Barron's Up & Down Wall Street by Alan Abelson - Barrons.com
We also haven't seen Obama really do anything positive for business or positive in the way of cutting back on government regulations or inhibitions to business here in the ole USA.
We heard a bit of talk about actually get drilling permits issued for the Gulf - but, talk isn't action and action is what's been missing.
And, lest we forget the ever closer June end of QE2 - as if the open money spigot was inconsequential.
Clearly Obama and his cohorts and supporters feel there is nothing wrong with endless entitlements and bigger and bigger debts to be paid by - can we guess - higher taxes.
So, looking down the road, one does have to opine that the sagacious should be cautious; and, that frankly doesn't sound like much in the way of job growth or economic expansion.
(We really appear to have a two-tier job picture and again, nothing is being done to recognize it, let alone take steps to ameliorate the discrepancy of less than 5% unemployment for those with a college education vs. all the rest.)
Saturday, February 26, 2011
Monday, February 21, 2011
More Companies Plan to Put R&D Overseas - WSJ.com
AND, IF OR WHEN? :More Companies Plan to Put R&D Overseas - WSJ.com
Clearly Democrats have no idea what it takes to make America business competitive; and, the Republicans are still chicken (and may not really know themselves).
Sadly, many Americans who want to return America to being a competitive business environment in terms of taxes haven't a clue about the impact of immigration policies (read: Republicans).
The easy route is to play the Greek card - both parties let their adherents think the sky isn't falling and serious decisions can be postponed or are all the fault of the other party.
Everyone seems to have a different guess of the outcome and timing.
Clearly Democrats have no idea what it takes to make America business competitive; and, the Republicans are still chicken (and may not really know themselves).
Sadly, many Americans who want to return America to being a competitive business environment in terms of taxes haven't a clue about the impact of immigration policies (read: Republicans).
The easy route is to play the Greek card - both parties let their adherents think the sky isn't falling and serious decisions can be postponed or are all the fault of the other party.
Everyone seems to have a different guess of the outcome and timing.
Sunday, February 20, 2011
When and How Will the Fed Tighten? - Barrons.com
THE MEMORY LESSON: When and How Will the Fed Tighten? - Barrons.com
Also to remember - as a lesson from the 1970's and 80's - is that people generally expect more of what they've just had. In other words, low interest rates are expected to beget low interest rates (from the 1970's).
Thus, throughout the period, savers never demanded enough return to compensate for the inflation they would face.
(In the 80's of course, it was vice versa.)
Also to remember - as a lesson from the 1970's and 80's - is that people generally expect more of what they've just had. In other words, low interest rates are expected to beget low interest rates (from the 1970's).
Thus, throughout the period, savers never demanded enough return to compensate for the inflation they would face.
(In the 80's of course, it was vice versa.)
Saturday, February 19, 2011
Up and Down Wall Street: Worse Than You Ever Dreamed - Barrons.com
Up and Down Wall Street: Worse Than You Ever Dreamed - Barrons.com
One could use the term "ominous parallels" but I believe that's the title of someone else's book.
Somehow the analogies start to stand out from a wonderful old book by a now retired professor from the University of Chicago entitled "Plagues and Peoples".
It goes over the affects on the Roman Empire of the plagues which decimated its Mediterranean population in the 2nd century AD and then later.
The net result was a diminished tax-paying population to support the Roman armies on the frontier. (We all know what happened next.)
Similarly today, the plague is government and entitlement spending. It keeps the society from realizing its economic potential (except of course for the macro and microparasitic elements themselves running the government and receiving the entitlements).
The ongoing discussions of the Dark Ages are interesting to consider - i.e. will government and entitlements get reined in (which Obama's budget clearly resists) or not. Just like dealing with a disease and epidemic.
One could use the term "ominous parallels" but I believe that's the title of someone else's book.
Somehow the analogies start to stand out from a wonderful old book by a now retired professor from the University of Chicago entitled "Plagues and Peoples".
It goes over the affects on the Roman Empire of the plagues which decimated its Mediterranean population in the 2nd century AD and then later.
The net result was a diminished tax-paying population to support the Roman armies on the frontier. (We all know what happened next.)
Similarly today, the plague is government and entitlement spending. It keeps the society from realizing its economic potential (except of course for the macro and microparasitic elements themselves running the government and receiving the entitlements).
The ongoing discussions of the Dark Ages are interesting to consider - i.e. will government and entitlements get reined in (which Obama's budget clearly resists) or not. Just like dealing with a disease and epidemic.
Friday, February 18, 2011
Bernanke Defends Fed Policies - WSJ.com
FAILURE TO RECOGNIZE A BIFURCATED LABOR MARKET OR TO RESPOND TO ITS NEEDS: Bernanke Defends Fed Policies - WSJ.com
An interesting and open question would appear to be - if the US is distorting its economic view by listening to the mantra of the liberals and unions (for example, by not segmenting the needs of the labor force, where college-educated unemployment is under 5% but U6 unemployment is 17%) is it reasonable to have employment policies that broadly try to stimulate an economy where jobs are plentiful for those with an education and desperately lacking for those with little or no skills or education?
It there is a bifurcated labor market, why isn't this a subject of discussion?
An interesting and open question would appear to be - if the US is distorting its economic view by listening to the mantra of the liberals and unions (for example, by not segmenting the needs of the labor force, where college-educated unemployment is under 5% but U6 unemployment is 17%) is it reasonable to have employment policies that broadly try to stimulate an economy where jobs are plentiful for those with an education and desperately lacking for those with little or no skills or education?
It there is a bifurcated labor market, why isn't this a subject of discussion?
Wednesday, February 16, 2011
Wholesale Prices Hit Two-Year High - WSJ.com
ECONOMIC LA LA LAND:Wholesale Prices Hit Two-Year High - WSJ.com
Why is it so hard to recognize that we have:
(1) A bifurcated labor market - i.e. those with education and skills (see BLS reports) have under 5% unemployment. (Do the math for the other numbers).
(2) As for high powered, funny money, the government is borrowing money to give to those who don't work (or produce). Thus the productive sector is having to share its bounty with more mouths and hands. If this isn't an inflation scenario, what is?
Even if the government was able to clamp down on its spending largess, it's rather a stretch to see this all coming back to ground without some major transformative upheavals. After all, the 70's didn't end without some trying economic times in the early '80's and we're seeing lots of evidence of what happens when subsidies encourage too many mouths to seek too little food.
Housing was also a bubble when reality dispensed with finally reasserted itself.
One does wonder how this will all play out?
Why is it so hard to recognize that we have:
(1) A bifurcated labor market - i.e. those with education and skills (see BLS reports) have under 5% unemployment. (Do the math for the other numbers).
(2) As for high powered, funny money, the government is borrowing money to give to those who don't work (or produce). Thus the productive sector is having to share its bounty with more mouths and hands. If this isn't an inflation scenario, what is?
Even if the government was able to clamp down on its spending largess, it's rather a stretch to see this all coming back to ground without some major transformative upheavals. After all, the 70's didn't end without some trying economic times in the early '80's and we're seeing lots of evidence of what happens when subsidies encourage too many mouths to seek too little food.
Housing was also a bubble when reality dispensed with finally reasserted itself.
One does wonder how this will all play out?
Tuesday, February 15, 2011
Review & Outlook: 5,100 More IRS Agents - WSJ.com
THOUGHTS ON OBAMA'S BUDGET: Review & Outlook: 5,100 More IRS Agents - WSJ.com
We should be focused on the percent of GDP spent by the government and its impact on the economy (see Art Laffer) and not on making sure everyone who took early retirement, didn't want to study or complete high school, etc. gets the same benefits and healthcare as those who went to graduate school and work 60 hour weeks.
Clearly the country is at an ethical divide here (is it comparable to the divide separating those folks who believe in 'birth control' from those who believe birth control is a 'sin'? I don't know.)
It was clear however that in talking about 'education' (and the need for more and better), Obama failed to challenge the seniority system of the public teachers unions who have created the greatest mess with respect to employment.
And, this is the immediate and most pressing need - to wit, that those with college educations have less than 5% unemployment right now (Dec 2010/Jan 2011). But unemployment gets lumped together for those with all levels of education and is reported at 9% (17% on U6).
Thus, the news media and politicians would seem to prefer to 'not' recognize the unemployment bifurcation (can they be that stupid?).
And, the same fail to recognize that the cost (capital) required to create jobs where large capital is needed to compensate for high salaries is huge (see LA 'shovel ready' report where the cost per job was $2 million each).
Thus, it would seem (off the top) that Obama is unable to grasp the true nature of employment, the source of much of the education problem and the need to support the creation of capital to create jobs (vs. giving it away in entitlement consumption).
One could go on and on - but it would seem as though Obama has dug himself a hole and doesn't know it.
We should be focused on the percent of GDP spent by the government and its impact on the economy (see Art Laffer) and not on making sure everyone who took early retirement, didn't want to study or complete high school, etc. gets the same benefits and healthcare as those who went to graduate school and work 60 hour weeks.
Clearly the country is at an ethical divide here (is it comparable to the divide separating those folks who believe in 'birth control' from those who believe birth control is a 'sin'? I don't know.)
It was clear however that in talking about 'education' (and the need for more and better), Obama failed to challenge the seniority system of the public teachers unions who have created the greatest mess with respect to employment.
And, this is the immediate and most pressing need - to wit, that those with college educations have less than 5% unemployment right now (Dec 2010/Jan 2011). But unemployment gets lumped together for those with all levels of education and is reported at 9% (17% on U6).
Thus, the news media and politicians would seem to prefer to 'not' recognize the unemployment bifurcation (can they be that stupid?).
And, the same fail to recognize that the cost (capital) required to create jobs where large capital is needed to compensate for high salaries is huge (see LA 'shovel ready' report where the cost per job was $2 million each).
Thus, it would seem (off the top) that Obama is unable to grasp the true nature of employment, the source of much of the education problem and the need to support the creation of capital to create jobs (vs. giving it away in entitlement consumption).
One could go on and on - but it would seem as though Obama has dug himself a hole and doesn't know it.
Friday, February 11, 2011
Higher Pay Gains Seen for 2011 - WSJ.com
QUESTIONS ON JOB OPTIONS: Higher Pay Gains Seen for 2011 - WSJ.com
George, I was thinking more about the typical family with two wage earners on reasonable salaries.
To start with, when they have a family, they have lots of choices - amongst which is one partner staying home to raise the kids.
Since any domestic work is paid for with 'after-tax' dollars, I've often seen the tradeoff where one spouse stops working.
However, most of what they do is within the ability of someone with a lesser level of education being able to handle rather well.
Thus, why shouldn't any payments to someone out of 'earned income' be tax deductible?
Plus, instead of making maids, nannies, etc. be 'employees', why not let them be 'independent contractors'? Besides making their employment easier (after all, we are trying to create jobs for the lesser educated), it will let them see how government is adding to their salary with all of the 'benefits' that employers have to pay?
If the government feels these people aren't competent to handle benefit filings, then this is a constructive option to outsource some private work to people like H&R Block - except that instead of just taxes, these people will file all of the government benefit taxes that independent contractors could pay?
The end result is that a number of skilled workers (current unemployment less than 5%) might stay in the workforce. Thus, added productivity; less pressure on wages; etc.
And, those who can't find work, would suddenly be able to contribute to the overall well-being of society by having a real job?????
George, I was thinking more about the typical family with two wage earners on reasonable salaries.
To start with, when they have a family, they have lots of choices - amongst which is one partner staying home to raise the kids.
Since any domestic work is paid for with 'after-tax' dollars, I've often seen the tradeoff where one spouse stops working.
However, most of what they do is within the ability of someone with a lesser level of education being able to handle rather well.
Thus, why shouldn't any payments to someone out of 'earned income' be tax deductible?
Plus, instead of making maids, nannies, etc. be 'employees', why not let them be 'independent contractors'? Besides making their employment easier (after all, we are trying to create jobs for the lesser educated), it will let them see how government is adding to their salary with all of the 'benefits' that employers have to pay?
If the government feels these people aren't competent to handle benefit filings, then this is a constructive option to outsource some private work to people like H&R Block - except that instead of just taxes, these people will file all of the government benefit taxes that independent contractors could pay?
The end result is that a number of skilled workers (current unemployment less than 5%) might stay in the workforce. Thus, added productivity; less pressure on wages; etc.
And, those who can't find work, would suddenly be able to contribute to the overall well-being of society by having a real job?????
Thursday, February 10, 2011
Bernanke Moves to Reassure Republicans - WSJ.com
A CAMEL OR NOT A CAMEL?: Bernanke Moves to Reassure Republicans - WSJ.com
Greece found out that loading up on debt and fiscal mismanagement was like loading up a camel - it suddenly quit acting like you wanted. Luckily the Greeks were bailed out.
An open question would seem to be whether the piling on of debt and overspending on entitlements in the US will end up more like a 'straw on the camel's back' situation or not?
Greece found out that loading up on debt and fiscal mismanagement was like loading up a camel - it suddenly quit acting like you wanted. Luckily the Greeks were bailed out.
An open question would seem to be whether the piling on of debt and overspending on entitlements in the US will end up more like a 'straw on the camel's back' situation or not?
Wednesday, February 9, 2011
Fed's Lacker Says Bond Purchases Need Re-Evaluating - WSJ.com
LET THEM EAT CAKE BELIEFS: Fed's Lacker Says Bond Purchases Need Re-Evaluating - WSJ.com
Why don't we start talking more specifically about the segmentation across the unemployment statistics?
In other words, where is the slack when college graduate unemployment (per BLS statistics - either adjusted or not) is below 5%?
In a modern (i.e. US economy), is there really a substitution effect in the economy for those with limited reading, math and logic skills?
Is there in fact a need to rethink the labor market and tax and benefit laws in ways to make more jobs available for those with little education and skills? (The latest activities of the Democrats have clearly gone in the opposite direction here and, as shown by where American companies are investing, there is little current opportunity to bring low-skill (and what should be low gross cost of employment) jobs back to the US.)
So, shouldn't journalists be taking Bernanke, et al. to task for saying there is 'slack' in the economy? It's like Marie Antoinette said when bread was short, "Let them eat cake". (The substitution for skilled labor is more technology, not more unskilled labor - at least in the US).
Why don't we start talking more specifically about the segmentation across the unemployment statistics?
In other words, where is the slack when college graduate unemployment (per BLS statistics - either adjusted or not) is below 5%?
In a modern (i.e. US economy), is there really a substitution effect in the economy for those with limited reading, math and logic skills?
Is there in fact a need to rethink the labor market and tax and benefit laws in ways to make more jobs available for those with little education and skills? (The latest activities of the Democrats have clearly gone in the opposite direction here and, as shown by where American companies are investing, there is little current opportunity to bring low-skill (and what should be low gross cost of employment) jobs back to the US.)
So, shouldn't journalists be taking Bernanke, et al. to task for saying there is 'slack' in the economy? It's like Marie Antoinette said when bread was short, "Let them eat cake". (The substitution for skilled labor is more technology, not more unskilled labor - at least in the US).
Tuesday, February 8, 2011
Obama Budget Proposes Broader Unemployment Taxes - WSJ.com
DOUBLE SPEAK: Obama Budget Proposes Broader Unemployment Taxes - WSJ.com
And if one wondered if the cajoling of business by Obama wasn't 'double-speak', I guess the question is answered.
It's sort of typical of socialists and do-gooders that they hope people won't get the big picture (i.e. the gross cost of employment) and, it is looking more and more like the administration doesn't put things together either.
So, here we have clear evidence that the cost of employing Americans is going to be increasing - but, (per Obama) "Hey businesses, why not bring jobs back to America?" Too bad we can't say the president isn't from another planet. It's just that he had no idea about running a business, meeting a budget, etc.
And if one wondered if the cajoling of business by Obama wasn't 'double-speak', I guess the question is answered.
It's sort of typical of socialists and do-gooders that they hope people won't get the big picture (i.e. the gross cost of employment) and, it is looking more and more like the administration doesn't put things together either.
So, here we have clear evidence that the cost of employing Americans is going to be increasing - but, (per Obama) "Hey businesses, why not bring jobs back to America?" Too bad we can't say the president isn't from another planet. It's just that he had no idea about running a business, meeting a budget, etc.
Obama Says Tax Breaks Should Now Spur Hiring - WSJ.com
ALL TALK, NO ACTION: Obama Says Tax Breaks Should Now Spur Hiring - WSJ.com
What has Obama really done (vs. said)?
It would appear Obama is trying to "talk-the'talk" without "walking-the-walk" as the old saying goes.
When one looks at the BLS statistics related to joblessness based on level of education,
http://www.bls.gov/news.release/empsit.t04.htm
it is clear that the problem is there aren't jobs for those who have limited reading and math and logic and learning skills based on the salary and wage and benefit structure (read also union bias of the administration) extant in the US.
These are issues which could be addressed but are being obfuscated.
The US economy and its place in the world requires higher levels of skills and those without these skills are of less and less value in an information based economy.
It is not that the lower skilled can't be integrated into the economy, but the policies to integrate them are not coming from the administration.
It is probably a matter of differing opinion as to whether Obama thinks talking will make America a place people want to do business, but tax rates are high, unions are pandered to, entitlements are out of control, the budget is out of control, immigration policies remain anti-business, etc.
Where is some action? Doesn't the administration know that talk is cheap but that's all it is. Where are the permits to start drilling in the Gulf - for instance?
What has Obama really done (vs. said)?
It would appear Obama is trying to "talk-the'talk" without "walking-the-walk" as the old saying goes.
When one looks at the BLS statistics related to joblessness based on level of education,
http://www.bls.gov/news.release/empsit.t04.htm
it is clear that the problem is there aren't jobs for those who have limited reading and math and logic and learning skills based on the salary and wage and benefit structure (read also union bias of the administration) extant in the US.
These are issues which could be addressed but are being obfuscated.
The US economy and its place in the world requires higher levels of skills and those without these skills are of less and less value in an information based economy.
It is not that the lower skilled can't be integrated into the economy, but the policies to integrate them are not coming from the administration.
It is probably a matter of differing opinion as to whether Obama thinks talking will make America a place people want to do business, but tax rates are high, unions are pandered to, entitlements are out of control, the budget is out of control, immigration policies remain anti-business, etc.
Where is some action? Doesn't the administration know that talk is cheap but that's all it is. Where are the permits to start drilling in the Gulf - for instance?
Sunday, February 6, 2011
Economists React: ‘Ton of Noise’ in Jobs Report - Real Time Economics - WSJ
WHERE TO LOOK TO REMOVE SOME CHATTER: Economists React: ‘Ton of Noise’ in Jobs Report - Real Time Economics - WSJ
It's worth taking a look at this chart from the BLS which someone included in their comments to a current Barron's article.
It breaks down employment and unemployment by level of education.
For those with college degrees it rather clearly shows an unemployment level of less than 5%.
It's too bad all of the commentary in the press on the employment figures released Friday don't take into account some of the evidence from this chart.
http://www.bls.gov/news.release/empsit.t04.htm
It's worth taking a look at this chart from the BLS which someone included in their comments to a current Barron's article.
It breaks down employment and unemployment by level of education.
For those with college degrees it rather clearly shows an unemployment level of less than 5%.
It's too bad all of the commentary in the press on the employment figures released Friday don't take into account some of the evidence from this chart.
http://www.bls.gov/news.release/empsit.t04.htm
Saturday, February 5, 2011
Table A-4. Employment status of the civilian population 25 years and over by educational attainment
For anyone interested in some very interesting data on unemployment in the US at the beginning of 2011, the following chart was suggested by someone.
It clearly shows that there is almost full employment for the college educated.
Table A-4. Employment status of the civilian population 25 years and over by educational attainment
It clearly shows that there is almost full employment for the college educated.
Table A-4. Employment status of the civilian population 25 years and over by educational attainment
Barron's Up & Down Wall Street - Barrons.com
THE SAME OLD UNANSWERED QUESTIONS: Barron's Up & Down Wall Street - Barrons.com
What somehow never gets explained by all these upbeat types is "why is this time different (if not worse)"?
In other words, in the 1970's we had 'staglation' when the Feds share of GDP was over 19%. Now we're roughly at 25%.
If anything, the economic competitors to the US today (vs. the 1970's) would appear to be nothing if not more formidable. So, one would have to assume that American job creation would take even more capital???? (per job)
Some rather strong evidence supports this capital (and the ancillary rate of return) argument in terms of data showing the total output of goods and services in the US back to pre-bust levels with substantially fewer people working. Am I missing something here with the math?
What somehow never gets explained by all these upbeat types is "why is this time different (if not worse)"?
In other words, in the 1970's we had 'staglation' when the Feds share of GDP was over 19%. Now we're roughly at 25%.
If anything, the economic competitors to the US today (vs. the 1970's) would appear to be nothing if not more formidable. So, one would have to assume that American job creation would take even more capital???? (per job)
Some rather strong evidence supports this capital (and the ancillary rate of return) argument in terms of data showing the total output of goods and services in the US back to pre-bust levels with substantially fewer people working. Am I missing something here with the math?
Friday, February 4, 2011
Bernanke Says Policies Boost Stocks, Not Food Prices - Barrons.com
MORE ON THE FED: Bernanke Says Policies Boost Stocks, Not Food Prices - Barrons.com
Sometimes there are numbers that seem to linger - such as the percent of GDP spent by the Federal Government - and have consequent actions from time and time again.
It's sort of like separating the wheat from the chaff or separating the static from the transmission.
I'm not sure, but it would seem as though the size and weight of the Federal Government on the economy would logically have an impact on the economy.
Is the Fed's printing or non-printing of money an equal or subservient or dominant cause of conditionality? In the 70's, there was stagflation - in that case both a high GDP % and high money growth existed.
Now, we have an even higher share of GDP going to the Federal government, very strong money printing (which was abjured back in the 70's and early 80's (with warnings)) - so, what now?
Sometimes there are numbers that seem to linger - such as the percent of GDP spent by the Federal Government - and have consequent actions from time and time again.
It's sort of like separating the wheat from the chaff or separating the static from the transmission.
I'm not sure, but it would seem as though the size and weight of the Federal Government on the economy would logically have an impact on the economy.
Is the Fed's printing or non-printing of money an equal or subservient or dominant cause of conditionality? In the 70's, there was stagflation - in that case both a high GDP % and high money growth existed.
Now, we have an even higher share of GDP going to the Federal government, very strong money printing (which was abjured back in the 70's and early 80's (with warnings)) - so, what now?
Economy Added Few Jobs in January - WSJ.com
THE OLD GOVERNMENT SHARE OF THE ECONOMY: Economy Added Few Jobs in January - WSJ.com
If the share of GDP taken by the Federal Government's impact on the economy hasn't changed (and why would it????), then it's hard to see the economy doing anything but coping with the Scylla and Charybdis of stagnation and inflation.
We see the stagnation of a 25% GDP share (and the share taken by states has grown since the 70's and early 80's - so the Fed. share may need to be lowered from 19% (or vice versa).
Thus, the big picture is the macro driver of the weight of government on the economy.
How the individual players (e.g. inflation, jobs, etc.) perform their tasks seems to be playing out right now with the inflation much higher in the destination of the dollars being created by the Federal Reserve - i.e. developing country economies.
Liberal politicians live in a fantasy world where real money doesn't matter and entitlement spending (to the deserving) is all that matters. There are some Republicans (Tea Party) that would like to start confronting entitlements - but, can they really be serious enough.
Several years back, forecasters predicted an inflationary depression. Will it come to pass?
Clearly, the spin-masters are hoping to avoid it. But, 20-22% of Americans who would normally be looking for a job can't find one - yet, the government would like us to believe this number is only 9%. Hmmm?
If the share of GDP taken by the Federal Government's impact on the economy hasn't changed (and why would it????), then it's hard to see the economy doing anything but coping with the Scylla and Charybdis of stagnation and inflation.
We see the stagnation of a 25% GDP share (and the share taken by states has grown since the 70's and early 80's - so the Fed. share may need to be lowered from 19% (or vice versa).
Thus, the big picture is the macro driver of the weight of government on the economy.
How the individual players (e.g. inflation, jobs, etc.) perform their tasks seems to be playing out right now with the inflation much higher in the destination of the dollars being created by the Federal Reserve - i.e. developing country economies.
Liberal politicians live in a fantasy world where real money doesn't matter and entitlement spending (to the deserving) is all that matters. There are some Republicans (Tea Party) that would like to start confronting entitlements - but, can they really be serious enough.
Several years back, forecasters predicted an inflationary depression. Will it come to pass?
Clearly, the spin-masters are hoping to avoid it. But, 20-22% of Americans who would normally be looking for a job can't find one - yet, the government would like us to believe this number is only 9%. Hmmm?
Thursday, February 3, 2011
Planet Hunt Comes up With Host of New Candidates - WSJ.com
Planet Hunt Comes up With Host of New Candidates - WSJ.com
I guess we know how to cure the unemployment problem!
We might also consider this a warning that the 'frontier' has been opened. We can either go through it on our own or wait for others to come through to us. History suggests the latter is almost always unpleasant with very bad consequences.
I guess we know how to cure the unemployment problem!
We might also consider this a warning that the 'frontier' has been opened. We can either go through it on our own or wait for others to come through to us. History suggests the latter is almost always unpleasant with very bad consequences.
Tuesday, February 1, 2011
Consumers Going Into Their Shells - WSJ.com
DELUSIONS VIS-A-VIS THE CENTRAL BANK: Consumers Going Into Their Shells - WSJ.com
Some of this points to the dilemma that the above-the-regression-line economies face - i.e. to stay above the line, you have to have something extra. It can be more investment (read: capital), more education, better coordination and management, etc. But, it has to be something. That's what 'above the regression line' means - a higher income and standard of living.
If the schools don't push to provide a better education and every wage earner has to support a retiree and welfare recipient, that just drags down the real/effective wage of the worker.
Meanwhile, in developing countries, the worker has no one but themselves to support.
Add in taxes on the capital creators income in one country, but not the other, one can see how additional capital is created in the country with less social spending.
Meanwhile, the delusion of developed country prosperity may well be being sustained by central bank printing.
Some of this points to the dilemma that the above-the-regression-line economies face - i.e. to stay above the line, you have to have something extra. It can be more investment (read: capital), more education, better coordination and management, etc. But, it has to be something. That's what 'above the regression line' means - a higher income and standard of living.
If the schools don't push to provide a better education and every wage earner has to support a retiree and welfare recipient, that just drags down the real/effective wage of the worker.
Meanwhile, in developing countries, the worker has no one but themselves to support.
Add in taxes on the capital creators income in one country, but not the other, one can see how additional capital is created in the country with less social spending.
Meanwhile, the delusion of developed country prosperity may well be being sustained by central bank printing.
Rising Rates Fuel Boomlet in Buyouts - WSJ.com
DIFFERENT THIS TIME? MAYBE SOMEONE CAN ANSWER THESE QUESTIONS: Rising Rates Fuel Boomlet in Buyouts - WSJ.com
The question that would seem reasonable to keep in the forefront of one's thinking would be the situation in the 1970's in which Fed share of GDP over 19% or so was credited with the 'stag' part of stagflation.
While some are lauding the lack of inflation in the US right now - i.e. the 'flation' part of the above - others credit CPI adjustments coming from housing (rent) as holding down the number.
An unadjusted number for CPI is clearly evident in China.
What does all this portend? Obviously there are differing points of view.
Some see the economy turning around (but what about the GDP % of 25 vs. 19?)
Some see no inflation (but there are the questions).
So, if things are 'really different' this time, can someone explain what the differences might be? (It would seem as though the production numbers now equal to 2007 but with some 15% greater unemployment (approx.21 - 5) now vs. then, would suggest we've had stunning productivity gains; or, we've subtantially increased the amount of capital behind each job (thus to create new jobs for some of the 21% unemployed or underemployed will take a lot more capital; etc.).
The questions just keep coming and the answers stay hidden or few.
The question that would seem reasonable to keep in the forefront of one's thinking would be the situation in the 1970's in which Fed share of GDP over 19% or so was credited with the 'stag' part of stagflation.
While some are lauding the lack of inflation in the US right now - i.e. the 'flation' part of the above - others credit CPI adjustments coming from housing (rent) as holding down the number.
An unadjusted number for CPI is clearly evident in China.
What does all this portend? Obviously there are differing points of view.
Some see the economy turning around (but what about the GDP % of 25 vs. 19?)
Some see no inflation (but there are the questions).
So, if things are 'really different' this time, can someone explain what the differences might be? (It would seem as though the production numbers now equal to 2007 but with some 15% greater unemployment (approx.21 - 5) now vs. then, would suggest we've had stunning productivity gains; or, we've subtantially increased the amount of capital behind each job (thus to create new jobs for some of the 21% unemployed or underemployed will take a lot more capital; etc.).
The questions just keep coming and the answers stay hidden or few.
Subscribe to:
Posts (Atom)
