Opera-House Industrialism - Barrons.com
Such a good essay.
It highlights the problems with the Democratic agenda of trying to protect middle class lifestyles (as stated by Obama again this weekend).
Yet, by trying to do so with debt and entitlements, the very deprivation of the chance of renewal is evident.
Let's hope the voters are given a choice in November and take it to cleave off some of the burdens of all the entitlements.
Sunday, February 7, 2010
Saturday, February 6, 2010
Top 2009 Forecasters Saw High Unemployment - WSJ.com
Top 2009 Forecasters Saw High Unemployment - WSJ.com
More on Unemployment and Causes:
What you may be missing with salaries are several things:
1. As with any business, you pay what you have to for top talent. (In a normal environment, these high salaries should be promoting competition (not castigation or anger). The fact that more businesses aren't there to compete is what should be questioned (another subject).
2. As for a lack of raises for many workers, here again the government wants to obfuscate and hide the fact that it has increased the cost of all sorts of benefit programs - so added worker productivity gets channeled into support for such programs rather than into cash worker salaries.
(A subtle example is the 'cost-shifting' government uses to support Medicare and Medicaid programs. You wonder why your health insurance costs go up - well, there's a subsidy for the government programs you pay through higher prices than paid by government.)
3. As for younger workers, besides the crazy minimum wage laws or unions, there is the basic 'nut' of extra costs for employment. So, if the government requires this and that benefit, then jobs just don't get done or they're outsourced because the economic cost is higher than the utility benefit to the purchaser.
After years and years - and, it is vastly worse under Obama, Pelosi, etc. - the distortion in the economic utility equation just gets worse and worse. Thus, fewer jobs!
More on Unemployment and Causes:
What you may be missing with salaries are several things:
1. As with any business, you pay what you have to for top talent. (In a normal environment, these high salaries should be promoting competition (not castigation or anger). The fact that more businesses aren't there to compete is what should be questioned (another subject).
2. As for a lack of raises for many workers, here again the government wants to obfuscate and hide the fact that it has increased the cost of all sorts of benefit programs - so added worker productivity gets channeled into support for such programs rather than into cash worker salaries.
(A subtle example is the 'cost-shifting' government uses to support Medicare and Medicaid programs. You wonder why your health insurance costs go up - well, there's a subsidy for the government programs you pay through higher prices than paid by government.)
3. As for younger workers, besides the crazy minimum wage laws or unions, there is the basic 'nut' of extra costs for employment. So, if the government requires this and that benefit, then jobs just don't get done or they're outsourced because the economic cost is higher than the utility benefit to the purchaser.
After years and years - and, it is vastly worse under Obama, Pelosi, etc. - the distortion in the economic utility equation just gets worse and worse. Thus, fewer jobs!
Opinions Are Split on How Best to Spur Jobs - WSJ.com
Opinions Are Split on How Best to Spur Jobs - WSJ.com
Let's keep it simple and consider some of the 'macro' elements at play here:
1) Just as we don't make buggy whips and buggies or keep horses for transport anymore, advanced economies need to grow with lots of new ideas (e.g. Intel expansion plans, chemical plant cutback announcements in this past weeks WSJ).
2) What is the most efficient way to allocate resources and encourage people to study hard, work hard, invest and save, etc.? It's a free market (which is exactly what there is less and less of).
3) Do people work to provide for themselves or for retirees or non-producers? A good suggestion was made to stop indexing social security and to cap Medicare and government pensions.
4) As long as the government is spending 50% more than it's taking in - entitlement cutbacks are essential (but not discussed).
5) Borrowing from the future to fund current consumption is what has gotten the US and Europe into the mess it's in. If government can come up with grand plans (like the trip to the moon or serious changes to automated transportation (akin to the changes brought about by the internet), then these are worthy efforts).
But, in the interim, taking productive resources and allocating them to make-work or unproductive government jobs (of which there is a plethora already - base value on economic utility - not wish lists or social want lists) - othersize, isn't it like a family that runs up too big a debt on their credit cards and then hasn't got much disposable income left?
All governments in Europe and the US seem to be spending too much through borrowing. Where will this continued flow of savings come from?
Isn't this one of the bubbles that will have to burst? I.e. too much social spending; too much money taken from investors, savers and producers; reduced incentives throughout life to get an education, work hard and take care of oneself?
Let's keep it simple and consider some of the 'macro' elements at play here:
1) Just as we don't make buggy whips and buggies or keep horses for transport anymore, advanced economies need to grow with lots of new ideas (e.g. Intel expansion plans, chemical plant cutback announcements in this past weeks WSJ).
2) What is the most efficient way to allocate resources and encourage people to study hard, work hard, invest and save, etc.? It's a free market (which is exactly what there is less and less of).
3) Do people work to provide for themselves or for retirees or non-producers? A good suggestion was made to stop indexing social security and to cap Medicare and government pensions.
4) As long as the government is spending 50% more than it's taking in - entitlement cutbacks are essential (but not discussed).
5) Borrowing from the future to fund current consumption is what has gotten the US and Europe into the mess it's in. If government can come up with grand plans (like the trip to the moon or serious changes to automated transportation (akin to the changes brought about by the internet), then these are worthy efforts).
But, in the interim, taking productive resources and allocating them to make-work or unproductive government jobs (of which there is a plethora already - base value on economic utility - not wish lists or social want lists) - othersize, isn't it like a family that runs up too big a debt on their credit cards and then hasn't got much disposable income left?
All governments in Europe and the US seem to be spending too much through borrowing. Where will this continued flow of savings come from?
Isn't this one of the bubbles that will have to burst? I.e. too much social spending; too much money taken from investors, savers and producers; reduced incentives throughout life to get an education, work hard and take care of oneself?
Thursday, February 4, 2010
Productivity, Jobless Claims Rise - WSJ.com
Productivity, Jobless Claims Rise - WSJ.com
In terms of Obamanomics, you wonder if jobs will come back and the economy will grow? Start from looking at the fiscal environment created by government policies. Make them personal:
It's sort of like your family going shopping.
If the paycheck is smaller (i.e. higher taxes), then you have less to spend.
When you go to the bank to get a loan to expand your business, the banker says - "sorry, we just spent our money buying government bonds!"
When you wonder where the extra tax money (or borrowed money went) by government, you here your neighbor who works for the government just got a raise; and, his/her retirement is still on track to be fully funded and available at an early age.
You go to the doctor and worry about the deductible (if you even can afford insurance). The doctor says your bill will be $150. You ask him why - "it was $75 just a year ago for the same thing?" He says, yeah - it was - but, we have all these Medicare and Medicaid patients and the government only pays us $35 for them to get the same treatment. So, we have to charge private patients more.
Hmmm - does this seem like the right way to grow the economy?
In terms of Obamanomics, you wonder if jobs will come back and the economy will grow? Start from looking at the fiscal environment created by government policies. Make them personal:
It's sort of like your family going shopping.
If the paycheck is smaller (i.e. higher taxes), then you have less to spend.
When you go to the bank to get a loan to expand your business, the banker says - "sorry, we just spent our money buying government bonds!"
When you wonder where the extra tax money (or borrowed money went) by government, you here your neighbor who works for the government just got a raise; and, his/her retirement is still on track to be fully funded and available at an early age.
You go to the doctor and worry about the deductible (if you even can afford insurance). The doctor says your bill will be $150. You ask him why - "it was $75 just a year ago for the same thing?" He says, yeah - it was - but, we have all these Medicare and Medicaid patients and the government only pays us $35 for them to get the same treatment. So, we have to charge private patients more.
Hmmm - does this seem like the right way to grow the economy?
Tuesday, February 2, 2010
Capital Journal: Budget Deficit Threatens National Security - WSJ.com
Capital Journal: Budget Deficit Threatens National Security - WSJ.com
Isn't it clearly a combination of the "can't say no" welfare state, out-of-date retirement ages and benefits (particularly for public employee unions and unions that have legacy contracts), laws that make no sense (such as the anti-drug laws) that cost too much plus have negative international implications, etc.
None of these are really being addressed by the Obama administration and its ultra liberal allies.
The only reason for a business to spend or invest is if there is such an unambiguous and amazing opportunity (can we say 'rare') or a glimmering hope that the Democrats lose so badly in the fall elections that the new Congress has a veto-proof majority in both houses, along with a Republican party that has some guts to say no to spending, a willingness to cutback existing social redistribution programs and a new found financial rectitude they lacked under Bush.
Isn't it clearly a combination of the "can't say no" welfare state, out-of-date retirement ages and benefits (particularly for public employee unions and unions that have legacy contracts), laws that make no sense (such as the anti-drug laws) that cost too much plus have negative international implications, etc.
None of these are really being addressed by the Obama administration and its ultra liberal allies.
The only reason for a business to spend or invest is if there is such an unambiguous and amazing opportunity (can we say 'rare') or a glimmering hope that the Democrats lose so badly in the fall elections that the new Congress has a veto-proof majority in both houses, along with a Republican party that has some guts to say no to spending, a willingness to cutback existing social redistribution programs and a new found financial rectitude they lacked under Bush.
Monday, February 1, 2010
Knives Are Drawn for Proposed Budget Cuts - WSJ.com
Knives Are Drawn for Proposed Budget Cuts - WSJ.com
A serious question would appear to loom - i.e. is the Federal Government's fiscal policy going to produce a Michigan-like economy nationwide?
If so, the government is going down a very slippery slope. Greece, Argentina are all examples of socialist states that rely on government to provide jobs and benefits to the detriment of the private economy.
Clearly, the government of the US is allocating more resources to social benefit that people neither earn nor pay for nor restrain their acceptance of. As such, the burdens on the shrinking private sector become increasingly great.
We've seen what happens in Michigan and even California when government takes too much from the private economy. Is an economy like the old story of the straw and the camel? Probably not.
But, as every financial planner tells you - you should let 'compound interest' be your friend.
And, as widely accepted, if you don't have a job when young, it will impact you throughout much of your later working life.
So, would it be reasonable to try and contain even entitlements and to try and forge a business growth and rebuilding strategy - or, as evident from the current spate of programs, should the government continue the same-ole consumption and social redistribution programs which are sapping the strength of the private sector?
After all, if the government takes 30% out of the economy rather than 20% (this is Federal only), then it only follows that the private economy will have less to building businesses with and to create jobs with!
A serious question would appear to loom - i.e. is the Federal Government's fiscal policy going to produce a Michigan-like economy nationwide?
If so, the government is going down a very slippery slope. Greece, Argentina are all examples of socialist states that rely on government to provide jobs and benefits to the detriment of the private economy.
Clearly, the government of the US is allocating more resources to social benefit that people neither earn nor pay for nor restrain their acceptance of. As such, the burdens on the shrinking private sector become increasingly great.
We've seen what happens in Michigan and even California when government takes too much from the private economy. Is an economy like the old story of the straw and the camel? Probably not.
But, as every financial planner tells you - you should let 'compound interest' be your friend.
And, as widely accepted, if you don't have a job when young, it will impact you throughout much of your later working life.
So, would it be reasonable to try and contain even entitlements and to try and forge a business growth and rebuilding strategy - or, as evident from the current spate of programs, should the government continue the same-ole consumption and social redistribution programs which are sapping the strength of the private sector?
After all, if the government takes 30% out of the economy rather than 20% (this is Federal only), then it only follows that the private economy will have less to building businesses with and to create jobs with!
U.S. Deficit to Hit All-Time High - WSJ.com
U.S. Deficit to Hit All-Time High - WSJ.com
Isn't this all like a family with too many"I wants"?
Every deserving program - just like every deserving child in a family - has things they want; but, somehow, lots of families learn to live without and live within budgets.
One thinks of the American immigrant's typical story of coming to the country and scrimping and saving to give their child a better life.
Now, we have the "all-American" family borrowing from their kids to give themselves the immediate "I wants".
It's too bad the 'parents' (the Administration and Congress) can't discipline themselves or the family.
By discouraging investors and businessmen - who know they'll be asked to pay for all the 'largess' - the income to the country will be going down as well. It's just a shame!
Isn't this all like a family with too many"I wants"?
Every deserving program - just like every deserving child in a family - has things they want; but, somehow, lots of families learn to live without and live within budgets.
One thinks of the American immigrant's typical story of coming to the country and scrimping and saving to give their child a better life.
Now, we have the "all-American" family borrowing from their kids to give themselves the immediate "I wants".
It's too bad the 'parents' (the Administration and Congress) can't discipline themselves or the family.
By discouraging investors and businessmen - who know they'll be asked to pay for all the 'largess' - the income to the country will be going down as well. It's just a shame!
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