FRIEDMAN, KEYNES AND LAFFER - WHO'S RIGHT? Slowdown in Growth Is Becoming a Concern - WSJ.com
One might suggest that the media and consumers should recognize that Obama's hope that things are 'different this time' is the proverbial definition of an idiot (when you keep doing the same things and expect a different result).
First, he should also recognize we have a bifurcated economy where skills and education are in high demand and have rising salaries and low unemployment.
With policies that are anti-business, pro-union, pro-entitlements, geared to higher and higher shares of GDP being spent on entitlement consumption (read: high taxes, etc.), then is it any wonder that the economy is not recovering as it would be without these job-growth-constraining policies?
History is a very good teacher - as long as one looks in the right place. An example is the monetary vs. tax rate changes debate over causes of the 1930's depression.
Milton Friedman posited that the length of the Depression was due to the tightening of the money supply. Keynes argued that it was due to a lack of demand. Arthur Laffer points to the increasingly higher tax rates during the Depression.
Clearly Bernanke and Obama are of the Friedman and Keynes schools. And, both of their policy choices run in 180 degrees the opposite direction from Laffer's position.
If we open our eyes, it would seem as though Bernanke's and Obama's policies are/have failed. In fact, as discussed, they are causing their own problems.
No one knows how it will all play out; however, it is usually the case that when major changes need to be made, the investment dollars need to be allocated to help make these changes. This includes a review of policies and procedures that suck away the dollars needed to make these investments, as well as changes to policies to speed up the impact of the investments.
Again, if one believes in Keynes, one doesn't invest in the economy, one invests in consumer spending - i.e. Obama and Democrats.
Along with the dilemma created by focusing on Keynes-type solutions, Obama is telling the average Joe and Jane on the street - especially, if they are retired - that more taxes (read: anti-Laffer) will solve the problem of keeping their entitlements at current levels.
Thus, the public is encouraged to believe things need not change and the policymakers of the left believe things will turn out differently this time. Not a very sanguine prescription.
Tuesday, May 31, 2011
Sunday, May 29, 2011
An Epidemic of Amnesia - Barrons.com
A PLAGUE NO MATTER HOW YOU LOOK AT IT: An Epidemic of Amnesia - Barrons.com
It would seem reasonable at this point to bring up the nemesis that appears to be the real plague (and, as with the Romans in the 2nd century AD), they really don't want to face what they are up against.
In other words, fiscal type policies. (For the Romans it was the epidemics from the East.)
Examples here in Europe and let's take Portugal, are government policies that drive business away - and thus, increase the cost of labor and the returns on capital. These could be changed. A few nibbles at change are being made.
But, as in the US (especially with Medicare), who's to complain when buying a service at 10 cents on the dollar?
People get to believe they are 'entitled' to subsidized whatever. In Greece and Portugal, it may be a featherbedded job at some government-owned entity like the rail roads.
When one thinks back to the 70's, it was really the change in fiscal policy that made reining in inflation possible.
To think inflation will cure any problems without addressing the underlying cause of those problems (don't read: too much accumulated debt), the problems won't disappear; and, if memory serves, the 1980 election was to a large extent fought over the issues before the US today - i.e. can we focus on getting the economy to grow again (Republicans and esp. the Tea Party); or, are we concerned about social redistribution and hoping for growth with added regulations, taxes and the impact of the share of GDP going to government ignored (Democrats).
It would seem reasonable at this point to bring up the nemesis that appears to be the real plague (and, as with the Romans in the 2nd century AD), they really don't want to face what they are up against.
In other words, fiscal type policies. (For the Romans it was the epidemics from the East.)
Examples here in Europe and let's take Portugal, are government policies that drive business away - and thus, increase the cost of labor and the returns on capital. These could be changed. A few nibbles at change are being made.
But, as in the US (especially with Medicare), who's to complain when buying a service at 10 cents on the dollar?
People get to believe they are 'entitled' to subsidized whatever. In Greece and Portugal, it may be a featherbedded job at some government-owned entity like the rail roads.
When one thinks back to the 70's, it was really the change in fiscal policy that made reining in inflation possible.
To think inflation will cure any problems without addressing the underlying cause of those problems (don't read: too much accumulated debt), the problems won't disappear; and, if memory serves, the 1980 election was to a large extent fought over the issues before the US today - i.e. can we focus on getting the economy to grow again (Republicans and esp. the Tea Party); or, are we concerned about social redistribution and hoping for growth with added regulations, taxes and the impact of the share of GDP going to government ignored (Democrats).
Saturday, May 28, 2011
Europe's Dispute on Crisis Intensifies - WSJ.com
GOOD MONEY AFTER BAD: Europe's Dispute on Crisis Intensifies - WSJ.com
Isn't this all a reminder of the expression - "Don't throw good money after bad?"
In other words (and this has to be faced by the US as well as many European countries and lots of average citizens), are the countries spending too much? Is government too big and being relied on too much? Do unions have too much power - are they holding back growth and rationalization of the cost of labor?
Etc., etc.
To some extent, it's a question of where the country and its citizens are on the global regression line in terms of consuming global resources. In other words, if a country like the US (with 3% of the worlds population and consuming 25% of the world's resources) wants to stay as far above the regression line as it is now, can it afford not to focus on productivity and investment? (i.e. can it really afford to take capital and spend it on social consumption?)
The new talk of a double dip in the US with all of the tax stimulus being thrown at the economy would suggest something is wrong in the Obama policies (let's not touch the Fed and the half-hearted Republicans) - or the citizens who so happily believe they can keep big government if only the rich would pay more!
Which gets us right back to the Greeks, etc. Here the people want to believe the 'rich' Germans are just being selfish. A bit more help and the Greeks can basically hope that doing what they have been doing (which got themselves in this debt pickle in the first place) will somehow turn out differently - next time!
(As an old saying goes in talking about what defines someone as insidiously stupid, it is something about continuing to do the same thing over and over again, but somehow expecting a different result!
Thus, the Greeks don't really want to change - my gosh not having government jobs and early retirement and no competition in services, etc. - well, why not? The Greeks can't even conceive of what a competitive economy looks like. Until they do - i.e. they have to - it would seem as though the debt problem is only growing bigger and the resources that could have been used productively are being further squandered in support of a status quo.
Too bad the young people are not more aware of what is really happening and/or they cared enough to try and really shake things up! (I sure recall how the golden 1960's in the US was squandered with a half-hearted war and too much social consciousness - effectively a politically bought decade of stagnation and inflation. It didn't have to happen; but, it did. Europe and the US don't have to stagnate their economies for the sake of the non-producers and the under productive but, that's politics. Lie to people and they won't know that they are hurting themselves).
Isn't this all a reminder of the expression - "Don't throw good money after bad?"
In other words (and this has to be faced by the US as well as many European countries and lots of average citizens), are the countries spending too much? Is government too big and being relied on too much? Do unions have too much power - are they holding back growth and rationalization of the cost of labor?
Etc., etc.
To some extent, it's a question of where the country and its citizens are on the global regression line in terms of consuming global resources. In other words, if a country like the US (with 3% of the worlds population and consuming 25% of the world's resources) wants to stay as far above the regression line as it is now, can it afford not to focus on productivity and investment? (i.e. can it really afford to take capital and spend it on social consumption?)
The new talk of a double dip in the US with all of the tax stimulus being thrown at the economy would suggest something is wrong in the Obama policies (let's not touch the Fed and the half-hearted Republicans) - or the citizens who so happily believe they can keep big government if only the rich would pay more!
Which gets us right back to the Greeks, etc. Here the people want to believe the 'rich' Germans are just being selfish. A bit more help and the Greeks can basically hope that doing what they have been doing (which got themselves in this debt pickle in the first place) will somehow turn out differently - next time!
(As an old saying goes in talking about what defines someone as insidiously stupid, it is something about continuing to do the same thing over and over again, but somehow expecting a different result!
Thus, the Greeks don't really want to change - my gosh not having government jobs and early retirement and no competition in services, etc. - well, why not? The Greeks can't even conceive of what a competitive economy looks like. Until they do - i.e. they have to - it would seem as though the debt problem is only growing bigger and the resources that could have been used productively are being further squandered in support of a status quo.
Too bad the young people are not more aware of what is really happening and/or they cared enough to try and really shake things up! (I sure recall how the golden 1960's in the US was squandered with a half-hearted war and too much social consciousness - effectively a politically bought decade of stagnation and inflation. It didn't have to happen; but, it did. Europe and the US don't have to stagnate their economies for the sake of the non-producers and the under productive but, that's politics. Lie to people and they won't know that they are hurting themselves).
Saudi Bid to Curb Iran Worries U.S. - WSJ.com
Saudi Bid to Curb Iran Worries U.S. - WSJ.com
Ah, but don't you know? He also believes people work as hard if they pay all of their earnings to the government in taxes and that if you want to grow a business, all you need to do is pay overpaid and over-benefited union people and never have profits left over to invest, etc.
The administration is in liberal la-la-land. History says the direction for change may take a long time; but, the change itself often comes quickly.
Obama seems to be in the same state of mind as Neville Chamberlain in dealing with Hitler. He doesn't see bad motives or personal agendas.
The risks to everyone (economy included) grow with a Chamberlain (even Carteresque) type president.
And, as with the English upon Chamberlain's return, Americans want to belief the pap fed them by Washington - but ask the question, "Why isn't the US growing terrifically this year with all the tax and monetary stimulus?"
Obama needs to spend sometime in front of a mirror (oh, sorry, I guess he does and that's why he believes what he says - no awareness of a larger reality).
Oh yes, one might think of the gold signal as a more independent voter's confidence index in Washington.
Ah, but don't you know? He also believes people work as hard if they pay all of their earnings to the government in taxes and that if you want to grow a business, all you need to do is pay overpaid and over-benefited union people and never have profits left over to invest, etc.
The administration is in liberal la-la-land. History says the direction for change may take a long time; but, the change itself often comes quickly.
Obama seems to be in the same state of mind as Neville Chamberlain in dealing with Hitler. He doesn't see bad motives or personal agendas.
The risks to everyone (economy included) grow with a Chamberlain (even Carteresque) type president.
And, as with the English upon Chamberlain's return, Americans want to belief the pap fed them by Washington - but ask the question, "Why isn't the US growing terrifically this year with all the tax and monetary stimulus?"
Obama needs to spend sometime in front of a mirror (oh, sorry, I guess he does and that's why he believes what he says - no awareness of a larger reality).
Oh yes, one might think of the gold signal as a more independent voter's confidence index in Washington.
Tuesday, May 24, 2011
Prison Ruling Roils California Budget Talks - WSJ.com
Prison Ruling Roils California Budget Talks - WSJ.com
Maybe it is time the US assess why it has the world's highest per capita incarceration rate?
Could it be that public unions, which might otherwise be somewhat liberal, are hardnosed about crime to support union jobs; and, the religious right is the party of hate and opprobrium, so they like to tell other people how to live their lives. A fateful combination!
Maybe it is time the US assess why it has the world's highest per capita incarceration rate?
Could it be that public unions, which might otherwise be somewhat liberal, are hardnosed about crime to support union jobs; and, the religious right is the party of hate and opprobrium, so they like to tell other people how to live their lives. A fateful combination!
Thursday, May 19, 2011
Oil Futures Decline As Economic Data Disappoints - WSJ.com
CREDIT LINES AND SPENDING: Oil Futures Decline As Economic Data Disappoints - WSJ.com
As we look at the economy, it would seem reasonable to take a glance at what happens when Obama's socially conscious policies have been followed elsewhere. (Needless to say the picture isn't good!)
One can't help but think about the parallels the US under the Democrats has to a family where one of the partners seems in control (read: the spender) and thinks that every whim and wish of the children needs to be satisfied. At best, they fail to fix the roof on the house, maybe consider putting one of the staff on shorter hours - but, the little kids always get the extras - because they are just so important!
And, we would all expect the banker to start raising interest rates and restricting the family's credit line.
Of course, the spending parent (read: Democrats and Obama) can't understand why.
The US is in the position of just such an overspending family. The Republicans want to rein in spending, the Democrats don't want to cut back.
Luckily, the world's investors haven't cut back on the US's seemingly endless credit line.
But, it's illogical to assume this will go on forever.
Just as with the family that would spend on ballet lessons and private tutors, big vacations and fancy cars and new TVs - all the while forgoing roof repairs and maybe downsizing on the big house - so we have to look at the US.
Just as it was illogical for house prices to go up forever, so it is illogical to think that the US can under-invest in jobs and incur debt for consumption.
To listen to those who think the US debt ceiling should automatically be raised - because it has to be - perhaps a rethink as to what a banker would do to a family spending beyond its means should be given some consideration.
As we look at the economy, it would seem reasonable to take a glance at what happens when Obama's socially conscious policies have been followed elsewhere. (Needless to say the picture isn't good!)
One can't help but think about the parallels the US under the Democrats has to a family where one of the partners seems in control (read: the spender) and thinks that every whim and wish of the children needs to be satisfied. At best, they fail to fix the roof on the house, maybe consider putting one of the staff on shorter hours - but, the little kids always get the extras - because they are just so important!
And, we would all expect the banker to start raising interest rates and restricting the family's credit line.
Of course, the spending parent (read: Democrats and Obama) can't understand why.
The US is in the position of just such an overspending family. The Republicans want to rein in spending, the Democrats don't want to cut back.
Luckily, the world's investors haven't cut back on the US's seemingly endless credit line.
But, it's illogical to assume this will go on forever.
Just as with the family that would spend on ballet lessons and private tutors, big vacations and fancy cars and new TVs - all the while forgoing roof repairs and maybe downsizing on the big house - so we have to look at the US.
Just as it was illogical for house prices to go up forever, so it is illogical to think that the US can under-invest in jobs and incur debt for consumption.
To listen to those who think the US debt ceiling should automatically be raised - because it has to be - perhaps a rethink as to what a banker would do to a family spending beyond its means should be given some consideration.
Sunday, May 15, 2011
Treasuries Rally Amid Worries of Slower Economic Growth - Barrons.com
DEFLATION FROM WHERE: Treasuries Rally Amid Worries of Slower Economic Growth - Barrons.com
As for deflation, one wonders where it will come from?
Sure, there are some nice operating margins, but are the Chinese going to charge less for the goods they produce (not only are their domestic costs rising but any currency revaluations of the yuan will work against lower costs for US domestic consumers).
Global commodities are up and if there are successful Asian and developing economies, their regression to the consumption mean has a lot more of a way to go on the upside.
The developing world is highly in debt. I've yet to hear of over-leveraged consumers or businesses getting lower rates.
Lower housing prices have seemed to mask US inflation numbers for quite a while - but is this really how we want to assess prices? Etc.
As for deflation, one wonders where it will come from?
Sure, there are some nice operating margins, but are the Chinese going to charge less for the goods they produce (not only are their domestic costs rising but any currency revaluations of the yuan will work against lower costs for US domestic consumers).
Global commodities are up and if there are successful Asian and developing economies, their regression to the consumption mean has a lot more of a way to go on the upside.
The developing world is highly in debt. I've yet to hear of over-leveraged consumers or businesses getting lower rates.
Lower housing prices have seemed to mask US inflation numbers for quite a while - but is this really how we want to assess prices? Etc.
Treasuries Rally Amid Worries of Slower Economic Growth - Barrons.com
HOW OBAMANOMICS AND THE HOUSING CRISIS SEEM SIMILAR: Treasuries Rally Amid Worries of Slower Economic Growth - Barrons.com
Somehow the Obama and liberals (read also 'unions') economic policy is horrifyingly reminiscent of the beliefs that led up to what one could call the 'housing bubble' (or the 'big housing bubble').
In other words, they both rely on a lack of fundamental underlying logic - to wit, in the case of the housing bubble that, all else being equal, housing prices can continue to rise disproportionately to people's (read: 'buyers') income with no constraints on added supply.
Likewise, the liberal economic mantra seems to be that no matter what one does to the disincentives (read: taxes, regulatory environment, immigration policies, pro-union policies, support for non-outcome based public education, etc.) towards business and doing business in America, American investors and entrepreneurs will somehow stick it out and still create jobs like they have in the past.
Now it seems that a bit of reality is starting to come round - in that, with all the stimulus (or apparent stimulus) in tax cuts again this year, the over-riding anti-business tone and lack of fiscal realism is clearly impacting the economic picture.
(One sees all of these efforts to find miscreants in the private business sector but one doesn't see any effort to go after the miscreants in the public sector, politicians and union leaders. Does it matter????? Apparently, yes!)
Somehow the Obama and liberals (read also 'unions') economic policy is horrifyingly reminiscent of the beliefs that led up to what one could call the 'housing bubble' (or the 'big housing bubble').
In other words, they both rely on a lack of fundamental underlying logic - to wit, in the case of the housing bubble that, all else being equal, housing prices can continue to rise disproportionately to people's (read: 'buyers') income with no constraints on added supply.
Likewise, the liberal economic mantra seems to be that no matter what one does to the disincentives (read: taxes, regulatory environment, immigration policies, pro-union policies, support for non-outcome based public education, etc.) towards business and doing business in America, American investors and entrepreneurs will somehow stick it out and still create jobs like they have in the past.
Now it seems that a bit of reality is starting to come round - in that, with all the stimulus (or apparent stimulus) in tax cuts again this year, the over-riding anti-business tone and lack of fiscal realism is clearly impacting the economic picture.
(One sees all of these efforts to find miscreants in the private business sector but one doesn't see any effort to go after the miscreants in the public sector, politicians and union leaders. Does it matter????? Apparently, yes!)
Friday, May 13, 2011
Europe Will Need to Dig Deeper for Greece - WSJ.com
NURTURE OR NOT (BUSINESS)!: Europe Will Need to Dig Deeper for Greece - WSJ.com
Isn't there a question begging to be inserted here - i.e. "What does it say when banks find better investment opportunities in giving government money rather than the private sector?"
Clearly the communist / socialist labor practices in periphery countries go against all logic (jobs for life, 3 people doing the job 1 person could do, regulations for regulations sake, belief that performance and productivity have no relationship to salary or compensation, etc.). Yet, banks freely lent to these governments.
The US is in the same position. Obama and his liberal allies want to spend more money through the government than they can possible tax from the rich. The public is deluded (happily) into believing the bounty of government can be maintained by just getting the rich to pay.
Every statistic produced shows the liberals are in the proverbial 'la-la-land'. Bill Gross at least is refusing to buy government bonds.
Sadly, support for private sector initiatives and investment (as just talked about on Bloomberg) is a 'tone' against business that makes any investors extremely cautious and distrusting.
It's sort of like a family. Kids can know they have a pair of loving parents who are nurturing, etc. - or, they can know they have the opposite. Right now, governments find it hard to nurture business because too many people believe they are 'entitled' to something they can't earn and only government can redistribute.
This redistribution can come from taxes or borrowing (i.e. from the income of others or their savings). Either way, redistribution doesn't build the wealth of society. It does the opposite.
Isn't there a question begging to be inserted here - i.e. "What does it say when banks find better investment opportunities in giving government money rather than the private sector?"
Clearly the communist / socialist labor practices in periphery countries go against all logic (jobs for life, 3 people doing the job 1 person could do, regulations for regulations sake, belief that performance and productivity have no relationship to salary or compensation, etc.). Yet, banks freely lent to these governments.
The US is in the same position. Obama and his liberal allies want to spend more money through the government than they can possible tax from the rich. The public is deluded (happily) into believing the bounty of government can be maintained by just getting the rich to pay.
Every statistic produced shows the liberals are in the proverbial 'la-la-land'. Bill Gross at least is refusing to buy government bonds.
Sadly, support for private sector initiatives and investment (as just talked about on Bloomberg) is a 'tone' against business that makes any investors extremely cautious and distrusting.
It's sort of like a family. Kids can know they have a pair of loving parents who are nurturing, etc. - or, they can know they have the opposite. Right now, governments find it hard to nurture business because too many people believe they are 'entitled' to something they can't earn and only government can redistribute.
This redistribution can come from taxes or borrowing (i.e. from the income of others or their savings). Either way, redistribution doesn't build the wealth of society. It does the opposite.
Thursday, May 12, 2011
Voters Dislike GOP Plan to Change Medicare, Medicaid - Washington Wire - WSJ
LIKE TWO PARENTS TELLING A CHILD TWO DIFFERENT THINGS: Voters Dislike GOP Plan to Change Medicare, Medicaid - Washington Wire - WSJ
Most voters are like little children. If one parent says they can do something (or have something - i.e. in this case a Medicare program that is unaffordable and only appears to work), they don't want to listen to the other parent who says the kids can't have something.
As for understanding economics, anyone with a union mentality always believes they are entitled to more and, as shown with the UAW and GM, they expect the government to have all other taxpayers pay for their bankrupting of an industry and the destruction of investors' capital.
It's just like the discussion in the other part of the paper about the 'tax holiday'. Some Americans are deluded enough to believe the US will actually eventually get to 'tax' those overseas profits. They never start to ask themselves whether the businesses aren't being forced to invest in jobs outside of the US.
It's a shame more people don't think about economics on a grander scale as they do about their own family spending. If they did, they'd better realize that bargains and discounts work to move merchandise (i.e. create jobs) and overpriced products just sit on the shelf (i.e. unemployment).
Most voters are like little children. If one parent says they can do something (or have something - i.e. in this case a Medicare program that is unaffordable and only appears to work), they don't want to listen to the other parent who says the kids can't have something.
As for understanding economics, anyone with a union mentality always believes they are entitled to more and, as shown with the UAW and GM, they expect the government to have all other taxpayers pay for their bankrupting of an industry and the destruction of investors' capital.
It's just like the discussion in the other part of the paper about the 'tax holiday'. Some Americans are deluded enough to believe the US will actually eventually get to 'tax' those overseas profits. They never start to ask themselves whether the businesses aren't being forced to invest in jobs outside of the US.
It's a shame more people don't think about economics on a grander scale as they do about their own family spending. If they did, they'd better realize that bargains and discounts work to move merchandise (i.e. create jobs) and overpriced products just sit on the shelf (i.e. unemployment).
Sunday, May 8, 2011
Plans for Slashing Corporate Taxes Worry Some Firms - WSJ.com
NANNY STATE QUESTION: Plans for Slashing Corporate Taxes Worry Some Firms - WSJ.com
Question:
(re: the poor state of education in the US)
Maybe the "teachers" at home are not doing their job?
Answer:
It would certainly seem as though that's the idea of the "nanny-state" - i.e. no one needs to be responsible for themselves - it's always someone else's fault.
It's the nemesis behind the idea of "entitlement". Is it the entitlement to the 'opportunity' or to the 'outcome'.
I know in California, the teachers union believed in the 'outcome'; and, the same is endemic in the idea of 'social promotion' - where, to not make kids feel bad in 2nd and 3rd grades (for example), the kids are allowed to move ahead with their age group, even if they haven't mastered the rudiments of reading and writing. As a result, the kids are lost as they move up in grades, because they lack some basic skills.
All well-meaning parts of the liberal agenda - but, screwed up in practice.
We will have to see how it all plays out for the economy - meanwhile, how can one not expect the halting recovery?
Question:
(re: the poor state of education in the US)
Maybe the "teachers" at home are not doing their job?
Answer:
It would certainly seem as though that's the idea of the "nanny-state" - i.e. no one needs to be responsible for themselves - it's always someone else's fault.
It's the nemesis behind the idea of "entitlement". Is it the entitlement to the 'opportunity' or to the 'outcome'.
I know in California, the teachers union believed in the 'outcome'; and, the same is endemic in the idea of 'social promotion' - where, to not make kids feel bad in 2nd and 3rd grades (for example), the kids are allowed to move ahead with their age group, even if they haven't mastered the rudiments of reading and writing. As a result, the kids are lost as they move up in grades, because they lack some basic skills.
All well-meaning parts of the liberal agenda - but, screwed up in practice.
We will have to see how it all plays out for the economy - meanwhile, how can one not expect the halting recovery?
Alan Abelson's Up & Down Wall Street - Barrons.com
WHAT'S THE GOVERNMENT'S TAKE GOING TO BE?:Alan Abelson's Up & Down Wall Street - Barrons.com
What puzzles me is the lack of attention to climate - and, by this I mean the climate to reward investors and entrepreneurs vs. bureaucrats and 'the entitled'?
Just casually looking at reports of new factories, it would seem as though huge investment sums are needed for the creation of a rather paltry number of jobs. To wit, if the US is going to be creating seriously well-paying jobs, the amount of investment will have to go up.
One of the things that will have to be resolved would seem to be whether the federal government is going to be taking 25% of GDP (Obama and liberals) or less (Republicans).
What puzzles me is the lack of attention to climate - and, by this I mean the climate to reward investors and entrepreneurs vs. bureaucrats and 'the entitled'?
Just casually looking at reports of new factories, it would seem as though huge investment sums are needed for the creation of a rather paltry number of jobs. To wit, if the US is going to be creating seriously well-paying jobs, the amount of investment will have to go up.
One of the things that will have to be resolved would seem to be whether the federal government is going to be taking 25% of GDP (Obama and liberals) or less (Republicans).
Plans for Slashing Corporate Taxes Worry Some Firms - WSJ.com
KEY IS THE SIZE OF GOVERNMENT: Plans for Slashing Corporate Taxes Worry Some Firms - WSJ.com
S-Corps that have a small ownership are likely also entities run by very bright people. With all of the changes in technology, the US should be paying attention to the ability of very bright business owners that have businesses built around intellectual capital to just move out of the US.
The smarter and more affluent you are, the easier it is to do so.
The critical issue is really the ability, need or implications of letting the size of government grow.
Everything one hears about the education system suggests the current generation is less educated than the last. It's hard not to consider this failure has to be laid clearly on the government and teachers unions. Thus, they both need to be cutback and their power and influence markedly reduced.
S-Corps that have a small ownership are likely also entities run by very bright people. With all of the changes in technology, the US should be paying attention to the ability of very bright business owners that have businesses built around intellectual capital to just move out of the US.
The smarter and more affluent you are, the easier it is to do so.
The critical issue is really the ability, need or implications of letting the size of government grow.
Everything one hears about the education system suggests the current generation is less educated than the last. It's hard not to consider this failure has to be laid clearly on the government and teachers unions. Thus, they both need to be cutback and their power and influence markedly reduced.
Saturday, May 7, 2011
Review & Outlook: The New Lackluster - WSJ.com
Review & Outlook: The New Lackluster - WSJ.com
Some less than educated but highly politicized liberal wrote:
"History does not support your assertion that less government = higher prosperity.
If that were the case, then Somalia, with no government would be the most prosperous country on earth.
In the US in the 1960's and 1970's - one average working person could support a family with a house and car
That was with a lot of government vs. today.
The real difference is more one-way trade agreements & global labor arbitrage = less prosperity for the average American."
In response:
Ah, but do some math and check the percent of GDP taken by government!
Also, since the liberal education reforms and teachers unions have throttled and despoiled the educational system, the US now has a less-educated workforce (according to recent articles) than back a generation or more back.
And, if we have even more skilled and aggressive economic competitors, then, like with any business, one would think we would want to invest more in the economy to stay competitive. But no, not in liberal thinking. Instead, the US has said no cutbacks to expenditure programs like Medicaid and Medicare. These are consumption - not investments.
As for "less prosperity for the average American", Americans were told back in the 1960's and 70's to recognize that their outsized demand for the world's resources were something they should pay attention to. Now that other countries are demanding access to and a greater (more equal) sharing of those resources, many Americans may not like what this means (i.e. a change in US living standards); but, sadly, the politicians of the day (read; Obama, et al) haven't a clue (or choose to ignore) the basic economics.
Where are positive policies? Even a village idiot can see where liberal policies lead. But, as the old saying goes - "it's the blind leading the blind"; and, as Mark Twain would say, "It ain't what you don't know that gets you into trouble. It's what you know for sure that just ain't so."
Some less than educated but highly politicized liberal wrote:
"History does not support your assertion that less government = higher prosperity.
If that were the case, then Somalia, with no government would be the most prosperous country on earth.
In the US in the 1960's and 1970's - one average working person could support a family with a house and car
That was with a lot of government vs. today.
The real difference is more one-way trade agreements & global labor arbitrage = less prosperity for the average American."
In response:
Ah, but do some math and check the percent of GDP taken by government!
Also, since the liberal education reforms and teachers unions have throttled and despoiled the educational system, the US now has a less-educated workforce (according to recent articles) than back a generation or more back.
And, if we have even more skilled and aggressive economic competitors, then, like with any business, one would think we would want to invest more in the economy to stay competitive. But no, not in liberal thinking. Instead, the US has said no cutbacks to expenditure programs like Medicaid and Medicare. These are consumption - not investments.
As for "less prosperity for the average American", Americans were told back in the 1960's and 70's to recognize that their outsized demand for the world's resources were something they should pay attention to. Now that other countries are demanding access to and a greater (more equal) sharing of those resources, many Americans may not like what this means (i.e. a change in US living standards); but, sadly, the politicians of the day (read; Obama, et al) haven't a clue (or choose to ignore) the basic economics.
Where are positive policies? Even a village idiot can see where liberal policies lead. But, as the old saying goes - "it's the blind leading the blind"; and, as Mark Twain would say, "It ain't what you don't know that gets you into trouble. It's what you know for sure that just ain't so."
Wednesday, May 4, 2011
Loan Appetite in Emerging World Is Strong - WSJ.com
THE US SHOULD STOP BLAMING OTHERS AND LOOK WITHIN: Loan Appetite in Emerging World Is Strong - WSJ.com
Friedrich, all you say about China may well be true. It was certainly true in the US at that stage of the game.
But, the US shouldn't try to make believe that only the Chinese have glass houses. (A clear subject of discussion in the US is the impact of all the chemicals we have to ostensibly make life better and more comfortable.)
Notwithstanding the environmental lessons, it should be clear that to create economically competitive jobs, the US will need to have a better educated work force backed by larger amounts of capital.
Pandering to the liberal and teachers union academic agenda has reportedly left the current generation of US citizens less-well educated than earlier generations. And, all the hue and cry about wage gaps is a logical consequence of failures to educate and train.
As for additional investment, all it takes is a brief look at the cost of some new plant going in and a mathematical reflection on the cost per new permanent job to realize the US is under-investing. So, what do the politicians do? They beat up on investors and blame them for too few jobs. Instead the politicians should look in the mirror. Etc.
Americans should consider making positive changes to the American economy - rather than trying to make excuses to obviate the need for domestic structural economic changes!
Friedrich, all you say about China may well be true. It was certainly true in the US at that stage of the game.
But, the US shouldn't try to make believe that only the Chinese have glass houses. (A clear subject of discussion in the US is the impact of all the chemicals we have to ostensibly make life better and more comfortable.)
Notwithstanding the environmental lessons, it should be clear that to create economically competitive jobs, the US will need to have a better educated work force backed by larger amounts of capital.
Pandering to the liberal and teachers union academic agenda has reportedly left the current generation of US citizens less-well educated than earlier generations. And, all the hue and cry about wage gaps is a logical consequence of failures to educate and train.
As for additional investment, all it takes is a brief look at the cost of some new plant going in and a mathematical reflection on the cost per new permanent job to realize the US is under-investing. So, what do the politicians do? They beat up on investors and blame them for too few jobs. Instead the politicians should look in the mirror. Etc.
Americans should consider making positive changes to the American economy - rather than trying to make excuses to obviate the need for domestic structural economic changes!
Loan Appetite in Emerging World Is Strong - WSJ.com
IS THE US TRYING ALL THE WRONG SOLUTIONS?: Loan Appetite in Emerging World Is Strong - WSJ.com
There was an interesting book from the late 1960's or early 70's that talked about how hard it is for leading economies to stay in the lead and easy for emerging economies to catch up.
Someone from China must have read that book and a number of people in the US must have failed to read it (or forgotten about it).
There are lots of lamentations in the press and by comment leavers to the WSJ that bemoan all of the fall in wages, serious unemployment issues, etc. - but, there is a distinct lack of realization that the US (and those workers whom the educational establishment and unions have failed to provide the training and opportunities necessary - but that's another issue) consumes an absolutely disproportionate share of the world's resources.
Now that competition for those resources has been heating up, Americans should be helped to realize that economic growth is needed and it is difficult and expensive.
Instead, Bernanke seems to be acting like the person flooding their car with gas when it won't get started - and, we all know that doesn't really work.
Likewise, US immigration policies are cutting off the life-blood of future growth and instead sending all those entrepreneurial, highly-trained foreigners back home to create more-and-more competition for the American economy.
As for entitlements, the Democrats clearly think (along with the unions) that taking from one part of the economy (either through taxes or borrowing), that there is no impact or counter-pressure on the economy. To even believe this where the evidence in the US is so clear that these policies have disastrous longer-term results is 'the blind leading the blind'.
And, to put the icing on the cake, there was the press conference yesterday where reporters seemed concerned that the US Seal Team might have killed an 'unarmed' Bin Laden. Like, he was a criminal and his guilt was certainly not questionable. And, why should footsoldiers have the right to be killed but the government have decided it is wrong to knock off top management? Could this be an rather too obvious disingenuousness on the part of political leaders?
There was an interesting book from the late 1960's or early 70's that talked about how hard it is for leading economies to stay in the lead and easy for emerging economies to catch up.
Someone from China must have read that book and a number of people in the US must have failed to read it (or forgotten about it).
There are lots of lamentations in the press and by comment leavers to the WSJ that bemoan all of the fall in wages, serious unemployment issues, etc. - but, there is a distinct lack of realization that the US (and those workers whom the educational establishment and unions have failed to provide the training and opportunities necessary - but that's another issue) consumes an absolutely disproportionate share of the world's resources.
Now that competition for those resources has been heating up, Americans should be helped to realize that economic growth is needed and it is difficult and expensive.
Instead, Bernanke seems to be acting like the person flooding their car with gas when it won't get started - and, we all know that doesn't really work.
Likewise, US immigration policies are cutting off the life-blood of future growth and instead sending all those entrepreneurial, highly-trained foreigners back home to create more-and-more competition for the American economy.
As for entitlements, the Democrats clearly think (along with the unions) that taking from one part of the economy (either through taxes or borrowing), that there is no impact or counter-pressure on the economy. To even believe this where the evidence in the US is so clear that these policies have disastrous longer-term results is 'the blind leading the blind'.
And, to put the icing on the cake, there was the press conference yesterday where reporters seemed concerned that the US Seal Team might have killed an 'unarmed' Bin Laden. Like, he was a criminal and his guilt was certainly not questionable. And, why should footsoldiers have the right to be killed but the government have decided it is wrong to knock off top management? Could this be an rather too obvious disingenuousness on the part of political leaders?
Tuesday, May 3, 2011
High-Earning Households Pay Growing Share of Taxes - WSJ.com
High-Earning Households Pay Growing Share of Taxes - WSJ.com
Part and parcel to the above is that the country should be talking honestly about the employment situation - i.e. there is low unemployment for those with skills and an education.
Likewise, we've allowed overpaid teachers unions with restrictive educational mandates to degrade the educational system that is an absolute pre-requisite for better paying jobs. The number of anti-job policies from both parties is a very long list.
It's too bad an honest discussion of what could be done to improve the economy doesn't take on some of the sacred cows of the right (anti-immigrant, religious right, etc.) and the left (too much socialism, too little accountability, regulatory and tax policies, etc.).
We need to make America the place people want to live in to start and make prosperous businesses.
The disconnect is that many people feel this to be the case wherein the factual evidence is just the opposite.
As such, people can't make informed decisions because the politicians and media are insidiously undereducated.
Thus, the old Mark Twain saying, ""It ain't what you don't know that gets you into trouble. It's what you know for sure that just ain't so."
Part and parcel to the above is that the country should be talking honestly about the employment situation - i.e. there is low unemployment for those with skills and an education.
Likewise, we've allowed overpaid teachers unions with restrictive educational mandates to degrade the educational system that is an absolute pre-requisite for better paying jobs. The number of anti-job policies from both parties is a very long list.
It's too bad an honest discussion of what could be done to improve the economy doesn't take on some of the sacred cows of the right (anti-immigrant, religious right, etc.) and the left (too much socialism, too little accountability, regulatory and tax policies, etc.).
We need to make America the place people want to live in to start and make prosperous businesses.
The disconnect is that many people feel this to be the case wherein the factual evidence is just the opposite.
As such, people can't make informed decisions because the politicians and media are insidiously undereducated.
Thus, the old Mark Twain saying, ""It ain't what you don't know that gets you into trouble. It's what you know for sure that just ain't so."
Monday, May 2, 2011
States' Pay Cuts Present Mixed Economic Blessing - WSJ.com
States' LET'S EMPHASIZE THE 'NET POSITIVE': Pay Cuts Present Mixed Economic Blessing - WSJ.com
Gee - and, by not raising taxes, maybe more private sector employers will stay in the state or not close up shop.
There is an old saying about "economic utility", which is fostered by the ideas of supply and demand and choice.
When government decides to intervene with supply, demand or choice, the results are always net negative. But, Obama and the liberals and the unions don't get it. They think taking from workers and giving to non-workers is a net positive. As a result the economic rebound has been moribund at best.
The Republicans and their religious mullahs aren't off the hook either. The hate they preach has probably led to a decade of future foreign business leaders not coming to the US. The impact of this is still a few years off - but, it is clearly evident in the lack of economic growth.
Gee - and, by not raising taxes, maybe more private sector employers will stay in the state or not close up shop.
There is an old saying about "economic utility", which is fostered by the ideas of supply and demand and choice.
When government decides to intervene with supply, demand or choice, the results are always net negative. But, Obama and the liberals and the unions don't get it. They think taking from workers and giving to non-workers is a net positive. As a result the economic rebound has been moribund at best.
The Republicans and their religious mullahs aren't off the hook either. The hate they preach has probably led to a decade of future foreign business leaders not coming to the US. The impact of this is still a few years off - but, it is clearly evident in the lack of economic growth.
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