Portugal Unveils New Budget, Braces for Protests - WSJ.com
High taxes on individuals sap the capital necessary to keep a business alive - and, clearly those with higher incomes will look to leave the country or not recognize income.
There is no growth component except if a multi-national company (i.e. the owners aren't in Portugal) decide the cost of private labor is low enough (although motivation is questionable). However, Portugal has to compete with other countries with low cost and motivateable labor; and, bottom line, someone has to manage a business and they need to have a good lifestyle. This is not helped by the new proposals.
Clearly the budget and government policies are being directed by people on the upper deck of the ship without a clue to the fact that they are starving those down below and not providing them with the means to fix the major leaks.
There is no leadership with an eye to growth.
If the money goes to government and is taken from the pockets of workers, investors and business people, then there is nothing left to fund the actual work of the economy.
People I know in Portugal talk of all the multi-nationals pulling their expat employees out of Portugal. They are focusing their business away from Portugal. Very sad.
The government is pouring salt into the wound instead of dressing and cleaning it.
Monday, October 15, 2012
Tuesday, October 9, 2012
The backpack and the camel: Video - IMF Predicts Lower Growth in World Economy - WSJ.com
Video - IMF Predicts Lower Growth in World Economy - WSJ.com
It would be nice to see a Lafferesque take on these global economic events - something which is distinctly missing.
Taxes and government are too big! Austerity through tax increases is the antithesis of what logic would say is needed.
The analogy of economies being like a person climbing a hill with a backpack seems called for - to wit, the more in the way of taxes and regulatory burdens thrown into the economic backpack, the more difficult the economic climb (read: growth).
For a while, the drug of government borrowing can mask the difficulties - but, cutting back government and people's sense of entitlement to government care is clearly missing.
It's not to say that government can't place certain burdens on the economy; but, when government is run by non-investor, non-business people, then the right balance is something they can't imagine. Such non-business types just see what they want to throw into the economy's backpack. They don't consider the impact.
One can't help but think of the story of the camel and the straw! The straw clearly has hit the Greek economy and it has laid down like the camel. Sadly, the government and people of Greece can't see their way to take everything off the camel. At least that's how the story goes - i.e. once the camel has sat down, it won't get up until everything put on it has been taken off!
It would be nice to see a Lafferesque take on these global economic events - something which is distinctly missing.
Taxes and government are too big! Austerity through tax increases is the antithesis of what logic would say is needed.
The analogy of economies being like a person climbing a hill with a backpack seems called for - to wit, the more in the way of taxes and regulatory burdens thrown into the economic backpack, the more difficult the economic climb (read: growth).
For a while, the drug of government borrowing can mask the difficulties - but, cutting back government and people's sense of entitlement to government care is clearly missing.
It's not to say that government can't place certain burdens on the economy; but, when government is run by non-investor, non-business people, then the right balance is something they can't imagine. Such non-business types just see what they want to throw into the economy's backpack. They don't consider the impact.
One can't help but think of the story of the camel and the straw! The straw clearly has hit the Greek economy and it has laid down like the camel. Sadly, the government and people of Greece can't see their way to take everything off the camel. At least that's how the story goes - i.e. once the camel has sat down, it won't get up until everything put on it has been taken off!
Saturday, October 6, 2012
September Unemployment: No U Turn - Barrons.com
September Unemployment: No U Turn - Barrons.com
"...The last time unemployment was at 7.8% occurred in January 2009, the month Obama took office.
"...The last time unemployment was at 7.8% occurred in January 2009, the month Obama took office.
But the three-tenths of a percentage point decline in joblessness was not an unalloyed triumph. The BLS tracks six different measures of "labor underutilization," of which the official unemployment rate, called "U-3," is but one measure. Normally, the trend in the other five measures adds very little information that isn't already observable in U-3.
This month was an exception. Another measure, U-6, includes everything in U-3 and then some; and it held firm at 14.7%. That's because this broader measure of labor underutilization includes people who work part-time but would prefer full-time jobs. The number of these involuntary part-timers jumped by 582,000 in September, about offsetting the decline in U-3.
For a broader perspective, take the ratio between U-6 and U-3 since the BLS began tracking U-6 in January 1994. Over this period, the ratio of U-6 to U-3 has averaged 1.76-to-1 and has generally been lower than 1.80-to-1. In September 2012, it ran 1.88-to-1, the highest on record.
So let's hope that ratio narrows in coming months, with U-3 at least holding at 7.8% and U-6 declining, as the involuntary part-timers begin to find the full-time jobs they seek. Otherwise, the 7.8% unemployment rate deserves a huge asterisk.
No great shakes was the addition to nonfarm-payroll employment of 114,000 in September, with government adding 10,000 and the private sector 104,000. With revisions to July and August, the total net addition came to 200,000, but all those upward revisions were from government."
Thursday, October 4, 2012
Probe Finds Long Island Rail Road Waste - WSJ.com
Probe Finds Long Island Rail Road Waste - WSJ.com
If unions are involved, then we know there is waste, featherbedding, encouragement of sloth and inefficiency. Sadly, many union members are probably too deluded to see the facts or writing on the wall.
The more unions act as unions, the more likely large numbers of union jobs will disappear. And, should they be counting on promised retirement benefits, they may well find in their later years (80's, 90's or their surviving spouses) that greed leads to less-than-bargained-for.
And, as they say about the difference between 'pigs' and 'hogs' - pigs get fat and hogs get slaughtered. It's hard to remember a union leader that wasn't a hog.
If unions are involved, then we know there is waste, featherbedding, encouragement of sloth and inefficiency. Sadly, many union members are probably too deluded to see the facts or writing on the wall.
The more unions act as unions, the more likely large numbers of union jobs will disappear. And, should they be counting on promised retirement benefits, they may well find in their later years (80's, 90's or their surviving spouses) that greed leads to less-than-bargained-for.
And, as they say about the difference between 'pigs' and 'hogs' - pigs get fat and hogs get slaughtered. It's hard to remember a union leader that wasn't a hog.
Portugal and shooting themselves in the foot
Portugal Revamps Austerity Measures
The idiocy of it all. Like Holland in France, take the money from those who might 'stay' in Portugal and create jobs and take the capital that could create jobs. While simultaneously trying to keep the social spending and government workers up.
Oh, and don't even think about encouraging business in other ways - like the recent case where people tried to start a corporation but were hamstrung and gave up because of either the intellectually challenged or regulatorially challenged members of the Portuguese bureaucracy.
Friends in PT tell me of the senior executives being reassigned to positions outside of the country.
There is also talk of the 'two' communist parties joining forces. Can we say "un-business-friendly".
Of course, socialists and communists deride rewarding investors and entrepreneurs - but, when they get into power, they want any spoils that might accrue from saving, investing and risk-taking to accrue to themselves.
(Oh yes, as an aside, there are many, many very poor people in Portugal. One sees them every day. One of their few pleasures in life is a cigarette. So, of course, make them more-and-more out of reach to the poor.)
Monday, October 1, 2012
Socialist government's 'Catch 22': Review & Outlook: Europe's Same Old Austerity - WSJ.com
Review & Outlook: Europe's Same Old Austerity - WSJ.com
Aren't we missing something - i.e. can most European governments actually survive if their economies grow? In other words, if there is growth, it is logical that interest rates (or inflation through expansive money printing) will rise.
Governments have gone into such debt that - while they may not even want to hint at it - they can't allow for growth.
Thus, there is a perfect logic to their 'austerity' policies.
The only question is "what does history say happens when governments are in such hock that they can't service their debt?"
Aren't we missing something - i.e. can most European governments actually survive if their economies grow? In other words, if there is growth, it is logical that interest rates (or inflation through expansive money printing) will rise.
Governments have gone into such debt that - while they may not even want to hint at it - they can't allow for growth.
Thus, there is a perfect logic to their 'austerity' policies.
The only question is "what does history say happens when governments are in such hock that they can't service their debt?"
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