Sharp Divide at the Federal Reserve - Barrons.com
The Obama Administration and its policies keep reminding me of the Catholic Church in Spain and Portugal at the time of the Inquisition.
They have such faith in their Keynesian beliefs.
That those beliefs are malicious and wrong doesn't affect or get to them at all. It's their abiding faith in them that guides their actions.
We also all know what the impact of the Inquisition was on the Spanish economy. Something else Obama's policies have in common with those of the 16th century.
Wednesday, August 31, 2011
UNEXPECTED CONSEQUENCES: Review & Outlook: The Labor Board Wants You - WSJ.com
Review & Outlook: The Labor Board Wants You - WSJ.com
If one assumes Google's employees won't unionize (college educated, current unemployment rate 4%) but that the small furniture manufacturer's might, then one has to assume the furniture manufacturer will close its doors and we'll be importing that furniture.
Along the same line of thinking, it's likely that the furniture manufacturer has some employees who have just finished high school (current unemployment rate 9%) or not even finished high school (current unemployment rate 14%, per an article in this week's Barrons Magazine).
So, the very area where we want to add jobs, the Obama Administration will encourage employers to not create employment.
Liberals are so consistent. They do things that always have unexpected or unwanted consequences and they expect someone else to pick up the tab.
If one assumes Google's employees won't unionize (college educated, current unemployment rate 4%) but that the small furniture manufacturer's might, then one has to assume the furniture manufacturer will close its doors and we'll be importing that furniture.
Along the same line of thinking, it's likely that the furniture manufacturer has some employees who have just finished high school (current unemployment rate 9%) or not even finished high school (current unemployment rate 14%, per an article in this week's Barrons Magazine).
So, the very area where we want to add jobs, the Obama Administration will encourage employers to not create employment.
Liberals are so consistent. They do things that always have unexpected or unwanted consequences and they expect someone else to pick up the tab.
Tuesday, August 30, 2011
TIPPING POINTS: Confidence Data Hurt Dollar, Euro - WSJ.com
Confidence Data Hurt Dollar, Euro - WSJ.com
The question is where is the tipping point.
There was a tipping point for Greece and for Ireland and Portugal.
It's Alice through the Looking Glass that there is always magic money to fund government spending and deficits with no consequences.
To date, the consequences have been slow growth and stable to rising unemployment. The interest rate hobgoblin has yet to appear (except for Greece, etc.).
But, like the bubble in US housing prices not too far back, the bubble of the cross in interest rates between rewarding savers and costing borrowers is still a vast gap that is only growing bigger.
The closing of that gap can't be a pretty sight - however, it turns out the gap will be closed with massive cutbacks, stupendous economic growth or significant inflation.
Gold's price today would suggest the latter is high up there in the range of probabilities.
The question is where is the tipping point.
There was a tipping point for Greece and for Ireland and Portugal.
It's Alice through the Looking Glass that there is always magic money to fund government spending and deficits with no consequences.
To date, the consequences have been slow growth and stable to rising unemployment. The interest rate hobgoblin has yet to appear (except for Greece, etc.).
But, like the bubble in US housing prices not too far back, the bubble of the cross in interest rates between rewarding savers and costing borrowers is still a vast gap that is only growing bigger.
The closing of that gap can't be a pretty sight - however, it turns out the gap will be closed with massive cutbacks, stupendous economic growth or significant inflation.
Gold's price today would suggest the latter is high up there in the range of probabilities.
THE INFLATIONARY GENII: Minutes: Fed Weighed Asset Purchases - WSJ.com
Minutes: Fed Weighed Asset Purchases - WSJ.com
Or, as is getting more and more media time - including on Bloomberg's Tom Keene - is the idea of targeting something like nominal GDP.
In other words, since the policies of the government inhibit reasonable investing, go back to the cook the numbers game. Make it seem as though things are growing. Flood the economy with money. Inflate away all debt (i.e. do it very quickly and Bill Gross was premature, but not wrong about Treasuries).
The relationship between saver and borrower has clearly been sundered. In the early 1980s it was at least discussed as an issue of 'crowding out' and the possible need (as a last resort) to print money.
Now, the only question is how much to print and when.
I recall a story a friend told me once about a musician in Wiemar Germany during the inflation of the early 1920s.
The man had performed one night and took half his money earned that night to buy dinner, saving the other half for breakfast. In the morning, his money had lost so much value that he couldn't afford any breakfast.
Or, as is getting more and more media time - including on Bloomberg's Tom Keene - is the idea of targeting something like nominal GDP.
In other words, since the policies of the government inhibit reasonable investing, go back to the cook the numbers game. Make it seem as though things are growing. Flood the economy with money. Inflate away all debt (i.e. do it very quickly and Bill Gross was premature, but not wrong about Treasuries).
The relationship between saver and borrower has clearly been sundered. In the early 1980s it was at least discussed as an issue of 'crowding out' and the possible need (as a last resort) to print money.
Now, the only question is how much to print and when.
I recall a story a friend told me once about a musician in Wiemar Germany during the inflation of the early 1920s.
The man had performed one night and took half his money earned that night to buy dinner, saving the other half for breakfast. In the morning, his money had lost so much value that he couldn't afford any breakfast.
Q&A: WHY NOT REPLACE ILLEGAL IMMIGRANTS?: Obama Pick Kreuger to Join Growth Debate - WSJ.com
Obama Pick Kreuger to Join Growth Debate - WSJ.com
Question:
"You can solve unemployment and illegal immigration at the same time.
Replace illegal workers by using longest unemployed policy. As each employed illegal alien is found and returned the first listed unemployed is required to do that job or forfeit all benefits. The faster you deport the illegal aliens the faster the unemployment is solved."
Answer:
You know deep down you are in la-la-land don't you?
Let's see? The unemployed person making, say $40,000 a year with benefits (or much more), is going to take a job for $20,000 a year?
Or, the American who joined a union and worked on a seniority system where performance was secondary - if at all - is going to replace someone who knew they really had to work to get paid.
This idea is the most wishful, boldfaced wrong thinking.
It is very sad.
The issue is best summed up by the unemployment numbers someone quoted in this week's Barrons - i.e. that respectively 4%, 9% and 14% unemployment rates applied to those with college, a high school graduation degree and no graduation from high school.
As such, those chronically unemployed would likely be those with no high school diploma - or, they'd be competing with jobs filled by those with such a situation (the likely circumstances of illegal immigrants).
The President and liberals have told the bottom of the educational rung that they are 'entitled' to equal things like healthcare, etc. They know they don't have to work.
A much more insightful comment was to recognize that labor will have a clearing price at which people would be hired. To do this, things like Obamacare need to be killed off.
Likewise, we need policies to make America business friendly.
Note, such a committee to make the US business friendly was not and has not really been created (albeit the committee with Immelt, etc.). Where's a report.
Instead, the President is appointing someone to the Council of Economic Advisers, Krueger, who says minimum wage rates don't impact employment.
I can tell you from broad personal experience that minimum wage rates encourage substitution of equipment - especially in the fast food industry, a place where there used to be many low wage, starter jobs.
And, to make himself look like even a more consummate idiot, the President then takes the opposite tack and is apparently going to argue for a $5,000 credit for new hires.
He doesn't see the dichotomy between the two positions because a high minimum wage is part of liberal dogma (the old 'living wage').
We are truly in a 1984 George Orwell situation.
Your idea sadly is one of such ideas.
Question:
"You can solve unemployment and illegal immigration at the same time.
Replace illegal workers by using longest unemployed policy. As each employed illegal alien is found and returned the first listed unemployed is required to do that job or forfeit all benefits. The faster you deport the illegal aliens the faster the unemployment is solved."
Answer:
You know deep down you are in la-la-land don't you?
Let's see? The unemployed person making, say $40,000 a year with benefits (or much more), is going to take a job for $20,000 a year?
Or, the American who joined a union and worked on a seniority system where performance was secondary - if at all - is going to replace someone who knew they really had to work to get paid.
This idea is the most wishful, boldfaced wrong thinking.
It is very sad.
The issue is best summed up by the unemployment numbers someone quoted in this week's Barrons - i.e. that respectively 4%, 9% and 14% unemployment rates applied to those with college, a high school graduation degree and no graduation from high school.
As such, those chronically unemployed would likely be those with no high school diploma - or, they'd be competing with jobs filled by those with such a situation (the likely circumstances of illegal immigrants).
The President and liberals have told the bottom of the educational rung that they are 'entitled' to equal things like healthcare, etc. They know they don't have to work.
A much more insightful comment was to recognize that labor will have a clearing price at which people would be hired. To do this, things like Obamacare need to be killed off.
Likewise, we need policies to make America business friendly.
Note, such a committee to make the US business friendly was not and has not really been created (albeit the committee with Immelt, etc.). Where's a report.
Instead, the President is appointing someone to the Council of Economic Advisers, Krueger, who says minimum wage rates don't impact employment.
I can tell you from broad personal experience that minimum wage rates encourage substitution of equipment - especially in the fast food industry, a place where there used to be many low wage, starter jobs.
And, to make himself look like even a more consummate idiot, the President then takes the opposite tack and is apparently going to argue for a $5,000 credit for new hires.
He doesn't see the dichotomy between the two positions because a high minimum wage is part of liberal dogma (the old 'living wage').
We are truly in a 1984 George Orwell situation.
Your idea sadly is one of such ideas.
Basic Math Skills and the President
Can you believe the President? The guy he wants to appoint to the Council of Economic Advisers on one hand says minimum wage rates don't influence employment. And next, the President is suggesting a $5,000 credit for hiring a new employee?
How many people can buy into this? It's very scary!
Actually, I'd hope not just young people but also the baby boomers would wake up and say the math doesn't compute!
How many people can buy into this? It's very scary!
Actually, I'd hope not just young people but also the baby boomers would wake up and say the math doesn't compute!
Monday, August 29, 2011
AGAIN, THE GREAT DISCONNECT: Pimco's Gross Has 'Lost Sleep' Over Bad Bets - WSJ.com
Pimco's Gross Has 'Lost Sleep' Over Bad Bets - WSJ.com
There is a clear and evident disconnect between rewarding savers for foregoing current rewards and the cost to those that borrow.
The Fed has printed the money for the government to borrow at low rates in the US.
In Europe, there has been the delusion of safety for Southern European bonds that is now becoming unwound.
The logic that savers expect a return for foregoing current consumption at a level to meet the demands of borrowers is seemingly far more out-of-whack than house prices during the bubble run-up in US housing.
How this will unwind and when is again like the housing bubble. Some left too soon and some didn't realize they needed to leave.
This bubble reminds one of a great battleship. It doesn't turn on a dime, but when it does turn, watch out.
Greece found this out and those in charge of US fiscal policy (e.g. Obama, et al.) have just today admitted what they don't know in their selection of someone to the Council of Economic Advisers who believes minimum wage rates have no impact on hiring.
There is a clear and evident disconnect between rewarding savers for foregoing current rewards and the cost to those that borrow.
The Fed has printed the money for the government to borrow at low rates in the US.
In Europe, there has been the delusion of safety for Southern European bonds that is now becoming unwound.
The logic that savers expect a return for foregoing current consumption at a level to meet the demands of borrowers is seemingly far more out-of-whack than house prices during the bubble run-up in US housing.
How this will unwind and when is again like the housing bubble. Some left too soon and some didn't realize they needed to leave.
This bubble reminds one of a great battleship. It doesn't turn on a dime, but when it does turn, watch out.
Greece found this out and those in charge of US fiscal policy (e.g. Obama, et al.) have just today admitted what they don't know in their selection of someone to the Council of Economic Advisers who believes minimum wage rates have no impact on hiring.
THE WORLD OF 'NON-FACTS': Consumer Spending Rose in July - WSJ.com
Consumer Spending Rose in July - WSJ.com
As for the math in the latest economic reports - don't you know?
Liberals have their own math.
As the new-to-be-appointed to the Council of Economic Advisors said, it's a lie that when a fast food restaurant owner finds it cheaper to install a machine to automatically dispense sodas instead of hiring an employee, the fact that they bought the machine and fired (or didn't hire) that employee is somehow a 'non-fact'.
We all know how liberals like these 'non-facts'. They fly in the face of liberal dogma. Sort of like what happens to most religious believers.
And, as both the religious right and liberals from Chicago believe, you punish those who raise the issue of 'non-facts'.
As for the math in the latest economic reports - don't you know?
Liberals have their own math.
As the new-to-be-appointed to the Council of Economic Advisors said, it's a lie that when a fast food restaurant owner finds it cheaper to install a machine to automatically dispense sodas instead of hiring an employee, the fact that they bought the machine and fired (or didn't hire) that employee is somehow a 'non-fact'.
We all know how liberals like these 'non-facts'. They fly in the face of liberal dogma. Sort of like what happens to most religious believers.
And, as both the religious right and liberals from Chicago believe, you punish those who raise the issue of 'non-facts'.
HONESTY ABOUT SEGMENTATION: Consumer Spending Rose in July - WSJ.com
Consumer Spending Rose in July - WSJ.com
What could possibly be missing from this report?
Well, let's start with the same thing that was missing on Tom Keene in his discussion of this on the Mid-day Report - i.e. what has spending been like for the three basic educational groups - college, high school, not-finished-high-school.
Over the weekend, Barrons reported the respective unemployment rates at 4% (i.e. good spending), 9% (not so good spending) and 14% (not spending).
When the president has the (fill-in the blanks) desire to appoint someone to tell him about economic implications as part of the Council of Economic Advisers that minimum wage rates have no impact on employment, it doesn't take a grade school kid to realize that those with less education (read: not even finished high school) are not exactly finding lots of jobs.
If Tiffany reports good sales and lower priced stores do not, there is clearly a bi-furcation or tri-furcation of the economy going on.
The averages are masking some people who are really hurting and need work and a purpose in life. The liberals think it's unfair not to let everyone have a good-paying job with high benefits; but, frankly, supply and demand says it isn't possible.
What could possibly be missing from this report?
Well, let's start with the same thing that was missing on Tom Keene in his discussion of this on the Mid-day Report - i.e. what has spending been like for the three basic educational groups - college, high school, not-finished-high-school.
Over the weekend, Barrons reported the respective unemployment rates at 4% (i.e. good spending), 9% (not so good spending) and 14% (not spending).
When the president has the (fill-in the blanks) desire to appoint someone to tell him about economic implications as part of the Council of Economic Advisers that minimum wage rates have no impact on employment, it doesn't take a grade school kid to realize that those with less education (read: not even finished high school) are not exactly finding lots of jobs.
If Tiffany reports good sales and lower priced stores do not, there is clearly a bi-furcation or tri-furcation of the economy going on.
The averages are masking some people who are really hurting and need work and a purpose in life. The liberals think it's unfair not to let everyone have a good-paying job with high benefits; but, frankly, supply and demand says it isn't possible.
A WHIMPER OR A BANG (the relationship between saver/lender and borrower): Investors of Last Resort - Barrons.com
Investors of Last Resort - Barrons.com
Donlan touches on a topic - the funding of spending out of Central Banks - that was also a major topic of discussion back in the late 1970s and early '80s.
At that time however, the discussion included the terms 'crowding out' and the hope that government borrowing both wouldn't crowd out private borrowing needs (like mortgages and car loans) and that the government (i.e. the Federal Reserve) wouldn't have to 'print' money to provide the cash needed for the government to borrow.
Somehow it does strike one that, having clearly moved beyond even questioning the fact that the government is printing money, we've also lost the intended relationship between saver/lender and borrower.
Whenever there is a big dislocation between something inherently rational and sane, it's hard not to recall the same irrationality in support of the housing bubble or, way back when, the Tulipmania.
No one knew exactly how the housing bubble would end (we still don't - although Mr. Paulson did rather well with his guess on it) nor do we know how the excess of government borrowing and spending will end. But, it is hard to think it will end with a whimper rather than a bang.
Donlan touches on a topic - the funding of spending out of Central Banks - that was also a major topic of discussion back in the late 1970s and early '80s.
At that time however, the discussion included the terms 'crowding out' and the hope that government borrowing both wouldn't crowd out private borrowing needs (like mortgages and car loans) and that the government (i.e. the Federal Reserve) wouldn't have to 'print' money to provide the cash needed for the government to borrow.
Somehow it does strike one that, having clearly moved beyond even questioning the fact that the government is printing money, we've also lost the intended relationship between saver/lender and borrower.
Whenever there is a big dislocation between something inherently rational and sane, it's hard not to recall the same irrationality in support of the housing bubble or, way back when, the Tulipmania.
No one knew exactly how the housing bubble would end (we still don't - although Mr. Paulson did rather well with his guess on it) nor do we know how the excess of government borrowing and spending will end. But, it is hard to think it will end with a whimper rather than a bang.
Sunday, August 28, 2011
THERE IS SOME LOW-HANGING ECONOMIC INHIBITING FRUIT. WHY IS NOTHING BEING DONE?HEARD ON THE STREET: Bernanke Puts Ball in Politicians' Court - WSJ.com
HEARD ON THE STREET: Bernanke Puts Ball in Politicians' Court - WSJ.com
Sadly, the lunatic fringe economically is in the White House - i.e. the Keynesians.
Luckily Bloomberg hasn't had Christine Romer on that I've seen in the last few months.
Sadly too is that in more ways than one, the dichotomy between the parties is somewhat akin to the difference between 'creationists' and 'evolutionists'. Not quite of course, although with Perry...; however, the gap between a pro-business and pro-union, socialist agenda are huge.
Instead of just focusing on the cost, there is so much that could be done on a regulatory cutback front. Yet, here again, the media isn't focusing on it and the Democrats don't want to give up Dodd Frank and who knows about Sarbanes Oxley (two pieces of low-hanging regulatory fruit).
Then, of course, there is ObamaCare.
It is interesting to read how many states are discussed in Barrons this week as likely having to cut back on Medicaid programs (and the difference between what different states offer is also interesting in Barrons).
There is a lot that clearly could be done in the way of cutbacks that wouldn't be a drag on the recovery and that could spur growth. But each has change goes against the grain of someone in Washington.
Clearly the economy hasn't really gotten anyone in Washington's attention. Each party - and here lets just focus on the Democrats - think that same-ole, same-ole will somehow be able to turn the economy around.
Frankly, I'm tired of waiting! It reminds me of a great ship that should be laid up for repairs. As the repairs (i.e. to the economic policies out of Washington) are delayed, the cost and extent of repairs necessary will only increase.
But, who's really looking?
Sadly, the lunatic fringe economically is in the White House - i.e. the Keynesians.
Luckily Bloomberg hasn't had Christine Romer on that I've seen in the last few months.
Sadly too is that in more ways than one, the dichotomy between the parties is somewhat akin to the difference between 'creationists' and 'evolutionists'. Not quite of course, although with Perry...; however, the gap between a pro-business and pro-union, socialist agenda are huge.
Instead of just focusing on the cost, there is so much that could be done on a regulatory cutback front. Yet, here again, the media isn't focusing on it and the Democrats don't want to give up Dodd Frank and who knows about Sarbanes Oxley (two pieces of low-hanging regulatory fruit).
Then, of course, there is ObamaCare.
It is interesting to read how many states are discussed in Barrons this week as likely having to cut back on Medicaid programs (and the difference between what different states offer is also interesting in Barrons).
There is a lot that clearly could be done in the way of cutbacks that wouldn't be a drag on the recovery and that could spur growth. But each has change goes against the grain of someone in Washington.
Clearly the economy hasn't really gotten anyone in Washington's attention. Each party - and here lets just focus on the Democrats - think that same-ole, same-ole will somehow be able to turn the economy around.
Frankly, I'm tired of waiting! It reminds me of a great ship that should be laid up for repairs. As the repairs (i.e. to the economic policies out of Washington) are delayed, the cost and extent of repairs necessary will only increase.
But, who's really looking?
Saturday, August 27, 2011
THE WEEK THAT WAS: Passing the Buck at Jackson Hole - Barrons.com
Passing the Buck at Jackson Hole - Barrons.com
It has also been an interesting week in finally seeing more articles articulating the inept and anti-economic stability, let alone growth of the economy from the Obama administration.
However, there have really been no signs that Obama gets what needs to be done or has a clue (e.g. his discussion of regulatory restraint is like putting a finger in a creek to hold back the flow; or, his inane infrastructure programs, which every writer I've seen says will be counterproductive as 'shovel-ready' means after 5-7 years of hearings for permits).
Now, we even have the Fed (Bernanke) starting to tip his toes into the water of criticizing the president's fiscal policies.
As for me, I don't think Obama, Pelosi or Reid have a clue what to do to really help the economy. They seem to be looking for a political solution that keeps their voters 'believing'. Almost something religious here.
It has also been an interesting week in finally seeing more articles articulating the inept and anti-economic stability, let alone growth of the economy from the Obama administration.
However, there have really been no signs that Obama gets what needs to be done or has a clue (e.g. his discussion of regulatory restraint is like putting a finger in a creek to hold back the flow; or, his inane infrastructure programs, which every writer I've seen says will be counterproductive as 'shovel-ready' means after 5-7 years of hearings for permits).
Now, we even have the Fed (Bernanke) starting to tip his toes into the water of criticizing the president's fiscal policies.
As for me, I don't think Obama, Pelosi or Reid have a clue what to do to really help the economy. They seem to be looking for a political solution that keeps their voters 'believing'. Almost something religious here.
Wednesday, August 24, 2011
THE RISK OF IGNORING BASIC RULES OF SAVING AND BORROWING: The Errors Behind Today's Economic Woes - WSJ.com
The Errors Behind Today's Economic Woes - WSJ.com
As for barter, there were some interesting comments related to that on Bloomberg Wednesday - to wit, the markets are acting irrationally, currencies the same and no one knows what to do or what play is coming next.
Thus, it would seem as though this is akin to barter - i.e. for example, buy some Swiss Francs so you can hope to barter in your own local currency in the future for the same amount of goods you local currency would buy now. Same with gold.
How the economy will all play out is certainly not known by me. However, as crazy as housing prices going up indefinitely without a commensurate change in income or limit on supply; so to is the idea that governments can print money to make up for deficits.
Somehow the idea that there is a clearing price for savings (foregone gratification) and borrowing (to provide a future stream of income to reward whoever deferred their gratification) seems to escape the daily media and most current politicians.
This dichotomy from basic economics 101 will haunt us - but, like the housing bubble, until it bursts and then maybe a few years after, no one wants to know or think about it.
What was the rate today on Greek 2-year bonds? I think Bloomberg had posted something like 44%!
Can we possibly say "oh my!" and wonder why Obama and the Congress are following a Greek economic policy? Oh well, go to sleep and hope it will all go away with some magic.
As for barter, there were some interesting comments related to that on Bloomberg Wednesday - to wit, the markets are acting irrationally, currencies the same and no one knows what to do or what play is coming next.
Thus, it would seem as though this is akin to barter - i.e. for example, buy some Swiss Francs so you can hope to barter in your own local currency in the future for the same amount of goods you local currency would buy now. Same with gold.
How the economy will all play out is certainly not known by me. However, as crazy as housing prices going up indefinitely without a commensurate change in income or limit on supply; so to is the idea that governments can print money to make up for deficits.
Somehow the idea that there is a clearing price for savings (foregone gratification) and borrowing (to provide a future stream of income to reward whoever deferred their gratification) seems to escape the daily media and most current politicians.
This dichotomy from basic economics 101 will haunt us - but, like the housing bubble, until it bursts and then maybe a few years after, no one wants to know or think about it.
What was the rate today on Greek 2-year bonds? I think Bloomberg had posted something like 44%!
Can we possibly say "oh my!" and wonder why Obama and the Congress are following a Greek economic policy? Oh well, go to sleep and hope it will all go away with some magic.
TOO MANY AMERICANS RIDING THAT SAME OLD TIRED HORSE OF FISCAL UNION IN EUROPE: The Errors Behind Today's Economic Woes - WSJ.com
The Errors Behind Today's Economic Woes - WSJ.com
It is a puzzle why Americans are so fixated on Germany paying for the Greeks, etc.?
After all, how many Texans will be bailing out California when it can't pay the interest and/or refinance its bonds?
And, from what appears still to be the case, the Greeks haven't come close to a fiscal policy that can support its economy without fresh money - and, every year.
So, some of us just have to laugh and chortle at those who think the Germans have to take care of the Greeks. Those who bought Greek bonds thinking the Greek fiscal policy, body politic and economy were akin to that of Germany deserve to pay the price for their lack of insightful thinking.
But, then again, socialists like to avoid insightful thinking - it tends to be stratifying.
So, as well put in several recent editorials, the idea that Basel II and III made all European euro sovereign debt equal is now being shown as the king with no clothes.
It is a puzzle why Americans are so fixated on Germany paying for the Greeks, etc.?
After all, how many Texans will be bailing out California when it can't pay the interest and/or refinance its bonds?
And, from what appears still to be the case, the Greeks haven't come close to a fiscal policy that can support its economy without fresh money - and, every year.
So, some of us just have to laugh and chortle at those who think the Germans have to take care of the Greeks. Those who bought Greek bonds thinking the Greek fiscal policy, body politic and economy were akin to that of Germany deserve to pay the price for their lack of insightful thinking.
But, then again, socialists like to avoid insightful thinking - it tends to be stratifying.
So, as well put in several recent editorials, the idea that Basel II and III made all European euro sovereign debt equal is now being shown as the king with no clothes.
Tuesday, August 23, 2011
THE ALL-IN-ONE THEM AND ME: Review & Outlook: How Not to Grow an Economy - WSJ.com
Review & Outlook: How Not to Grow an Economy - WSJ.com
Clearly the public media doesn't want or understand what the Administration is doing.
Thus, they are failing to serve the public.
Or, the media and the Administration are so economically inept that they think there are two types of behavior (well, I guess we know there are two types of behavior) - the behavior that they do in their private lives and then there's the behavior they expect the 'others' to follow (i.e. to behave not as they as individuals would do to optimize the economic utility of their individual lives; but rather, the not act in their own self-interest but to ignore their own self-interest so they can be tapped to pay for all the policies the media and Administration believes the country should follow).
It is sadly them vs. us all wrapped up in each individual. Not a very good way to make decisions or to bring people together.
Clearly the public media doesn't want or understand what the Administration is doing.
Thus, they are failing to serve the public.
Or, the media and the Administration are so economically inept that they think there are two types of behavior (well, I guess we know there are two types of behavior) - the behavior that they do in their private lives and then there's the behavior they expect the 'others' to follow (i.e. to behave not as they as individuals would do to optimize the economic utility of their individual lives; but rather, the not act in their own self-interest but to ignore their own self-interest so they can be tapped to pay for all the policies the media and Administration believes the country should follow).
It is sadly them vs. us all wrapped up in each individual. Not a very good way to make decisions or to bring people together.
Monday, August 22, 2011
AN AFFINITY FOR MAKING STUPID MISTAKES: Foreclosure Talks Snag on Bank Liability - WSJ.com
Foreclosure Talks Snag on Bank Liability - WSJ.com
What seems the most ridiculous is that the people are upside down on the houses and not paying the mortgages and populist angst says the people who overpaid or lost their jobs aren't responsible.
Can we ever say one more example of Democrat and liberal outcome based social planning?
So, lets bankrupt the banks and have the government (i.e. other taxpayers) bail them out.
The stupid greed of liberals and those that have bought into their social and economic philosophy will prolong the downturn in housing and the economy and, like unions, will make everyone suffer in the end.
But, heck - kick the can down the road, look for massive bank job layoffs, little or no new lending and a continued economic downturn.
Just try and remember at election day (maybe not this cycle but some cycle) that maybe those who thought they could punish the innocent were actually the guilty of being too self-interested.
The guilty party for all of the housing bubble should be the Congress and government and lets just start with Barney Frank and Chris Dodd.
What seems the most ridiculous is that the people are upside down on the houses and not paying the mortgages and populist angst says the people who overpaid or lost their jobs aren't responsible.
Can we ever say one more example of Democrat and liberal outcome based social planning?
So, lets bankrupt the banks and have the government (i.e. other taxpayers) bail them out.
The stupid greed of liberals and those that have bought into their social and economic philosophy will prolong the downturn in housing and the economy and, like unions, will make everyone suffer in the end.
But, heck - kick the can down the road, look for massive bank job layoffs, little or no new lending and a continued economic downturn.
Just try and remember at election day (maybe not this cycle but some cycle) that maybe those who thought they could punish the innocent were actually the guilty of being too self-interested.
The guilty party for all of the housing bubble should be the Congress and government and lets just start with Barney Frank and Chris Dodd.
FAITH, RESULTS AND THE UPCOMING US ELECTION: Fred Siegel: Who Lost the Middle Class? - WSJ.com
Fred Siegel: Who Lost the Middle Class? - WSJ.com
And, as we know, the most profitable and high paying jobs and professions tend to be those that are knowledge-based.
Thus, it's not plant and equipment that locks a company or person to the United States.
Warren Buffet may feel as though the upper income earners should pay higher taxes (Charlie Rose interview) but Harvey Golub (WSJ, Mon. Aug. 22) clearly disagrees.
And, the idea of taxing people who could leave the US and locate to another location somehow escapes the minds of the liberals who are trying to desperately find a way to fund their handout programs and failed policies.
Let's hope Republican 'creationism' isn't part of the upcoming election and that a reasonable dialog can be put before the American people so they can understand the opportunities from a re-energized country (as Warren Buffet pictures it) vs. the nanny state of Obama and Pelosi et al., which is sapping the country's ability to start growing again.
It seems clear from the comments in this paper that there are strong believers in Obamanomics who, like the religious right, have to base their beliefs on 'faith' vs. 'results'.
And, as we know, the most profitable and high paying jobs and professions tend to be those that are knowledge-based.
Thus, it's not plant and equipment that locks a company or person to the United States.
Warren Buffet may feel as though the upper income earners should pay higher taxes (Charlie Rose interview) but Harvey Golub (WSJ, Mon. Aug. 22) clearly disagrees.
And, the idea of taxing people who could leave the US and locate to another location somehow escapes the minds of the liberals who are trying to desperately find a way to fund their handout programs and failed policies.
Let's hope Republican 'creationism' isn't part of the upcoming election and that a reasonable dialog can be put before the American people so they can understand the opportunities from a re-energized country (as Warren Buffet pictures it) vs. the nanny state of Obama and Pelosi et al., which is sapping the country's ability to start growing again.
It seems clear from the comments in this paper that there are strong believers in Obamanomics who, like the religious right, have to base their beliefs on 'faith' vs. 'results'.
THE RISKS INHERENT IN LIBERAL POLICIES: Fred Siegel: Who Lost the Middle Class? - WSJ.com
Fred Siegel: Who Lost the Middle Class? - WSJ.com
Excellent article!
Another way to look at the problem and consonant with this opinion piece is to see the disparity of that between those supporting an equality of outcome (Democrats and liberals) and those supporting a right to a reasonable opportunity (the disenfranchised in this article looking to the Tea Party).
The parallels with Europe are very fair; however, too many Americans are unaware or can't think about or consider the downside of European social policies and social engineering. (Perhaps they have trouble reading as the information is out there - for example the unemployment rate among youth in Italy in today's WSJ.)
There is another union-centric, socially-liberal focus on process vs. product. Which is well evidenced in the discussion of middle class youth coming out of colleges with little knowledge but huge loans to support tenured teachers.
One of the obscene obfuscations of the media and liberals is a failure to talk about and put on the top of the table the dichotomy between the unemployment rate of those with a college education and those without. The problem is ignored.
Let's hope that an alternate candidate to social-outcome-focused Obama of some merit enters the race. To have a Republican who openly espouses 'creationism' (Perry) is sick and disgusting.
The youth of the developed countries who are being asked to support the older entrenched entitled (including UAW workers and public union employees who are getting lower wages and more costly benefits) are a ripe constituency for social unrest.
There is the old saying about pigs and hogs and the hogs in the unions and those receiving untoward benefits are asking for some rude changes if they ignore the aphorism.
Excellent article!
Another way to look at the problem and consonant with this opinion piece is to see the disparity of that between those supporting an equality of outcome (Democrats and liberals) and those supporting a right to a reasonable opportunity (the disenfranchised in this article looking to the Tea Party).
The parallels with Europe are very fair; however, too many Americans are unaware or can't think about or consider the downside of European social policies and social engineering. (Perhaps they have trouble reading as the information is out there - for example the unemployment rate among youth in Italy in today's WSJ.)
There is another union-centric, socially-liberal focus on process vs. product. Which is well evidenced in the discussion of middle class youth coming out of colleges with little knowledge but huge loans to support tenured teachers.
One of the obscene obfuscations of the media and liberals is a failure to talk about and put on the top of the table the dichotomy between the unemployment rate of those with a college education and those without. The problem is ignored.
Let's hope that an alternate candidate to social-outcome-focused Obama of some merit enters the race. To have a Republican who openly espouses 'creationism' (Perry) is sick and disgusting.
The youth of the developed countries who are being asked to support the older entrenched entitled (including UAW workers and public union employees who are getting lower wages and more costly benefits) are a ripe constituency for social unrest.
There is the old saying about pigs and hogs and the hogs in the unions and those receiving untoward benefits are asking for some rude changes if they ignore the aphorism.
Saturday, August 20, 2011
THE NEW WE NEED: The President's Island Retreat - WSJ.com
The President's Island Retreat - WSJ.com
If it is true that a policy of equality of outcomes doesn't work, then, the President is a lost ship on an economic sea with lots of competition.
Clearly, Obama doesn't get the fact that the equality of outcomes mantra of the liberals and unions is dead and needs to change.
So, we might as well sit back and watch everything play out. It may be years, as the Republicans have their eyes on 'creationism' with Governor Perry. So watch out. We have the old and totally failed and the old and hope to be resurrected.
What we don't have is a bright future respecting and rewarding the individual and his or her initiatives.
If it is true that a policy of equality of outcomes doesn't work, then, the President is a lost ship on an economic sea with lots of competition.
Clearly, Obama doesn't get the fact that the equality of outcomes mantra of the liberals and unions is dead and needs to change.
So, we might as well sit back and watch everything play out. It may be years, as the Republicans have their eyes on 'creationism' with Governor Perry. So watch out. We have the old and totally failed and the old and hope to be resurrected.
What we don't have is a bright future respecting and rewarding the individual and his or her initiatives.
Society and choices: Put Politics Aside, Obama Says - WSJ.com
Put Politics Aside, Obama Says - WSJ.com
What are our choices?
I emphasized the need for individuals to both assume and be held responsible for their actions.
The bane is that the religious right has picked and chosen their favorite parts of the Bible to become doctrine, which is totally specious, but not unlike any other religion that wants to stir up the masses (including the Spanish inquisition).
Another problem is the plethora of social policies that support a lack of individual responsibility.
Sadly, I'd suggest we need a third party - perhaps libertarian - that focuses on individual choice and responsibility.
If the Republicans pick Perry who supports creationism, we are back in the Dark Ages and will just have to wait for some kind of sanity.
An obvious open question in the markets is gold expects the politicians to decide to print money to support liberal social objectives and Treasuries assume there won't be any printing and social policies will work to further collapse the economy.
It would be nice to find another route - i.e. quickly or slowly dismantle the social support network and force people to be more self-reliant.
This might include putting Barney Frank in jail and Obama held before a commission of some sort.
It would of course also require the drug laws to be rescinded as well as the laws against vice, etc.
But, one can only dream; thus, hard times are before us and the outcome is uncertain.
When Rome fell, epidemics from the East decimated the population and the ability of Rome to defend itself.
Currently, we've been faced with a semi-controlled plague of socialism and religious extremism.
What are our choices?
I emphasized the need for individuals to both assume and be held responsible for their actions.
The bane is that the religious right has picked and chosen their favorite parts of the Bible to become doctrine, which is totally specious, but not unlike any other religion that wants to stir up the masses (including the Spanish inquisition).
Another problem is the plethora of social policies that support a lack of individual responsibility.
Sadly, I'd suggest we need a third party - perhaps libertarian - that focuses on individual choice and responsibility.
If the Republicans pick Perry who supports creationism, we are back in the Dark Ages and will just have to wait for some kind of sanity.
An obvious open question in the markets is gold expects the politicians to decide to print money to support liberal social objectives and Treasuries assume there won't be any printing and social policies will work to further collapse the economy.
It would be nice to find another route - i.e. quickly or slowly dismantle the social support network and force people to be more self-reliant.
This might include putting Barney Frank in jail and Obama held before a commission of some sort.
It would of course also require the drug laws to be rescinded as well as the laws against vice, etc.
But, one can only dream; thus, hard times are before us and the outcome is uncertain.
When Rome fell, epidemics from the East decimated the population and the ability of Rome to defend itself.
Currently, we've been faced with a semi-controlled plague of socialism and religious extremism.
DAVIS BACON ACT CONSIDERATIONS: The Return of Dr. Infrastructure - Barrons.com
DAVIS BACON ACT: The Return of Dr. Infrastructure - Barrons.com
Has there been any discussion of suspending Davis-Bacon Act wage requirements?
I haven't heard anything about this (lucky unions).
An interesting comment on Bloomberg addressed the issue of 'clearing prices for labor'.
Again, gee, I haven't heard anything about this from Democrats. Ah well, if you can't drive a Cadillac or Mercedes, etc. - why drive at all!
Has there been any discussion of suspending Davis-Bacon Act wage requirements?
I haven't heard anything about this (lucky unions).
An interesting comment on Bloomberg addressed the issue of 'clearing prices for labor'.
Again, gee, I haven't heard anything about this from Democrats. Ah well, if you can't drive a Cadillac or Mercedes, etc. - why drive at all!
Awaiting Jackson Hole - Barrons.com
AN IMMIGRANT WARNING AND EXAMPLE: Awaiting Jackson Hole - Barrons.com
With respect to what is wrong with US social and fiscal policies and what might be done about it:
The simple story that seems relevant here is that of the (let's say Mexican) immigrants who come to the wonderful liberal state of California. They work hard, earn little, are known to always pay their debts and find a way to make due.
That is, the immigrant generation!
As for their kids, it's a totally different story - usually involving dropping out of school, crime, welfare, etc.
It would seem there is a lesson here that we are overlooking.
With respect to what is wrong with US social and fiscal policies and what might be done about it:
The simple story that seems relevant here is that of the (let's say Mexican) immigrants who come to the wonderful liberal state of California. They work hard, earn little, are known to always pay their debts and find a way to make due.
That is, the immigrant generation!
As for their kids, it's a totally different story - usually involving dropping out of school, crime, welfare, etc.
It would seem there is a lesson here that we are overlooking.
Awaiting Jackson Hole - Barrons.com
MORE ON THE CERTAIN KNOWLEDGE OF THE LIBERAL LEFT AND THE RELIGIOUS RIGHT: Awaiting Jackson Hole - Barrons.com
An interesting comment was made on Bloomberg this week about clearing prices in the labor market.
Not to say that minimum wage rates and unemployment insurance and Obamacare aren't perhaps all well-and-good in a way - however, they clearly work against a clearing price for labor that would see actual job creation and employment.
Many other anti-job creation policies and regulations exist as well; and, it amazes me that the only thing politicians seem to be able to think about is taxes or spending - and, never about deregulation and de-lawing some of the social do-gooderisms that seem focused on economic outcomes rather than economic opportunity.
Perhaps the Republicans could better articulate policies that focus on opportunity vs. outcome; and, thereby better distinguish themselves from their liberal, Democratic opposites who focus only on outcomes.
Because clearly, the vacuity of Obama's pandering to the idea of comity assume outcome-based policies are close to the godliness of the religious right. And, both of these policies want to subjugate the individual and deny the individual his or her right to succeed or fail on his or her own.
An interesting comment was made on Bloomberg this week about clearing prices in the labor market.
Not to say that minimum wage rates and unemployment insurance and Obamacare aren't perhaps all well-and-good in a way - however, they clearly work against a clearing price for labor that would see actual job creation and employment.
Many other anti-job creation policies and regulations exist as well; and, it amazes me that the only thing politicians seem to be able to think about is taxes or spending - and, never about deregulation and de-lawing some of the social do-gooderisms that seem focused on economic outcomes rather than economic opportunity.
Perhaps the Republicans could better articulate policies that focus on opportunity vs. outcome; and, thereby better distinguish themselves from their liberal, Democratic opposites who focus only on outcomes.
Because clearly, the vacuity of Obama's pandering to the idea of comity assume outcome-based policies are close to the godliness of the religious right. And, both of these policies want to subjugate the individual and deny the individual his or her right to succeed or fail on his or her own.
Put Politics Aside, Obama Says - WSJ.com
AN SUGGESTION AS TO WHAT IS ONE OF OBAMA'S BIG PROBLEMS - I.E. BEING OUTCOME FOCUSED VS. OPPORTUNITY FOCUSED: Put Politics Aside, Obama Says - WSJ.com
I might suggest thinking of the issue as one where the President believes in funding for equality of outcome vs. equality of opportunity.
As such, the gap is as you say the opposite side of the coin.
The President doesn't realize the failure of his outcome model, nor do other Democrats.
Sadly, the Republicans seem to be favoring their traditional religious right candidates who are also outcome based at another part of the outcome scale - here, a religiously inspired sense of truth. Their religion of course - no one else's.
The President is clearly anxious that his points of view be given another chance - because, he really believes it and doesn't see anything else.
Until the country starts to really debate the outcome vs. opportunity issue and confront the fact that turning back to some dark age religion (pick your faith here) is not the answer either, it's hard to see how things will move forward.
I'd posit that respect for the individual is the way to move ahead and this would of course mean getting rid of things like our drug laws (both a major cost saving and income source) and all this waste on things like prostitution laws.
Don't try and tell others how to live their lives and expect them to be responsible for the outcome. If it isn't what they expect, then maybe that's too bad. Charity should be voluntary.
I might suggest thinking of the issue as one where the President believes in funding for equality of outcome vs. equality of opportunity.
As such, the gap is as you say the opposite side of the coin.
The President doesn't realize the failure of his outcome model, nor do other Democrats.
Sadly, the Republicans seem to be favoring their traditional religious right candidates who are also outcome based at another part of the outcome scale - here, a religiously inspired sense of truth. Their religion of course - no one else's.
The President is clearly anxious that his points of view be given another chance - because, he really believes it and doesn't see anything else.
Until the country starts to really debate the outcome vs. opportunity issue and confront the fact that turning back to some dark age religion (pick your faith here) is not the answer either, it's hard to see how things will move forward.
I'd posit that respect for the individual is the way to move ahead and this would of course mean getting rid of things like our drug laws (both a major cost saving and income source) and all this waste on things like prostitution laws.
Don't try and tell others how to live their lives and expect them to be responsible for the outcome. If it isn't what they expect, then maybe that's too bad. Charity should be voluntary.
Reversing the Moral Decay Behind the London Riots - WSJ.com
THE FAILURE OF BOTH THE CHURCHES AND LIBERAL SOCIETY: Reversing the Moral Decay Behind the London Riots - WSJ.com
The mistake in this article is its attempt to focus on looking back instead of ahead.
People dismiss religion (and here let's focus on theocracy vs. simple faith or belief) because it tends to be based on them vs. us (the non-believers vs. the believers).
If anything is evident, it is that all theocratic religions tend to become formulaic and desire to impose their beliefs on others - often without being able to distinguish 'belief' vs. 'truth' because their beliefs become the truth - witness the current preoccupation of many so-called Christians in the US with abortion rights and traditional (male/female) marriage.
If there is anything really wrong today, it is the idea of liberals in equality of outcome vs. equality of opportunity.
It has destroyed the schools and education in the US and it has crippled the economy.
When Obama says "we should all work together", he doesn't realize the gap in belief between 'outcome equality' and 'equality of opportunity'. It is all quite similar to the them vs. us of religion.
Is it any wonder that people feel no anchor. Both the churches and liberal society have failed to respect the individual. This is the real challenge.
To go back to religion as it is today is not the answer.
The mistake in this article is its attempt to focus on looking back instead of ahead.
People dismiss religion (and here let's focus on theocracy vs. simple faith or belief) because it tends to be based on them vs. us (the non-believers vs. the believers).
If anything is evident, it is that all theocratic religions tend to become formulaic and desire to impose their beliefs on others - often without being able to distinguish 'belief' vs. 'truth' because their beliefs become the truth - witness the current preoccupation of many so-called Christians in the US with abortion rights and traditional (male/female) marriage.
If there is anything really wrong today, it is the idea of liberals in equality of outcome vs. equality of opportunity.
It has destroyed the schools and education in the US and it has crippled the economy.
When Obama says "we should all work together", he doesn't realize the gap in belief between 'outcome equality' and 'equality of opportunity'. It is all quite similar to the them vs. us of religion.
Is it any wonder that people feel no anchor. Both the churches and liberal society have failed to respect the individual. This is the real challenge.
To go back to religion as it is today is not the answer.
Friday, August 19, 2011
A Shaken Europe Looks for Bolder Fixes - WSJ.com
PROCESS VS. PRODUCT AND ISO-ISM: A Shaken Europe Looks for Bolder Fixes - WSJ.com
Q&A: You asked 'why' someone didn't think of the major differences between common currency countries before lending to them on similar terms?
Just for fun consider looking at what underlay the ideas of Basel II and III.
In other words, let rating agencies decide what is triple A paper (i.e. the worthless US subprime securities).
All you as a banker need to know (process) is that someone appropriate said 'triple A'. No more thinking, process trumps product.
(For more on process vs. product consider all of the so-called 'quality certifications' (ISO xxxx) rampant to supposedly assure 'quality' in goods or services procured. Again, it is all 'process' designed to insure quality.)
Such thinking is rampant and abjures the need for critical thinking at any level.
Q&A: You asked 'why' someone didn't think of the major differences between common currency countries before lending to them on similar terms?
Just for fun consider looking at what underlay the ideas of Basel II and III.
In other words, let rating agencies decide what is triple A paper (i.e. the worthless US subprime securities).
All you as a banker need to know (process) is that someone appropriate said 'triple A'. No more thinking, process trumps product.
(For more on process vs. product consider all of the so-called 'quality certifications' (ISO xxxx) rampant to supposedly assure 'quality' in goods or services procured. Again, it is all 'process' designed to insure quality.)
Such thinking is rampant and abjures the need for critical thinking at any level.
A Shaken Europe Looks for Bolder Fixes - WSJ.com
EURO-COUNTRIES, US STATES AND OBAMANOMICS: A Shaken Europe Looks for Bolder Fixes - WSJ.com
Where is the comparison with America's separate states?
For instance, why should any other state backstop profligate California?
Or, why should Texas change its pro-job-creation, pro-business policies to be more like the socialist entitlement, anti-business, hi-tax policies of other states like California or Michigan?
Countries with anti-business policies like Greece should face the same problems over-spending by a US state would face - i.e. bankruptcy!
If California went bankrupt, would it effect the value of the US dollar? I don't think so!
As such, if Greece goes bankrupt and maybe Portugal, it should have no impact on the euro. By joining the euro, the easy-way-out of devaluation is gone. Nothing else should change.
Why not get on with things and force these countries to recognize their problems? Well, maybe because they are like Obama and his obamanomics - which believes their policies will 'eventually' produce good job growth, low inflation, etc.
I wouldn't count on Obama's policies being successful and it looks more and more as though the markets are moving in that direction as well.
Where is the comparison with America's separate states?
For instance, why should any other state backstop profligate California?
Or, why should Texas change its pro-job-creation, pro-business policies to be more like the socialist entitlement, anti-business, hi-tax policies of other states like California or Michigan?
Countries with anti-business policies like Greece should face the same problems over-spending by a US state would face - i.e. bankruptcy!
If California went bankrupt, would it effect the value of the US dollar? I don't think so!
As such, if Greece goes bankrupt and maybe Portugal, it should have no impact on the euro. By joining the euro, the easy-way-out of devaluation is gone. Nothing else should change.
Why not get on with things and force these countries to recognize their problems? Well, maybe because they are like Obama and his obamanomics - which believes their policies will 'eventually' produce good job growth, low inflation, etc.
I wouldn't count on Obama's policies being successful and it looks more and more as though the markets are moving in that direction as well.
Thursday, August 18, 2011
Exxon, U.S. Government Duel Over Huge Oil Find - WSJ.com
SIMILARITIES BETWEEN OBAMANOMICS AND THE SPANISH INQUISITION - YOU HAVE TO HAVE FAITH BECAUSE WHAT THEY ARE DOING IS HORRIFIC: Exxon, U.S. Government Duel Over Huge Oil Find - WSJ.com
Isn't it interesting how there is daily proof that the Obama Administration and its bureaucrats and supporters don't get how to create jobs.
Here's another telling example at the same time the market is down almost 500 points.
We now also see the Administration is going after S&P for downgrading the US.
Somehow, the Administration is acting more-and-more like the Spanish priests of the inquisition. They demanded faith or else.
So, if you don't have 'faith' that Obama's economic prescription will work and is 'the answer'...
(SUGGESTION: Read the Barone article this week in the Wall Street Journal)
Isn't it interesting how there is daily proof that the Obama Administration and its bureaucrats and supporters don't get how to create jobs.
Here's another telling example at the same time the market is down almost 500 points.
We now also see the Administration is going after S&P for downgrading the US.
Somehow, the Administration is acting more-and-more like the Spanish priests of the inquisition. They demanded faith or else.
So, if you don't have 'faith' that Obama's economic prescription will work and is 'the answer'...
(SUGGESTION: Read the Barone article this week in the Wall Street Journal)
Wednesday, August 17, 2011
Kessler and Taylor: Medicare Reform—Obama vs. Ryan - WSJ.com
AN ADDITIONAL OPTION: Kessler and Taylor: Medicare Reform—Obama vs. Ryan - WSJ.com
One big problem with Medicare (as is typical of almost all liberal structured plans) is that it is full of mandates.
A big problem in health insurance in the US should be to have two choices - (1) the liberal approach with lots of mandates (i.e. government is taking care of you); and (2) a totally unregulated set of private plans (i.e. the individual needs to know what he/she is buying).
My guess is that option 2 would make affordable insurance available to a great number of people. Likewise, the mandate option 1 would start costing more.
But, at least individuals would have a choice and be able to get what they want to pay for (of course, Obama and the Democrats want those with benefits to get someone else to pay for them).
One big problem with Medicare (as is typical of almost all liberal structured plans) is that it is full of mandates.
A big problem in health insurance in the US should be to have two choices - (1) the liberal approach with lots of mandates (i.e. government is taking care of you); and (2) a totally unregulated set of private plans (i.e. the individual needs to know what he/she is buying).
My guess is that option 2 would make affordable insurance available to a great number of people. Likewise, the mandate option 1 would start costing more.
But, at least individuals would have a choice and be able to get what they want to pay for (of course, Obama and the Democrats want those with benefits to get someone else to pay for them).
Tuesday, August 16, 2011
Chinese Students Flood U.S. Grad Schools - WSJ.com
THE WELL-MEANING LIBERAL DESTRUCTION OF EDUCATION IN THE US: Chinese Students Flood U.S. Grad Schools - WSJ.com
Let's see?
Affirmative action and liberal values call for more places for US minorities in our colleges (as reported by friends from California). So, our best and brightest US students are replaced with a liberal-defined equality of outcome without regard to skills or capabilities.
Now, to make money, our colleges then take in foreign students.
What is the result?
We have fewer qualified US students who are likely to stay in the US and work and start businesses; and, we have more educated foreign students who will go and create jobs outside the US.
Are the liberals happy?
Of course, they don't know what they are doing.
Are average Americans happy?
Well, only if they like lower wages and a stagnant to declining lifestyle.
Who do they blame?
Well, we know who they should blame; but, will they?
Obama and Pelosi certainly hope not. So do the teacher unions.
Let's see?
Affirmative action and liberal values call for more places for US minorities in our colleges (as reported by friends from California). So, our best and brightest US students are replaced with a liberal-defined equality of outcome without regard to skills or capabilities.
Now, to make money, our colleges then take in foreign students.
What is the result?
We have fewer qualified US students who are likely to stay in the US and work and start businesses; and, we have more educated foreign students who will go and create jobs outside the US.
Are the liberals happy?
Of course, they don't know what they are doing.
Are average Americans happy?
Well, only if they like lower wages and a stagnant to declining lifestyle.
Who do they blame?
Well, we know who they should blame; but, will they?
Obama and Pelosi certainly hope not. So do the teacher unions.
Supertall! | The Skyscraper Museum | Heights of Fancy | By James Gardner - WSJ.com
VERTICAL ARCOLOGIES: Supertall! | The Skyscraper Museum | Heights of Fancy | By James Gardner - WSJ.com
An interesting additional thought is to add in the 'potential' influence of Paolo Soleri's archologies. Even larger structures that were to be sculpted cities built as a single entity.
One can't help but think of some of these archologies as a wonderful solution to rebuilding parts of Japan destroyed by the tsunami; and, one wonders why at least one wasn't tried in the Mid-East with their from-the-ground-up cities.
When one walks around an old city with the shops at the sidewalk front vacant and struggling economically and then when one walks into a nearby shopping center with convenient underground parking, full climate control (maybe some outside terraces for smokers and fresh air), few empty shops, etc. - one can't help but think that Soleri was on to something well before his time.
As these skyscrapers get bigger and bigger, the are clearly heading into the direction of vertical arcologies.
An interesting additional thought is to add in the 'potential' influence of Paolo Soleri's archologies. Even larger structures that were to be sculpted cities built as a single entity.
One can't help but think of some of these archologies as a wonderful solution to rebuilding parts of Japan destroyed by the tsunami; and, one wonders why at least one wasn't tried in the Mid-East with their from-the-ground-up cities.
When one walks around an old city with the shops at the sidewalk front vacant and struggling economically and then when one walks into a nearby shopping center with convenient underground parking, full climate control (maybe some outside terraces for smokers and fresh air), few empty shops, etc. - one can't help but think that Soleri was on to something well before his time.
As these skyscrapers get bigger and bigger, the are clearly heading into the direction of vertical arcologies.
Monday, August 15, 2011
After Stocks' Slump, Earnings in Focus - WSJ.com
THOUGHTS ON AN ECONOMIC TURNAROUND AND THE BATTLESHIP ANALOGY: After Stocks' Slump, Earnings in Focus - WSJ.com
I don't know if you happened to read the story (last week in the WSJ, I think) about the banker in Texas who was going to turn in his banking license?
The issue was clearly the regulatory environment and how gun-shy a bank had to be about lending to a small business.
If government regulatory bureaucrats make banks gun-shy of lending, then it would seem as though the chances of a small business start-up succeeding would be further reduced.
If one thinks of the economy as similar to a battleship, I always liked the old saying that it took a battleship 20 miles of ocean to turn around in.
As such, Obamanomics has been pushing the overall economy in a wrong direction for almost 3 years now. After 4 years, the turnaround will not likely be swift; and, if the anti-Democrats don't have sizable majorities, the Democrats likely have many delaying tactics that will prevent a turnaround.
After all, they are intent on the type of country where entitlement trumps opportunity or rewarding effort and accomplishment (see also today's article on the UK: The Barbarians inside Britain's Gates - http://professional.wsj.com/article/SB10001424053111903918104576504033881168802.html?mod=djemITP_h&mg=reno-secaucus-wsj)
I don't know if you happened to read the story (last week in the WSJ, I think) about the banker in Texas who was going to turn in his banking license?
The issue was clearly the regulatory environment and how gun-shy a bank had to be about lending to a small business.
If government regulatory bureaucrats make banks gun-shy of lending, then it would seem as though the chances of a small business start-up succeeding would be further reduced.
If one thinks of the economy as similar to a battleship, I always liked the old saying that it took a battleship 20 miles of ocean to turn around in.
As such, Obamanomics has been pushing the overall economy in a wrong direction for almost 3 years now. After 4 years, the turnaround will not likely be swift; and, if the anti-Democrats don't have sizable majorities, the Democrats likely have many delaying tactics that will prevent a turnaround.
After all, they are intent on the type of country where entitlement trumps opportunity or rewarding effort and accomplishment (see also today's article on the UK: The Barbarians inside Britain's Gates - http://professional.wsj.com/article/SB10001424053111903918104576504033881168802.html?mod=djemITP_h&mg=reno-secaucus-wsj)
Sunday, August 14, 2011
Wealthy Americans Shun Risky Investments - WSJ.com
DEMOCRATS OR THEOCRATS?: Wealthy Americans Shun Risky Investments - WSJ.com
If one takes a looks at the policies coming out of Washington, a reasonable question to ask is, "are they the policies of growing countries and economies". To wit, I'd say the answer is 'no'.
If one asked whether Washington's policies were those of unions, socialist countries, countries with large safety nets, etc., then the answer would clearly be 'yes'.
Is the country in favor of the safety net and labor-centric policies or does the country want growth and jobs?
The answers, if one looks around the world, aren't the same.
Clearly, the Obama administration hopes that the answers will be the same, even if they aren't yet.
Nancy Pelosi summed the problem up during the debt debates when she said cutbacks would "end the world as we've known it".
Somehow, it does seem reasonable that risk taking, saving and hard work get rewarded and that lackadaisicalness and laziness don't fail to be rewarded.
But, of course, many see it differently and see themselves as unfairly suffering.
And, of course, in particular the Democrats pander to this by saying "all will be well. The rich can pay."
Sadly, the other side of the coin has Republican's like Bachman who remind one of the theocrats in Iran.
What's a person to do?
If one takes a looks at the policies coming out of Washington, a reasonable question to ask is, "are they the policies of growing countries and economies". To wit, I'd say the answer is 'no'.
If one asked whether Washington's policies were those of unions, socialist countries, countries with large safety nets, etc., then the answer would clearly be 'yes'.
Is the country in favor of the safety net and labor-centric policies or does the country want growth and jobs?
The answers, if one looks around the world, aren't the same.
Clearly, the Obama administration hopes that the answers will be the same, even if they aren't yet.
Nancy Pelosi summed the problem up during the debt debates when she said cutbacks would "end the world as we've known it".
Somehow, it does seem reasonable that risk taking, saving and hard work get rewarded and that lackadaisicalness and laziness don't fail to be rewarded.
But, of course, many see it differently and see themselves as unfairly suffering.
And, of course, in particular the Democrats pander to this by saying "all will be well. The rich can pay."
Sadly, the other side of the coin has Republican's like Bachman who remind one of the theocrats in Iran.
What's a person to do?
Obama: Congress Needs to Act on Economy - WSJ.com
DEMOCRATIC SMOKE AND MIRRORS: Obama: Congress Needs to Act on Economy - WSJ.com
Can we say "smoke and mirrors"!
As Nancy Pelosi said during the negotiations over the debt increase about any major cutbacks, "...it will end life as we know it".
As such, Obama would have to say something like "entitlements have to be cut", "ObamaCare will be put on hold until a new Congress and President can re-examine it", "Dodd-Frank will be put into stasis until its impact can be better assessed", "Corporate (and personal) income taxes will be lowered and simplified", etc.
Frankly, I've not heard anything like even one of the comments without codicils on taxes that have "their fair share" (meaning increases) attached to them.
The President seems to ignore the simple evidence before him from both the US and Europe that Democratic policies produce economic stagnation and eventually excessive debt.
The option of Japan is another case where high corporate tax rates make investment out of the country more attractive than domestic investment.
What is scary is that the US is starting to look like Japan. And, the longer the economy suffers under the real and projected cloud of Democratic spending priorities, the harder, longer and more difficult it will be for the US economy to right itself.
Can we say "smoke and mirrors"!
As Nancy Pelosi said during the negotiations over the debt increase about any major cutbacks, "...it will end life as we know it".
As such, Obama would have to say something like "entitlements have to be cut", "ObamaCare will be put on hold until a new Congress and President can re-examine it", "Dodd-Frank will be put into stasis until its impact can be better assessed", "Corporate (and personal) income taxes will be lowered and simplified", etc.
Frankly, I've not heard anything like even one of the comments without codicils on taxes that have "their fair share" (meaning increases) attached to them.
The President seems to ignore the simple evidence before him from both the US and Europe that Democratic policies produce economic stagnation and eventually excessive debt.
The option of Japan is another case where high corporate tax rates make investment out of the country more attractive than domestic investment.
What is scary is that the US is starting to look like Japan. And, the longer the economy suffers under the real and projected cloud of Democratic spending priorities, the harder, longer and more difficult it will be for the US economy to right itself.
Saturday, August 13, 2011
Forecasters Trim Growth Outlook - Barrons.com
HERE A MODEL, THERE A MODEL, EVERYONE HAS A DIFFERENT FORECASTING MODEL: Forecasters Trim Growth Outlook - Barrons.com
Somehow it seems as though Gene is the perpetual optimist and often wrong!
Somewhere else this week there is a mention of 1980 and it would seem as though Gene and many of those making growth projections are following the 1970's pattern of looking back and taking that information to project the future.
In the 1970's this resulted in continuing to underestimate the level of interest rates and inflation.
It would be very hard to run econometric projection models today because there are clearly disparate views of what the economy needs and doesn't need.
Just one comparison would be the opposite views of the Keynesians and Art Laffer.
Bernanke would seem to be in the Monetarism school and what he's been doing hasn't worked!
So, which data should guide a projection of the future. Obama and his crew have certainly gotten things wrong since he came into office.
I'd say Laffer has been on the money and I can't see his model projecting growth?
Somehow it seems as though Gene is the perpetual optimist and often wrong!
Somewhere else this week there is a mention of 1980 and it would seem as though Gene and many of those making growth projections are following the 1970's pattern of looking back and taking that information to project the future.
In the 1970's this resulted in continuing to underestimate the level of interest rates and inflation.
It would be very hard to run econometric projection models today because there are clearly disparate views of what the economy needs and doesn't need.
Just one comparison would be the opposite views of the Keynesians and Art Laffer.
Bernanke would seem to be in the Monetarism school and what he's been doing hasn't worked!
So, which data should guide a projection of the future. Obama and his crew have certainly gotten things wrong since he came into office.
I'd say Laffer has been on the money and I can't see his model projecting growth?
Auction of 30-Year U.S. Treasury Bonds Falls Flat - Barrons.com
ALMOST FREE MONEY - SO CLOSE TO A POLITICIAN'S HEART: Auction of 30-Year U.S. Treasury Bonds Falls Flat - Barrons.com
A parallel and interesting comment on current US interest rates was made on Bloomberg Friday - to wit, that with the cost of money almost zero, a certain group of politicians have no incentive to not spend-and-spend-and-spend and ... - to them, money if free.
A parallel and interesting comment on current US interest rates was made on Bloomberg Friday - to wit, that with the cost of money almost zero, a certain group of politicians have no incentive to not spend-and-spend-and-spend and ... - to them, money if free.
Panic Aplenty: Selling and Buying Too - Barrons.com
A CHANGED ENTREPRENEUR LANDSCAPE: Panic Aplenty: Selling and Buying Too - Barrons.com
Another interesting aside to ponder (brought up by a recent article on entrepreneurs) and comparing things to 1980, is that in 1980 housing prices were up and still to head higher.
Thus, while interest rates were stiff, there was equity available to entrepreneurs to get going when Reagan's enlightened tax policies were passed.
This time, that equity isn't there and likely won't be.
Thus, the whole to dig out of is far greater; and, no matter who or which party wins the next presidential election, it is likely that this will still be a heavily divided country and those who want to keep their money and those that want to take it and redistribute it may see no clear victor?
Another interesting aside to ponder (brought up by a recent article on entrepreneurs) and comparing things to 1980, is that in 1980 housing prices were up and still to head higher.
Thus, while interest rates were stiff, there was equity available to entrepreneurs to get going when Reagan's enlightened tax policies were passed.
This time, that equity isn't there and likely won't be.
Thus, the whole to dig out of is far greater; and, no matter who or which party wins the next presidential election, it is likely that this will still be a heavily divided country and those who want to keep their money and those that want to take it and redistribute it may see no clear victor?
Thursday, August 11, 2011
Allan Meltzer: The Folly of Economic Short-Termism - WSJ.com
JOBS, WORKING FOR LESS AND NETTING LESS THAN ON UNEMPLOYMENT: Allan Meltzer: The Folly of Economic Short-Termism - WSJ.com
In terms of helping the unemployed, a friend in California told me about his situation.
He is a computer techie type and had lost his job during the recession. He went on unemployment and said he had to take a low paying job to get back into the work force.
He said his job paid about the same as his unemployment and he had the additional cost of over a 100 mile daily commute.
But, he stuck with it; and now, less than a year in this low-paying job, he's been offered a job with a new employer at $55,000 and a much reduced commute.
The lesson?
One has to wonder if people won't have to take much lower pay to get back into the work force? Of course, getting rid of ObamaCare, etc. would help too!
In terms of helping the unemployed, a friend in California told me about his situation.
He is a computer techie type and had lost his job during the recession. He went on unemployment and said he had to take a low paying job to get back into the work force.
He said his job paid about the same as his unemployment and he had the additional cost of over a 100 mile daily commute.
But, he stuck with it; and now, less than a year in this low-paying job, he's been offered a job with a new employer at $55,000 and a much reduced commute.
The lesson?
One has to wonder if people won't have to take much lower pay to get back into the work force? Of course, getting rid of ObamaCare, etc. would help too!
Tuesday, August 9, 2011
Why This Crisis Is Different From the 2008 Financial Crisis - WSJ.com
OBAMA LACKS THE RIGHT COMPASS - BUT DOESN'T KNOW IT: Why This Crisis Is Different From the 2008 Financial Crisis - WSJ.com
Obama certainly needs a different compass but he doesn't realize it from his speech last night.
This article certainly highlights the Rubicon to be crossed by the left or the right in terms of how they view government.
The liberals and Obama think more of what got us into this mess (as discussed above) will somehow get us out of it. Each of us can decide on our own whether we think they can change; or, like those well-indoctrinated in a particular religious faith, the 'knowledge' that they have a true belief goes far beyond reason; and, thus, the hope for a change of heart or a new 'awakening' is highly problematic.
Perhaps not truly Cassandras, there are those who say some type of true shock will be necessary to make people realize too much government is too much government.
Obama's focus on tax increases while he could just wipe ObamaCare or Dodd-Frank from the system for free is emblematic of the big problem; and, the fact that he doesn't even begin to see shows that things won't be getting better economically soon.
The real question is how the future will unfold amongst the myriad of alternate paths. Sadly, the best one can probably hope for is to move sideways and kick the can down the road. The downward paths are all more dour and upward paths will require a different compass.
Obama certainly needs a different compass but he doesn't realize it from his speech last night.
This article certainly highlights the Rubicon to be crossed by the left or the right in terms of how they view government.
The liberals and Obama think more of what got us into this mess (as discussed above) will somehow get us out of it. Each of us can decide on our own whether we think they can change; or, like those well-indoctrinated in a particular religious faith, the 'knowledge' that they have a true belief goes far beyond reason; and, thus, the hope for a change of heart or a new 'awakening' is highly problematic.
Perhaps not truly Cassandras, there are those who say some type of true shock will be necessary to make people realize too much government is too much government.
Obama's focus on tax increases while he could just wipe ObamaCare or Dodd-Frank from the system for free is emblematic of the big problem; and, the fact that he doesn't even begin to see shows that things won't be getting better economically soon.
The real question is how the future will unfold amongst the myriad of alternate paths. Sadly, the best one can probably hope for is to move sideways and kick the can down the road. The downward paths are all more dour and upward paths will require a different compass.
Monday, August 8, 2011
Obama: Downgrade Adds 'Renewed Sense of Urgency' to Tackle Debt - WSJ.com
THE APPARENT OBAMA GAME PLAN: Obama: Downgrade Adds 'Renewed Sense of Urgency' to Tackle Debt - WSJ.com
Communism ostensibly equalizes outcomes, not opportunities. This is the goal of the California Teachers Union and most Democrats. In other words - communism.
They just don't realize it. Nor, do they realize the consequences. It's the blind leading the blind economically.
Socially, they are right on with liberal beliefs that everyone should have a good basic standard of living. Remove the incentives to work and study and the result is what we have now.
Obama wants to say if you can't find the job you feel you deserve, we'll keep paying you unemployment. He is not saying take what's available.
Nor is Obama saying we'll get rid of any of the impediments to job creation.
In other words, you deserve a union job, you should have a union job and, if there isn't one available, we'll take our cue from the UAW and keep paying you as though you had such a job.
And, after we've tapped out the rich, we'll borrow and print.
Communism ostensibly equalizes outcomes, not opportunities. This is the goal of the California Teachers Union and most Democrats. In other words - communism.
They just don't realize it. Nor, do they realize the consequences. It's the blind leading the blind economically.
Socially, they are right on with liberal beliefs that everyone should have a good basic standard of living. Remove the incentives to work and study and the result is what we have now.
Obama wants to say if you can't find the job you feel you deserve, we'll keep paying you unemployment. He is not saying take what's available.
Nor is Obama saying we'll get rid of any of the impediments to job creation.
In other words, you deserve a union job, you should have a union job and, if there isn't one available, we'll take our cue from the UAW and keep paying you as though you had such a job.
And, after we've tapped out the rich, we'll borrow and print.
S&P Downgrades U.S. Debt for First Time - WSJ.com
MORE ON WHY SIMPLE KEYNESIAN SOLUTIONS WON'T WORK IN THE US WITHIN THE EXISTING POLITICAL STALEMATE AND POLICIES: S&P Downgrades U.S. Debt for First Time - WSJ.com
Think of demand with a bit more discrimination.
For example, I ask you to provide me with some kitchen cabinets (your job). To do this, you will have to borrow money to buy supplies or use your own equity. You will have to hire one extra person.
You estimate the costs and the profit potential. The fact you'll have to borrow money or tie up equity; pay taxes on any profit, etc.
When you look at my offer to buy, you decide you can't make enough profit so you pass on the potential job.
This is the same as any department store buying stock, food store buying food products, etc.
So, the logic that demand creates jobs is fine - as long as the support for production is there.
The extreme example is of course situations in which shortages are so great there is a black market and or inflation.
What is going on now is that there are too many hurtles facing domestic supply. Thus, when QE2 pumped money into the economy, people invested and sent cash outside the US.
The left has no sense of the burden they've placed on the supply side of the economy. To them, nothing has changed. Sadly, the goal posts are continuing to move and the reset will be harder and harder as the economy falters.
Some sectors remain robust - think Apple - but????
What we need from the Democrat's perspective is exactly yours - i.e. goose demand - pay people for not working, etc. - all of the Keynesian remedies of the 1930's with the added benefit of loose money.
Well, it hasn't worked; and, I would posit for the same reasons it didn't work in the 1930's - read Arthur Laffer for a discourse on this.
Another way to think of it is to compare the economy to a soldier or hiker. Regularly they could walk say 50 miles a day (I don't know - pick any number).
Then you start adding weight to a backpack, don't give them as much food as before (read: regulations, taxes, labor policies, etc. - all dear to the heart of Democrats and some Republicans) and, low-and-behold, some (read Democrats) expect them to cover the same distance as before in a day.
When they don't cover the same distance, the Democrats can't grasp why.
This is the dilemma the economy is in today. And until the supply side of the equation is changed, demand economics won't work or will work only be pushing on a string.
We saw what happened when government policies tried to put too many people into the role of being homeowners. All looked good until the bubble burst.
We have several bubbles going on right now and the fact that there is no public or political consensus that they exist and/or how to fix them is far more complex than simple Keynesian economics.
Think of demand with a bit more discrimination.
For example, I ask you to provide me with some kitchen cabinets (your job). To do this, you will have to borrow money to buy supplies or use your own equity. You will have to hire one extra person.
You estimate the costs and the profit potential. The fact you'll have to borrow money or tie up equity; pay taxes on any profit, etc.
When you look at my offer to buy, you decide you can't make enough profit so you pass on the potential job.
This is the same as any department store buying stock, food store buying food products, etc.
So, the logic that demand creates jobs is fine - as long as the support for production is there.
The extreme example is of course situations in which shortages are so great there is a black market and or inflation.
What is going on now is that there are too many hurtles facing domestic supply. Thus, when QE2 pumped money into the economy, people invested and sent cash outside the US.
The left has no sense of the burden they've placed on the supply side of the economy. To them, nothing has changed. Sadly, the goal posts are continuing to move and the reset will be harder and harder as the economy falters.
Some sectors remain robust - think Apple - but????
What we need from the Democrat's perspective is exactly yours - i.e. goose demand - pay people for not working, etc. - all of the Keynesian remedies of the 1930's with the added benefit of loose money.
Well, it hasn't worked; and, I would posit for the same reasons it didn't work in the 1930's - read Arthur Laffer for a discourse on this.
Another way to think of it is to compare the economy to a soldier or hiker. Regularly they could walk say 50 miles a day (I don't know - pick any number).
Then you start adding weight to a backpack, don't give them as much food as before (read: regulations, taxes, labor policies, etc. - all dear to the heart of Democrats and some Republicans) and, low-and-behold, some (read Democrats) expect them to cover the same distance as before in a day.
When they don't cover the same distance, the Democrats can't grasp why.
This is the dilemma the economy is in today. And until the supply side of the equation is changed, demand economics won't work or will work only be pushing on a string.
We saw what happened when government policies tried to put too many people into the role of being homeowners. All looked good until the bubble burst.
We have several bubbles going on right now and the fact that there is no public or political consensus that they exist and/or how to fix them is far more complex than simple Keynesian economics.
Saturday, August 6, 2011
Focus Shifts to the Fed - Barrons.com
OUT-OF-SYNC: Focus Shifts to the Fed - Barrons.com
Yes, but things need to be in balance and move toward balance when they are out of balance.
Right now, the developed world is out-of-balance with respect to the aspirations of the developing world.
The developed world has been in the hands of liberals and unions that don't want to change and want to regulate everything.
The result is that investment dollars, jobs, etc. are moving away from the developed world.
There is also the impact of technology and ideas. These are highly mobile, as are dollars.
The evidence would appear to be that too many in America don't understand a bifurcated economy and the need to make some major changes.
As a commentator on Bloomberg this week suggested, the politicians need to be honest and level with Americans. Maybe Paul Ryan is trying to level - but, the question is whether the Democrats even understand the larger world in which their policies are out-of-sync.
Yes, but things need to be in balance and move toward balance when they are out of balance.
Right now, the developed world is out-of-balance with respect to the aspirations of the developing world.
The developed world has been in the hands of liberals and unions that don't want to change and want to regulate everything.
The result is that investment dollars, jobs, etc. are moving away from the developed world.
There is also the impact of technology and ideas. These are highly mobile, as are dollars.
The evidence would appear to be that too many in America don't understand a bifurcated economy and the need to make some major changes.
As a commentator on Bloomberg this week suggested, the politicians need to be honest and level with Americans. Maybe Paul Ryan is trying to level - but, the question is whether the Democrats even understand the larger world in which their policies are out-of-sync.
Focus Shifts to the Fed - Barrons.com
GREECE ACROSS THE ATLANTIC: Focus Shifts to the Fed - Barrons.com
You say the problem with the economy right now is that Obama didn't win anything in the debt debate?
Ah, a died-in-the-wool Keynesian who misses the big picture - i.e. heavily regulated, anti-business, pro-entitlement, unions, etc. countries are all having problems.
And, you think more of the same is an answer?
Could the problem be more evident - i.e. you support government spenders and think more of the same will produce different economic results - like suddenly those whose money you want to tax away will eventually create jobs - even though the government has said it wants to pick winners and losers (so you could be wiped out at any time) and since there has never been a regulation government doesn't like or an additional bureaucracy that can gain a benefit, the costs and risks of doing business keeping going up.
But, heck, you don't like the results or the logical implications of telling others how to run their lives.
This certainly would appear to be the problem the market (read investors) know all too well; and, the problem the liberals and union supporters are totally ignorant of.
Welcome to Greece across the Atlantic.
You say the problem with the economy right now is that Obama didn't win anything in the debt debate?
Ah, a died-in-the-wool Keynesian who misses the big picture - i.e. heavily regulated, anti-business, pro-entitlement, unions, etc. countries are all having problems.
And, you think more of the same is an answer?
Could the problem be more evident - i.e. you support government spenders and think more of the same will produce different economic results - like suddenly those whose money you want to tax away will eventually create jobs - even though the government has said it wants to pick winners and losers (so you could be wiped out at any time) and since there has never been a regulation government doesn't like or an additional bureaucracy that can gain a benefit, the costs and risks of doing business keeping going up.
But, heck, you don't like the results or the logical implications of telling others how to run their lives.
This certainly would appear to be the problem the market (read investors) know all too well; and, the problem the liberals and union supporters are totally ignorant of.
Welcome to Greece across the Atlantic.
S&P Downgrades U.S. Debt for First Time - WSJ.com
MISSING THE FOREST AND MAKING THINGS TOO COMPLEX WHEN THEY ARE SIMPLE: S&P Downgrades U.S. Debt for First Time - WSJ.com
Comment:
"... an analogy between a household's finances (or a companies', state's or municipal government's ...) and the Federal Government's, with a sovereign currency, is just plain ludicrous...Boehner and his ilk ... are terrorists... The GOP has been hijacked by the Tea Party and the religious right... I now recognize the role of the Federal Government to "promote the general welfare" of it's citizens. The Dems are no better! The Gov. needs to step up to the plate and put dollars into the hands of the consumer, not banksters & Wall Street. It's about jobs not debt."
Response:
Your circular argument would appear to miss the simple drivers that you confuse with complex drivers of the economy.
Think simply about where you end up - i.e. jobs.
Think simply about what encourages you to make a job for someone else.
Then think of the things that might make you do the work yourself, postpone the work or maybe hire a contractor instead of an employee.
Think about how you are going to pay for the work, etc.
Instead of making it an 'us vs. them', which is the Democratic mantra, think of it always as an 'us'. Thus, the family analogy is much closer to point and far from ludicrous.
By making the 'big picture' of the economy too complex, everyone misses its simplicity. That's why we had a housing bubble and most people missed it. The simple fact was: how could house prices go up faster than incomes - by a large margin - when there weren't any constraints on new supply?
What society and Democrats don't want to face today is that they are going to have to say 'no' to many, many people. Paul Ryan is telling the truth about Medicare and no one really wants to hear it - especially if relying on it or using it for political talking points.
As for the Republicans, I agree with you that much of its policies (including Mr. Bush's) were hijacked by the anti-abortion, anti-gay agendas of the religious right.
The religious right and the Democrats have something in common - they both know better how people (them) should lead their lives.
I'm not a psychologist who can tell you how to get people to give up deeply felt beliefs; but, 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."
Comment:
"... an analogy between a household's finances (or a companies', state's or municipal government's ...) and the Federal Government's, with a sovereign currency, is just plain ludicrous...Boehner and his ilk ... are terrorists... The GOP has been hijacked by the Tea Party and the religious right... I now recognize the role of the Federal Government to "promote the general welfare" of it's citizens. The Dems are no better! The Gov. needs to step up to the plate and put dollars into the hands of the consumer, not banksters & Wall Street. It's about jobs not debt."
Response:
Your circular argument would appear to miss the simple drivers that you confuse with complex drivers of the economy.
Think simply about where you end up - i.e. jobs.
Think simply about what encourages you to make a job for someone else.
Then think of the things that might make you do the work yourself, postpone the work or maybe hire a contractor instead of an employee.
Think about how you are going to pay for the work, etc.
Instead of making it an 'us vs. them', which is the Democratic mantra, think of it always as an 'us'. Thus, the family analogy is much closer to point and far from ludicrous.
By making the 'big picture' of the economy too complex, everyone misses its simplicity. That's why we had a housing bubble and most people missed it. The simple fact was: how could house prices go up faster than incomes - by a large margin - when there weren't any constraints on new supply?
What society and Democrats don't want to face today is that they are going to have to say 'no' to many, many people. Paul Ryan is telling the truth about Medicare and no one really wants to hear it - especially if relying on it or using it for political talking points.
As for the Republicans, I agree with you that much of its policies (including Mr. Bush's) were hijacked by the anti-abortion, anti-gay agendas of the religious right.
The religious right and the Democrats have something in common - they both know better how people (them) should lead their lives.
I'm not a psychologist who can tell you how to get people to give up deeply felt beliefs; but, 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."
Finding a Prescription for the U.S.'s 'Liquidity Trap' - WSJ.com
THE PELOSI VIEW THAT HAS TO CHANGE AND WHY THE OFFERED PRESCRIPTIONS ARE DOOMED TO FAIL UNDER DEMOCRATIC LIBERALISM: Finding a Prescription for the U.S.'s 'Liquidity Trap' - WSJ.com
Aren't we missing something here?
In other words, take option 3 with a little inflation. It is true that in the 1970's lenders always felt rates wouldn't rise as much as they did (the look-back behavior pattern) and as such, inflation raced ahead of interest rates.
But, at the same time, the economy didn't get going - there was 'stagflation'.
This time the problem sits in the economic and fiscal policies coming out of Washington.
From a Fred Barnes article this past week:
"Ms. Pelosi was melodramatic in her attacks on the cuts in domestic spending that Republicans attached to the debt measure. Her comment that Democrats were trying "to save life on this planet as we know it" was widely reported."
The US isn't business friendly. The idea of being business friendly runs counter to the liberals view that they know better than markets and equality of outcome is equivalent to and more important than equality of opportunity.
One has to be blind to evidence that business-friendly, investor-friendly policies bring about growth and new jobs and opportunities; and, policies that try to protect every grandma and illiterate don't produce growth.
But, too many people support Pelosi and her views and these aren't the people who create jobs, they are the people who look to government to protect them and support them.
As such, until there is a balance between what is left the economic farmer to grow his next year's crop and what is taken from the farmer to support those not working, the problems with the money trap will persist.
The 1930s and 1970s both point to the oppressive level of government as a more serious cause of economic malaise than we want to confront as a society right now - except perhaps for the Tea Party.
Aren't we missing something here?
In other words, take option 3 with a little inflation. It is true that in the 1970's lenders always felt rates wouldn't rise as much as they did (the look-back behavior pattern) and as such, inflation raced ahead of interest rates.
But, at the same time, the economy didn't get going - there was 'stagflation'.
This time the problem sits in the economic and fiscal policies coming out of Washington.
From a Fred Barnes article this past week:
"Ms. Pelosi was melodramatic in her attacks on the cuts in domestic spending that Republicans attached to the debt measure. Her comment that Democrats were trying "to save life on this planet as we know it" was widely reported."
The US isn't business friendly. The idea of being business friendly runs counter to the liberals view that they know better than markets and equality of outcome is equivalent to and more important than equality of opportunity.
One has to be blind to evidence that business-friendly, investor-friendly policies bring about growth and new jobs and opportunities; and, policies that try to protect every grandma and illiterate don't produce growth.
But, too many people support Pelosi and her views and these aren't the people who create jobs, they are the people who look to government to protect them and support them.
As such, until there is a balance between what is left the economic farmer to grow his next year's crop and what is taken from the farmer to support those not working, the problems with the money trap will persist.
The 1930s and 1970s both point to the oppressive level of government as a more serious cause of economic malaise than we want to confront as a society right now - except perhaps for the Tea Party.
Dark Clouds Linger for U.S. Economy - Barrons.com
ANOTHER TAKE ON BIG BUSINESS, SMALL BUSINESS AND OUTSOURCING IN THE US: Dark Clouds Linger for U.S. Economy - Barrons.com
An interesting take on some things, which I haven't seen, is a relationship between the supposed 'successful' sectors of the economy and those that are more moribund - i.e. big (read: multinational) and smaller (domestic) businesses.
It makes sense that after the arrival of the platform economy that things would be outsourced. And, we all know about foreign outsourcing.
Another take on the Obamanomics approach to regulatory control and government benefits (read: Obamacare, Dodd-Frank, etc.)is that the people really hurting are small business. Sure, $250,000 sounds like a big income until you start to look to buy plant and equipment.
So, if the bigger business is looking to outsource and to keep prices competitive, it has to look for low-cost suppliers.
By making it more expensive and difficult for US small business to build equity, keep costs down on labor (and please no unions), have access to bank credit, maybe go public (think Sarbanes Oxley), there is a lot of headwind for American small business as an outsource supplier.
The logic of their difficulties would appear to reflected in the commitment of small business entrepreneurs to risk in this economy. If the business plan doesn't work (costs too high, returns to low, regulatory risks too great, etc.), then sit this one out.
The Democrats have shown an utter disregard for small business and only moan about some wonderful benefit being cutback.
An interesting take on some things, which I haven't seen, is a relationship between the supposed 'successful' sectors of the economy and those that are more moribund - i.e. big (read: multinational) and smaller (domestic) businesses.
It makes sense that after the arrival of the platform economy that things would be outsourced. And, we all know about foreign outsourcing.
Another take on the Obamanomics approach to regulatory control and government benefits (read: Obamacare, Dodd-Frank, etc.)is that the people really hurting are small business. Sure, $250,000 sounds like a big income until you start to look to buy plant and equipment.
So, if the bigger business is looking to outsource and to keep prices competitive, it has to look for low-cost suppliers.
By making it more expensive and difficult for US small business to build equity, keep costs down on labor (and please no unions), have access to bank credit, maybe go public (think Sarbanes Oxley), there is a lot of headwind for American small business as an outsource supplier.
The logic of their difficulties would appear to reflected in the commitment of small business entrepreneurs to risk in this economy. If the business plan doesn't work (costs too high, returns to low, regulatory risks too great, etc.), then sit this one out.
The Democrats have shown an utter disregard for small business and only moan about some wonderful benefit being cutback.
S&P Downgrades U.S. Debt for First Time - WSJ.com
THE TWO-PARENT ANALOGY - ONE INTERESTED IN SPENDING, THE OTHER IN LIVING WITHIN ONE'S MEANS: S&P Downgrades U.S. Debt for First Time - WSJ.com
Part of the problem for the US is that so many Democratic legislators and the President have clearly voiced their belief that life in the US revolves around a huge safety net and that all else is secondary.
As a result, job producing incentives or freedom to act, save and invest are overwhelmed by liberal policies that are not supportive of job creation.
If one thinks of a family in which one parent is wholly concerned with the well-being of the family in terms of consumption, one thinks of a parent who doesn't care whether the other partner has a job or income - in other words, if there is a (seen as non-essential) asset to be sold or credit still available on the credit card to use, this parent will use it.
When the other parent talks about going to work, looking for a job, spending within one's means, the other parent can't see the relevance - e.g. there's still some credit available, so let's go on holiday.
This is the dilemma the US faces.
If the average member of the population (or union member) is faced with a question as to whether they can have or do something, which parent do they want to listen to? Certainly, the Democrats.
As said in several articles and commentaries, the Democrats are afraid to present the American public with their actual budget for all of this and thus the Senate Budget Committee has failed to present one.
Somehow the two-parent analogy here is a bit scary in how it seems to represent too many Democrats - e.g. Ms. Pelosi's comments on the debt debate.
Part of the problem for the US is that so many Democratic legislators and the President have clearly voiced their belief that life in the US revolves around a huge safety net and that all else is secondary.
As a result, job producing incentives or freedom to act, save and invest are overwhelmed by liberal policies that are not supportive of job creation.
If one thinks of a family in which one parent is wholly concerned with the well-being of the family in terms of consumption, one thinks of a parent who doesn't care whether the other partner has a job or income - in other words, if there is a (seen as non-essential) asset to be sold or credit still available on the credit card to use, this parent will use it.
When the other parent talks about going to work, looking for a job, spending within one's means, the other parent can't see the relevance - e.g. there's still some credit available, so let's go on holiday.
This is the dilemma the US faces.
If the average member of the population (or union member) is faced with a question as to whether they can have or do something, which parent do they want to listen to? Certainly, the Democrats.
As said in several articles and commentaries, the Democrats are afraid to present the American public with their actual budget for all of this and thus the Senate Budget Committee has failed to present one.
Somehow the two-parent analogy here is a bit scary in how it seems to represent too many Democrats - e.g. Ms. Pelosi's comments on the debt debate.
Thursday, August 4, 2011
Dash for Cash Sends Assets Tumbling - Barrons.com
IS THERE REALLY LIMITLESS CASH FOR THE US?: Dash for Cash Sends Assets Tumbling - Barrons.com
It's interesting to think about what is really going on - up there somewhere in the political ether of social democracies.
In other words, taxes are high - but, not high enough.
So, we do a double whammy. We borrow to make up for what we can't tax; and, we offer savers no incentive to save (corporations and businesses excepted) with generous safety nets.
So, is it conceivable that we eventually run out of money?
Right now of course things seem to be rosy in the US (not so in - say Italy, where there are lots of savers); but, unless Bernanke keeps printing, it would seem as though the economic hole of Obamanomics keeps getting deeper and at some point, Greek-like things could come to the Treasury market.
It's interesting to think about what is really going on - up there somewhere in the political ether of social democracies.
In other words, taxes are high - but, not high enough.
So, we do a double whammy. We borrow to make up for what we can't tax; and, we offer savers no incentive to save (corporations and businesses excepted) with generous safety nets.
So, is it conceivable that we eventually run out of money?
Right now of course things seem to be rosy in the US (not so in - say Italy, where there are lots of savers); but, unless Bernanke keeps printing, it would seem as though the economic hole of Obamanomics keeps getting deeper and at some point, Greek-like things could come to the Treasury market.
Wednesday, August 3, 2011
Seeking a New U.S. Business Model - WSJ.com
HOW DEMOCRATIC ECONOMIC POLICIES ARE LIKE THE CHRISTIAN FAITH THAT LED THE MARTYRS TO FEEL GOOD ABOUT GOING INTO THE ARENA FOR A LAST TIME: Seeking a New U.S. Business Model - WSJ.com
What could be the problem with this?
"The alternative view is that the private sector is working only for a thin layer of winners at the top; government should play Robin Hood. "Tax cuts do not...create jobs," said Rep. Barbara Lee (D., Calif.). "When we do not ask the super rich and the corporations who make billions of dollars of profits off of the American economy, we will not have the funds to keep that engine running...to make sure that we can meet our nation's obligations to our seniors, our children and our poor." The slogan: no Medicare, Medicaid or Social Security cuts."
1) Government policy is against business and job creation in favor of redistribution and unions.
2) The businesses that are leading the economy today are not stuck in America. They can move.
3) To get anywhere near the money the administration needs for its handouts, it has to tackle and tax (plus of course regulate, etc.) the smaller businesses that actually need to stay in America.
The Democrats are so deluded. They are so reminiscent of the communists who ran Eastern Europe. They might consider looking at what that situation was like in terms of encouraging production - or, the lack thereof.
But clearly, they have rosy glasses that think entrepreneurs and investors will work for the socialist good the Democrats are attached to.
The experience of Eastern Europe (let alone all the examples even in the US) show this doesn't work.
Every lost job should be directly put on the backs of insidious Democratic fiscal, regulatory and tax policies.
Will it take a Greek-like collapse to make them change their minds? Not likely, they are like the faithful heading into to be killed in the arena. They so think they are right that the results really don't matter.
What could be the problem with this?
"The alternative view is that the private sector is working only for a thin layer of winners at the top; government should play Robin Hood. "Tax cuts do not...create jobs," said Rep. Barbara Lee (D., Calif.). "When we do not ask the super rich and the corporations who make billions of dollars of profits off of the American economy, we will not have the funds to keep that engine running...to make sure that we can meet our nation's obligations to our seniors, our children and our poor." The slogan: no Medicare, Medicaid or Social Security cuts."
1) Government policy is against business and job creation in favor of redistribution and unions.
2) The businesses that are leading the economy today are not stuck in America. They can move.
3) To get anywhere near the money the administration needs for its handouts, it has to tackle and tax (plus of course regulate, etc.) the smaller businesses that actually need to stay in America.
The Democrats are so deluded. They are so reminiscent of the communists who ran Eastern Europe. They might consider looking at what that situation was like in terms of encouraging production - or, the lack thereof.
But clearly, they have rosy glasses that think entrepreneurs and investors will work for the socialist good the Democrats are attached to.
The experience of Eastern Europe (let alone all the examples even in the US) show this doesn't work.
Every lost job should be directly put on the backs of insidious Democratic fiscal, regulatory and tax policies.
Will it take a Greek-like collapse to make them change their minds? Not likely, they are like the faithful heading into to be killed in the arena. They so think they are right that the results really don't matter.
Tuesday, August 2, 2011
Henry Kaufman: Excessive Optimism and Other Economic Biases - WSJ.com
PARALLELS WITH GROCERY STORE SHOPPING: Henry Kaufman: Excessive Optimism and Other Economic Biases - WSJ.com
Maybe a simple question would suffice:
Are we doing everything we can to be business friendly, investor friendly, job creation friendly, etc.?
We all really know the answer here. We just don't want to admit it.
These pages have been replete with regulatory and policy changes that could be implemented - and, likely save a lot of money in doing so. But, some special interest group would have their ox gored and thus - nothing happens.
Meanwhile, in the same way people shop efficiently to optimize their experience in the grocery store, individuals and businesses act to optimize their investment dollars and means of production.
Sadly, the grocery store is immediate in people's minds. The actions of 'others' in terms of finance and job creation - well, that's something entirely different.
Why should it be?
Maybe a simple question would suffice:
Are we doing everything we can to be business friendly, investor friendly, job creation friendly, etc.?
We all really know the answer here. We just don't want to admit it.
These pages have been replete with regulatory and policy changes that could be implemented - and, likely save a lot of money in doing so. But, some special interest group would have their ox gored and thus - nothing happens.
Meanwhile, in the same way people shop efficiently to optimize their experience in the grocery store, individuals and businesses act to optimize their investment dollars and means of production.
Sadly, the grocery store is immediate in people's minds. The actions of 'others' in terms of finance and job creation - well, that's something entirely different.
Why should it be?
Fed Confronts Limited Tools to Stir Economy - WSJ.com
IGNORANCE IS BLISS: Fed Confronts Limited Tools to Stir Economy - WSJ.com
Why is it that in all of these discussions (or seemingly all), there isn't more of a discussion of lessons that can be learned from the 1930's - i.e. that it wasn't monetary policy that actually continued the recession in 1937/38, it was fiscal policies and specifically tax increases and support for unionization?
Of course the Democrats are blind to all of this, as are their union allies - but, that doesn't mean the subject isn't ripe for discussion.
To the Democrats, it is logical that the more they can give away, the happier their constituents will be.
To those who economic fruits the Democrats want to take and give away, it makes sense to put less at risk and not overextend.
Likewise, if the returns are better by sending dollars and jobs abroad, it is only logical that this will be done. Democrats would like to hope that this wouldn't be - so would lots of their populist, likely unemployed constituents.
But, the bottom line is a producer has to earn a competitive return on capital based on competitive prices for goods sold. Unions of course have no concept of this and that's why they'd like tariffs, closed shops, etc.
The longer it takes for the US to come up with pro-jobs, pro-business, pro-investor regulations and taxes, etc., the longer it will take to bring the economy back.
The willingness of Democrats to spend a little less starting in the beginning of August isn't really the type of change that will accomplish much. They've built up a mountain that needs to be torn down of anti-business policies - which, like the mileage standards issued by the White House last week, attest to government thinking it knows better than the market how to provide jobs and an improved standard of living for all Americans.
Why is it that in all of these discussions (or seemingly all), there isn't more of a discussion of lessons that can be learned from the 1930's - i.e. that it wasn't monetary policy that actually continued the recession in 1937/38, it was fiscal policies and specifically tax increases and support for unionization?
Of course the Democrats are blind to all of this, as are their union allies - but, that doesn't mean the subject isn't ripe for discussion.
To the Democrats, it is logical that the more they can give away, the happier their constituents will be.
To those who economic fruits the Democrats want to take and give away, it makes sense to put less at risk and not overextend.
Likewise, if the returns are better by sending dollars and jobs abroad, it is only logical that this will be done. Democrats would like to hope that this wouldn't be - so would lots of their populist, likely unemployed constituents.
But, the bottom line is a producer has to earn a competitive return on capital based on competitive prices for goods sold. Unions of course have no concept of this and that's why they'd like tariffs, closed shops, etc.
The longer it takes for the US to come up with pro-jobs, pro-business, pro-investor regulations and taxes, etc., the longer it will take to bring the economy back.
The willingness of Democrats to spend a little less starting in the beginning of August isn't really the type of change that will accomplish much. They've built up a mountain that needs to be torn down of anti-business policies - which, like the mileage standards issued by the White House last week, attest to government thinking it knows better than the market how to provide jobs and an improved standard of living for all Americans.
Monday, August 1, 2011
Fouad Ajami: Barack Obama the Pessimist - WSJ.com
OBAMA THE ECONOMIC FARMER: Fouad Ajami: Barack Obama the Pessimist - WSJ.com
In some ways, President Obama can be compared to a farmer - and one that doesn't realize he doesn't know how to farm.
The fiscal policies of the country are a disaster because too much is being taken out of the economy and burdens placed on it.
In terms of too much being taken out for redistribution, Obama is like the farmer who ignores what other farmers know that they need to save 10% of their crop as the next year's seed. Instead, he freely gives away his seed and wonders why he can't plant all the land he has the second year.
In terms of farming practices, his regulatory burdens and policies (like ObamaCare, Dodd-Frank, mileage standards, Boeing plant decision, even the UAW decisions with respect to GM and Chrysler, etc.) are like the farmer that doesn't realize he/she needs to use fertilizer and sometime irrigation.
When he uses regulations, it's often the equivalent of draining the well when the water should be saved for when it doesn't rain.
Etc., etc. Sadly, most Democrats aren't very good economic farmers either. They don't grow the food, they just tax away what's produced by others.
In some ways, President Obama can be compared to a farmer - and one that doesn't realize he doesn't know how to farm.
The fiscal policies of the country are a disaster because too much is being taken out of the economy and burdens placed on it.
In terms of too much being taken out for redistribution, Obama is like the farmer who ignores what other farmers know that they need to save 10% of their crop as the next year's seed. Instead, he freely gives away his seed and wonders why he can't plant all the land he has the second year.
In terms of farming practices, his regulatory burdens and policies (like ObamaCare, Dodd-Frank, mileage standards, Boeing plant decision, even the UAW decisions with respect to GM and Chrysler, etc.) are like the farmer that doesn't realize he/she needs to use fertilizer and sometime irrigation.
When he uses regulations, it's often the equivalent of draining the well when the water should be saved for when it doesn't rain.
Etc., etc. Sadly, most Democrats aren't very good economic farmers either. They don't grow the food, they just tax away what's produced by others.
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