Big Brother Meets Big Data - Barrons.com
John C wrote: "|Ben Bernanchio's legacy will be higher prices for food, fuel and medical costs and who knows what other unintended consequences."
response:
Something one can also ponder is whether Laffer's view of the cause and effects of the 30's depression might not also be what we are seeing now:
i.e. for many people there aren't jobs. New tech creates new and replacement jobs; and, as it becomes more expensive to high workers (e.g. Obamacare) or the income from doing business is reduced (e.g. Bill Gross's trenchant article on the effects of low rates on banking and lending - cost sizable numbers of direct jobs in banking and finance and reduced business lending) -
(Bill Gross Explores the Downside of Ultra-Low Rates
By WILLIAM H. GROSS | MORE ARTICLES BY AUTHOR
The PIMCO founder wonders whether the Fed's policy of "zero-bound" interest rates has become as much a problem as a solution for the economy.)
http://online.barrons.com/article/SB50001424052748703578204578525100112860398.html?mod=djembdr_h#articleTabs_article%3D0
- it might be conceivable that we will be fighting an ongoing sense of deflation as more and more have to do with less; and, as more of what's left gets taken by government for redistribution. That is surely what the case seems to be like in much of Europe, where taxes go up, the economy contracts and contracts faster than any cutbacks in government.
Saturday, June 8, 2013
Where Are the "Best and Brightest?" - Barrons.com
Where Are the "Best and Brightest?" - Barrons.com
This article seems sadly like looking at only a few trees in the forest - i.e. there are broad pressures in US tax law to keep large numbers of jobs outside of the US - especially for multi-national companies.
Obama's new high personal income tax rates are the bane evident in Europe - i.e. when small businesses start, the income likely comes to and accrues to an individual entrepreneur not a corporation.
Thus, to build more small tech businesses (not just a few high flyers), maximum personal income tax rates and corporate rates need to come down - a lot. (In Europe, for example, corporate rates may be in the 20% range but personal tax rates are in the 40-50% range. Exceptions include countries in Eastern Europe where personal rates can be capped in the 15% range.)
Another aspect of misplaced policies with unintended consequences is highlighted by Bill Gross in the following: http://online.barrons.com/article/SB50001424052748703578204578525100112860398.html?mod=djembdr_h#articleTabs_article%3D0
In both cases, current policies work against job creation. Reading latest job creation data points to lower paid and part-time jobs - partly resulting from Obamacare.
This article seems sadly like looking at only a few trees in the forest - i.e. there are broad pressures in US tax law to keep large numbers of jobs outside of the US - especially for multi-national companies.
Obama's new high personal income tax rates are the bane evident in Europe - i.e. when small businesses start, the income likely comes to and accrues to an individual entrepreneur not a corporation.
Thus, to build more small tech businesses (not just a few high flyers), maximum personal income tax rates and corporate rates need to come down - a lot. (In Europe, for example, corporate rates may be in the 20% range but personal tax rates are in the 40-50% range. Exceptions include countries in Eastern Europe where personal rates can be capped in the 15% range.)
Another aspect of misplaced policies with unintended consequences is highlighted by Bill Gross in the following: http://online.barrons.com/article/SB50001424052748703578204578525100112860398.html?mod=djembdr_h#articleTabs_article%3D0
In both cases, current policies work against job creation. Reading latest job creation data points to lower paid and part-time jobs - partly resulting from Obamacare.
Friday, June 7, 2013
Austerity Principles, or How to Save an Economy in Crisis - Bloomberg
Austerity Principles, or How to Save an Economy in Crisis - Bloomberg
Such a sadly remiss article:
Such a sadly remiss article:
Missing are:
Supply / Demand Distortions - i.e. with 20-23% VAT, demand is strongly curtailed - read: fewer jobs in the supply side.
Tax and regulatory policies that discourage, inhibit and make it impossible to invest and earn a positive net return (see Art Laffer, etc.).
Clearly there is something politically incorrect from a socialist perspective in hitting at the things that expand working people's opportunities for a better life and the net incentives to private capital.
Until the above are addressed - and they seem not to be in terms of European policy - a rebound will come only with difficulty.
Barrons has also recently published some very insightful comments by Bill Gross on how low interest rates are in fact job destroyers as part of distorting normal financial markets.
http://online.barrons.com/
Thursday, May 16, 2013
Stock Market: Ready to Fall? - Barrons.com
Stock Market: Ready to Fall? - Barrons.com
What are investors to do?
The government is printing money with abandon and bond rates can only go up. All one can do is find something with retainable value.
It is a huge bubble with the government more concerned about high taxes to support social benefits and heavy regulations to meet the objectives of unions and the left.
Much of Europe today shows what current US government policies bring about - but heck, better not look, it's not the desired outcome.
What are investors to do?
The government is printing money with abandon and bond rates can only go up. All one can do is find something with retainable value.
It is a huge bubble with the government more concerned about high taxes to support social benefits and heavy regulations to meet the objectives of unions and the left.
Much of Europe today shows what current US government policies bring about - but heck, better not look, it's not the desired outcome.
Tuesday, May 7, 2013
Look at the doughnut, not at the hole - Irwin Kellner - MarketWatch
Look at the doughnut, not at the hole - Irwin Kellner - MarketWatch
Kellner writes:
"The health of the labor market is best measured by employment, not by unemployment....
...The drop in the unemployment rate from over 10% just after the recession ended to 7.5% today is more a reflection of people dropping out of the labor force than of people finding jobs....
...My colleague, Rex Nutting,pointed out last week that the drop in hours worked in April was the equivalent of a loss of more than 500,000 jobs..."
Kellner writes:
"The health of the labor market is best measured by employment, not by unemployment....
...The drop in the unemployment rate from over 10% just after the recession ended to 7.5% today is more a reflection of people dropping out of the labor force than of people finding jobs....
...My colleague, Rex Nutting,pointed out last week that the drop in hours worked in April was the equivalent of a loss of more than 500,000 jobs..."
It would seem as though mention should be made of the old ratio from the 1980's that found growth in the private economy (read: jobs) needed more money to be left in the private economy both as a reward for and the means to create private jobs. That ratio was the share of GDP taken by government and was roughly 19%.
Regulatory concerns, relative tax rates, labor policies also matter and with respect to the Obama Administration, plus the excess above the above ratio taken by the entitlement state, is something too easily overlooked.
Many European countries talk about a growth agenda for their economies but, these economies are so mired in too high taxes and too much government that they can't afford or support real growth in private jobs.
If a person knows how to create a business plan, one knows that in the private economy what matters is the net after-tax internal rate of return (plus other factors). If the net a/t return isn't there, then the venture isn't begun.
Government should be looking to maximize this net a/t return for the greatest number of possible entrepreneurs and job creators. Somehow, however, it can't get beyond raising taxes to support its welfare state.
Thursday, May 2, 2013
Review & Outlook: Spain and Taxes - WSJ.com
Review & Outlook: Spain and Taxes - WSJ.com
It is amazing how governments and, of course, those who are socialistically inclined, don't realize that entrepreneurs create jobs that are long lasting and that government is a leach.
As such, they need to lower taxes, lower regulations and let those who are and can be successful receive and retain the fruits of their labors.
52% tax rates are anathema to that.
Let's go down to 20% tax rates, easy bankruptcy laws and respect for property rights.
If these tax rates don't pay the socialist bills, then don't pay them.
Otherwise, as is so blatantly shown throughout Europe and the US, people will be jobless, government debts will grow and the day of reckoning will become all that harder.
It is amazing how governments and, of course, those who are socialistically inclined, don't realize that entrepreneurs create jobs that are long lasting and that government is a leach.
As such, they need to lower taxes, lower regulations and let those who are and can be successful receive and retain the fruits of their labors.
52% tax rates are anathema to that.
Let's go down to 20% tax rates, easy bankruptcy laws and respect for property rights.
If these tax rates don't pay the socialist bills, then don't pay them.
Otherwise, as is so blatantly shown throughout Europe and the US, people will be jobless, government debts will grow and the day of reckoning will become all that harder.
Monday, April 22, 2013
Economic Thoughts on How to Make Diesel Fuel From Vegetable Oil
(5) 21st Century Entrepreneur
· How to Make Diesel Fuel From Vegetable Oil
By Charles Mathewson
Adding methanol (paint thinner) and lye (drain cleaner) to vegetable oil will produce diesel fuel--called biodiesel--but of exceedingly poor quality. Producing something you would want to put in an engine requires high-quality ingredients and precise measuring. Several communities exist online (see References and Resources below) to guide beginner diesel fuel brewers.
By Charles Mathewson
Adding methanol (paint thinner) and lye (drain cleaner) to vegetable oil will produce diesel fuel--called biodiesel--but of exceedingly poor quality. Producing something you would want to put in an engine requires high-quality ingredients and precise measuring. Several communities exist online (see References and Resources below) to guide beginner diesel fuel brewers.
· 
Olanrewaju Afolayan Pour the methanol into the 1/2-liter container using a funnel. The lye can be potassium (KOH) or sodium (NaOH) hydroxide. This recipe uses KOH. Measure it according to its purity: 5.8 grams for 85 percent pure, 5.5 grams for 90 percent, 5.3 grams for 92 percent. Pour the lye into the container using a clean funnel. Swirl the container until the mixture is clear. The result is methoxide.
Heat the oil in a pan until the thermometer shows 130 F. Pour it into the blender. Carefully add the methoxide and mix on low speed for 30 minutes. Pour it into one of the soda bottles and let settle for 12 to 24 hours.
Glycerine, a 20 percent byproduct, will separate and fall to the bottom. Decant the top 80 percent into a clean soda bottle. Don't allow any glycerine in.
Test the quality of the fuel. Pour 1/2 liter of water into it. Shake vigorously. Let it settle. If the fuel completely separates from the water within 30 minutes, it's good. Decant the fuel from the water into a clean soda bottle. But if it continues to look like mayonnaise, start over with more-precise measurements.
Wash any remaining impurities from the biodiesel. Washing is done by forcing air bubbles through the fuel or, easier for home brewers, mixing it with water. Pour 1/2 liter of water into the fuel. Roll the bottle on a flat surface until the two liquids...See More
Let the fuel settle. When it turns completely translucent, it's ready to use.
Ensure cleanliness of all equipment.
This recipe uses pure plant oil (PPO). It will work with waste vegetable oil (WVO), but with the added steps of filtering non-oil materials and titration to adjust the amount of lye.
This process uses two chemical...See More
This recipe uses pure plant oil (PPO). It will work with waste vegetable oil (WVO), but with the added steps of filtering non-oil materials and titration to adjust the amount of lye.
This process uses two chemical...See More
·
Bruce Birkett What is interesting and even more interesting about this recipe is what it perhaps contains underneath it with respect to any economy that inhibits, limits (or perhaps prohibits) specialization to make this product.
I think of Portugal where a 23% VAT rate would immediately raise the cost to the consumer and pressure the manufacturer with a lower gross profit margin.
Also, likely the permitting would be impossible and then the government would rapidly increase the tax rate on the income earned to pay down the capital that was borrowed to fund the business.
And, oh yes and of course, the capital cost of setting up the operation is 23% more to have an expert make the bio-diesel than if everyone tries it themselves.
So, the end result is the Portuguese economy - starved for growth and bled for taxes. And, all the young can do is ask how to get a job out-of-the country.
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