shares Rise Belies Lack of Housing Recovery - Barrons.com
Home Builders' Shares Rise Belies Lack of Housing Recovery - Barrons.com
What perhaps should be added to this discussion is the issue of interest rates.
Right now, the spread between short and longer terms rates was reported to be signaling stagflation.
The impact of rising interest rates is an open issue - as they haven't risen. (But, one does wonder how much printing it will take to continue to support the deficits of the extended entitlement countries - i.e. in Europe and the US?)
After all, the talk from Obama on supporting this, that and the other in his State of the Union (plus his support for the corporate tax changes), rather blatantly to me is leaving out any attempt to cut back on entitlement / social expenditures that have driven the share of GDP the Federal government is spending to 25%+.
Again, just a bit of broad macroeconomic questions, which one would think it perilous to ignore.
What perhaps should be added to this discussion is the issue of interest rates.
Right now, the spread between short and longer terms rates was reported to be signaling stagflation.
The impact of rising interest rates is an open issue - as they haven't risen. (But, one does wonder how much printing it will take to continue to support the deficits of the extended entitlement countries - i.e. in Europe and the US?)
After all, the talk from Obama on supporting this, that and the other in his State of the Union (plus his support for the corporate tax changes), rather blatantly to me is leaving out any attempt to cut back on entitlement / social expenditures that have driven the share of GDP the Federal government is spending to 25%+.
Again, just a bit of broad macroeconomic questions, which one would think it perilous to ignore.
Friday, January 21, 2011
Treasurys Throw the Recovery a Curve - WSJ.com
INFLATIONARY CHICKEN: Treasurys Throw the Recovery a Curve - WSJ.com
Somehow, one can't help but read article after article talking about how the cost of basic expenditures are going up - the only real exceptions being computers and house prices (rents are reported going up).
One reads that with the big impact "owner's equivalent rent" has on the calculation of the CPI - where it didn't impact CPI when housing prices were flying through the roof a few years back and now apparently while housing prices are gliding still down - is it reasonable to assume that the public has realized the government is using flawed CPI calculations (could we even hint at political motivation?) and that the inflationary chicken is already out running about? It would sure seem so.
Somehow, one can't help but read article after article talking about how the cost of basic expenditures are going up - the only real exceptions being computers and house prices (rents are reported going up).
One reads that with the big impact "owner's equivalent rent" has on the calculation of the CPI - where it didn't impact CPI when housing prices were flying through the roof a few years back and now apparently while housing prices are gliding still down - is it reasonable to assume that the public has realized the government is using flawed CPI calculations (could we even hint at political motivation?) and that the inflationary chicken is already out running about? It would sure seem so.
Thursday, January 20, 2011
Monetary Expansion Propels Stocks Higher - Barrons.com
WONDERLAND: Monetary Expansion Propels Stocks Higher - Barrons.com
And, let's see? They are talking about adjusting high corporate income taxes; and, oh yes, are they really saying anything about reining in entitlements?
But, wonder of wonder, everyone is thinking Obama a moderate, his poll ratings are going up; and, people no longer worry about money printing, the deficit or the obfuscated domestic inflation.
Wait, did we join a rabbit down the rabbit hole? Or, are we trying to converse with a Cheshire Cat?
And, let's see? They are talking about adjusting high corporate income taxes; and, oh yes, are they really saying anything about reining in entitlements?
But, wonder of wonder, everyone is thinking Obama a moderate, his poll ratings are going up; and, people no longer worry about money printing, the deficit or the obfuscated domestic inflation.
Wait, did we join a rabbit down the rabbit hole? Or, are we trying to converse with a Cheshire Cat?
Thursday, January 13, 2011
S&P, Moody's Warn On U.S. Credit Rating - WSJ.com
S&P, Moody's GOOSE AND GANDER: Warn On U.S. Credit Rating - WSJ.com
Question: And how does the public employee compensation package stack up against the CEO's and corporate officer's packages? ...Offer 1/2 the compensation package of a corporate officer or CEO that is running that company into the ground to any public employee and I will bet that that public employee will do no worse at running the company and will do it for half the price!
Answer:
One can't help but jump down to respond to the questioner who clearly has an overestimation of people like the deputy fire chief of Orlinda California who was reported a year ago June as retiring at age 51 with a pension of over $250,000 a year, fully indexed for inflation; or, perhaps the Deputy Police Chief in San Francisco making over $550,000 a year with a 50% retirement package at age 50.
Clearly the numbers of corporate officials making this kind of salary is few and far between. And, if anyone has ever run into close contact with government workers, their motivation is much more geared to either power or how to spend money and not to any long term survival of their job or city or state - as well witnessed.
Likewise, it's too bad government employees and politicians don't get pensions and benefits based on long-term performance as the politicians are running over themselves to 'supposedly' right problems with banker compensation.
Somehow what's good for the gander isn't good for the goose.
Question: And how does the public employee compensation package stack up against the CEO's and corporate officer's packages? ...Offer 1/2 the compensation package of a corporate officer or CEO that is running that company into the ground to any public employee and I will bet that that public employee will do no worse at running the company and will do it for half the price!
Answer:
One can't help but jump down to respond to the questioner who clearly has an overestimation of people like the deputy fire chief of Orlinda California who was reported a year ago June as retiring at age 51 with a pension of over $250,000 a year, fully indexed for inflation; or, perhaps the Deputy Police Chief in San Francisco making over $550,000 a year with a 50% retirement package at age 50.
Clearly the numbers of corporate officials making this kind of salary is few and far between. And, if anyone has ever run into close contact with government workers, their motivation is much more geared to either power or how to spend money and not to any long term survival of their job or city or state - as well witnessed.
Likewise, it's too bad government employees and politicians don't get pensions and benefits based on long-term performance as the politicians are running over themselves to 'supposedly' right problems with banker compensation.
Somehow what's good for the gander isn't good for the goose.
Wednesday, January 12, 2011
Review & Outlook: Raise My Company's Taxes - WSJ.com
RACKETEERING?: Review & Outlook: Raise My Company's Taxes - WSJ.com
In addition to what is said in the above article, more could be added about the long-term ineptitude of unions in helping strengthen the economy of America and job creation.
Unions are blatantly short-sighted and self-serving and the days when companies were geographically bound is continuing to change - especially for those companies that are the most cutting edge and profitable - exactly those companies that one wants to see stay and grow their operations in America.
The unions seem to be blind to need to support businesses and the jobs that come from healthy businesses. They see nothing wrong with bleeding businesses and society dry in order to support the unproductive siphoning of economic strength into the hands of unions leaders and, secondly, their members.
Somehow, unions seem to have the mentality of the Mafia more than anything else. Anyone for racketeering charges?
In addition to what is said in the above article, more could be added about the long-term ineptitude of unions in helping strengthen the economy of America and job creation.
Unions are blatantly short-sighted and self-serving and the days when companies were geographically bound is continuing to change - especially for those companies that are the most cutting edge and profitable - exactly those companies that one wants to see stay and grow their operations in America.
The unions seem to be blind to need to support businesses and the jobs that come from healthy businesses. They see nothing wrong with bleeding businesses and society dry in order to support the unproductive siphoning of economic strength into the hands of unions leaders and, secondly, their members.
Somehow, unions seem to have the mentality of the Mafia more than anything else. Anyone for racketeering charges?
Monday, January 10, 2011
U.K. Financial Sector Sheds Jobs - WSJ.com
DEMOCRACY'S QUANDARY: U.K. Financial Sector Sheds Jobs - WSJ.com
Let's see?
The government decides it knows better than the banks how they should run their business. The government decides to increase taxes on banks.
And, gee, the banks contract the number of employees they have in Britain.
The article seems to be ignoring the obvious because it might make the government look bad.
After all, in an information society where knowledge and expertise add the most value, these are also the most portable aspects of any business. Something socialists ignore at their peril.
Question: What are you advocating?
Answer:
The idea is let everyone perhaps focus on the logical implications of the policies being pursued.
Those who think that punishing business (taxes, regulations, etc.) has no impact on job creation, will dismiss the issues raised as irrelevant.
Those who understand the need to support business will recognize the stupidity of the government's policies.
But socialism is expensive and the Western democracies are unable to get a consensus about how to solve the problem.
It would seem to me that higher taxes, etc. exacerbate the problem of little or no growth - i.e. logic would say that spending capital on current consumption vs. those things that let a society grown is anti-growth.
But those whose focus is only on the here-and-now (e.g. most liberals), think all social needs have to be met without any question or limit to entitlements and that early, lush retirement and benefits is also an entitlement, etc.
It's the quandary we face in many societies.
The young have yet to realize that there is something inherently unfair for them to be asked to take reduced salaries and benefits so higher salaries and benefits can be maintained for older workers.
There was a recent article in this paper highlighting how Cameron's policies are actually allowing far to much spending to continue.
Is it a house-of-cards that will collapse on itself? History would suggest this is not an utterly remote possibility. But, then again, if you are 60 or 70, you may hope that things will hang together until you die - who cares about the aftermath.
Let's see?
The government decides it knows better than the banks how they should run their business. The government decides to increase taxes on banks.
And, gee, the banks contract the number of employees they have in Britain.
The article seems to be ignoring the obvious because it might make the government look bad.
After all, in an information society where knowledge and expertise add the most value, these are also the most portable aspects of any business. Something socialists ignore at their peril.
Question: What are you advocating?
Answer:
The idea is let everyone perhaps focus on the logical implications of the policies being pursued.
Those who think that punishing business (taxes, regulations, etc.) has no impact on job creation, will dismiss the issues raised as irrelevant.
Those who understand the need to support business will recognize the stupidity of the government's policies.
But socialism is expensive and the Western democracies are unable to get a consensus about how to solve the problem.
It would seem to me that higher taxes, etc. exacerbate the problem of little or no growth - i.e. logic would say that spending capital on current consumption vs. those things that let a society grown is anti-growth.
But those whose focus is only on the here-and-now (e.g. most liberals), think all social needs have to be met without any question or limit to entitlements and that early, lush retirement and benefits is also an entitlement, etc.
It's the quandary we face in many societies.
The young have yet to realize that there is something inherently unfair for them to be asked to take reduced salaries and benefits so higher salaries and benefits can be maintained for older workers.
There was a recent article in this paper highlighting how Cameron's policies are actually allowing far to much spending to continue.
Is it a house-of-cards that will collapse on itself? History would suggest this is not an utterly remote possibility. But, then again, if you are 60 or 70, you may hope that things will hang together until you die - who cares about the aftermath.
Friday, January 7, 2011
Economy Adds Fewer Jobs Than Expected - WSJ.com
JOB AND BUDGET QUESTIONS: Economy Adds Fewer Jobs Than Expected - WSJ.com
One does miss having a couple of questions answered in all of these articles?
1) How much capital does it take to fund a new job these days (on average)? The greater the breakdown the better. But when one looks at the capital investment charts, which are way down, it's hard to see any sign of coming up with more jobs.
2) Of course also of interest would be statistics that breakout the gross vs. net cost of employment based on government mandates, etc. Since these costs vis-a-vis government are only going up, the gross production required of an employee has to also have been going up.
3) And, of course, one has to look at the net return from outsourcing or using technology to replace labor in the US. This is glossed over but not good for US employment. Thus, if a company doesn't have to employ in the US, it probably won't.
4) So, a further breakdown should/could look at how to create jobs that cannot be outsourced.
5) Since we all know from the media that local and state governments are strapped; but, that they also are overpaying and over-benefiting their employees, it would be interesting to see enumerated the savings (read: tax reductions) that could be had by equalizing government total pay and benefit packages to comparable private sector employment. Is a 20-30% tax cut a reasonable number?
6) If a family's income goes down, a lot of previous items in a family budget also get cut. With social programs and entitlements (plus the drug war), the liberals seem to have convinced society that all of these programs are sacrosanct. Well, they wouldn't be if paid for like a family budget. Things would be cut.
Clearly if we want to have jobs come back to the US, all of the above need to be addressed and put on the table.
One does miss having a couple of questions answered in all of these articles?
1) How much capital does it take to fund a new job these days (on average)? The greater the breakdown the better. But when one looks at the capital investment charts, which are way down, it's hard to see any sign of coming up with more jobs.
2) Of course also of interest would be statistics that breakout the gross vs. net cost of employment based on government mandates, etc. Since these costs vis-a-vis government are only going up, the gross production required of an employee has to also have been going up.
3) And, of course, one has to look at the net return from outsourcing or using technology to replace labor in the US. This is glossed over but not good for US employment. Thus, if a company doesn't have to employ in the US, it probably won't.
4) So, a further breakdown should/could look at how to create jobs that cannot be outsourced.
5) Since we all know from the media that local and state governments are strapped; but, that they also are overpaying and over-benefiting their employees, it would be interesting to see enumerated the savings (read: tax reductions) that could be had by equalizing government total pay and benefit packages to comparable private sector employment. Is a 20-30% tax cut a reasonable number?
6) If a family's income goes down, a lot of previous items in a family budget also get cut. With social programs and entitlements (plus the drug war), the liberals seem to have convinced society that all of these programs are sacrosanct. Well, they wouldn't be if paid for like a family budget. Things would be cut.
Clearly if we want to have jobs come back to the US, all of the above need to be addressed and put on the table.
Tuesday, January 4, 2011
Outlook goes from half-empty to half-full Irwin Kellner - MarketWatch
SOME BUSINESS DECISION POINTS?: Outlook goes from half-empty to half-full Irwin Kellner - MarketWatch
Let's see?
a) Platform economy, money for new technology...?
b) Ignoring of too much government spending and out of control entitlement programs.
c) States failing to consider serious budget controls and program changes - yet so many are broke (big time).
d) Where are the new customers? (Asia perhaps?)
e) Oh yes, and the US wouldn't let me hire those PhD graduates from other countries that were just trained in the US.
f) Oh yes, the US has the world's highest corporate taxes.
g) And, money in overseas subsidiaries (which has already been taxed there) will be fully taxed if I bring it back to the US. Maybe I should keep 100 cents on the dollar (vs. sixty) and invest this money abroad?
Hmmm, wonder where the next factory should be? Or, research facility?
Let's see?
a) Platform economy, money for new technology...?
b) Ignoring of too much government spending and out of control entitlement programs.
c) States failing to consider serious budget controls and program changes - yet so many are broke (big time).
d) Where are the new customers? (Asia perhaps?)
e) Oh yes, and the US wouldn't let me hire those PhD graduates from other countries that were just trained in the US.
f) Oh yes, the US has the world's highest corporate taxes.
g) And, money in overseas subsidiaries (which has already been taxed there) will be fully taxed if I bring it back to the US. Maybe I should keep 100 cents on the dollar (vs. sixty) and invest this money abroad?
Hmmm, wonder where the next factory should be? Or, research facility?
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