THE DEMOCRATS PHILOSOPHICAL QUANDARY: Karl Rove: Obama Has a Listening Problem - WSJ.com
Clearly Obama comes from the school that believes people are 'entitled' and 'deserving' and thus they should have - all of which has to be paid for; no matter what the consequences to those who produce.
This is the flip side of the basic economic quandary it would appear Obama and the Democrats are in. Coming from a socialist-type (or communist-type) social view, they don't understand how incentives to produce, save, invest work. All they know is to divide up what there is and hope the supply is there. Because - someone else is doing the providing.
The opposite group of people - the producers - weigh the advantages of taking risks, foregoing immediate gain for future gain, etc. But, these people don't want to see their future gain taken to support non-producers.
This is the quandary: As Art Laffer has pointed out, higher and higher taxes may have been the actual cause or the tipping point cause of the prolonging of the 1930's recession.
The idea that it was monetary policy is certainly an appealing alternate view, which has been picked up by Bernanke and Obama.
Logic however would support the fiscal/tax policy argument - i.e. too much of the rewards for growing the economy were taken by government for redistribution, so those who can grow the economy decided to sit this tax round out.
Thursday, November 11, 2010
Monday, November 8, 2010
As Global Economy Shifts, Companies Rethink, Retool - WSJ.com
WHAT NO ONE WANTS TO TALK ABOUT: As Global Economy Shifts, Companies Rethink, Retool - WSJ.com
Let's see?
If the US wants to dampen down US consumption, it could do what Europe does - put up the price of everything with a VAT tax and cut wages.
Then, to ask the Europeans to consume more, it could ask them to cut social benefits and the taxes to support them so that the individual consumers would have both more money in their pockets and lower priced goods.
Does anyone expect either to be advocated (at least publicly) by Mr. Obama or Mr. Geithner?
Let's see?
If the US wants to dampen down US consumption, it could do what Europe does - put up the price of everything with a VAT tax and cut wages.
Then, to ask the Europeans to consume more, it could ask them to cut social benefits and the taxes to support them so that the individual consumers would have both more money in their pockets and lower priced goods.
Does anyone expect either to be advocated (at least publicly) by Mr. Obama or Mr. Geithner?
Statistics don't help in the battle between stimulus and austerity - WSJ.com
THE GEITNER, LAGARDE OSTRICH: Statistics don't help in the battle between stimulus and austerity - WSJ.com
One is either an ostrich or not.
What does one mean by 'ostrich'? Well, think of the two farmers.
Each farmer knows that he/she has to save 10% of each crop as seed for the next crop.
However one farmer (say Greece) just can't save 10%, it wants to consume more.
Another farmer, say China, decides it wants to grow and so it saves 20% and goes a bit hungry.
According to Geitner, et al, something is wrong with China, it's producing too much at too good prices.
Over time, the high cost of goods in Europe makes it hard for European individuals and businesses to be able to afford to be competitive and to be competitively productive. This can include featherbedding and work rules in Greece, etc.
So much of Europe and the US ignore the need to reward producers and savers and instead concentrate on social benefits, etc. - ignoring the long-term cost to society of doing so! The ignorance of an ostrich hiding its head in the sand.
One is either an ostrich or not.
What does one mean by 'ostrich'? Well, think of the two farmers.
Each farmer knows that he/she has to save 10% of each crop as seed for the next crop.
However one farmer (say Greece) just can't save 10%, it wants to consume more.
Another farmer, say China, decides it wants to grow and so it saves 20% and goes a bit hungry.
According to Geitner, et al, something is wrong with China, it's producing too much at too good prices.
Over time, the high cost of goods in Europe makes it hard for European individuals and businesses to be able to afford to be competitive and to be competitively productive. This can include featherbedding and work rules in Greece, etc.
So much of Europe and the US ignore the need to reward producers and savers and instead concentrate on social benefits, etc. - ignoring the long-term cost to society of doing so! The ignorance of an ostrich hiding its head in the sand.
Fed Governor Doubts Program - WSJ.com
UNDERUTILIZED OR OVERPRICED RESOURCES?: Fed Governor Doubts Program - WSJ.com
What seems to be unduly glossed over (or totally ignored by Bernanke, et al) is that certain inputs - be they labor or capital are being mispriced or having their prices distorted by fiscal policies coming out of Washington and state governments.
Thus, the comment "We see an economy which has a very high level of under utilization of resources and a relatively slow growth rate" may not in any way be 'underutilizing' what are 'overpriced' assets.
The country and its policy makers should be talking about how taxes and entitlements and the drug laws (amongst others) are providing distortions that hurt competitiveness and entrepreneurial incentives and create major global political upheaval (esp. the drug laws).
What seems to be unduly glossed over (or totally ignored by Bernanke, et al) is that certain inputs - be they labor or capital are being mispriced or having their prices distorted by fiscal policies coming out of Washington and state governments.
Thus, the comment "We see an economy which has a very high level of under utilization of resources and a relatively slow growth rate" may not in any way be 'underutilizing' what are 'overpriced' assets.
The country and its policy makers should be talking about how taxes and entitlements and the drug laws (amongst others) are providing distortions that hurt competitiveness and entrepreneurial incentives and create major global political upheaval (esp. the drug laws).
Thursday, November 4, 2010
Daniel Henninger: Unlock the American Economy - WSJ.com
A SIMPLE ECONOMIC PRO-JOBS MODEL:Daniel Henninger: Unlock the American Economy - WSJ.com
Right on - and, perhaps a suggestion for an even clearer focus - is to say jobs are number one and for them to be number one, the US has to make itself the best place in the world to locate and grow a business.
This means unequivocally that social programs come second - not first. They get funded out of what's left, not what there is to take!
Whether one thinks of the farmer that knows he has to save 10% of his crop to provide the seed for the next crop (and to grow needs to save maybe 12% or more);
Or, one thinks of the employer who has lots of itinerant family members who have their hands out and would like to be 'given' some money before the employer pays his own workers and consultants,
These are the models we need - save and grow and pay producers first!
Right on - and, perhaps a suggestion for an even clearer focus - is to say jobs are number one and for them to be number one, the US has to make itself the best place in the world to locate and grow a business.
This means unequivocally that social programs come second - not first. They get funded out of what's left, not what there is to take!
Whether one thinks of the farmer that knows he has to save 10% of his crop to provide the seed for the next crop (and to grow needs to save maybe 12% or more);
Or, one thinks of the employer who has lots of itinerant family members who have their hands out and would like to be 'given' some money before the employer pays his own workers and consultants,
These are the models we need - save and grow and pay producers first!
In Washington, an Awkward Triangle of Power - WSJ.com
BASIC CORRELATION ANALYSIS AND THE CURRENT COUNTER-REFORMATION SOCIAL PROGRAMS: In Washington, an Awkward Triangle of Power - WSJ.com
It would seem as though even the President is starting to at least talk as though he needs to consider the needs of business if business is going to create jobs. But the true correlation is likely well-beyond his ability to understand it.
But, as with all sorts of projections - the old econometric analysis projection game - everything ends up dependent on key variables and factors that are included in the math.
It would seem rather obvious that the correlations between taxes that are too high end up creating job losses and a lack of job-creating vigor - one can't help but think of Michigan and California.
Yet, this basic correlation in which too much is taken by government is unlikely to the starting point.
But, we already know what the outcome of the current political framework and government programs at a national level is showing - and that is a lack of jobs.
Going back and tinkering with the inputs of the linear progression model could perhaps show why; but, it's pretty obvious that there is something holding back (if not eating into and destroying) the potential of the US to grow, evolve, change and create jobs.
Somehow, the banter back and forth in all these articles misses the idea of blatantly obvious correlations.
I guess if the goal is to focus on benefits and care for the poor and elderly, it's like the counter-reformation - i.e. you fight change so hard you hold yourself back.
It would seem as though even the President is starting to at least talk as though he needs to consider the needs of business if business is going to create jobs. But the true correlation is likely well-beyond his ability to understand it.
But, as with all sorts of projections - the old econometric analysis projection game - everything ends up dependent on key variables and factors that are included in the math.
It would seem rather obvious that the correlations between taxes that are too high end up creating job losses and a lack of job-creating vigor - one can't help but think of Michigan and California.
Yet, this basic correlation in which too much is taken by government is unlikely to the starting point.
But, we already know what the outcome of the current political framework and government programs at a national level is showing - and that is a lack of jobs.
Going back and tinkering with the inputs of the linear progression model could perhaps show why; but, it's pretty obvious that there is something holding back (if not eating into and destroying) the potential of the US to grow, evolve, change and create jobs.
Somehow, the banter back and forth in all these articles misses the idea of blatantly obvious correlations.
I guess if the goal is to focus on benefits and care for the poor and elderly, it's like the counter-reformation - i.e. you fight change so hard you hold yourself back.
Wednesday, November 3, 2010
Gridlock Isn't as Bullish as Markets Think - Barrons.com
CORRELATIONS, LINKS AND THE 'OLE' INEXORABLE: Gridlock Isn't as Bullish as Markets Think - Barrons.com
Could these perhaps be 'naked' correlations?
In other words, rather than leave these out in the open, what would the correlations be if paired with say 'percent of GDP being spent by government'?
Another interesting correlation would be the 'direction of housing prices over the past year / past 2 years / 3 years'.
As the old project, correlation game goes, it all depends on whether things have changed.
And, it would seem as though the inexorable is clearly marching on - and, one suggestion for the 'inexorable' would be the growing sense of 'unearned and unfunded entitlements'.
Could these perhaps be 'naked' correlations?
In other words, rather than leave these out in the open, what would the correlations be if paired with say 'percent of GDP being spent by government'?
Another interesting correlation would be the 'direction of housing prices over the past year / past 2 years / 3 years'.
As the old project, correlation game goes, it all depends on whether things have changed.
And, it would seem as though the inexorable is clearly marching on - and, one suggestion for the 'inexorable' would be the growing sense of 'unearned and unfunded entitlements'.
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