OBAMA AND THE CAMEL: Treasuries Still Seem a Safe Bet - Barrons.com
One can't help but think of the Obama Adminstration, its supporters and lackeys as the camel driver whose camel has grounded itself with the last straw; and, rather than start unloading the camel, the Obama drivers are hoping it will either get up on its own,after getting tired of sitting; or, they can find one more hand-out that will shake the camel from its malaise.
Anyone wanna bet on Obama?
Saturday, July 30, 2011
Dire Omen - Barrons.com
GDP ADJUSTED FOR INFLATION - A QUESTION: Dire Omen - Barrons.com
When we say "1.3% adjusted for inflation", one does sort of pause and wonder what inflation is actually being counted - since of course the pundits are replete with discourse on how much inflation is understating the facts?
Just wondering?
When we say "1.3% adjusted for inflation", one does sort of pause and wonder what inflation is actually being counted - since of course the pundits are replete with discourse on how much inflation is understating the facts?
Just wondering?
Dire Omen - Barrons.com
MORE ON KEYNES, MONETARISTS AND LAFFER: Dire Omen - Barrons.com
Another nagging question relates to the economic forecasting savants - i.e. what is their underlying economic belief construct?
To wit, it seems as though the Keynesians or the Monetarists are still in the ascendancy or at least the seats of power. And, as such, they tend to ignore the tax (both current and future) and regulatory policies of government and their impact on the economy.
Art Laffer talks about the Laffer Curve in taxes and it applies in an equal and horrifically correlated way to regulatory policies.
But somehow, Laffer is out and forecasts are wrong. Is it time to reassess?
Another nagging question relates to the economic forecasting savants - i.e. what is their underlying economic belief construct?
To wit, it seems as though the Keynesians or the Monetarists are still in the ascendancy or at least the seats of power. And, as such, they tend to ignore the tax (both current and future) and regulatory policies of government and their impact on the economy.
Art Laffer talks about the Laffer Curve in taxes and it applies in an equal and horrifically correlated way to regulatory policies.
But somehow, Laffer is out and forecasts are wrong. Is it time to reassess?
GOP's McConnell Likely Holds Key to Deal - WSJ.com
SATURDAY - WHAT MCCONNEL COULD SUGGEST AS A WAY OUT IN THE SENATE: GOP's McConnell Likely Holds Key to Deal - WSJ.com
As an alternative to the balanced budget amendment, might one suggest putting into hiatus and limbo ObamaCare and Dodd-Frank - all to be considered anew by a new Congress and President in 2012?
Not only would this be a Tea Party win, it would not be a total loss for the President.
If Obama, Pelosi, Reid, et al. feel the above to bills are the way the country should move forward, they should have no qualms about putting it to the test in the Fall of 2012.
As an alternative to the balanced budget amendment, might one suggest putting into hiatus and limbo ObamaCare and Dodd-Frank - all to be considered anew by a new Congress and President in 2012?
Not only would this be a Tea Party win, it would not be a total loss for the President.
If Obama, Pelosi, Reid, et al. feel the above to bills are the way the country should move forward, they should have no qualms about putting it to the test in the Fall of 2012.
Economy Losing Its Cushion - WSJ.com
ON OBESE KIDS WITH EARLY DIABETES AND PARENTAL RESPONSIBILITIES: Economy Losing Its Cushion - WSJ.com
You are right that people get in bed with the devil. It's Chicago politics - the Chicago way.
Sadly, the hole his policies and those of Pelosi / Reid are digging is growing particularly deep.
He tells the American people more of the same will cure things if we only tax the rich more (the so-called rich of course).
People desperately want to believe.
Obama wants to convince enough Americans that more of his same-ol, same-ol will eventually turn things around and he can get re-elected.
He's telling people what they want to hear. It's just that the broader economy is hammering them with other information (such as the latest GDP statistics).
The GDP is doing a very poor job of putting the reins on the low hanging fruit of ObamaCare, Dodd-Frank and the corporate tax code.
We have yet to see what the budget for the fiscal year starting in October will look like.
Obama is a canny politician and he is telling people what they want to hear. I think of it as the parent telling the kid not to worry about all the talk about sugar, soda and snack foods being a problem. Thus the kid (read here the economy) may get fat and obese (read: too much government and social programs) and become a childhood diabetic (again, our sick economy) - but, like the parents with little education, the current administration really doesn't think it is doing anything wrong.
And, like the kid who gets fat and becomes an early diabetic, the correlation with diet and health isn't made because the kid doesn't know enough. The parent (read: government and maybe the media to some extent) failed in its parental (read fiscal and tax policies) responsibilities.
You are right that people get in bed with the devil. It's Chicago politics - the Chicago way.
Sadly, the hole his policies and those of Pelosi / Reid are digging is growing particularly deep.
He tells the American people more of the same will cure things if we only tax the rich more (the so-called rich of course).
People desperately want to believe.
Obama wants to convince enough Americans that more of his same-ol, same-ol will eventually turn things around and he can get re-elected.
He's telling people what they want to hear. It's just that the broader economy is hammering them with other information (such as the latest GDP statistics).
The GDP is doing a very poor job of putting the reins on the low hanging fruit of ObamaCare, Dodd-Frank and the corporate tax code.
We have yet to see what the budget for the fiscal year starting in October will look like.
Obama is a canny politician and he is telling people what they want to hear. I think of it as the parent telling the kid not to worry about all the talk about sugar, soda and snack foods being a problem. Thus the kid (read here the economy) may get fat and obese (read: too much government and social programs) and become a childhood diabetic (again, our sick economy) - but, like the parents with little education, the current administration really doesn't think it is doing anything wrong.
And, like the kid who gets fat and becomes an early diabetic, the correlation with diet and health isn't made because the kid doesn't know enough. The parent (read: government and maybe the media to some extent) failed in its parental (read fiscal and tax policies) responsibilities.
Economy Losing Its Cushion - WSJ.com
Q&A - ON STRAW AND CAMELS AND ECONOMETRIC ANALYSIS: Economy Losing Its Cushion - WSJ.com
Question:
Is anyone really saying, "gee, who knew?"
Answer = Yes
The economists, WH, Reuters and NBCCBSABCMSNBCCNN are all finding this horribly "unexpected".
Answer:
I don't know how familiar you are with econometric analysis - but, it is based on inputs of past data in order to make correlations.
We now have a changed correlation matrix and there wouldn't be any easy inputs.
The clearest comparison would be the 1937-38 downturn experience using a Laffer-type interpretation.
It goes to his 'Laffer Curve' (or, as I can also think of it - the story about the straw on the camel's back). There is too much government spending (and here, the tax increases are partly built in vis-a-vis ObamaCare, etc. and partly anticipatory and advertised to hit the 'rich' (making over $250k, etc.)).
Obama's Keynesians would discount the importance of those straws on the camel's back. Laffer wouldn't.
Since those regulatory and tax constraints (two big ones are the corporate tax rate and the inability to bring back overseas profits with 'no' tax cost - as can be done in all other countries) have past the tipping point, the current models are fatally flawed.
When they are run against the 30's, most probably still follow the Chicago School monetarist thinking about tight money causing the downturn. All of which would seem to have been disproven by QE1 and 2.
It's rather amazing more people aren't picking up on this.
It's also interesting to recall that, as was well shown in the 1970's and in the reflections upon that era and interest rates even up though the 1980's, people were shown to always look back to their most recent experience to make a forecast for the future.
Thus, people in the 70's always asked less in interest than the next round of inflation. Likewise, in the 80's, having learned their lesson before, they asked more interest than inflation.
The parallel now in forecasting is perhaps most evident in the inability to read the tea leaves of the camel.
It will be interesting to see when this is talked about more. It should be soon.
Question:
Is anyone really saying, "gee, who knew?"
Answer = Yes
The economists, WH, Reuters and NBCCBSABCMSNBCCNN are all finding this horribly "unexpected".
Answer:
I don't know how familiar you are with econometric analysis - but, it is based on inputs of past data in order to make correlations.
We now have a changed correlation matrix and there wouldn't be any easy inputs.
The clearest comparison would be the 1937-38 downturn experience using a Laffer-type interpretation.
It goes to his 'Laffer Curve' (or, as I can also think of it - the story about the straw on the camel's back). There is too much government spending (and here, the tax increases are partly built in vis-a-vis ObamaCare, etc. and partly anticipatory and advertised to hit the 'rich' (making over $250k, etc.)).
Obama's Keynesians would discount the importance of those straws on the camel's back. Laffer wouldn't.
Since those regulatory and tax constraints (two big ones are the corporate tax rate and the inability to bring back overseas profits with 'no' tax cost - as can be done in all other countries) have past the tipping point, the current models are fatally flawed.
When they are run against the 30's, most probably still follow the Chicago School monetarist thinking about tight money causing the downturn. All of which would seem to have been disproven by QE1 and 2.
It's rather amazing more people aren't picking up on this.
It's also interesting to recall that, as was well shown in the 1970's and in the reflections upon that era and interest rates even up though the 1980's, people were shown to always look back to their most recent experience to make a forecast for the future.
Thus, people in the 70's always asked less in interest than the next round of inflation. Likewise, in the 80's, having learned their lesson before, they asked more interest than inflation.
The parallel now in forecasting is perhaps most evident in the inability to read the tea leaves of the camel.
It will be interesting to see when this is talked about more. It should be soon.
Friday, July 29, 2011
Economy Losing Its Cushion - WSJ.com
DEMOCRATS AND REPORTERS IN DENIAL - THERE ARE MANY POSITIVE OPTIONS AVAILABLE - THEY JUST DON'T FIT THE DEMOCRATIC POLICY MANTRA: Economy Losing Its Cushion - WSJ.com
At the end of the article, the impression is left that the government doesn't have many tools left.
Where is the mind of this reporter?
There is a huge anti-business regulatory framework - all of which could be dismantled.
ObamaCare could be cancelled or postponed. Same with Dodd-Frank.
But the Administration doesn't get it. Maybe it's the fact that they think of business people and investors as captive slaves and that beating them will only improve performance.
Well, the evidence is in. It doesn't!
But the Administration and Democrats and their union allies are in a state of total denial.
Meanwhile, it will be harder and harder to climb out with a probable major change coming to those in power in Washington after 2012 elections.
At the end of the article, the impression is left that the government doesn't have many tools left.
Where is the mind of this reporter?
There is a huge anti-business regulatory framework - all of which could be dismantled.
ObamaCare could be cancelled or postponed. Same with Dodd-Frank.
But the Administration doesn't get it. Maybe it's the fact that they think of business people and investors as captive slaves and that beating them will only improve performance.
Well, the evidence is in. It doesn't!
But the Administration and Democrats and their union allies are in a state of total denial.
Meanwhile, it will be harder and harder to climb out with a probable major change coming to those in power in Washington after 2012 elections.
Economists React: ‘Recovery? What Recovery?’ - Real Time Economics - WSJ
WAKE UP TIME AT THE WHITE HOUSE: Economists React: ‘Recovery? What Recovery?’ - Real Time Economics - WSJ
Art Laffer wrote within the last year about the tax increases and pro-union policies as a causative factory of the 1937/38 downturn in the Great Depression.
It’s uncanny how accurate he was.
Of course the White House Keynesians don’t see high taxes and great regulation as anything that would cause business, investors, etc. to hold back job creation.
Could we say, “Wake UPPPPPP!”
Art Laffer wrote within the last year about the tax increases and pro-union policies as a causative factory of the 1937/38 downturn in the Great Depression.
It’s uncanny how accurate he was.
Of course the White House Keynesians don’t see high taxes and great regulation as anything that would cause business, investors, etc. to hold back job creation.
Could we say, “Wake UPPPPPP!”
House Passes GOP Debt Plan - WSJ.com
AN OBVIOUS POSITIVE OPTION: House Passes GOP Debt Plan - WSJ.com
Wouldn't it be nice if with all this jockeying back-and-forth, a compromise could include putting ObamaCare and Dodd-Frank into abeyance until they could be reconsidered by a new President and Congress after 2012.
Now, that might give the economy a bit of a boost.
Wouldn't it be nice if with all this jockeying back-and-forth, a compromise could include putting ObamaCare and Dodd-Frank into abeyance until they could be reconsidered by a new President and Congress after 2012.
Now, that might give the economy a bit of a boost.
Wednesday, July 27, 2011
The Europeans' View of the U.S. May Change Yet Again — Letters to the Editor - WSJ.com
MORE PEOPLE SHOULD READ THIS LETTER: The Europeans' View of the U.S. May Change Yet Again — Letters to the Editor - WSJ.com
Hear, hear on this letter.
The media and lots of talking heads don't want to talk about Obama and the Democrats in the way this letter clearly lays out their agenda and plan.
Likewise, the media abjures discussing what the Republican Tea Party is trying to do in terms of getting the US back to having a growing economy.
The media and too many pundits get it all mixed up.
(An analogy that has cropped up in Chamberlain trying to negotiate with Hitler. He trusted Hitler (Obama) and look what happened? As this letter attests, Chamberlain (the Republicans) should have stood strong.)
Of course, the Democrats don't understand the impact of their policies are they are telling the public things can go back to a better economy on the back of anti-business policies, high taxes and sticking it to the rich.
Roosevelt raised taxes and pandered to unions and the Great Depression continued and took a dip in 37/38.
We are in the same position with Obama and the Democrats. Why aren't more people talking about it?
This letter starts to lay things out. Thanks for such a good letter.
"Western Europe's resentment of American economic and military power has been based on envy and dependence, not on rational analysis ("The World Says China Will Overtake America" by Andrew Kohut, op-ed, July 14). It is no surprise that Europeans who got what they wanted—a chastened, humbler and weaker America—now realize the negative implications for their welfare states. Per Daniel Henninger's same-day Wonder Land column, "The Disappearing Recovery," post-World War II Europe accepted slower economic growth in exchange for generous state benefits. But Europe still struggles to meet its benefit obligations and can do so only by skimping on military expenditures and relying on U.S. strength. As the U.S. moves toward adoption of a welfare-state model (federal spending of more than 25% of GDP instead of less than 20%), Europe will need to triple its military spending or find itself increasingly vulnerable to threats from other rising powers.
President Obama assured the international community that post-Bush America would be a partner, no longer acting with impunity and arrogance prior to consulting others. Europeans cheered, until they realized that they can't even battle the forces of Libya's Moammar Gadhafi without U.S. support. What happens when China starts to flex its muscles and the U.S. no longer can afford to be the world's policeman (at a cost of nearly 5% of GDP per year)? For that matter, what happens when ObamaCare kicks in and the U.S. no longer can afford to subsidize the world's health-care research and innovation? Either medical progress will slow or Europeans who have been getting a free ride need to pony up more money that they don't have.
Fortunately for Europeans and Americans, expectations regarding who will or will not be a world power in future decades are very rarely accurate. Just 25 years ago Japan's economic ascendancy seemed inevitable. If America slams the brakes now on mimicking Europe, the Brits, French and Germans can go back to envy of and dependence on America, rather than fearing for their health and security.
Gary R"
Hear, hear on this letter.
The media and lots of talking heads don't want to talk about Obama and the Democrats in the way this letter clearly lays out their agenda and plan.
Likewise, the media abjures discussing what the Republican Tea Party is trying to do in terms of getting the US back to having a growing economy.
The media and too many pundits get it all mixed up.
(An analogy that has cropped up in Chamberlain trying to negotiate with Hitler. He trusted Hitler (Obama) and look what happened? As this letter attests, Chamberlain (the Republicans) should have stood strong.)
Of course, the Democrats don't understand the impact of their policies are they are telling the public things can go back to a better economy on the back of anti-business policies, high taxes and sticking it to the rich.
Roosevelt raised taxes and pandered to unions and the Great Depression continued and took a dip in 37/38.
We are in the same position with Obama and the Democrats. Why aren't more people talking about it?
This letter starts to lay things out. Thanks for such a good letter.
"Western Europe's resentment of American economic and military power has been based on envy and dependence, not on rational analysis ("The World Says China Will Overtake America" by Andrew Kohut, op-ed, July 14). It is no surprise that Europeans who got what they wanted—a chastened, humbler and weaker America—now realize the negative implications for their welfare states. Per Daniel Henninger's same-day Wonder Land column, "The Disappearing Recovery," post-World War II Europe accepted slower economic growth in exchange for generous state benefits. But Europe still struggles to meet its benefit obligations and can do so only by skimping on military expenditures and relying on U.S. strength. As the U.S. moves toward adoption of a welfare-state model (federal spending of more than 25% of GDP instead of less than 20%), Europe will need to triple its military spending or find itself increasingly vulnerable to threats from other rising powers.
President Obama assured the international community that post-Bush America would be a partner, no longer acting with impunity and arrogance prior to consulting others. Europeans cheered, until they realized that they can't even battle the forces of Libya's Moammar Gadhafi without U.S. support. What happens when China starts to flex its muscles and the U.S. no longer can afford to be the world's policeman (at a cost of nearly 5% of GDP per year)? For that matter, what happens when ObamaCare kicks in and the U.S. no longer can afford to subsidize the world's health-care research and innovation? Either medical progress will slow or Europeans who have been getting a free ride need to pony up more money that they don't have.
Fortunately for Europeans and Americans, expectations regarding who will or will not be a world power in future decades are very rarely accurate. Just 25 years ago Japan's economic ascendancy seemed inevitable. If America slams the brakes now on mimicking Europe, the Brits, French and Germans can go back to envy of and dependence on America, rather than fearing for their health and security.
Gary R"
What's Wrong With America's Job Engine? - WSJ.com
HITLER AND CHAMBERLAIN REDUX: What's Wrong With America's Job Engine? - WSJ.com
Check the BLS statistics on those with and those without a college education. The dichotomy is telling.
The US needs to be pro-business so the economy is in an expansive mode.
With the rank anti-business policies of Obama and the pandering he does to the public to try and convince them that his policies aren't responsible - plus of course, no changes to those policies - he is a lost leader. He hasn't a real clue as to what is going on.
Somehow, the analogy of Obama as Hitler (in economic socialist terms) and the Republicans as Chamberlain (trying to hold Hitler/Obama back) come to mind.
Obama is trying to argue for 'peace in our times' and this time, the Republicans have a cohort of strong resisters.
It will be interesting to see how it eventually plays out.
But, Obama's policies have deprived the economy of the life blood necessary to take advantage of the loose money from Bernanke. And, Obama hasn't a clue he's doing anything wrong or that his policies are such a causative factor.
The 1930's has lessons here - (see Laffer's articles); and, so do the Carter years.
In both cases, bad policy from Washington was crippling the economy and in both cases, the Democrats in charge didn't see themselves at fault.
We can hope for the best but, so far, the evidence points to a greater need to prepare for the worst. The president will be in office for quite a while still and the Dems control the Senate.
Check the BLS statistics on those with and those without a college education. The dichotomy is telling.
The US needs to be pro-business so the economy is in an expansive mode.
With the rank anti-business policies of Obama and the pandering he does to the public to try and convince them that his policies aren't responsible - plus of course, no changes to those policies - he is a lost leader. He hasn't a real clue as to what is going on.
Somehow, the analogy of Obama as Hitler (in economic socialist terms) and the Republicans as Chamberlain (trying to hold Hitler/Obama back) come to mind.
Obama is trying to argue for 'peace in our times' and this time, the Republicans have a cohort of strong resisters.
It will be interesting to see how it eventually plays out.
But, Obama's policies have deprived the economy of the life blood necessary to take advantage of the loose money from Bernanke. And, Obama hasn't a clue he's doing anything wrong or that his policies are such a causative factor.
The 1930's has lessons here - (see Laffer's articles); and, so do the Carter years.
In both cases, bad policy from Washington was crippling the economy and in both cases, the Democrats in charge didn't see themselves at fault.
We can hope for the best but, so far, the evidence points to a greater need to prepare for the worst. The president will be in office for quite a while still and the Dems control the Senate.
Tuesday, July 26, 2011
White House Proposes Changes to Fuel-Economy Targets - WSJ.com
ANOTHER ANTI-BUSINESS, ANTI-MARKET, ANTI-INFRASTRUCTURE, PRO-DEFICIT POLICY FROM THE WHITE HOUSE: White House Proposes Changes to Fuel-Economy Targets - WSJ.com
Is the president a joke or a joke.
Here he has a huge deficit and, true to his socialist (ne: communist) leanings, rather than put in a gas tax and let the market determine the best technology for cars going forward (and, there is no clearcut superior technology and many on the drawing boards), he hews to his big-command-government-we-know-better philosophy and tries to dictate mileage standards with lots of government-determined technology bennies.
Meanwhile, he foregoes all the revenue a gas tax could bring in to both reduce the deficits, pay for needed infrastructure improvements and let the market decide on what course to pursue in the development of new technologies.
This president pursues one failed policy after another. No wonder jobs are wanting.
Is the president a joke or a joke.
Here he has a huge deficit and, true to his socialist (ne: communist) leanings, rather than put in a gas tax and let the market determine the best technology for cars going forward (and, there is no clearcut superior technology and many on the drawing boards), he hews to his big-command-government-we-know-better philosophy and tries to dictate mileage standards with lots of government-determined technology bennies.
Meanwhile, he foregoes all the revenue a gas tax could bring in to both reduce the deficits, pay for needed infrastructure improvements and let the market decide on what course to pursue in the development of new technologies.
This president pursues one failed policy after another. No wonder jobs are wanting.
Twin Forces Paralyze Washington - WSJ.com
FOUNDING FATHERS: Twin Forces Paralyze Washington - WSJ.com
Do you recall when presidential primaries were introduced to combat back-door politics.
It is somewhat the same today where the primary system in many states lets only the die-hard (read: extremist) party members choose candidates.
There are clearly now two extreme views of the economy. The same different views are displayed around the world.
Many learned people in America believe high taxes and more government create prosperity, yet the results around the world and even in the US would suggest a direct correlation between such policies and low growth and higher unemployment.
The founding fathers may have tried to set up good checks and balances, but right now we are seeing that there are two extreme views.
Those who support either view are rather like those who believe in God and those who don't (no relation to the religious right intended). But, it is a belief in the individual vs. big government.
Those who run businesses and can create jobs want to restrain government; and, those who believe government can provide the answers (e.g. like communists in all too many ways) are on the other extreme.
If Obama was an economic Hitler, one rather gets the point. Should the Republicans be Chamberlain?
Clearly of course many believe Obama is only out to defend middle class rights. But, the policies are like those of Carter - i.e. no growth and only redistribution.
We are going through trying times and I certainly have no final answers and am but a fly on the wall as the forces battle it out.
Of course, I'd rather see prosperity than socialist penury; but, who knows.
Do you recall when presidential primaries were introduced to combat back-door politics.
It is somewhat the same today where the primary system in many states lets only the die-hard (read: extremist) party members choose candidates.
There are clearly now two extreme views of the economy. The same different views are displayed around the world.
Many learned people in America believe high taxes and more government create prosperity, yet the results around the world and even in the US would suggest a direct correlation between such policies and low growth and higher unemployment.
The founding fathers may have tried to set up good checks and balances, but right now we are seeing that there are two extreme views.
Those who support either view are rather like those who believe in God and those who don't (no relation to the religious right intended). But, it is a belief in the individual vs. big government.
Those who run businesses and can create jobs want to restrain government; and, those who believe government can provide the answers (e.g. like communists in all too many ways) are on the other extreme.
If Obama was an economic Hitler, one rather gets the point. Should the Republicans be Chamberlain?
Clearly of course many believe Obama is only out to defend middle class rights. But, the policies are like those of Carter - i.e. no growth and only redistribution.
We are going through trying times and I certainly have no final answers and am but a fly on the wall as the forces battle it out.
Of course, I'd rather see prosperity than socialist penury; but, who knows.
Twin Forces Paralyze Washington - WSJ.com
Twin Forces Paralyze Washington - WSJ.com
There is also the issue of whether the Democratic model can co-exist with a vibrant, growing economy that provides jobs.
Clearly, the Democrats don't believe their high tax, heavily regulated, pro-union economic model is an inhibitor to job creation. Any look around in the US or globally would argue strongly against such an assumption - but, then again, those with rose colored glasses or, as Mark Twain said, "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," aren't inclined to do much looking around.
Thus, the Republicans strongly (and rightly) believe that the economy and degree of government involvement (in the broadest sense of fiscal policy and size) needs to diminish if we are going to keep the economy going and let it start to grow.
Bush with his anti-immigration policy wasn't perfect but the economy needs to have some pro-business policies.
The Democratic policies are take a dollar and give back 20 cents policies and the results are obvious - stagnation and high (and likely growing again) joblessness.
Under such conditions and scenario was Boehner right in describing Obama as wanting only more government and more taxes? All the evidence points to the fact that the problem is Obama and his policies - if we want to add jobs and growth to the economy. If not, that was the hue and cry under Jimmy Carter - and, we can recall the stagflation of the Carter era with almost 20% interest rates and no growth.
There is also the issue of whether the Democratic model can co-exist with a vibrant, growing economy that provides jobs.
Clearly, the Democrats don't believe their high tax, heavily regulated, pro-union economic model is an inhibitor to job creation. Any look around in the US or globally would argue strongly against such an assumption - but, then again, those with rose colored glasses or, as Mark Twain said, "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," aren't inclined to do much looking around.
Thus, the Republicans strongly (and rightly) believe that the economy and degree of government involvement (in the broadest sense of fiscal policy and size) needs to diminish if we are going to keep the economy going and let it start to grow.
Bush with his anti-immigration policy wasn't perfect but the economy needs to have some pro-business policies.
The Democratic policies are take a dollar and give back 20 cents policies and the results are obvious - stagnation and high (and likely growing again) joblessness.
Under such conditions and scenario was Boehner right in describing Obama as wanting only more government and more taxes? All the evidence points to the fact that the problem is Obama and his policies - if we want to add jobs and growth to the economy. If not, that was the hue and cry under Jimmy Carter - and, we can recall the stagflation of the Carter era with almost 20% interest rates and no growth.
Obama Warns of Default Risk - WSJ.com
THE SHOPAHOLIC PRESIDENT: Obama Warns of Default Risk - WSJ.com
The president should understand that his policies are like Greek President Papandreou's - and, they won't, don't and aren't working.
Since he has the power he does, good luck to Republicans for standing up to him.
It would be nice if the media had a better understanding of economics and didn't have so many talking heads saying cutbacks in government are inappropriate. How else are we going to get a balance that will give business confidence?
The driving force should be how to create new jobs in America - not, as with Obama, to keep handing out entitlements and welfare and doing the same-ol, same-ol.
Obama didn't fix healthcare, he made it worse. Dodd-Frank isn't what it should have been.
The fact that the government continues borrowing and spending like a shopaholic using credit cards shouldn't be seen as beneficial - but, for too many liberals and Democrats, all they know is government, more government and even more government.
The president should understand that his policies are like Greek President Papandreou's - and, they won't, don't and aren't working.
Since he has the power he does, good luck to Republicans for standing up to him.
It would be nice if the media had a better understanding of economics and didn't have so many talking heads saying cutbacks in government are inappropriate. How else are we going to get a balance that will give business confidence?
The driving force should be how to create new jobs in America - not, as with Obama, to keep handing out entitlements and welfare and doing the same-ol, same-ol.
Obama didn't fix healthcare, he made it worse. Dodd-Frank isn't what it should have been.
The fact that the government continues borrowing and spending like a shopaholic using credit cards shouldn't be seen as beneficial - but, for too many liberals and Democrats, all they know is government, more government and even more government.
Moody's Downgrades Greece; Rivals Papandreou, Samaras Hold Nation's Debt-Laden Fate in Balance - WSJ.com
HOW PAPANDREOU AND OBAMA ARE JUST ALIKE: Moody's Downgrades Greece; Rivals Papandreou, Samaras Hold Nation's Debt-Laden Fate in Balance - WSJ.com
It's still the story of the farmer under two scenarios.
Papandreou and Obama are cut from the same cloth. They both believe in more government and no support for the private sector or encouragement of individual initiative with commensurate rewards.
The story of the farmer is that he/she knows that to plant the next season's crop, 10% of the last harvest needs to be saved.
If less than 10% is saved, the new harvest will be smaller than the last; likewise, if more is saved, planting can be expanded and the new harvest will be greater.
Both Papandreou and Obama believe taxing the farmer has no impact on that 10% or the farmer's decisions that go along with it.
Of course, Samaras is right that incentives matter. If the farmer knows he will be able to keep most of the gains of saving seed for an expanded harvest, he/she will be encouraged to do so. Maybe to feed a bigger family, have more to sell to buy something the family might want, etc.
Instead, both Papandreou and Obama believe in taxing the farmer and borrowing against future tax receipts from the farmer to fund handouts and pursue their own policy objectives (with Obama it could be high speed rail, union wage rates for construction, the failed drug war, anti-business policies, over regulation, etc., etc.).
It's hard not to want to look to a future with growth. But government has to make sacrifices and those not part of a growth agenda, but feeding off of it, should be forced to do with less. After all, they didn't earn what they are getting. It is being taken from others to be handed out as a government benefit (even if that government benefit is a job that isn't critically necessary, early or rich retirement benefits, etc.).
It's still the story of the farmer under two scenarios.
Papandreou and Obama are cut from the same cloth. They both believe in more government and no support for the private sector or encouragement of individual initiative with commensurate rewards.
The story of the farmer is that he/she knows that to plant the next season's crop, 10% of the last harvest needs to be saved.
If less than 10% is saved, the new harvest will be smaller than the last; likewise, if more is saved, planting can be expanded and the new harvest will be greater.
Both Papandreou and Obama believe taxing the farmer has no impact on that 10% or the farmer's decisions that go along with it.
Of course, Samaras is right that incentives matter. If the farmer knows he will be able to keep most of the gains of saving seed for an expanded harvest, he/she will be encouraged to do so. Maybe to feed a bigger family, have more to sell to buy something the family might want, etc.
Instead, both Papandreou and Obama believe in taxing the farmer and borrowing against future tax receipts from the farmer to fund handouts and pursue their own policy objectives (with Obama it could be high speed rail, union wage rates for construction, the failed drug war, anti-business policies, over regulation, etc., etc.).
It's hard not to want to look to a future with growth. But government has to make sacrifices and those not part of a growth agenda, but feeding off of it, should be forced to do with less. After all, they didn't earn what they are getting. It is being taken from others to be handed out as a government benefit (even if that government benefit is a job that isn't critically necessary, early or rich retirement benefits, etc.).
Sunday, July 24, 2011
Up & Down Wall Street - Barrons.com
MORE OF THE SAME: Up & Down Wall Street - Barrons.com
As for the Bush tax cuts, as I recall, they saw the percent of all income taxes paid by the top 1-2% go from 41-2% of all income taxes paid to something like 51-52%.
One reason people for years have said Hong Kong is business friendly and people pay taxes is its low top rate.
This has been taken as policy by some of the Eastern European countries and of course Singapore.
At the opposite end is Greece, where high taxes are directly correlated with low receipts and high tax evasion.
Somehow people forget that they too like to shop in stores where prices are low and benefits are high. When the prices don't equal the benefits, they shop elsewhere.
How is it possible that those 'others' won't also change their patterns of behavior when taxes go up? All evidence would seem to point to the fact that people are pretty normal and they like to be paid for and keep what they can and buy the most with it.
Sadly, its redistributionist policies that rely on other peoples money to support spending that has gotten the world into its current mess.
Saying "more of the same" would seem exactly the wrong prescription.
As for the Bush tax cuts, as I recall, they saw the percent of all income taxes paid by the top 1-2% go from 41-2% of all income taxes paid to something like 51-52%.
One reason people for years have said Hong Kong is business friendly and people pay taxes is its low top rate.
This has been taken as policy by some of the Eastern European countries and of course Singapore.
At the opposite end is Greece, where high taxes are directly correlated with low receipts and high tax evasion.
Somehow people forget that they too like to shop in stores where prices are low and benefits are high. When the prices don't equal the benefits, they shop elsewhere.
How is it possible that those 'others' won't also change their patterns of behavior when taxes go up? All evidence would seem to point to the fact that people are pretty normal and they like to be paid for and keep what they can and buy the most with it.
Sadly, its redistributionist policies that rely on other peoples money to support spending that has gotten the world into its current mess.
Saying "more of the same" would seem exactly the wrong prescription.
Up & Down Wall Street - Barrons.com
LET'S NOT FORGET THE NEED FOR SOME PRO-GROWTH AS WELL AS LESS GOVERNMENT: Up & Down Wall Street - Barrons.com
The sadly trenchant issue with 'austerity' is it may mean some cutbacks in government excesses (although hard to see in Greece or Portugal; and, of course, ignored in the US); but, there is a flip-side to all of this - i.e. growth.
The 30's taught many different lessons - depending on the student and teacher.
The lesson that seems to have been clearly 'disproven' is that tight or loose monetary policy can support or hold back economic growth when the fiscal policies (tax, regulatory, etc.) are against the economy.
Southern Europe isn't changing their anti-business policies (exception was the Greek conservative leader who was almost universally booed by his European brethren)and clearly the Democrats don't realize there policies are anything but pro-business or business-neutral.
The lack of pro-business policies needs to be factored in - BIG TIME!
The sadly trenchant issue with 'austerity' is it may mean some cutbacks in government excesses (although hard to see in Greece or Portugal; and, of course, ignored in the US); but, there is a flip-side to all of this - i.e. growth.
The 30's taught many different lessons - depending on the student and teacher.
The lesson that seems to have been clearly 'disproven' is that tight or loose monetary policy can support or hold back economic growth when the fiscal policies (tax, regulatory, etc.) are against the economy.
Southern Europe isn't changing their anti-business policies (exception was the Greek conservative leader who was almost universally booed by his European brethren)and clearly the Democrats don't realize there policies are anything but pro-business or business-neutral.
The lack of pro-business policies needs to be factored in - BIG TIME!
Saturday, July 23, 2011
Threat of Mutiny in Both Parties Helped Scuttle Talks - WSJ.com
Q&A: WHY MEDICARE CUTBACKS ARE IMPORTANT: Threat of Mutiny in Both Parties Helped Scuttle Talks - WSJ.com
Question:
Being an amateur student of economics, I am unfamiliar with a theory of economics that would indicate that cuts in Medicare and Social Security would increase employment. Would you please explain how this would work?
Answer:
You need to think of things with a bigger, macro view.
In other words, there is a reason that there is so much talk about the % of GDP taken from taxpayers (or borrowed) and spent by government.
Right now of course Obama has dug an even deeper who by projecting a share of GDP of 25-30% and having borrowed almost half of what he is currently spending to do it!
For business and investors to have faith in the economy, they need to know they'll be able to keep a fair and reasonable share of their profits and income and have a reasonable return on investment risk.
Right now, too much money is going into Medicare. The program is grossly inefficient and ineptly designed and managed. Although it does give the power to government, which government loves.
So, if money isn't being invested (read: faith in the future management of the economy), then jobs are not being created and they are being lost.
This is the problem Obamanomics faces. His supporters don't make any correlation between high taxes, huge amounts of government regulation and interference in the economy, etc. and job creation.
(As an example, think of a simple farmer. He knows that he needs to save 10% of his crop every year as seed for the next year's crop.
If he wants to provide for a bigger family and produce more, he may want to scrimp and save 11-12%, etc.
Now, if he knows that bandits will come and take all but 5% (or perhaps all of his crop), he may move (i.e. offshoring), he may try to labor and do something else, etc.
Without protection, he won't see any reason to expand his harvest (read: jobs).
So the bandits are the government. Those receiving entitlement benefits are getting them from someone else. What is the percent of all income taxes paid by the top 1 or 2% of the population? As I recall a couple of years ago it had gone from 42% to 51% under the Bush tax cuts.
So, sometimes you get more by charging less or taking less.
This is something Democrats don't understand. Their policies are directly responsible for the unemployment numbers.
Government spending has to be cut. Medicare and Medicaid are out of control. Obamacare was designed to spread the entitlement to healthcare with just some new taxes on the rich.
Again, were are jobs not being created right now where they should be? It's small and medium sized businesses. Exactly those people whom Obama and the Democrats want to tax and burden with additional employment costs and regulatory burdens.
You get the idea.
Question:
Being an amateur student of economics, I am unfamiliar with a theory of economics that would indicate that cuts in Medicare and Social Security would increase employment. Would you please explain how this would work?
Answer:
You need to think of things with a bigger, macro view.
In other words, there is a reason that there is so much talk about the % of GDP taken from taxpayers (or borrowed) and spent by government.
Right now of course Obama has dug an even deeper who by projecting a share of GDP of 25-30% and having borrowed almost half of what he is currently spending to do it!
For business and investors to have faith in the economy, they need to know they'll be able to keep a fair and reasonable share of their profits and income and have a reasonable return on investment risk.
Right now, too much money is going into Medicare. The program is grossly inefficient and ineptly designed and managed. Although it does give the power to government, which government loves.
So, if money isn't being invested (read: faith in the future management of the economy), then jobs are not being created and they are being lost.
This is the problem Obamanomics faces. His supporters don't make any correlation between high taxes, huge amounts of government regulation and interference in the economy, etc. and job creation.
(As an example, think of a simple farmer. He knows that he needs to save 10% of his crop every year as seed for the next year's crop.
If he wants to provide for a bigger family and produce more, he may want to scrimp and save 11-12%, etc.
Now, if he knows that bandits will come and take all but 5% (or perhaps all of his crop), he may move (i.e. offshoring), he may try to labor and do something else, etc.
Without protection, he won't see any reason to expand his harvest (read: jobs).
So the bandits are the government. Those receiving entitlement benefits are getting them from someone else. What is the percent of all income taxes paid by the top 1 or 2% of the population? As I recall a couple of years ago it had gone from 42% to 51% under the Bush tax cuts.
So, sometimes you get more by charging less or taking less.
This is something Democrats don't understand. Their policies are directly responsible for the unemployment numbers.
Government spending has to be cut. Medicare and Medicaid are out of control. Obamacare was designed to spread the entitlement to healthcare with just some new taxes on the rich.
Again, were are jobs not being created right now where they should be? It's small and medium sized businesses. Exactly those people whom Obama and the Democrats want to tax and burden with additional employment costs and regulatory burdens.
You get the idea.
Friday, July 22, 2011
Jobless Rates Rise in Most U.S. States - Real Time Economics - WSJ
OBAMA'S CORRELATION: Jobless Rates Rise in Most U.S. States - Real Time Economics - WSJ
It is now clear that Obama thinks that if he takes the money out of the producers in the economy to hand out as entitlements then more jobs will be created.
Oh, wait a minute, he doesn't care about jobs! He just wants a bigger government with more money to hand out.
We saw what happened in 1937/38. Some blame tight money; but, since money is now loose as can be, it can't have been tight money that through the economy back into recession back then.
Thus, logically, it was Roosevelt's higher income taxes and new empowerment legislation for unions.
Oh my, exactly Obama's prescription for the US. Did we say jobs or jobless?
Can we make the correlation?
It is now clear that Obama thinks that if he takes the money out of the producers in the economy to hand out as entitlements then more jobs will be created.
Oh, wait a minute, he doesn't care about jobs! He just wants a bigger government with more money to hand out.
We saw what happened in 1937/38. Some blame tight money; but, since money is now loose as can be, it can't have been tight money that through the economy back into recession back then.
Thus, logically, it was Roosevelt's higher income taxes and new empowerment legislation for unions.
Oh my, exactly Obama's prescription for the US. Did we say jobs or jobless?
Can we make the correlation?
Thursday, July 21, 2011
What Happened to the Recovery? - WSJ.com
HOW OBAMA'S ECONOMIC SPENDING BUBBLE IS LIKE THE HOUSING BUBBLE: What Happened to the Recovery? - WSJ.com
It's hard to believe we can still be seeing growth projections like 3% for the 3rd and 4th quarters.
If there was any more proof needed, its the current debt limit negotiations.
Anyone not tied to big government and entitlements has to see that we can't afford what Obama has put in place and defending tooth and nail.
A perfect parallel was the housing crisis. Then people thought houses could keep going up in price without any substantive changes to incomes (and no real limit to new houses being built).
Right now, we have economic leadership believing that borrowing and printing money never needs to stop and that high taxes won't impact the economy. (Wessel's discussion of 1937 omits a reference Art Laffer makes to higher taxes and support for unions. Both of which should be put into current econometric models.)
Now we have a spending bubble that is like the housing bubble.
If the housing bubble had stopped growing sooner, we'd all have been better off. Obama clearly has no interest in stopping the government spending bubble.
It's hard to believe we can still be seeing growth projections like 3% for the 3rd and 4th quarters.
If there was any more proof needed, its the current debt limit negotiations.
Anyone not tied to big government and entitlements has to see that we can't afford what Obama has put in place and defending tooth and nail.
A perfect parallel was the housing crisis. Then people thought houses could keep going up in price without any substantive changes to incomes (and no real limit to new houses being built).
Right now, we have economic leadership believing that borrowing and printing money never needs to stop and that high taxes won't impact the economy. (Wessel's discussion of 1937 omits a reference Art Laffer makes to higher taxes and support for unions. Both of which should be put into current econometric models.)
Now we have a spending bubble that is like the housing bubble.
If the housing bubble had stopped growing sooner, we'd all have been better off. Obama clearly has no interest in stopping the government spending bubble.
What Happened to the Recovery? - WSJ.com
THE ECONOMY ACTING LIKE SOMEONE SUFFERING FROM DEPRESSION (DUE TO OBAMA POLICIES): What Happened to the Recovery? - WSJ.com
What's interesting is to think of the economy as a person suffering from 'depression'.
My experience is that those suffering from depression can't work as well as they do when they aren't feeling depressed. Drugs can help but after-all, it's drugs.
Obama and his policies are like a bout of depression thrown over the economy. Of course, Obama and his supporters haven't a clue that there policies are casting this pale over the economy.
However, the Democrats have tried to apply all the medication possible - notwithstanding.
I'm not sure how much such a change-of-attitude could be put into econometric modeling as its a broad 'non-driver' of risk taking, investment and job creation.
Luckily, some of the high-tech areas of the economy (think Apple) have continued to do well; and, companies are doing well that are able to export and operate out of the US.
But the down home businesses are suffering.
As with a person suffering from depression, it's hard to eliminate the condition. If the Republicans gain control of the White House and both houses of Congress, then perhaps policies can be changed and a new day dawn.
But, as with people suffering depression, the condition often worsens over time and much gets neglected.
What's interesting is to think of the economy as a person suffering from 'depression'.
My experience is that those suffering from depression can't work as well as they do when they aren't feeling depressed. Drugs can help but after-all, it's drugs.
Obama and his policies are like a bout of depression thrown over the economy. Of course, Obama and his supporters haven't a clue that there policies are casting this pale over the economy.
However, the Democrats have tried to apply all the medication possible - notwithstanding.
I'm not sure how much such a change-of-attitude could be put into econometric modeling as its a broad 'non-driver' of risk taking, investment and job creation.
Luckily, some of the high-tech areas of the economy (think Apple) have continued to do well; and, companies are doing well that are able to export and operate out of the US.
But the down home businesses are suffering.
As with a person suffering from depression, it's hard to eliminate the condition. If the Republicans gain control of the White House and both houses of Congress, then perhaps policies can be changed and a new day dawn.
But, as with people suffering depression, the condition often worsens over time and much gets neglected.
Tuesday, July 19, 2011
American Leans Toward Airbus - WSJ.com
American Leans Toward Airbus - WSJ.com
Obama and the Boeing unions are to blame. Time to make the entire country right-to-work.
And, of course time to get rid of Obama. There is no free lunch and this is one more example.
The debt talks are over the ability to continue taxing and borrowing to pay unaffordable entitlements.
The unions and Obama want to act like the Greeks - believing there is never a day of reckoning. This is one more example of the larger global economy impacting the la-la-land they'd like to believe in.
American is not to blame. They have to act prudently and economically.
After all, when it comes to buying a ticket, would the American public pay a surcharge to fly on a Boeing plane. I don't think they care. They buy on price and/or service.
Again, something Obama and his cohorts are desperate to ignore.
Obama and the Boeing unions are to blame. Time to make the entire country right-to-work.
And, of course time to get rid of Obama. There is no free lunch and this is one more example.
The debt talks are over the ability to continue taxing and borrowing to pay unaffordable entitlements.
The unions and Obama want to act like the Greeks - believing there is never a day of reckoning. This is one more example of the larger global economy impacting the la-la-land they'd like to believe in.
American is not to blame. They have to act prudently and economically.
After all, when it comes to buying a ticket, would the American public pay a surcharge to fly on a Boeing plane. I don't think they care. They buy on price and/or service.
Again, something Obama and his cohorts are desperate to ignore.
Debt Worries Roil Markets - WSJ.com
OVIOUS CHOICES THAT ARE PART OF THE DEBT DEBATE: Debt Worries Roil Markets - WSJ.com
Medicare needs to be cut.
Let's talk about the alternatives in terms of jobs or keeping Medicare.
This is a jobless recovery in large part because of the economic management of the Democrats. The future under their policies is sufficiently bleak that their only alternative is to follow the same policies that got the Greeks into trouble.
At the end of the day, the Greeks have super austerity or default as a choice.
The same is with the US.
The la-la-land idea that the rich can be tapped to pay for Democratic social spending was basically kaboshed yesterday in an article by Boskin.
We are trading jobs and economic growth for our union-centric, social safety net.
To lie and misrepresent that fact is probably so second-nature to Democrats because they don't believe it.
They clearly see how people act in their private economic lives as different from how they expect the heavily taxed to act in terms of job creation. It's a delusion and a very dangerous belief in something that defies logic.
However, that appears to be the situation.
And, whether the Republicans cave into having to face Greece's economic problems in a few years vs. Obama and the Democrats realizing the downside of their policies - well, it's all up in the air.
But yes, clearly entitlements will have to be cut back. There is so much fat there it boggles the mind (one case would be $50,000 a month drugs to prolong a person's life a few months????, etc.)
We could also stop the drug war - again, something that would gore Republicans - but, I've not seen it even from Ron Paul.
Medicare needs to be cut.
Let's talk about the alternatives in terms of jobs or keeping Medicare.
This is a jobless recovery in large part because of the economic management of the Democrats. The future under their policies is sufficiently bleak that their only alternative is to follow the same policies that got the Greeks into trouble.
At the end of the day, the Greeks have super austerity or default as a choice.
The same is with the US.
The la-la-land idea that the rich can be tapped to pay for Democratic social spending was basically kaboshed yesterday in an article by Boskin.
We are trading jobs and economic growth for our union-centric, social safety net.
To lie and misrepresent that fact is probably so second-nature to Democrats because they don't believe it.
They clearly see how people act in their private economic lives as different from how they expect the heavily taxed to act in terms of job creation. It's a delusion and a very dangerous belief in something that defies logic.
However, that appears to be the situation.
And, whether the Republicans cave into having to face Greece's economic problems in a few years vs. Obama and the Democrats realizing the downside of their policies - well, it's all up in the air.
But yes, clearly entitlements will have to be cut back. There is so much fat there it boggles the mind (one case would be $50,000 a month drugs to prolong a person's life a few months????, etc.)
We could also stop the drug war - again, something that would gore Republicans - but, I've not seen it even from Ron Paul.
Monday, July 18, 2011
Michael Boskin: Get Ready for a 70% Marginal Tax Rate - WSJ.com
Michael Boskin: Get Ready for a 70% Marginal Tax Rate - WSJ.com
Democrats just flat-out don't believe the conclusions against higher taxes.
It is rather clear that Laffer's tax argument about the 1930's has been proven by the failure of Bernanke's loose money to overcome the tight money of the 30's.
But, the Democrats believe in a free lunch. They believe that while they go to a grocery store and take along coupons and buy bargains, the productive sector will ignore such behavior and will, in fact, be glad to pay double or triple and somehow still have the same buying power.
We've already seen the impact of the Democrat's free lunch in fewer jobs. The question is whether the voters will want to believe the political party that says candy (i.e. big government) isn't harmful or the political party that says taxes have consequences and there is no free-lunch?
Democrats just flat-out don't believe the conclusions against higher taxes.
It is rather clear that Laffer's tax argument about the 1930's has been proven by the failure of Bernanke's loose money to overcome the tight money of the 30's.
But, the Democrats believe in a free lunch. They believe that while they go to a grocery store and take along coupons and buy bargains, the productive sector will ignore such behavior and will, in fact, be glad to pay double or triple and somehow still have the same buying power.
We've already seen the impact of the Democrat's free lunch in fewer jobs. The question is whether the voters will want to believe the political party that says candy (i.e. big government) isn't harmful or the political party that says taxes have consequences and there is no free-lunch?
Dearth of Demand Seen Behind Weak Hiring - WSJ.com
ALL TOO OBVIOUS"Dearth of Demand Seen Behind Weak Hiring - WSJ.com
from the article: "Democrats and the economists who advise them tend to point to the weakness of demand, instead."
It's been obvious - including in the debt talks - that Obama and the Democrats don't see any elasticity in supply related to higher or lower taxes, fewer or more regulations, support for union job and featherbedding policies and unrealistic wage and benefit packages or the fact that the US is spending too much on entitlements.
Since the Democrats see no difference in the amount of investment going into jobs if the government takes 18% of GDP or 25 -30%, it's clear they have a disconnect with any type of economic reality other than handouts and a free-lunch.
The European problems with Greece, etc. should give the Obama Administration food for thought about its policies - but, of course they are not; because, the Obama Administration doesn't see a connection with too much government or too much government spending.
Perhaps the Republicans' can pull some type of small rabbit out of a hat; but, they haven't tackled some big easy fixes like getting rid of ObamaCare and Dodd-Frank.
from the article: "Democrats and the economists who advise them tend to point to the weakness of demand, instead."
It's been obvious - including in the debt talks - that Obama and the Democrats don't see any elasticity in supply related to higher or lower taxes, fewer or more regulations, support for union job and featherbedding policies and unrealistic wage and benefit packages or the fact that the US is spending too much on entitlements.
Since the Democrats see no difference in the amount of investment going into jobs if the government takes 18% of GDP or 25 -30%, it's clear they have a disconnect with any type of economic reality other than handouts and a free-lunch.
The European problems with Greece, etc. should give the Obama Administration food for thought about its policies - but, of course they are not; because, the Obama Administration doesn't see a connection with too much government or too much government spending.
Perhaps the Republicans' can pull some type of small rabbit out of a hat; but, they haven't tackled some big easy fixes like getting rid of ObamaCare and Dodd-Frank.
Sunday, July 17, 2011
Obama to Bypass Warren, Tap Cordray to Head Consumer Agency - WSJ.com
OPPORTUNITIES OR NOT? Obama to Bypass Warren, Tap Cordray to Head Consumer Agency - WSJ.com
In terms of regulation, the notices were out that there was something wrong with the derivatives marketplace - and, nothing was done about it (for example, a clearing exchange).
Meanwhile, the SEC was living with people paid a pittance of what the thinkers were paid to come up with new ways to 'mint' money.
Thus, it would seem always better to orchestrate a balance of market forces than to assume government could hire adequately compensated personnel to control markets.
As for Obama, I agree - I think he is well intentioned.
So are parents who think they shouldn't talk to their children about sex.
But, Obama has no ability to understand (apparently) that the actual day-to-day way in which individuals try and optimize their financial well-being is the same as with corporations.
One example: pay someone more, they work harder and more diligently. Pay them less and they work less hard.
We are in a globally competitive environment in which the US uses more than its fair share of the world's resources. We have to invest and work hard.
Obama's policies support those who don't work and want 'entitlements'.
We are now paying the price.
Bush may have been able to avoid dealing with such problems. But Obama, rather than recognizing the need to deal with such problems was like the auto unions in the 1950's or 60's. They just wanted to get 'more'.
Instead, they needed to recognize there was less to get and that more needed to be reinvested back into the economy.
We'll see how it will play out; but, I'd guess we are still in the third inning (of a nine inning game). So far, the US has been doing all the wrong things.
Obama believes nothing really needs to be done. That the broader economy will support his redistributionist goals. He hasn't a clue as to the real problem. Thus, what he does is counterproductive.
Sadly, the Republicans are still in bed with the religious right and those people are on the other side of Mars.
Thus, the world is not in a good place.
It will be interesting if the 2012 election really presents the electorate with an alternative and whether people really see the need for one?
In terms of regulation, the notices were out that there was something wrong with the derivatives marketplace - and, nothing was done about it (for example, a clearing exchange).
Meanwhile, the SEC was living with people paid a pittance of what the thinkers were paid to come up with new ways to 'mint' money.
Thus, it would seem always better to orchestrate a balance of market forces than to assume government could hire adequately compensated personnel to control markets.
As for Obama, I agree - I think he is well intentioned.
So are parents who think they shouldn't talk to their children about sex.
But, Obama has no ability to understand (apparently) that the actual day-to-day way in which individuals try and optimize their financial well-being is the same as with corporations.
One example: pay someone more, they work harder and more diligently. Pay them less and they work less hard.
We are in a globally competitive environment in which the US uses more than its fair share of the world's resources. We have to invest and work hard.
Obama's policies support those who don't work and want 'entitlements'.
We are now paying the price.
Bush may have been able to avoid dealing with such problems. But Obama, rather than recognizing the need to deal with such problems was like the auto unions in the 1950's or 60's. They just wanted to get 'more'.
Instead, they needed to recognize there was less to get and that more needed to be reinvested back into the economy.
We'll see how it will play out; but, I'd guess we are still in the third inning (of a nine inning game). So far, the US has been doing all the wrong things.
Obama believes nothing really needs to be done. That the broader economy will support his redistributionist goals. He hasn't a clue as to the real problem. Thus, what he does is counterproductive.
Sadly, the Republicans are still in bed with the religious right and those people are on the other side of Mars.
Thus, the world is not in a good place.
It will be interesting if the 2012 election really presents the electorate with an alternative and whether people really see the need for one?
Notable & Quotable - WSJ.com
JOB FRIENDLY AND ANTI-JOB POLICIES: Notable & Quotable - WSJ.com
Let's hope that Obama can start to understand there is a relationship between helping and supporting and encouraging business and investment and job creation.
With ObamaCare, the Boeing decision, etc., etc., it seems as though the administration is far more concerned with union politics and objectives and assumes they have no impact on investment and job creation.
It would help if more articles would talk about the different economic models and what they would suggest might happen.
There is clearly a big picture that would give confidence to the broad economy (the confidence and feeling of optimism and well-being that existed at times in the past). Clearly, Obama's liberal policies are the opposite of what is required - but, he seems to think they have no consequences; and, thus, he's hoping for a different outcome than the outcome such policies have always produced in the past.
It now seems clear that the controversy about whether it was monetary policy (restrictive in the 30's) was the cause of the continuation of the Great Depression.
The answer would appear to now support the contention of Laffer that it was higher and higher taxes and increased support for unions that kept investment down and unemployment up.
Notwithstanding, this is 'new evidence' and people take a long time to change and adjust their thinking. Let's hope they don't take too long (the Keynesians) and more extreme circumstances evidence themselves.
Let's hope that Obama can start to understand there is a relationship between helping and supporting and encouraging business and investment and job creation.
With ObamaCare, the Boeing decision, etc., etc., it seems as though the administration is far more concerned with union politics and objectives and assumes they have no impact on investment and job creation.
It would help if more articles would talk about the different economic models and what they would suggest might happen.
There is clearly a big picture that would give confidence to the broad economy (the confidence and feeling of optimism and well-being that existed at times in the past). Clearly, Obama's liberal policies are the opposite of what is required - but, he seems to think they have no consequences; and, thus, he's hoping for a different outcome than the outcome such policies have always produced in the past.
It now seems clear that the controversy about whether it was monetary policy (restrictive in the 30's) was the cause of the continuation of the Great Depression.
The answer would appear to now support the contention of Laffer that it was higher and higher taxes and increased support for unions that kept investment down and unemployment up.
Notwithstanding, this is 'new evidence' and people take a long time to change and adjust their thinking. Let's hope they don't take too long (the Keynesians) and more extreme circumstances evidence themselves.
Saturday, July 16, 2011
Beyond the Debt Ceiling - Barrons.com
DECISION MAKING MANTRAS - WHAT ARE WE MISSING?: Beyond the Debt Ceiling - Barrons.com
Econometic projections are always based on some manipulation of past data to forecast the future.
What we don't seem to be hearing enough of are Laffer-like projections vs. the Keynesian projections of the Democrats.
There are still many commentators in the Wall Street Journal who appear to be die-hard Keynesians. What do I mean by this?
Basically, they have a belief that a business should still hire someone if their salary is double what the market price is in another country and that these higher salaries don't influence the ability of a company to sell its goods.
And, if they might agree that costs of production matter, they seem oblivious to the implications of Obama's union / welfare-centric policies on doing business in America.
It would be nice to see some serious attempts to run some numbers.
A single change to a final figure for the stock market, employment, etc. is all well-and-good; however, it would be interesting to see more focus on policy implications.
The evidence has to be out there in spades - one just wonders why more isn't being done with it?
Perhaps people are so set in there views that any attempt to imply that personal decision-making mantras (like shopping for discounts or working harder when you get a promotion or a raise) also actually effect the broader economy. Obama clearly ignores such thoughts.
Econometic projections are always based on some manipulation of past data to forecast the future.
What we don't seem to be hearing enough of are Laffer-like projections vs. the Keynesian projections of the Democrats.
There are still many commentators in the Wall Street Journal who appear to be die-hard Keynesians. What do I mean by this?
Basically, they have a belief that a business should still hire someone if their salary is double what the market price is in another country and that these higher salaries don't influence the ability of a company to sell its goods.
And, if they might agree that costs of production matter, they seem oblivious to the implications of Obama's union / welfare-centric policies on doing business in America.
It would be nice to see some serious attempts to run some numbers.
A single change to a final figure for the stock market, employment, etc. is all well-and-good; however, it would be interesting to see more focus on policy implications.
The evidence has to be out there in spades - one just wonders why more isn't being done with it?
Perhaps people are so set in there views that any attempt to imply that personal decision-making mantras (like shopping for discounts or working harder when you get a promotion or a raise) also actually effect the broader economy. Obama clearly ignores such thoughts.
Friday, July 15, 2011
Strassel: The Real GOP Debt Choice - WSJ.com
SUPERMARKET FOOD SUPPLY ANALOGY: Strassel: The Real GOP Debt Choice - WSJ.com
One can believe in miracles or reckon that past is prologue.
It's a 1930's replay where Obama and Roosevelt felt more government would cure the problem.
Think of what's going on as 2 kids on a teeter-totter. Over time, one (government) gets fatter and fatter. The other kid (private economy) tries to stay lean.
Pretty soon, the fat kid is always sitting on the ground.
A happy balance between government and the private sector hasn't been struck. There is too much government (including both spending and regulatory excess). It's unbalanced.
But, like kids addicted to too much fast food and sweets, the government doesn't see anything wrong.
In some ways, it's also like the kid who never saw where their food comes from on the farm. They just know it comes from the supermarket.
Obama and the Democrats seem like such a kid economically. They really don't know how growth works.
One can believe in miracles or reckon that past is prologue.
It's a 1930's replay where Obama and Roosevelt felt more government would cure the problem.
Think of what's going on as 2 kids on a teeter-totter. Over time, one (government) gets fatter and fatter. The other kid (private economy) tries to stay lean.
Pretty soon, the fat kid is always sitting on the ground.
A happy balance between government and the private sector hasn't been struck. There is too much government (including both spending and regulatory excess). It's unbalanced.
But, like kids addicted to too much fast food and sweets, the government doesn't see anything wrong.
In some ways, it's also like the kid who never saw where their food comes from on the farm. They just know it comes from the supermarket.
Obama and the Democrats seem like such a kid economically. They really don't know how growth works.
This Is No Time for Games - WSJ.com
Scylla and Charybdis: This Is No Time for Games - WSJ.com
I'd rather say the cultural changes recanted in this editorial are generally good and NOT the problem.
Rather, the problem is an 'entitlement' culture of liberals where outcomes are more important than opportunities and the idea of a 'free lunch' are given new meaning.
Liberals don't know about opportunity; they think everyone who's successful somehow was benighted by some divinity or other and thus owes it to those less-benighted to pay for them as well.
The religious right has its own cudgel to wield on the economy in terms of myopic views.
So, best wishes to those kids who can navigate and survive Scylla and Charybdis.
I'd rather say the cultural changes recanted in this editorial are generally good and NOT the problem.
Rather, the problem is an 'entitlement' culture of liberals where outcomes are more important than opportunities and the idea of a 'free lunch' are given new meaning.
Liberals don't know about opportunity; they think everyone who's successful somehow was benighted by some divinity or other and thus owes it to those less-benighted to pay for them as well.
The religious right has its own cudgel to wield on the economy in terms of myopic views.
So, best wishes to those kids who can navigate and survive Scylla and Charybdis.
Robert Reich: Can Obama Pull a 'Clinton' on the GOP? - WSJ.com
NO ADMISSION OF OBESITY, OBAMA PREFERS DEBT INSULIN: Robert Reich: Can Obama Pull a 'Clinton' on the GOP? - WSJ.com
Clearly neither Mr. Reich's ideas nor those he suggests for the President deal with the real issues. They pander around the edges.
Reich and Obama, et al. are like the fat kid on the teeter-totter wondering why they are always the one on the ground with the other kids up in the air!
They don't realize that their anti-business, anti-investment policies are what they are - so they keep feeding them. Their basic overeating problems need to be addressed - but, of course aren't because they love entitlement ice cream, union-type trips to fast food, regulatory pizza and high tax toppings on everything.
In many ways, we have a part of the economy that has remained lean and healthy (big business).
But, as repeated frequently the last few days, the big part of the economy that is sitting things out is small business. I would posit that entrepreneurs need to have both the wherewithal to start businesses but also confidence that the stewards of the economy know what they are doing to balance things out.
Right now the balance has been upset by the fat of the government.
And, Obama and his supporters don't have a clue that they are fat. As part of the budget negotiations, they offer a paltry 1.5 trillion over 10 years. (It's more like cutting out the 5th candy bar as a 10 o'clock snack.)
There's well over a trillion dollars in cancelling out Obamacare - the immediate end of which should certainly should be demanded as part of any debt ceiling!
Right now the diabetic economy of Obama just wants more borrowing insulin. It doesn't want to lose weight!
Unlike Clinton, Obama looks to be more economically inept than Carter.
Clearly neither Mr. Reich's ideas nor those he suggests for the President deal with the real issues. They pander around the edges.
Reich and Obama, et al. are like the fat kid on the teeter-totter wondering why they are always the one on the ground with the other kids up in the air!
They don't realize that their anti-business, anti-investment policies are what they are - so they keep feeding them. Their basic overeating problems need to be addressed - but, of course aren't because they love entitlement ice cream, union-type trips to fast food, regulatory pizza and high tax toppings on everything.
In many ways, we have a part of the economy that has remained lean and healthy (big business).
But, as repeated frequently the last few days, the big part of the economy that is sitting things out is small business. I would posit that entrepreneurs need to have both the wherewithal to start businesses but also confidence that the stewards of the economy know what they are doing to balance things out.
Right now the balance has been upset by the fat of the government.
And, Obama and his supporters don't have a clue that they are fat. As part of the budget negotiations, they offer a paltry 1.5 trillion over 10 years. (It's more like cutting out the 5th candy bar as a 10 o'clock snack.)
There's well over a trillion dollars in cancelling out Obamacare - the immediate end of which should certainly should be demanded as part of any debt ceiling!
Right now the diabetic economy of Obama just wants more borrowing insulin. It doesn't want to lose weight!
Unlike Clinton, Obama looks to be more economically inept than Carter.
Thursday, July 14, 2011
Balanced-Budget Amendment Linked to Debt Talks - WSJ.com
THE TEETER-TOTTER ANALOGY: Balanced-Budget Amendment Linked to Debt Talks - WSJ.com
Perhaps one could think of the balancing act between the Republicans (less government both now and in the future) and the Democrats (more government and a permanent increase in the share of GDP taken by government) as two kids on a teeter-totter.
Everything is fine as long as the kids are of roughly equal size. But, when they aren't, one kid ends up in the air and the other on the ground.
Now, we can all take a look around and objectively see where societies are showing growth and where they aren't.
We can see where societies have overspent (e.g. US and Greece) and where they are in some type of trouble.
It would seem as though the Democrats have taken on the role of the 'fat' kid on the teeter-totter and they can't stop eating.
Perhaps one could think of the balancing act between the Republicans (less government both now and in the future) and the Democrats (more government and a permanent increase in the share of GDP taken by government) as two kids on a teeter-totter.
Everything is fine as long as the kids are of roughly equal size. But, when they aren't, one kid ends up in the air and the other on the ground.
Now, we can all take a look around and objectively see where societies are showing growth and where they aren't.
We can see where societies have overspent (e.g. US and Greece) and where they are in some type of trouble.
It would seem as though the Democrats have taken on the role of the 'fat' kid on the teeter-totter and they can't stop eating.
Balanced-Budget Amendment Linked to Debt Talks - WSJ.com
A HEAVY FOOT ON THE ECONOMIC BRAKES: Balanced-Budget Amendment Linked to Debt Talks - WSJ.com
The Democrats don't realize that high tax, high regulation, pandering to unions, beating up on business, trying to teach the public to blame bankers not politicians for the economic problems created by politicians, etc. is like putting the Democratic foot on the brakes of the economic engine of job creation.
The Democrats just don't see it. They are like the driver who gets 10 mpg instead of 30 mpg because of the way they drive with a foot on the brakes.
So all the gas the Democrats think they giving to the economy isn't really going to engine of the economy. Much of it is going just to make up for their foot on the economic brakes.
So, as it stands now, the Democrats just want to be able to put more gas into the economy but they don't realize they are wearing down the economy faster and faster without the economy being able to go faster.
In fact, it seems as though the economy is slowing - the impact of the brakes are greater than the push on the accelerator.
And, as seen in many countries (Greece comes to mind and the imminent downgrading of the US credit status) - eventually the economic engine sputters and may go into reverse.
I always remember a doctor who drove like a Democrat and after 30,000 miles or so, he would trade in his car. The unscrupulous car dealer would advertise the used vehicle as 'executive car', 'lightly driven'. In fact, it was almost ready to be scrapped.
It would seem to be an open question as to whether the Democrats can be taught something about keeping their foot off the brakes. So far, lessons seem to have failed and they don't even realize they have a heavy foot on the economic brakes.
The Democrats don't realize that high tax, high regulation, pandering to unions, beating up on business, trying to teach the public to blame bankers not politicians for the economic problems created by politicians, etc. is like putting the Democratic foot on the brakes of the economic engine of job creation.
The Democrats just don't see it. They are like the driver who gets 10 mpg instead of 30 mpg because of the way they drive with a foot on the brakes.
So all the gas the Democrats think they giving to the economy isn't really going to engine of the economy. Much of it is going just to make up for their foot on the economic brakes.
So, as it stands now, the Democrats just want to be able to put more gas into the economy but they don't realize they are wearing down the economy faster and faster without the economy being able to go faster.
In fact, it seems as though the economy is slowing - the impact of the brakes are greater than the push on the accelerator.
And, as seen in many countries (Greece comes to mind and the imminent downgrading of the US credit status) - eventually the economic engine sputters and may go into reverse.
I always remember a doctor who drove like a Democrat and after 30,000 miles or so, he would trade in his car. The unscrupulous car dealer would advertise the used vehicle as 'executive car', 'lightly driven'. In fact, it was almost ready to be scrapped.
It would seem to be an open question as to whether the Democrats can be taught something about keeping their foot off the brakes. So far, lessons seem to have failed and they don't even realize they have a heavy foot on the economic brakes.
Wednesday, July 13, 2011
S&P 500 Futures Retreat as Moody’s Puts U.S. Rating Under Review - Businessweek
Q&A: MEAT AND VEGETABLES VS. CANDY: S&P 500 Futures Retreat as Moody’s Puts U.S. Rating Under Review - Businessweek
Question:
When will the rest of us Americans wake up and realize that; the moneyed elite, who support these irresponsible Republicans, would actually benefit from the chaos and rising interest rates, which will inevitably come from any default by the U.S. government. Unfortunately, there isn't time to throw them out of office. Only solution, now is to throw them in jail, for Treason or dereliction of duty.
Answer:
It's like a little child that would rather go to the parent that says you can have the candy than the parent that says it isn't good for you and you shouldn't.
Obama wants to promise that the rich can pay and they are at fault.
He certainly can't tell his Democratic brethren and their union supporters that the US can't do business as usual and that all the social benefits they love so much have to be curtailed in order to live within a budget that supports job growth and investment.
So, blame Republicans because they are the parent that curtails candy.
But, when the teeth have cavities (as the US economy clearly has right now), you might consider blaming the parent that let you eat all that candy and, in fact, perhaps blamed the cavities on eating meat and vegetables.
Question:
When will the rest of us Americans wake up and realize that; the moneyed elite, who support these irresponsible Republicans, would actually benefit from the chaos and rising interest rates, which will inevitably come from any default by the U.S. government. Unfortunately, there isn't time to throw them out of office. Only solution, now is to throw them in jail, for Treason or dereliction of duty.
Answer:
It's like a little child that would rather go to the parent that says you can have the candy than the parent that says it isn't good for you and you shouldn't.
Obama wants to promise that the rich can pay and they are at fault.
He certainly can't tell his Democratic brethren and their union supporters that the US can't do business as usual and that all the social benefits they love so much have to be curtailed in order to live within a budget that supports job growth and investment.
So, blame Republicans because they are the parent that curtails candy.
But, when the teeth have cavities (as the US economy clearly has right now), you might consider blaming the parent that let you eat all that candy and, in fact, perhaps blamed the cavities on eating meat and vegetables.
Europe's Banks Ready for Worst - WSJ.com
;A FAILURE TO LOOK AT THE OBVIOUS: Europe's Banks Ready for Worst - WSJ.com
The failure to look at the obvious!
The puzzle here is that people do seem to be reluctant, as in the US, to look at those countries (or states), where the economies are doing better and where they are doing worse and then make a judgment call on the policies being followed (or promulgated) by the respective governments.
Austerity is one thing, but pro-active growth policies are another.
In Greece, a conservative leader has come up with some growth policies - but, no one is listening (maybe they will eventually).
In the US, Obama is following and supporting policies like those in California where, unlike in Texas, there is an above-average unemployment rate.
With problem governments (and this includes the US) having leaders and large number of their citizens who are hoping against hope that their obviously bad policy decisions will somehow produce different results, it's easy to see why business people are concerned and loathe to invest.
The failure to look at the obvious!
The puzzle here is that people do seem to be reluctant, as in the US, to look at those countries (or states), where the economies are doing better and where they are doing worse and then make a judgment call on the policies being followed (or promulgated) by the respective governments.
Austerity is one thing, but pro-active growth policies are another.
In Greece, a conservative leader has come up with some growth policies - but, no one is listening (maybe they will eventually).
In the US, Obama is following and supporting policies like those in California where, unlike in Texas, there is an above-average unemployment rate.
With problem governments (and this includes the US) having leaders and large number of their citizens who are hoping against hope that their obviously bad policy decisions will somehow produce different results, it's easy to see why business people are concerned and loathe to invest.
Monday, July 11, 2011
Obama Benefits by Pursuing Big Deficit Deal - WSJ.com
CAN WE REALLY STILL BE BLAMING BUSH?: Obama Benefits by Pursuing Big Deficit Deal - WSJ.com
Clearly there's a bit of subterfuge or ignorance here.
Let's look back at history and the Laffer Curve and realize that Obamanomics is like trying to run some pumps to bail out a ship still driving itself headfirst into the rocks of an economic reef.
We need to rebuild the economy and invest. If that means some 'entitlements' have to be given up (and Pelosi and Obama spent 2 years expanding them), then maybe a bit of recognition would be called for.
Clearly, the Democrats are still in nirvana land where people invest and work for the sake of others (oh yes, communism and socialism); and, it doesn't seem to be creating jobs.
So, like piling a ship on the rocks - should one change policies, back off the rocks and try to seal the hull; or, keep driving the ship of the economy into greater and greater loss of economic integrity?
Those who blame the rocks on some nefarious factor (e.g. Bush and Republicans) who will somehow save the US from the outcome of Greek-style economic policies - well, those people will be hard to convince that more spending and taxing for entitlements won't somehow bring about prosperity as the last bit of investment blood is drained from investors.
Logic would suggest that while one helps one's brother-in-law (or whoever) when in need, one also likes to buy at a discount and get paid for one's work. When these same liberals look at government, they think entrepreneurs aren't affected by higher prices (read: taxes, regulations, etc.) and that they'll buy and consume and produce in the same way as before.
There is something to the Laffer Curve and the evidence is in country after country, state after state - but heck, maybe you don't like what you see there?
Clearly there's a bit of subterfuge or ignorance here.
Let's look back at history and the Laffer Curve and realize that Obamanomics is like trying to run some pumps to bail out a ship still driving itself headfirst into the rocks of an economic reef.
We need to rebuild the economy and invest. If that means some 'entitlements' have to be given up (and Pelosi and Obama spent 2 years expanding them), then maybe a bit of recognition would be called for.
Clearly, the Democrats are still in nirvana land where people invest and work for the sake of others (oh yes, communism and socialism); and, it doesn't seem to be creating jobs.
So, like piling a ship on the rocks - should one change policies, back off the rocks and try to seal the hull; or, keep driving the ship of the economy into greater and greater loss of economic integrity?
Those who blame the rocks on some nefarious factor (e.g. Bush and Republicans) who will somehow save the US from the outcome of Greek-style economic policies - well, those people will be hard to convince that more spending and taxing for entitlements won't somehow bring about prosperity as the last bit of investment blood is drained from investors.
Logic would suggest that while one helps one's brother-in-law (or whoever) when in need, one also likes to buy at a discount and get paid for one's work. When these same liberals look at government, they think entrepreneurs aren't affected by higher prices (read: taxes, regulations, etc.) and that they'll buy and consume and produce in the same way as before.
There is something to the Laffer Curve and the evidence is in country after country, state after state - but heck, maybe you don't like what you see there?
Sunday, July 10, 2011
Profit Margins are Key for U.S. Growth - WSJ.com
WHERE'S THE MONEY?: Profit Margins are Key for U.S. Growth - WSJ.com
One can't help but think of the old saying "where's the money".
As such, we see government taking more and more of it and not doing anything productive with it.
That surely doesn't sound like the way to create long-term economic growth or jobs.
But heck, it's just like the California legislature passing a bill (reported in the LA Times this weekend) that schools in California can't lay off teachers to balance the books - so, here we are - "MAGIC MONEY". Exactly the same as many protesters and union members in Europe and Greece.
Don't lay us off; don't change work rules; and, oh yes, keep paying us!
Obama has that disconnect. He assumes the economy will keep producing the jobs and wealth that he wants to spend; but, he hasn't an obvious clue as to help support the ability of the economy to do it.
One can't help but think of the old saying "where's the money".
As such, we see government taking more and more of it and not doing anything productive with it.
That surely doesn't sound like the way to create long-term economic growth or jobs.
But heck, it's just like the California legislature passing a bill (reported in the LA Times this weekend) that schools in California can't lay off teachers to balance the books - so, here we are - "MAGIC MONEY". Exactly the same as many protesters and union members in Europe and Greece.
Don't lay us off; don't change work rules; and, oh yes, keep paying us!
Obama has that disconnect. He assumes the economy will keep producing the jobs and wealth that he wants to spend; but, he hasn't an obvious clue as to help support the ability of the economy to do it.
Saturday, July 9, 2011
Up and Down Wall Street - Barrons.com
SAFEGUARDING EMPLOYEES BUT NOT EMPLOYMENT: Up and Down Wall Street - Barrons.com
With respect to jobs and employment, what struck me last week were all the talking-head discussions of employees suing their employer over this and that.
Somehow, this doesn't strike me as the stuff to encourage employers to hire Americans!
And then, this Saturday morning on Bloomberg radio, there was a discussion of the risks employers face from what employees might be posting on social network sites.
Again, from a liberal perspective, the idea of defending employee rights trumps anything else - so, we I guess we should add 'job creation' to those things that don't matter (because they don't make the connection between the needs of the employer / investor and the desire to hire - ah well, Keynesians - aren't they grand).
Maybe some new laws to make it safer (i.e. less subject to lawsuits) when hiring Americans are what is called for.
With respect to jobs and employment, what struck me last week were all the talking-head discussions of employees suing their employer over this and that.
Somehow, this doesn't strike me as the stuff to encourage employers to hire Americans!
And then, this Saturday morning on Bloomberg radio, there was a discussion of the risks employers face from what employees might be posting on social network sites.
Again, from a liberal perspective, the idea of defending employee rights trumps anything else - so, we I guess we should add 'job creation' to those things that don't matter (because they don't make the connection between the needs of the employer / investor and the desire to hire - ah well, Keynesians - aren't they grand).
Maybe some new laws to make it safer (i.e. less subject to lawsuits) when hiring Americans are what is called for.
Friday, July 8, 2011
Jobs Data Dim Recovery Hopes - WSJ.com
FEED-A-DOG, BEAT-A-DOG: Jobs Data Dim Recovery Hopes - WSJ.com
Somehow, this all reminds me of Art Laffer's homonym about feeding-a-dog and beating-a-dog.
The Democrats and Obama somehow believe that beating up on business, bankers, investors, entrepreneurs - all for the sake of supporting social entitlements and unions (and to hide their own ineptitude) - will somehow get the economic dog to come around and nuzzle their policies.
It would seem reasonable to say its time to throw the Democrats and Obama out and time to start feeding the economic dog.
But, could he even imagine such a new approach, let alone follow it? (The economic left continues to be listened to from reports on debt limit negotiations.
Somehow, this all reminds me of Art Laffer's homonym about feeding-a-dog and beating-a-dog.
The Democrats and Obama somehow believe that beating up on business, bankers, investors, entrepreneurs - all for the sake of supporting social entitlements and unions (and to hide their own ineptitude) - will somehow get the economic dog to come around and nuzzle their policies.
It would seem reasonable to say its time to throw the Democrats and Obama out and time to start feeding the economic dog.
But, could he even imagine such a new approach, let alone follow it? (The economic left continues to be listened to from reports on debt limit negotiations.
Thursday, July 7, 2011
Ultralow Short-Term Rates Failing to Help Most Banks - Barrons.com
AHEAD OF THE BOND VIGILANTES: Ultralow Short-Term Rates Failing to Help Most Banks - Barrons.com
One could imagine a world in which the US was building infrastructure and had fiscal, tax, investor, anti-union,pro-education, immigration and regulatory policies that made it the ideal place to grow a business.
In such a situation, one could imagine loan growth.
Sadly, we're worried about funding those who can't take care of themselves and who've come to rely on government benefits and transfer payments.
Also, the liberals and Dems see nothing wrong with the policies that they support that got us into this situation and want more of the same.
Can't think this is much of a recipe for a turnaround. At best, something stagnant.
But, are we in fact in the midst of a Greek-like bubble with a Laffer Curve downside? And, if so, how long can it run?
Someone on Bloomberg tonight suggested the discussions by politicians in Washington are at least addressing issues before they are taken charge of by the 'bond vigilantes'????
One could imagine a world in which the US was building infrastructure and had fiscal, tax, investor, anti-union,pro-education, immigration and regulatory policies that made it the ideal place to grow a business.
In such a situation, one could imagine loan growth.
Sadly, we're worried about funding those who can't take care of themselves and who've come to rely on government benefits and transfer payments.
Also, the liberals and Dems see nothing wrong with the policies that they support that got us into this situation and want more of the same.
Can't think this is much of a recipe for a turnaround. At best, something stagnant.
But, are we in fact in the midst of a Greek-like bubble with a Laffer Curve downside? And, if so, how long can it run?
Someone on Bloomberg tonight suggested the discussions by politicians in Washington are at least addressing issues before they are taken charge of by the 'bond vigilantes'????
Friday, July 1, 2011
Barton Biggs: U.S. Needs a Massive Public Works Program - WSJ.com
NEVER-NEVER LAND: Barton Biggs: U.S. Needs a Massive Public Works Program - WSJ.com
This is almost a joke - a sad one at that.
Clearly, we need to assess employment policies that discourage employing those with less of an education (let's just admit its a problem).
Public works might be good but if the contracts are let out under Davis - Bacon (?) where union wage rates are required, then this is more of the problem than the solution.
The US needs to be business-friendly and investor-friendly. Dealing with companies paying less tax than someone else thinks they should is just a sign of too high rates.
The idea of bringing down government expenditures as a percent of GDP is the best idea - not mentioned by Biggs!
Make US tax rates competitive and make the US a competitive business environment - that would be my suggestion - not more debt and more boondoggles.
This is almost a joke - a sad one at that.
Clearly, we need to assess employment policies that discourage employing those with less of an education (let's just admit its a problem).
Public works might be good but if the contracts are let out under Davis - Bacon (?) where union wage rates are required, then this is more of the problem than the solution.
The US needs to be business-friendly and investor-friendly. Dealing with companies paying less tax than someone else thinks they should is just a sign of too high rates.
The idea of bringing down government expenditures as a percent of GDP is the best idea - not mentioned by Biggs!
Make US tax rates competitive and make the US a competitive business environment - that would be my suggestion - not more debt and more boondoggles.
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