Up & Down Wall Street by Alan Abelson - Barrons.com
Nagging questions also redound on the fact that this economy is in year 3 of huge deficits, notwithstanding underfunding social security.
How many of us wouldn't feel great by goosing our income and spending by 40%
And, with Greece, Portugal, etc. in mind, might we think that the ever-building credit doesn't have a downside? Sometimes one that comes surprisingly quickly?
When one listens to Obama on the State of the Union, somehow one can't help but think of the prognostications of the just-recently-left-office Greek president who entered office (in October wasn't it) expecting to keep spending even more (and borrowing more) only to find rather quickly that the markets had decided enough-was-enough?
Saturday, January 28, 2012
Friday, January 27, 2012
LOW INTEREST RATES AND AN UNKNOWN FUTURE: Review & Outlook: The Zero Decade - WSJ.com
Review & Outlook: The Zero Decade - WSJ.com
Bill Gross (PIMCO) made some good comments in Barron's 2012 Roundtable about the fallacy of the Fed's policy in terms of risk-based lending - i.e. with rates so low, banks don't want to lend. Why take the risk?
Much of Europe is showing what happens when governments believe they can borrow forever at low rates. Eventually the rates rise. Countries find they can't afford to pay the interest rates (we are only talking 7%) that bond buyers demand. The countries raise taxes and their economies start to fall apart.
Will this be the outcome. Or, will the central banks print, print, print and somehow all that money won't be chasing the same amount of goods?
Bill Gross (PIMCO) made some good comments in Barron's 2012 Roundtable about the fallacy of the Fed's policy in terms of risk-based lending - i.e. with rates so low, banks don't want to lend. Why take the risk?
Much of Europe is showing what happens when governments believe they can borrow forever at low rates. Eventually the rates rise. Countries find they can't afford to pay the interest rates (we are only talking 7%) that bond buyers demand. The countries raise taxes and their economies start to fall apart.
Will this be the outcome. Or, will the central banks print, print, print and somehow all that money won't be chasing the same amount of goods?
Thursday, January 26, 2012
THE ECONOMIC REGRESSION LINE: Million-Dollar Earners Would Work Hard to Avoid Obama Tax Hikes - Barrons.com
Million-Dollar Earners Would Work Hard to Avoid Obama Tax Hikes - Barrons.com
In European countries with union-centric labor laws, it is hard for a small business to hire and expand.
Job protections and social benefits are wonderful until there aren't any jobs.
As mentioned by many interviewees on Bloomberg from Davos, the threat of insurrection by the disenfranchised grows at the union job franchises retard job growth.
One also should heed the old regression line whereby if a country is above-it, then it has to be smarter. Obama's suggested approach assumes there is no country or economy below the regression line.
In European countries with union-centric labor laws, it is hard for a small business to hire and expand.
Job protections and social benefits are wonderful until there aren't any jobs.
As mentioned by many interviewees on Bloomberg from Davos, the threat of insurrection by the disenfranchised grows at the union job franchises retard job growth.
One also should heed the old regression line whereby if a country is above-it, then it has to be smarter. Obama's suggested approach assumes there is no country or economy below the regression line.
AN OBAMA MENTAL VACUUM: Million-Dollar Earners Would Work Hard to Avoid Obama Tax Hikes - Barrons.com
Million-Dollar Earners Would Work Hard to Avoid Obama Tax Hikes - Barrons.com
As somewhat noted, but shelved, the issue of many not paying any tax is ignored by Obama and the noted issue of the percentage of all taxes paid by the few is only noted by Randy.
Questions as to why we don't have more investment and why companies turn to a platform economy model were worse than totally ignored by Obama. He actually wanted to have the government further intervene in supply-demand economic decision-making.
As somewhat noted, but shelved, the issue of many not paying any tax is ignored by Obama and the noted issue of the percentage of all taxes paid by the few is only noted by Randy.
Questions as to why we don't have more investment and why companies turn to a platform economy model were worse than totally ignored by Obama. He actually wanted to have the government further intervene in supply-demand economic decision-making.
Wednesday, January 25, 2012
THE IDEA OF THE FREE LUNCH: Low Interest Rates Boost Pension Deficits - Barrons.com
Low Interest Rates Boost Pension Deficits - Barrons.com
As Obama clearly indicated in his State-of-the-Union speech, he believes there is a free lunch with no consequences.
The idea of a free supply-demand market has interesting issues - most of which relate to bringing together the willingness and ability to produce a product or service with the value the user or purchaser places on that good or service.
How many people have never gone into a store and compared prices?
Clearly, liberals, Democrats and those who feel entitled ignore their own behavior when it comes to the demands they want to place on others.
As Obama clearly indicated in his State-of-the-Union speech, he believes there is a free lunch with no consequences.
The idea of a free supply-demand market has interesting issues - most of which relate to bringing together the willingness and ability to produce a product or service with the value the user or purchaser places on that good or service.
How many people have never gone into a store and compared prices?
Clearly, liberals, Democrats and those who feel entitled ignore their own behavior when it comes to the demands they want to place on others.
OBAMANOMICS: Euro Fears Send a Shiver Through Davos Revelry - WSJ.com
Euro Fears Send a Shiver Through Davos Revelry - WSJ.com
Perhaps the US is like the family that increases their lifestyle by living on their credit cards (US government borrowing) and hasn't a clue there is a downside.
Just ask yourself in his speech yesterday, did Obama talk about asking the 50%+ of people in the US who pay no income tax to start paying? Nor, did he mention the percent of all taxes paid by top income earners vs. historical averages?
He's not encouraging or supporting training Americans to learn how to participate in the economy with new opportunities; rather, he's looking for additional sources of revenue for handouts!
Frankly, the Germans should be talking tough to Obama!
Perhaps the US is like the family that increases their lifestyle by living on their credit cards (US government borrowing) and hasn't a clue there is a downside.
Just ask yourself in his speech yesterday, did Obama talk about asking the 50%+ of people in the US who pay no income tax to start paying? Nor, did he mention the percent of all taxes paid by top income earners vs. historical averages?
He's not encouraging or supporting training Americans to learn how to participate in the economy with new opportunities; rather, he's looking for additional sources of revenue for handouts!
Frankly, the Germans should be talking tough to Obama!
Monday, January 23, 2012
GROWTH IS ALL TALK - NO ACTION:Fears Grow for Portuguese Economy - WSJ.com
Fears Grow for Portuguese Economy - WSJ.com
Comment:
I am a Brit living in Portugal and have done for fifteen years. Portugal pushed out the PS Socialist party last year and elected the PSD centre right party under a PM called Pedro Coelho, that is Peter Rabbit for those who remember the books for children. You would be mistaken for thinking this lot is to the right as they seem far more socialist than the socialists.
Response:
You are right on. The politicians have never read Arthur Laffer and thus don't have a clue that at a certain point, higher taxes produce diminished returns.
To say Portugal has passed the point of diminished returns is borne out by your comments.
It's like going to the grocery store with all prices doubled and no change in salaries. For most people, that means buying less.
If the VAT is 19% and people are spending all they make, then when the VAT rises to 23%, the people may spend the same amount of money - but they are buying less. Thus the stores and sellers of goods and services are transferring part of what they make to the government. And, as a result, they have less to pay themselves and their employees.
The question never asked in socialist Europe is whether policies are in place to support individual endeavor, savings and investment. Instead, it's higher taxes and cumbersome (let's admit it, make-work) bureaucracies.
Thus, no matter what people want to do, they realize they get left too little to start businesses and have them prosper.
All this talk of 'growth' in Europe's southern parts is just talk. No one wants to change socialist policies. They just seem to feel and hope that by changing the description of the outcome, then the outcome will change.
Europe needs pro-entrepreneurial, pro-saving, pro-investment policies. It's almost like asking for them to close the church door and stop having religious (socialist religion in this case) services.
Comment:
I am a Brit living in Portugal and have done for fifteen years. Portugal pushed out the PS Socialist party last year and elected the PSD centre right party under a PM called Pedro Coelho, that is Peter Rabbit for those who remember the books for children. You would be mistaken for thinking this lot is to the right as they seem far more socialist than the socialists.
Response:
You are right on. The politicians have never read Arthur Laffer and thus don't have a clue that at a certain point, higher taxes produce diminished returns.
To say Portugal has passed the point of diminished returns is borne out by your comments.
It's like going to the grocery store with all prices doubled and no change in salaries. For most people, that means buying less.
If the VAT is 19% and people are spending all they make, then when the VAT rises to 23%, the people may spend the same amount of money - but they are buying less. Thus the stores and sellers of goods and services are transferring part of what they make to the government. And, as a result, they have less to pay themselves and their employees.
The question never asked in socialist Europe is whether policies are in place to support individual endeavor, savings and investment. Instead, it's higher taxes and cumbersome (let's admit it, make-work) bureaucracies.
Thus, no matter what people want to do, they realize they get left too little to start businesses and have them prosper.
All this talk of 'growth' in Europe's southern parts is just talk. No one wants to change socialist policies. They just seem to feel and hope that by changing the description of the outcome, then the outcome will change.
Europe needs pro-entrepreneurial, pro-saving, pro-investment policies. It's almost like asking for them to close the church door and stop having religious (socialist religion in this case) services.
Tuesday, January 17, 2012
WISHFUL THINKING: Man vs. Machine: Behind the Jobless Recovery - WSJ.com
Man vs. Machine: Behind the Jobless Recovery - WSJ.com
You'd think government would be asking and the public demanding that every government policy be directed to spurring job opportunities and entrepreneurial activity.
Clearly, this is not the case - just the opposite.
The Democratic (and complacent Republican mindset) seems to be that if they want something to be there - like good jobs with good wages (read: unions); that education and wage mandates don't matter; regulations out the whaazoo, etc. - then, that is what will happen. It is like children's wishes, because, like children, the politicians and those who listen to them want these things to happen.
A more aduljavascript:void(0)t assessment of the situation seems to be lacking!
You'd think government would be asking and the public demanding that every government policy be directed to spurring job opportunities and entrepreneurial activity.
Clearly, this is not the case - just the opposite.
The Democratic (and complacent Republican mindset) seems to be that if they want something to be there - like good jobs with good wages (read: unions); that education and wage mandates don't matter; regulations out the whaazoo, etc. - then, that is what will happen. It is like children's wishes, because, like children, the politicians and those who listen to them want these things to happen.
A more aduljavascript:void(0)t assessment of the situation seems to be lacking!
Friday, January 13, 2012
Policies for the Election: How Good Are Fed Forecasts if it Can't Get the Present Right? - Barrons.com
How Good Are Fed Forecasts if it Can't Get the Present Right? - Barrons.com
I'd rather see the discussion centered on whether the government is acting like an adult and doing everything it can to relax regulatory, tax, immigration and other policies that inhibit making the US the best place in the world to move to and do business.
Clearly Obama's announcements this week are blatantly ignorant of a problem but, like the efforts of a child, they don't touch on solutions to the problem.
There is a huge debt, entitlement and public pension bubble that almost everyone seems to want to blissfully ignore - as they did with the housing bubble.
As with the housing bubble, when things don't add up (i.e. in that case, the correlation of incomes to housing prices), then the ultimate question is how the bubble will burst and be balanced.
The overspending of the Greeks (as with the US today) and anti-growth policies in both cases don't bode well for the US.
I'd rather see the discussion centered on whether the government is acting like an adult and doing everything it can to relax regulatory, tax, immigration and other policies that inhibit making the US the best place in the world to move to and do business.
Clearly Obama's announcements this week are blatantly ignorant of a problem but, like the efforts of a child, they don't touch on solutions to the problem.
There is a huge debt, entitlement and public pension bubble that almost everyone seems to want to blissfully ignore - as they did with the housing bubble.
As with the housing bubble, when things don't add up (i.e. in that case, the correlation of incomes to housing prices), then the ultimate question is how the bubble will burst and be balanced.
The overspending of the Greeks (as with the US today) and anti-growth policies in both cases don't bode well for the US.
PARENT-CHILD ANALOGY: Markets Bet on Greek Debt Deal - WSJ.com
Markets Bet on Greek Debt Deal - WSJ.com
Somehow the whole issue of getting growth going in Europe such that the broader sovereign debt problem is diminished, if not resolved, is like looking at an issue by certain participants as 'children', while others can see the economic issues as 'adults'.
Thus, like children, some politicians and citizens approach their economic decision making based on 'wants' - with no relation to the ability of the (parents) government or society to pay these costs; or, the consequences to the society and economy of providing for these wants.
Until these 'children' grow up, its hard to see growth and balance returning to Greece or other countries, such that debts actually can be paid.
Somehow the whole issue of getting growth going in Europe such that the broader sovereign debt problem is diminished, if not resolved, is like looking at an issue by certain participants as 'children', while others can see the economic issues as 'adults'.
Thus, like children, some politicians and citizens approach their economic decision making based on 'wants' - with no relation to the ability of the (parents) government or society to pay these costs; or, the consequences to the society and economy of providing for these wants.
Until these 'children' grow up, its hard to see growth and balance returning to Greece or other countries, such that debts actually can be paid.
Wednesday, January 11, 2012
SUPPLY-DEMAND DISTORTIONS: Monti, Merkel Talks to Focus on Growth - WSJ.com
Monti, Merkel Talks to Focus on Growth - WSJ.com
All socialist policies have a very difficult problem - people want something for nothing!
A VAT tax may seem simple as a funding mechanism, but it discourages consumption and distorts supply and demand. By letting VAT (and sales taxes increase slowly), people don't necessarily experience sticker-shock with the cost of goods. But, over time, the cost of goods rises in a manner totally unrelated to their cost of production.
Thus, the jobs related to producing things people buy with their own money are discouraged and lost. Instead there are government-service-related jobs, which people may or may not like, want or need - but, this employment is clearly not being paid for in a free market.
So, on one side Europe is besotten with mispricing goods and services to the detriment of job creation; and then, to really hammer jobs, there are labor laws, taxes and regulations that increase the labor component of production.
Thus, in a supply-demand balance, the cost of producing goods in Europe is artificially raised discouraging production and supply; and, the same takes place to reduce demand through VAT.
It's probably impossible to ask people to pick and choose and pay for social and government services - after all, most people believe they are entitled to have them and that others should pay the cost.
It's the same under Obama in the US - everyone wants job creation but no one wants to laud job creators - instead, they should be taxed and excoriated! After all, who can blame the unions and socialists for a lack of jobs?
All socialist policies have a very difficult problem - people want something for nothing!
A VAT tax may seem simple as a funding mechanism, but it discourages consumption and distorts supply and demand. By letting VAT (and sales taxes increase slowly), people don't necessarily experience sticker-shock with the cost of goods. But, over time, the cost of goods rises in a manner totally unrelated to their cost of production.
Thus, the jobs related to producing things people buy with their own money are discouraged and lost. Instead there are government-service-related jobs, which people may or may not like, want or need - but, this employment is clearly not being paid for in a free market.
So, on one side Europe is besotten with mispricing goods and services to the detriment of job creation; and then, to really hammer jobs, there are labor laws, taxes and regulations that increase the labor component of production.
Thus, in a supply-demand balance, the cost of producing goods in Europe is artificially raised discouraging production and supply; and, the same takes place to reduce demand through VAT.
It's probably impossible to ask people to pick and choose and pay for social and government services - after all, most people believe they are entitled to have them and that others should pay the cost.
It's the same under Obama in the US - everyone wants job creation but no one wants to laud job creators - instead, they should be taxed and excoriated! After all, who can blame the unions and socialists for a lack of jobs?
Sunday, January 8, 2012
PUSHING-ON-A-STRING; ECONOMIC ICE AND SNOW: Thought Experiments - Barrons.com
Thought Experiments - Barrons.com
Another thought experiment might relate to the old 'pushing-on-a-string' paradigm.
In other words, low interest rates and beneficent Ben have been pushing on the proverbial economic stimulus money string.
This string has been held back by the economic ice and snow of regulatory and fiscal policies that in part try to foster favored outcomes (be they environmental or entitlement based).
American economic competitors like China appear to support capital formation and high incomes - yet American liberals (think also Occupy-Wall-Street) seem to find support aggrandizement anathema.
Yet, through it all, these same liberals believe they can maintain the out-sized demand of the US economy on global resources with concomitant beneficent blue-collar incomes.
In light of the above, we've seen what happened to Greece when the economic string of euro-borrowing suddenly fell away.
We don't see even an acknowledgement by the political left that they have created barriers of economic ice and snow.
As a result, will Bernanke's money string continue to deliver as anticipated?
Another thought experiment might relate to the old 'pushing-on-a-string' paradigm.
In other words, low interest rates and beneficent Ben have been pushing on the proverbial economic stimulus money string.
This string has been held back by the economic ice and snow of regulatory and fiscal policies that in part try to foster favored outcomes (be they environmental or entitlement based).
American economic competitors like China appear to support capital formation and high incomes - yet American liberals (think also Occupy-Wall-Street) seem to find support aggrandizement anathema.
Yet, through it all, these same liberals believe they can maintain the out-sized demand of the US economy on global resources with concomitant beneficent blue-collar incomes.
In light of the above, we've seen what happened to Greece when the economic string of euro-borrowing suddenly fell away.
We don't see even an acknowledgement by the political left that they have created barriers of economic ice and snow.
As a result, will Bernanke's money string continue to deliver as anticipated?
Saturday, January 7, 2012
AN OPPORTUNITY SOCIETY ISN'T ALWAYS FAIR: Only a Holiday Pop? - Barrons.com
Only a Holiday Pop? - Barrons.com
What seems to be missing is a focus on opportunities for everyone in America - understanding that some will be more successful than others.
What is the general feeling in the economy after all the Fed’s QEing and other stimuli?
If one reads Obama’s Austan Goolsbee’s article in the Wall Street Journal this week, then (between the lines) there is utter liberal ignorance of any negative impact on the economy or the business sector by anything government is doing.
Those of us who consider there to be government snowdrifts and ice on the economic highway have to at least pay attention to, if not be concerned about, this ignorance of a business-restraining environment and mindset.
When pondering if the economy is ‘opportunity-based’ or ‘outcome-oriented’, clearly the Democrats are concerned with outcomes before opportunity.
The Democrats seem to enjoy focusing on carrying around the lodestone of fairness – and they don’t see the lack of an opportunistic society as being a problem.
Yet, from what one reads, China seems to be an ultimate opportunistic society. This week had numerous articles about opportunistic Chinese purchases of international energy assets. I don’t recall seeing American articles touting the success of aggressive American business practices – in fact, just the opposite.
So perhaps tone and direction don’t matter; but, I’d suggest they do. And, the US seems all too content on focusing on fairness and ignoring opportunity.
If the US wants to stay a wealthy country paying top wages, then it needs to have an opportunistic society that reflects its ongoing ambitions.
What seems to be missing is a focus on opportunities for everyone in America - understanding that some will be more successful than others.
What is the general feeling in the economy after all the Fed’s QEing and other stimuli?
If one reads Obama’s Austan Goolsbee’s article in the Wall Street Journal this week, then (between the lines) there is utter liberal ignorance of any negative impact on the economy or the business sector by anything government is doing.
Those of us who consider there to be government snowdrifts and ice on the economic highway have to at least pay attention to, if not be concerned about, this ignorance of a business-restraining environment and mindset.
When pondering if the economy is ‘opportunity-based’ or ‘outcome-oriented’, clearly the Democrats are concerned with outcomes before opportunity.
The Democrats seem to enjoy focusing on carrying around the lodestone of fairness – and they don’t see the lack of an opportunistic society as being a problem.
Yet, from what one reads, China seems to be an ultimate opportunistic society. This week had numerous articles about opportunistic Chinese purchases of international energy assets. I don’t recall seeing American articles touting the success of aggressive American business practices – in fact, just the opposite.
So perhaps tone and direction don’t matter; but, I’d suggest they do. And, the US seems all too content on focusing on fairness and ignoring opportunity.
If the US wants to stay a wealthy country paying top wages, then it needs to have an opportunistic society that reflects its ongoing ambitions.
Tuesday, January 3, 2012
VERSIONS AND BELIEFS: New Hurdles Loom in Euro Crisis - WSJ.com
New Hurdles Loom in Euro Crisis - WSJ.com
Someone wrote:
"Of course, we don't know if your own version is the faith based version, do we? Therein lies the problem. Until the science develops, your version is no more valid or reliable than another's."
Response:
Well, education and study do help to separate the wheat from the chaff (as they say) and have a better understanding of 'versions'.
I tend to believe in the maxim that if there is a 'third' option that allows two other options to co-exist, even if separately, then usually that is a better choice.
This rings true clearly with all of the economic and financial legerdemain out there.
I don't know if you ever got involved with working with econometric modeling? The key is to understand the correlations and the impact of something new.
As such, we see the wide variety of forecasts.
And again, going back to the earlier comments on 'beliefs', the selection of correlations and the inclusion (or exclusion) of data and relationships then often falls back on individual beliefs. Rather full circle and often self-reinforcing.
Someone wrote:
"Of course, we don't know if your own version is the faith based version, do we? Therein lies the problem. Until the science develops, your version is no more valid or reliable than another's."
Response:
Well, education and study do help to separate the wheat from the chaff (as they say) and have a better understanding of 'versions'.
I tend to believe in the maxim that if there is a 'third' option that allows two other options to co-exist, even if separately, then usually that is a better choice.
This rings true clearly with all of the economic and financial legerdemain out there.
I don't know if you ever got involved with working with econometric modeling? The key is to understand the correlations and the impact of something new.
As such, we see the wide variety of forecasts.
And again, going back to the earlier comments on 'beliefs', the selection of correlations and the inclusion (or exclusion) of data and relationships then often falls back on individual beliefs. Rather full circle and often self-reinforcing.
BESOTTEN WITH FALSE BELIEFS: Stephens: 2012—A U.S. Referendum on Europe - WSJ.com
Stephens: 2012—A U.S. Referendum on Europe - WSJ.com
Someone writes:
"....neo crud economics. He blames in part European unions for the mess. Anything to deflect the blame from the 'men' of places like Goldman Sissy..."
In response:
David, you have the ring of someone whose religious beliefs are being questioned - and, rightly so, one might suggest.
You are clearly ignorant of macroeconomics and you want to believe the misdirection coming from the politicians that the banks are to blame for that which government initiated and continues to promulgate and perpetuate.
Obama is following the economic policies that have brought this great hardship on the Greek people; yet, I'm sure you both believe that "this time it will be different".
Again, it's the old bane of religion that always turns back on to the believe the failure of the their religious faith to produce the 'promised' results. The failure of the belief itself and its lack of viable veracity is never to be questioned. The fault always lies elsewhere.
Thus, you too seem besotten with the desire for faith in Obamanomics. Feel free to tithe as much as you want to such faith. Just don't ask or expect anyone else to give to such false beliefs.
Someone writes:
"....neo crud economics. He blames in part European unions for the mess. Anything to deflect the blame from the 'men' of places like Goldman Sissy..."
In response:
David, you have the ring of someone whose religious beliefs are being questioned - and, rightly so, one might suggest.
You are clearly ignorant of macroeconomics and you want to believe the misdirection coming from the politicians that the banks are to blame for that which government initiated and continues to promulgate and perpetuate.
Obama is following the economic policies that have brought this great hardship on the Greek people; yet, I'm sure you both believe that "this time it will be different".
Again, it's the old bane of religion that always turns back on to the believe the failure of the their religious faith to produce the 'promised' results. The failure of the belief itself and its lack of viable veracity is never to be questioned. The fault always lies elsewhere.
Thus, you too seem besotten with the desire for faith in Obamanomics. Feel free to tithe as much as you want to such faith. Just don't ask or expect anyone else to give to such false beliefs.
BESOTTEN WITH FALSE BELIEFS: Stephens: 2012—A U.S. Referendum on Europe - WSJ.com
Stephens: 2012—A U.S. Referendum on Europe - WSJ.com
Someone writes:
"....neo crud economics. He blames in part European unions for the mess. Anything to deflect the blame from the 'men' of places like Goldman Sissy..."
In response:
David, you have the ring of someone whose religious beliefs are being questioned - and, rightly so, one might suggest.
You are clearly ignorant of macroeconomics and you want to believe the misdirection coming from the politicians that the banks are to blame for that which government initiated and continues to promulgate and perpetuate.
Obama is following the economic policies that have brought this great hardship on the Greek people; yet, I'm sure you both believe that "this time it will be different".
Again, it's the old bane of religion that always turns back on to the believe the failure of the their religious faith to produce the 'promised' results. The failure of the belief itself and its lack of viable veracity is never to be questioned. The fault always lies elsewhere.
Thus, you too seem besotten with the desire for faith in Obamanomics. Feel free to tithe as much as you want to such faith. Just don't ask or expect anyone else to give to such false beliefs.
Someone writes:
"....neo crud economics. He blames in part European unions for the mess. Anything to deflect the blame from the 'men' of places like Goldman Sissy..."
In response:
David, you have the ring of someone whose religious beliefs are being questioned - and, rightly so, one might suggest.
You are clearly ignorant of macroeconomics and you want to believe the misdirection coming from the politicians that the banks are to blame for that which government initiated and continues to promulgate and perpetuate.
Obama is following the economic policies that have brought this great hardship on the Greek people; yet, I'm sure you both believe that "this time it will be different".
Again, it's the old bane of religion that always turns back on to the believe the failure of the their religious faith to produce the 'promised' results. The failure of the belief itself and its lack of viable veracity is never to be questioned. The fault always lies elsewhere.
Thus, you too seem besotten with the desire for faith in Obamanomics. Feel free to tithe as much as you want to such faith. Just don't ask or expect anyone else to give to such false beliefs.
ALCHEMY AND RELIGION: New Hurdles Loom in Euro Crisis - WSJ.com
New Hurdles Loom in Euro Crisis - WSJ.com
Someone wrote, "Economists? They have several "schools of thought", such as the "Austrian", the "freshwater" and the "saltwater". Each school of thought completely rejects the other. Economics is still in the stage of alchemy."
In response:
Perhaps your alchemists analogy is more on point than you realize.
Once chemistry (and an actual understanding of molecular structure, molecular interactions, etc.) came into being, alchemists were shown to be the charlatans they actually were.
Today, the liberal socialists and unions believe there is a free lunch in taking from those who produce to equalize outcomes. These are like religious beliefs. You either have them and have succumbed to them or you don't. Some are religious agnostics and don't make a decision either way.
As with chemistry, each of us knows that deep down in side, when we do a job we expect to be fairly compensated. When we go to the grocery store, we make our buying decisions based on the relative prices of the different items for sale.
Economic alchemists believe society at large can function when you get to keep only part of what you earn and that society can arbitrarily raise the pay of some and decrease the pay of others without distorting incentives to work and not-work.
These economic alchemists dismiss any contrary evidence as 'false beliefs' or some type of 'voodoo science'.
To those who don't stop and think logically, all these economic policies may seem like alchemy.
However, there is an underlying science. The difference is whether one wants to ignore, dismiss or relegate lower the fact that all outcomes will be unequal in a society where opportunity is paramount (but outcomes aren't); or, whether one wants to believe equality of outcomes are paramount and one is willing to make the leap-of-faith that collectively society operates in a fashion antipodal to the way each member (including the respective thinker and voter) operates in their own life.
Thus, one might say it again is like religion. There are those who would dictate to others how others should live their lives (think of the American religious right) based on other people's beliefs. Lives to be lived on the basis of other's beliefs and not those of the individual (think abortion rights, gay rights, marriage rights, etc.).
Someone wrote, "Economists? They have several "schools of thought", such as the "Austrian", the "freshwater" and the "saltwater". Each school of thought completely rejects the other. Economics is still in the stage of alchemy."
In response:
Perhaps your alchemists analogy is more on point than you realize.
Once chemistry (and an actual understanding of molecular structure, molecular interactions, etc.) came into being, alchemists were shown to be the charlatans they actually were.
Today, the liberal socialists and unions believe there is a free lunch in taking from those who produce to equalize outcomes. These are like religious beliefs. You either have them and have succumbed to them or you don't. Some are religious agnostics and don't make a decision either way.
As with chemistry, each of us knows that deep down in side, when we do a job we expect to be fairly compensated. When we go to the grocery store, we make our buying decisions based on the relative prices of the different items for sale.
Economic alchemists believe society at large can function when you get to keep only part of what you earn and that society can arbitrarily raise the pay of some and decrease the pay of others without distorting incentives to work and not-work.
These economic alchemists dismiss any contrary evidence as 'false beliefs' or some type of 'voodoo science'.
To those who don't stop and think logically, all these economic policies may seem like alchemy.
However, there is an underlying science. The difference is whether one wants to ignore, dismiss or relegate lower the fact that all outcomes will be unequal in a society where opportunity is paramount (but outcomes aren't); or, whether one wants to believe equality of outcomes are paramount and one is willing to make the leap-of-faith that collectively society operates in a fashion antipodal to the way each member (including the respective thinker and voter) operates in their own life.
Thus, one might say it again is like religion. There are those who would dictate to others how others should live their lives (think of the American religious right) based on other people's beliefs. Lives to be lived on the basis of other's beliefs and not those of the individual (think abortion rights, gay rights, marriage rights, etc.).
THE HIDDEN ECONOMIC CANNIBALIZATION: New Hurdles Loom in Euro Crisis - WSJ.com
New Hurdles Loom in Euro Crisis - WSJ.com
Way back when in the US when the housing bubble was just starting to inflate, the trenchant question was how housing prices could keep rising if incomes weren't (and there were few constraints on adding more supply of houses)?
Today, the question in Europe would seem to be related to how an economy (or group of economies) can continue to fund themselves and stabilize - let alone grow - when the cost of buying goods produced in those societies continues to go up (due to higher taxes) and wages are flat to down? With downward pressure on demand, what will support job growth?
The answer is in 'la-la-land' of politicians and socialist unions.
The hope is that having borrowed all the money there is floating around, governments will somehow be able to keep printing more.
There is a lot governments could do to support job growth - but, they are faced with the huge burden of social costs and a public demanding protection of unproductive bureaucracies and anti-business regulatory environments.
----
The latter part of the 19th century in industrial societies may provide an analogy. Back then, everything continued to cost less because of technology (today it's both technology and new supply sources like China).
Perhaps the logical deflation is being masked by the inflationary spending of governments?
In the 19th century, government policies by-and-large did not discourage investment and expansion. Today, policies in the US and Europe do discourage such domestic growth.
Until these policies change, it's hard to see how these economies can have a satisfactory rebound. Instead, these economies are cannibalizing themselves. (Suddenly, the vitality of the economy is gone and there are massive job losses and economic contraction.)
Way back when in the US when the housing bubble was just starting to inflate, the trenchant question was how housing prices could keep rising if incomes weren't (and there were few constraints on adding more supply of houses)?
Today, the question in Europe would seem to be related to how an economy (or group of economies) can continue to fund themselves and stabilize - let alone grow - when the cost of buying goods produced in those societies continues to go up (due to higher taxes) and wages are flat to down? With downward pressure on demand, what will support job growth?
The answer is in 'la-la-land' of politicians and socialist unions.
The hope is that having borrowed all the money there is floating around, governments will somehow be able to keep printing more.
There is a lot governments could do to support job growth - but, they are faced with the huge burden of social costs and a public demanding protection of unproductive bureaucracies and anti-business regulatory environments.
----
The latter part of the 19th century in industrial societies may provide an analogy. Back then, everything continued to cost less because of technology (today it's both technology and new supply sources like China).
Perhaps the logical deflation is being masked by the inflationary spending of governments?
In the 19th century, government policies by-and-large did not discourage investment and expansion. Today, policies in the US and Europe do discourage such domestic growth.
Until these policies change, it's hard to see how these economies can have a satisfactory rebound. Instead, these economies are cannibalizing themselves. (Suddenly, the vitality of the economy is gone and there are massive job losses and economic contraction.)
AN OPPORTUNITY BASED ECONOMIC MODEL MISSING: Sarkozy, Merkel Set Bilateral Euro Talks - WSJ.com
Sarkozy, Merkel Set Bilateral Euro Talks - WSJ.com
Should there ever be a clearer explanation of Europe's problems, it was captured in the following quote from the article:
" the French president said in a televised address on New Year's Eve. 'Right now, our priority must be working for growth, competitiveness and reindustrialization that will allow us to create jobs and boost spending power.'"
European, union-centric job creation seems to be focused on adding people to payrolls without any increase in actual production of goods or services.
When a person is employed to do a job that provides no real increase in the productive services for a society (think bureaucrats), these 'apparent jobs' give a person a welfare check. They can demand housing, cars, food, clothing, vacations, etc. but they have nothing to give back to those providing these services.
What is rightly needed are jobs where people who 'take' from society 'give something commensurate back'.
As politicians and unions distort the balance of properly rewarding those who produce, save and invest, the entire framework of an economy gets out of whack. (The soviet communist model came to see this and the Greek socialist model is at the forefront of seeing this today.) But European socialists and the larger population still believe no one needs to be rewarded and allowed to keep what they earn. They believe in redistribution and social-equality. It doesn't work. Provide opportunities - yes; but, equalize outcomes - no.
Nothing is being done in Europe (and similar policies are the heart of Democratic policies in the US) to provide an opportunistic society in which people are encouraged to succeed (instead of being discouraged through taxes, regulations, etc.).
Should there ever be a clearer explanation of Europe's problems, it was captured in the following quote from the article:
" the French president said in a televised address on New Year's Eve. 'Right now, our priority must be working for growth, competitiveness and reindustrialization that will allow us to create jobs and boost spending power.'"
European, union-centric job creation seems to be focused on adding people to payrolls without any increase in actual production of goods or services.
When a person is employed to do a job that provides no real increase in the productive services for a society (think bureaucrats), these 'apparent jobs' give a person a welfare check. They can demand housing, cars, food, clothing, vacations, etc. but they have nothing to give back to those providing these services.
What is rightly needed are jobs where people who 'take' from society 'give something commensurate back'.
As politicians and unions distort the balance of properly rewarding those who produce, save and invest, the entire framework of an economy gets out of whack. (The soviet communist model came to see this and the Greek socialist model is at the forefront of seeing this today.) But European socialists and the larger population still believe no one needs to be rewarded and allowed to keep what they earn. They believe in redistribution and social-equality. It doesn't work. Provide opportunities - yes; but, equalize outcomes - no.
Nothing is being done in Europe (and similar policies are the heart of Democratic policies in the US) to provide an opportunistic society in which people are encouraged to succeed (instead of being discouraged through taxes, regulations, etc.).
Monday, January 2, 2012
THE EVER-LOVELY 'FREE ECONOMIC LUNCH': Europe's Leaders May Need History Lesson - WSJ.com
Europe's Leaders May Need History Lesson - WSJ.com
Socialists believe there really is a free lunch. And, from the strikes and the (non-growth and continuing anti-growth) policies of the politicians, it would appear as though the ability to restructure to a growth encouraging and job creating set of policies is still not on the table.
People have been told and led to believe (and, of course, would naturally want to believe) in a 'free-economic-lunch'.
Sadly for much of the socially-minded developed world, the deferred cost of that free lunch has compounded to quite a sum.
Now the politicians have to figure out how to pay for it since the old credit card limits have been reached (or perhaps exceeded).
Socialists believe there really is a free lunch. And, from the strikes and the (non-growth and continuing anti-growth) policies of the politicians, it would appear as though the ability to restructure to a growth encouraging and job creating set of policies is still not on the table.
People have been told and led to believe (and, of course, would naturally want to believe) in a 'free-economic-lunch'.
Sadly for much of the socially-minded developed world, the deferred cost of that free lunch has compounded to quite a sum.
Now the politicians have to figure out how to pay for it since the old credit card limits have been reached (or perhaps exceeded).
Debasing a currency - is it really going to be different this time? Europe's Leaders May Need History Lesson - WSJ.com
Europe's Leaders May Need History Lesson - WSJ.com
In some ways, are not economies perhaps like giant old battleships - i.e. it takes them 20 miles of ocean to make a turn.
So perhaps it is with all this printing of money.
It may seem to not have any grossly deleterious (read: inflationary) consequences. Yet, there was someone on Bloomberg toward the end of the year who strongly stated that the US is significantly 'understating' the current inflation. He talked of 8% or so last year - backing it up with the increases in a number of goods and services (such as educational tuition and healthcare).
In Roman times currencies got debased by shrinking the size or precious metal content of coins. Today, we just make more paper (or, in fact, electronic) coinage.
In some ways, are not economies perhaps like giant old battleships - i.e. it takes them 20 miles of ocean to make a turn.
So perhaps it is with all this printing of money.
It may seem to not have any grossly deleterious (read: inflationary) consequences. Yet, there was someone on Bloomberg toward the end of the year who strongly stated that the US is significantly 'understating' the current inflation. He talked of 8% or so last year - backing it up with the increases in a number of goods and services (such as educational tuition and healthcare).
In Roman times currencies got debased by shrinking the size or precious metal content of coins. Today, we just make more paper (or, in fact, electronic) coinage.
DELPHIC COMMENTS: Europe's Leaders May Need History Lesson - WSJ.com
Europe's Leaders May Need History Lesson - WSJ.com
It would seem like the Delphic oracle that this article is so open to interpretation that it really says nothing?
A discussion of issues such as supporting 'growth' in an economy through growth-engendering support for investment and entrepreneurship (both sorely lacking in Europe) are amiss.
Any questioning of union-centric labor policies that inhibit hiring and economic vitality are amiss.
There's also nothing about the fact that taxes, which raise prices for goods and services, concomitantly decrease the demand for those goods and services (and the jobs required to produce them).
There is also no criticism of policies such as those reported in Bloomberg today about the closure of French petroleum refineries due to falling demand and lack of profit. Do the French unions call for cuts in fuel taxes to spur demand or in labor costs to return the refinery to profitability? No, the unions want nationalization to transfer money from the still-solvent part of the economy to their own no-longer-solvent part.
If Europe has a problem, as in America, its the ostrich approach to a non-socialist political and economic construct and way of doing things. As with the classical definition of imbecility, which deals with continuing to do the same things in the same ways but expecting a different outcome, the policymakers and public of much of Europe and the US are deluding themselves.
It would seem like the Delphic oracle that this article is so open to interpretation that it really says nothing?
A discussion of issues such as supporting 'growth' in an economy through growth-engendering support for investment and entrepreneurship (both sorely lacking in Europe) are amiss.
Any questioning of union-centric labor policies that inhibit hiring and economic vitality are amiss.
There's also nothing about the fact that taxes, which raise prices for goods and services, concomitantly decrease the demand for those goods and services (and the jobs required to produce them).
There is also no criticism of policies such as those reported in Bloomberg today about the closure of French petroleum refineries due to falling demand and lack of profit. Do the French unions call for cuts in fuel taxes to spur demand or in labor costs to return the refinery to profitability? No, the unions want nationalization to transfer money from the still-solvent part of the economy to their own no-longer-solvent part.
If Europe has a problem, as in America, its the ostrich approach to a non-socialist political and economic construct and way of doing things. As with the classical definition of imbecility, which deals with continuing to do the same things in the same ways but expecting a different outcome, the policymakers and public of much of Europe and the US are deluding themselves.
ON EDUCATION AND TEACHERS' UNIONS: Review & Outlook: Republicans for Monopoly - WSJ.com
Review & Outlook: Republicans for Monopoly - WSJ.com
Clearly in California, the teachers unions and the support of liberal educational objectives based more on equalizing educational outcomes than educational opportunities is a bane that the country already has documented with increasingly less-educated generations of young people.
Since the teachers unions have won higher salaries and benefits and have assured that it is almost impossible to fire poorly performing or even grossly incompetent teachers at the same time educational outcomes are declining, there appears to be all-too-clear a correlation.
For those in favor of unions and government monopolies, "more-of-the-same" doesn't appear to be working to show any improvement.
Clearly in California, the teachers unions and the support of liberal educational objectives based more on equalizing educational outcomes than educational opportunities is a bane that the country already has documented with increasingly less-educated generations of young people.
Since the teachers unions have won higher salaries and benefits and have assured that it is almost impossible to fire poorly performing or even grossly incompetent teachers at the same time educational outcomes are declining, there appears to be all-too-clear a correlation.
For those in favor of unions and government monopolies, "more-of-the-same" doesn't appear to be working to show any improvement.
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