George Melloan: A Political Solution for the Euro? - WSJ.com
You are right, the blame should be on the free-lunch, entitlement crowd made up of unions (particularly public employee unions) and liberals who want to equalize outcomes vs. any equalization of opportunity.
People wonder why there is such an increase in what is called the 'wage gap'. They don't realize at which set of feet it should be laid - i.e. at the feet of those who constrain opportunity in order to assure outcomes.
The greater the opportunity cost to hire an employee or to start a business, the greater the return and, at least nominal, reward will be necessary. Of course liberals discount this, but it should be staring them in the face.
Luckily liberals and unionists, like those with a strong religious faith, easily ignore the logical outcomes of their policies and hold to a faith that something different can and will happen eventually in the future.
Sadly for liberals, people actually like to be fairly compensated for their work and savings and they don't like it when those who barely if at all produce anything demand too great a tithe to be handed over to non-producers.
Does a member of a union or an employee of these European government owned enterprises imagine they are giving back to society what they are taking. Abjure the thought - otherwise, they'd survive in a truly competitive environment.
By looking around, those with an open mind to basic economics can easily fathom the answer and outcome of these policies. For those in liberal denial, no evidence will convince them that their faith is misplaced. Seems like a recurring and very old story.
Wednesday, November 30, 2011
Tuesday, November 29, 2011
REGULATORY SNOW AND TAXING MIRE: Mood in Euro-Zone Remains Gloomy - WSJ.com
Mood in Euro-Zone Remains Gloomy - WSJ.com
Where are the incentives in the Eurozone for entrepreneurs, investors or growth?
Rather than cut taxes to spur growth, taxes are raised.
Rather than cut regulations, the public unions are striking for more of the same.
It is still like an economic car stuck in the snow of bureaucratic regulation and mired in the drifts of high taxes with the only hope that there's a nearby gas pump to keep the engine running while it is being flooded with cheap credit in the hope that it can get away from the snow and mire.
Why not cut back the regulatory snow and taxing mire?
Where are the incentives in the Eurozone for entrepreneurs, investors or growth?
Rather than cut taxes to spur growth, taxes are raised.
Rather than cut regulations, the public unions are striking for more of the same.
It is still like an economic car stuck in the snow of bureaucratic regulation and mired in the drifts of high taxes with the only hope that there's a nearby gas pump to keep the engine running while it is being flooded with cheap credit in the hope that it can get away from the snow and mire.
Why not cut back the regulatory snow and taxing mire?
THE WRONGFUL PANDERINGS OF THOSE BEHIND OBAMA: Austan Goolsbee: Europe's Currency Road to Nowhere - WSJ.com
Austan Goolsbee: Europe's Currency Road to Nowhere - WSJ.com
Sadly Mr. Goolsbee, your comments reflect the baneful mentality of the man you recently worked for.
There is no reason not to cut to the point that business is encouraged - but, then again, that plays against the social justice mantra of those who honor outcome more than accomplishment and achievement.
Southern Europe could put forth policies to encourage entrepreneurship, excellence and reward - but, to do that, it would have to cut back on all the waste and pandering to dreams of social justice and equality of outcome that discourage, hamper and constrain (if not eviscerate) economic investment and growth.
To acquiesce to socialist and union-centric economics is not the right approach. Obama added public employees, questionable-at-best regulations and decided to berate the private sector in favor of union-centric, social-redistributionist policies. The result is no growth.
If Southern Europe wants to continue in that vain, the eventual economic cliff awaits.
Sadly Mr. Goolsbee, your comments reflect the baneful mentality of the man you recently worked for.
There is no reason not to cut to the point that business is encouraged - but, then again, that plays against the social justice mantra of those who honor outcome more than accomplishment and achievement.
Southern Europe could put forth policies to encourage entrepreneurship, excellence and reward - but, to do that, it would have to cut back on all the waste and pandering to dreams of social justice and equality of outcome that discourage, hamper and constrain (if not eviscerate) economic investment and growth.
To acquiesce to socialist and union-centric economics is not the right approach. Obama added public employees, questionable-at-best regulations and decided to berate the private sector in favor of union-centric, social-redistributionist policies. The result is no growth.
If Southern Europe wants to continue in that vain, the eventual economic cliff awaits.
HOW PUBLIC SECTOR UNIONS ARE LIKE THE ZANU PF: European Nations Pressure Own Banks for Loans - WSJ.com
European Nations Pressure Own Banks for Loans - WSJ.com
The governments and their public sector unions have no ability to cut back their spending. They don't see a disconnect between subsidized or meaningless unproductive jobs and investing for growth. In fact, it's just the opposite. They see no limit to their ability to tax and suck money and capital out of the economy for worker consumption.
This is the same as Obama and many liberal economists.
Governments need to have negative real rates of return to savers. Eventually, accumulated savings and even regular bank current account deposits are exhausted - as is happening now. And, with high taxes and low rates, there is neither the means nor the incentive for people to save.
As Zimbabwe discovered and many European countries are starting to discover, as you keep eating the economy's economic seed corn, eventually you run out of other people's harvests to take.
Governments and unions can't imagine there isn't a free lunch. They fail to even imagine that there is a limit to what they can suck out of the private economy.
It seems as though the bridge has been crossed and, while it would be nice to think these governments and large blocks of their population would see the need to actually invest in their economies, it seems beyond them. To them, investment is just higher taxes and more for government consumption and handouts and less for the private economy to survive on.
Public sector unions and the governments supporting them have far more in common with Robert Mugabe and the Zanu PF party than they could bear to acknowledge. His results will be their results - and those of many of the rest of us as well - unfortunately!
The governments and their public sector unions have no ability to cut back their spending. They don't see a disconnect between subsidized or meaningless unproductive jobs and investing for growth. In fact, it's just the opposite. They see no limit to their ability to tax and suck money and capital out of the economy for worker consumption.
This is the same as Obama and many liberal economists.
Governments need to have negative real rates of return to savers. Eventually, accumulated savings and even regular bank current account deposits are exhausted - as is happening now. And, with high taxes and low rates, there is neither the means nor the incentive for people to save.
As Zimbabwe discovered and many European countries are starting to discover, as you keep eating the economy's economic seed corn, eventually you run out of other people's harvests to take.
Governments and unions can't imagine there isn't a free lunch. They fail to even imagine that there is a limit to what they can suck out of the private economy.
It seems as though the bridge has been crossed and, while it would be nice to think these governments and large blocks of their population would see the need to actually invest in their economies, it seems beyond them. To them, investment is just higher taxes and more for government consumption and handouts and less for the private economy to survive on.
Public sector unions and the governments supporting them have far more in common with Robert Mugabe and the Zanu PF party than they could bear to acknowledge. His results will be their results - and those of many of the rest of us as well - unfortunately!
Saturday, November 26, 2011
ONE TAKES YOUR RIGHTS, THE OTHER YOUR MONEY AND JOBS: Romney vs. Obama: The Choice Ahead - Barrons.com
Romney vs. Obama: The Choice Ahead - Barrons.com
You have to admit that this article deals with the likely logical choices.
A moderate third party would be nice (as noted by Bill Gross on Bloomberg recently), but will it happen?
We also need to get rid of gerrymandered 'safe' voting districts where each party gets to elect from the extremist elements of the country (right and left).
It the old saying, "The Republicans take your rights (think anti-abortion religious crazies (and that's being kind)) and the Democrats take your money (think no jobs and off-shoring of jobs with liberal education policies and teachers unions caring more about their own job security and equality of outcomes rather than performance and opportunities).
You have to admit that this article deals with the likely logical choices.
A moderate third party would be nice (as noted by Bill Gross on Bloomberg recently), but will it happen?
We also need to get rid of gerrymandered 'safe' voting districts where each party gets to elect from the extremist elements of the country (right and left).
It the old saying, "The Republicans take your rights (think anti-abortion religious crazies (and that's being kind)) and the Democrats take your money (think no jobs and off-shoring of jobs with liberal education policies and teachers unions caring more about their own job security and equality of outcomes rather than performance and opportunities).
MISPRICING: Europe Straitened - Barrons.com
Europe Straitened - Barrons.com
Speaking of "mispricing", sometimes little tidbits tell a lot.
What I'm talking about is the old "free-lunch school" of endless government borrowings at low rates (negative real rates) without consequences - and, especially when used to support socialist ideals, unions, abundant entitlements, etc.
As a result, the banks here in Europe (Portugal was noted in a recent article) are now paying savers 4%. Clearly not the 7% plus that lenders to many sovereigns demand; but, still, far more than where the ECB set the borrowing rate.
Portent or not, the logic that money grows on trees to support unaffordable and socially demanded benefit programs ad infinitum may not be true seems to be such anathema to most that they patently dismiss it. Thus, they want the ECB to keep the party going. (Might we say as Uncle Ben is doing in the US.)
An interesting suggestion this week (can't recall by whom) was to allow Southern Europe to have two currencies. Let the governments pay their benefits and workers in a local euro and let two prices co-exist. They can keep the standard euro and depreciate their local euro. Who knows, it's another option where at least the ECB doesn't have to run it's printing presses.
Speaking of "mispricing", sometimes little tidbits tell a lot.
What I'm talking about is the old "free-lunch school" of endless government borrowings at low rates (negative real rates) without consequences - and, especially when used to support socialist ideals, unions, abundant entitlements, etc.
As a result, the banks here in Europe (Portugal was noted in a recent article) are now paying savers 4%. Clearly not the 7% plus that lenders to many sovereigns demand; but, still, far more than where the ECB set the borrowing rate.
Portent or not, the logic that money grows on trees to support unaffordable and socially demanded benefit programs ad infinitum may not be true seems to be such anathema to most that they patently dismiss it. Thus, they want the ECB to keep the party going. (Might we say as Uncle Ben is doing in the US.)
An interesting suggestion this week (can't recall by whom) was to allow Southern Europe to have two currencies. Let the governments pay their benefits and workers in a local euro and let two prices co-exist. They can keep the standard euro and depreciate their local euro. Who knows, it's another option where at least the ECB doesn't have to run it's printing presses.
Friday, November 25, 2011
BENEFICENCE (CHURCH AND STATE): Jamie Whyte: Politicians and the Economy - WSJ.com
Jamie Whyte: Politicians and the Economy - WSJ.com
Somehow it all gets down to which of the three schools of economic thought (e.g. vis-a-vis the 1930's Depression) one gives credence to.
1) The Keynesian School (discussed in this article) and close to the heart of socialists and union members - also read: "The Free-Lunch School".
2) The Monetarist School (think Milton Friedman).
When one excludes the fact that there is a third school (see below), the monetarist school makes sense. However, thanks to Ben Bernanke (flooding the economy with the money the monetarists thought was missing in the Great Depression) and President Obama (validating by his policies the 3rd school below), the monetarists dictum that a flood of cheap money is all that is needed to get an economy going, has now been shown to be false.
So here we are at #3.
3) The Laffer School. Here if taxes or regulations are too high, then growth won't take place.
Unions, most politicians currently in office and the socialist and entitled electorates don't even acknowledge this school exists. It implies a level of self-interest on the part of savers, investors and entrepreneurs that is just 'unacceptable'.
As this article notes, 52% marginal taxes are fine because they are supposed to have no impact on the economic investment or entrepreneurial actions of the individuals and businesses paying them; and, the funds are needed by government for all of the beneficent things it does (oh my gosh, 'beneficence' - sounds like some church or other? Well, maybe it's the same, Control of the many for the benefit of the few at the top!).
Somehow it all gets down to which of the three schools of economic thought (e.g. vis-a-vis the 1930's Depression) one gives credence to.
1) The Keynesian School (discussed in this article) and close to the heart of socialists and union members - also read: "The Free-Lunch School".
2) The Monetarist School (think Milton Friedman).
When one excludes the fact that there is a third school (see below), the monetarist school makes sense. However, thanks to Ben Bernanke (flooding the economy with the money the monetarists thought was missing in the Great Depression) and President Obama (validating by his policies the 3rd school below), the monetarists dictum that a flood of cheap money is all that is needed to get an economy going, has now been shown to be false.
So here we are at #3.
3) The Laffer School. Here if taxes or regulations are too high, then growth won't take place.
Unions, most politicians currently in office and the socialist and entitled electorates don't even acknowledge this school exists. It implies a level of self-interest on the part of savers, investors and entrepreneurs that is just 'unacceptable'.
As this article notes, 52% marginal taxes are fine because they are supposed to have no impact on the economic investment or entrepreneurial actions of the individuals and businesses paying them; and, the funds are needed by government for all of the beneficent things it does (oh my gosh, 'beneficence' - sounds like some church or other? Well, maybe it's the same, Control of the many for the benefit of the few at the top!).
Tuesday, November 22, 2011
THE GROWTH CLOCK NEEDS ATTENTION NOT JUST TALK: Debt Crisis Is a Symptom of Wider Failings - WSJ.com
Debt Crisis Is a Symptom of Wider Failings - WSJ.com
It would seem as though EU citizens need to see the halcyon call of socialists has consequences. And, those consequences include a lack of jobs and growth.
The young need to see it and the old need to recognize it. But, this doesn't seem to be the case in much of Europe.
More taxes just mean less for the individuals and private sector and more for the bureaucrats, unions and politically entitled.
Those who think job protections are fair when there is 20% unemployment have a lesson to learn.
There are many ticking clocks. None of them very friendly.
Sadly, there's no interest in doing more than hoping the economic growth clock will start ticking. No politician has the guts to actually oil its works or wind it or even set it on level ground.
To do so would upset all too many other clocks.
It would seem as though EU citizens need to see the halcyon call of socialists has consequences. And, those consequences include a lack of jobs and growth.
The young need to see it and the old need to recognize it. But, this doesn't seem to be the case in much of Europe.
More taxes just mean less for the individuals and private sector and more for the bureaucrats, unions and politically entitled.
Those who think job protections are fair when there is 20% unemployment have a lesson to learn.
There are many ticking clocks. None of them very friendly.
Sadly, there's no interest in doing more than hoping the economic growth clock will start ticking. No politician has the guts to actually oil its works or wind it or even set it on level ground.
To do so would upset all too many other clocks.
GOSPEL AND ACCEPTED GOSPEL: Profits Rise as GDP Revised Lower - WSJ.com
Profits Rise as GDP Revised Lower - WSJ.com
It is amazing that all those 'solons' in the Wall Street protest movement never raise questions about why more companies aren't being started and more jobs being created?
Wouldn't it be interesting to have a panel (from wherever, including non-Liberals) to look at every regulation and evaluate its impact on 'opportunity' to start businesses, invest in businesses, improve one's education, create jobs, etc.
Clearly , Sarbanes Oxley, ObamaCare, immigration policies, Dodd-Frank and limits on oil drilling are at the top of such a list.
Sadly, neither party ones to really attack causative factors that have no negative impact on the Federal Budget.
One might say, no one wants to challenge 'accepted gospel'.
It is amazing that all those 'solons' in the Wall Street protest movement never raise questions about why more companies aren't being started and more jobs being created?
Wouldn't it be interesting to have a panel (from wherever, including non-Liberals) to look at every regulation and evaluate its impact on 'opportunity' to start businesses, invest in businesses, improve one's education, create jobs, etc.
Clearly , Sarbanes Oxley, ObamaCare, immigration policies, Dodd-Frank and limits on oil drilling are at the top of such a list.
Sadly, neither party ones to really attack causative factors that have no negative impact on the Federal Budget.
One might say, no one wants to challenge 'accepted gospel'.
Sunday, November 20, 2011
Tick-tock, tick-tock: Review & Outlook: Bailout of First Resort - WSJ.com
Review & Outlook: Bailout of First Resort - WSJ.com
Let's see?
The housing bubble was fine and dandy as long as prices kept going up even though incomes didn't. Eventually it burst to the downside - and, we're still in a correction phase.
Likewise, the government debt bubble all seems fine and dandy as long as interest rates stay low. But, no one has an incentive to save with negative real interest rates (the equivalent of the incomes to support house prices). So, as long as the printing presses don't really ignite inflation, all is halcyon.
But, when the sovereign debt bubble bursts - as is almost happening (and really happening in some places) - the choice will be the housing bubble equivalent - of course opposite direction - i.e. much higher interest rates and/or a flood of debt-devaluing-money-printing the ensuing inflation.
Tick-tock, tick-tock...
Let's see?
The housing bubble was fine and dandy as long as prices kept going up even though incomes didn't. Eventually it burst to the downside - and, we're still in a correction phase.
Likewise, the government debt bubble all seems fine and dandy as long as interest rates stay low. But, no one has an incentive to save with negative real interest rates (the equivalent of the incomes to support house prices). So, as long as the printing presses don't really ignite inflation, all is halcyon.
But, when the sovereign debt bubble bursts - as is almost happening (and really happening in some places) - the choice will be the housing bubble equivalent - of course opposite direction - i.e. much higher interest rates and/or a flood of debt-devaluing-money-printing the ensuing inflation.
Tick-tock, tick-tock...
BUBBLE #2 HAS BEEN STARRING US IN THE FACE- WE JUST DON'T LIKE WHAT WE SEE: Europe's Game of Political Chairs Doesn't Impress Markets - WSJ.com
Europe's Game of Political Chairs Doesn't Impress Markets - WSJ.com
Interestingly said - but, as Selzer alludes, if doesn't point out, the raft of politicians and union leaders believes there is a free lunch.
All the talk of the ECB coming to the rescue is like a family running up a limit on its credit cards. In other words, do they cut back their spending, live within their income, try to get a better job - or, as with the heavily indebted EU states (and the US), do they want the printing presses to roll out more credit?
Clearly, the objective is more credit.
After all, people have been told they are entitled. The unions haven't a clue how to start a business and socialist and union-centric governments don't want to encourage non-union, free-market businesses to compete with feather-bedded, regulatory-heavy businesses - as Selzer points out.
The US is in the same position.
The quagmire is like that of the housing market. In the US housing bubble, it was unsustainable housing price increases moving out-of-tandem with incomes.
In the world of sovereign debt, it's low interest rates moving out-of-tandem with the incentive of the private economy to save and transfer the savings to government borrowing for the socialist state.
To say the housing bubble was the first big bubble of the millenia is fairly easy; to say the sovereign debt bubble is the next - well, that would seem fairly easy too.
But, as with housing, how many really want to admit what is starring them in the face?
Interestingly said - but, as Selzer alludes, if doesn't point out, the raft of politicians and union leaders believes there is a free lunch.
All the talk of the ECB coming to the rescue is like a family running up a limit on its credit cards. In other words, do they cut back their spending, live within their income, try to get a better job - or, as with the heavily indebted EU states (and the US), do they want the printing presses to roll out more credit?
Clearly, the objective is more credit.
After all, people have been told they are entitled. The unions haven't a clue how to start a business and socialist and union-centric governments don't want to encourage non-union, free-market businesses to compete with feather-bedded, regulatory-heavy businesses - as Selzer points out.
The US is in the same position.
The quagmire is like that of the housing market. In the US housing bubble, it was unsustainable housing price increases moving out-of-tandem with incomes.
In the world of sovereign debt, it's low interest rates moving out-of-tandem with the incentive of the private economy to save and transfer the savings to government borrowing for the socialist state.
To say the housing bubble was the first big bubble of the millenia is fairly easy; to say the sovereign debt bubble is the next - well, that would seem fairly easy too.
But, as with housing, how many really want to admit what is starring them in the face?
THE ONGOING MISMATCH: High-Grade Corporates Benefit from Europe's Woes - Barrons.com
High-Grade Corporates Benefit from Europe's Woes - Barrons.com
As with the during-bubble run-up in housing prices in excess of income changes; so now, it would seem there is a developed world run-up in demand for new debt (even Greece in supposed austerity has a projected 10% of GDP deficit for the upcoming year) that is totally out-of-sync with the real returns offered to savers to provide the funding for the debt.
And, as governments' need low rates to be able to afford the interest due on their debt; and, as growth isn't happening under the regulatory and fiscal frameworks these governments feel necessary politically; and, as the governments (US and EU) appear to want money to be printed...
draw your own conclusions.
As with the during-bubble run-up in housing prices in excess of income changes; so now, it would seem there is a developed world run-up in demand for new debt (even Greece in supposed austerity has a projected 10% of GDP deficit for the upcoming year) that is totally out-of-sync with the real returns offered to savers to provide the funding for the debt.
And, as governments' need low rates to be able to afford the interest due on their debt; and, as growth isn't happening under the regulatory and fiscal frameworks these governments feel necessary politically; and, as the governments (US and EU) appear to want money to be printed...
draw your own conclusions.
Friday, November 18, 2011
FISCAL POLICY ICE AND SNOWDRIFTS: History Repeats In Policy Blunders - Barrons.com
History Repeats In Policy Blunders - Barrons.com
There is also the old-saying about "garbage-in-garbage-out".
In this case, it would appear the garbage is to ignore Art Laffer's many comments.
As said a few days back, why not approve this new pipeline and give a bunch of people jobs? (In this case, it's the environment lobby that needs appeasement) Same with more oil drilling off the coast of the US. - all totally outside of austerity policies.
The regulatory burden (Obama's and others such as Sarbanes Oxley) - all designed with seeming good intentions have nothing to do with austerity - they just hold back business.
The austerity debate is really more of a red herring of the socialist-union alliance that wants high levels of government spending - and, this alliance believes it is a free lunch.
The policies that are holding back the economic 'car' need to change. Flooding the engine and a heavy foot on the spending and borrowing accelerator do nothing to overcome the fiscal policy ice and snowdrifts.
There is also the old-saying about "garbage-in-garbage-out".
In this case, it would appear the garbage is to ignore Art Laffer's many comments.
As said a few days back, why not approve this new pipeline and give a bunch of people jobs? (In this case, it's the environment lobby that needs appeasement) Same with more oil drilling off the coast of the US. - all totally outside of austerity policies.
The regulatory burden (Obama's and others such as Sarbanes Oxley) - all designed with seeming good intentions have nothing to do with austerity - they just hold back business.
The austerity debate is really more of a red herring of the socialist-union alliance that wants high levels of government spending - and, this alliance believes it is a free lunch.
The policies that are holding back the economic 'car' need to change. Flooding the engine and a heavy foot on the spending and borrowing accelerator do nothing to overcome the fiscal policy ice and snowdrifts.
Thursday, November 17, 2011
THE RELATIONSHIP OF BORROWERS TO SAVERS (OR MONEY PRINTERS): Bond Market Calls the Shots in Europe - Barrons.com
Bond Market Calls the Shots in Europe - Barrons.com
The same is true in the United States - much to the less-than-realistic imagination of the socialist types like Obama and the public employee unions - all of whom somehow believe that if you 'wish for an outcome', then eventually, that's what will happen.
Even if history shows that not to be the case - witness union-centric socialist economic policies collapsing the economies of Greece, etc. And, as with GM, once the equity is gone, someone has to step in to revive what has been depleted.
When everyone keeps wanting to borrow (crowding-out by sovereigns noted) and no one wants to save (i.e. a negative real return), then something has to give.
Either savers need to be paid more or borrowers have to borrow less or start paying back.
Which way will the winds blow?
The same is true in the United States - much to the less-than-realistic imagination of the socialist types like Obama and the public employee unions - all of whom somehow believe that if you 'wish for an outcome', then eventually, that's what will happen.
Even if history shows that not to be the case - witness union-centric socialist economic policies collapsing the economies of Greece, etc. And, as with GM, once the equity is gone, someone has to step in to revive what has been depleted.
When everyone keeps wanting to borrow (crowding-out by sovereigns noted) and no one wants to save (i.e. a negative real return), then something has to give.
Either savers need to be paid more or borrowers have to borrow less or start paying back.
Which way will the winds blow?
THE ILLUSION OF A FREE LUNCH: Simon Moore: Britain's Gas-Price Gamble - WSJ.com
Simon Moore: Britain's Gas-Price Gamble - WSJ.com
Needless to say, any government intervention has consequences. The old law of physics about actions and reactions.
If costs are raised everywhere through higher taxes, there are implications in terms of fewer jobs being created.
People also live less well because everything costs more, salaries don't increase and people have to make do with less.
As people make do with less, the opportunity to create better, newer cities diminishes along with the jobs to build these cities.
As this article says, the less government interference in what people want (electric power) and the way in which the market supplies it (i.e. no subsidies), the better!
In terms of unknowns, it seems as though everyday is bringing more frightening news about the banking and sovereign debt crises - all of which should be laid directly at the feet of governments and their voting blocks that think there is a free government lunch. Clearly there is no such free lunch!
Needless to say, any government intervention has consequences. The old law of physics about actions and reactions.
If costs are raised everywhere through higher taxes, there are implications in terms of fewer jobs being created.
People also live less well because everything costs more, salaries don't increase and people have to make do with less.
As people make do with less, the opportunity to create better, newer cities diminishes along with the jobs to build these cities.
As this article says, the less government interference in what people want (electric power) and the way in which the market supplies it (i.e. no subsidies), the better!
In terms of unknowns, it seems as though everyday is bringing more frightening news about the banking and sovereign debt crises - all of which should be laid directly at the feet of governments and their voting blocks that think there is a free government lunch. Clearly there is no such free lunch!
Thursday, November 10, 2011
WHY NOT PUNISH UNION THUGGERY COSTING TAXPAYERS - THE LIRR SCANDAL: Review & Outlook: Europe's Entitlement Reckoning - WSJ.com
Review & Outlook: Europe's Entitlement Reckoning - WSJ.com
Fair is fair, but the unions are being given a free ride - particularly the public employee unions.
Sadly, the US unions and the Democrats haven't even a clue as to what they are doing to the economy. It's all free lunches to the deserving.
Yesterday, there was a report on the scandal of union members (the LIRR in this case) gaming the disability system.
Was there any indication that any public official saw this as an outrage and that the perpetrators (90% of retirees from the LIRR) be obligated to repay their ill gotten gains? I didn't and haven't seen it.
Fair is fair, but the unions are being given a free ride - particularly the public employee unions.
Sadly, the US unions and the Democrats haven't even a clue as to what they are doing to the economy. It's all free lunches to the deserving.
Yesterday, there was a report on the scandal of union members (the LIRR in this case) gaming the disability system.
Was there any indication that any public official saw this as an outrage and that the perpetrators (90% of retirees from the LIRR) be obligated to repay their ill gotten gains? I didn't and haven't seen it.
Saturday, November 5, 2011
THE TIMES DON'T REALLY SEEM TO BE CHANGING: Greek Referendum and Swaps Option Raise Huge Risks - Barrons.com
Greek Referendum and Swaps Option Raise Huge Risks - Barrons.com
In the same way the housing bubble, as it was building, seemed to be a house built on the sand of rising prices but not rising incomes; so too, the current environment,where interest rates are effectively zero or negative (thus no encouragement to save and defer gratification) yet governments are spending far more than their economies can give them with ever rising taxes, seems to be economic environment built on sand.
What the storm will be that wracks these economies and whether a particular storm will have the same destructive impact on all of them is clearly unknown.
However, this article starts to touch on them.
(As a simple example, we see low rates paid on savings here in Portugal; yet, Friday's news was that the Portuguese banks don't have the funds to lend to Portugal's largest companies that need to roll over EUR ($?) 3 billion in debt.)
Clearly, the economic balancing act between borrowers and savers is askew; and,looking for the Fed or ECB to keep printing money can't end well.
We know fiscal and regulatory policies are inhibiting growth in the US and here in many parts of Europe.
The housing bubble went on far longer than a number of people thought (the rest being blissfully ignorant). So too, people demanding and wanting things from government that are ultimately unaffordable seems to be going on far longer than one would hope.
Then again, politicians are afraid to talk about it.
In the same way the housing bubble, as it was building, seemed to be a house built on the sand of rising prices but not rising incomes; so too, the current environment,where interest rates are effectively zero or negative (thus no encouragement to save and defer gratification) yet governments are spending far more than their economies can give them with ever rising taxes, seems to be economic environment built on sand.
What the storm will be that wracks these economies and whether a particular storm will have the same destructive impact on all of them is clearly unknown.
However, this article starts to touch on them.
(As a simple example, we see low rates paid on savings here in Portugal; yet, Friday's news was that the Portuguese banks don't have the funds to lend to Portugal's largest companies that need to roll over EUR ($?) 3 billion in debt.)
Clearly, the economic balancing act between borrowers and savers is askew; and,looking for the Fed or ECB to keep printing money can't end well.
We know fiscal and regulatory policies are inhibiting growth in the US and here in many parts of Europe.
The housing bubble went on far longer than a number of people thought (the rest being blissfully ignorant). So too, people demanding and wanting things from government that are ultimately unaffordable seems to be going on far longer than one would hope.
Then again, politicians are afraid to talk about it.
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