AN UNASKED QUESTION: Mark Spitznagel: The Fed and the May 6 "Flash Crash" - WSJ.com
Another thought is to ask what the markets really are for and what they should represent.
Someone on Friday's newscast said there was 9 trillion dollars sitting to be invested.
9 trillion!!!!
Now, at $600,000 per job, could that be 15 million jobs?
Let's see? People have money to invest. People are in need of jobs. So, what's the problem?
Why aren't people asking the question?
Friday, May 28, 2010
Thursday's Rally -- What's Really Changed? - Up and Down Wall Street Daily - R. Forsyth - Barrons.com
HOW CAN PRICES FALL?: Thursday's Rally -- What's Really Changed? - Up and Down Wall Street Daily - R. Forsyth - Barrons.com
Let's see?
The government want to apply a Keynesian approach to maintaining aggregate demand.
OK, demand stays level.
But, government decides labor costs have to rise because more costs have to be added to labor to pay for healthcare for non-workers.
So, the labor component of production increases (as RF says, maybe less labor - i.e. fewer jobs).
But demand stays constant (Keynesian government consumption supports - transfer payments, unemployment insurance extensions, social benefits, support for Medicare, support for local and state government employment, etc.).
Raw materials prices go up.
The constraints on supply are HIGHER LABOR COSTS, HIGHER RAW MATERIAL COSTS plus, the favorite of liberals, higher taxes. So the COST OF CAPITAL goes up.
Now, it's hard to see how the price of goods can go down?
Let's see?
The government want to apply a Keynesian approach to maintaining aggregate demand.
OK, demand stays level.
But, government decides labor costs have to rise because more costs have to be added to labor to pay for healthcare for non-workers.
So, the labor component of production increases (as RF says, maybe less labor - i.e. fewer jobs).
But demand stays constant (Keynesian government consumption supports - transfer payments, unemployment insurance extensions, social benefits, support for Medicare, support for local and state government employment, etc.).
Raw materials prices go up.
The constraints on supply are HIGHER LABOR COSTS, HIGHER RAW MATERIAL COSTS plus, the favorite of liberals, higher taxes. So the COST OF CAPITAL goes up.
Now, it's hard to see how the price of goods can go down?
Wednesday, May 26, 2010
Geithner Urges Europe to Act on Markets - WSJ.com
THE QUESTIONS THAT SHOULD BE ANSWERED, OR, AT LEAST DISCUSSED: Geithner Urges Europe to Act on Markets - WSJ.com
The question G should be asking (both in Europe and at home in the US) is whether we've gone through a period in which liberal thinking, concentrating on benefits rather than incentives for job creation, can work in today's environment.
As an example, Ford recently announced the creation of approximately 220 jobs at a private sector cost per job of just over $600,000. One assumes these are productive, sustainable jobs.
So question 1 would be: What are the capital costs of creating the jobs that these different countries want? (ancillary to this is the level of income they'd like for each job - since higher value (read: paid) jobs probably take more capital).
Question 2 would be: How does society raise this capital? (Just back from China, G certainly must have seen that this capital is raised by entrepreneurs - of whatever relation to the Communist Party).
It would surely seem that the heavy spending of Western democracies on what can be referred to as 'social goods' but not job creation, makes the creation of real, sustainable jobs in this economic environment very unlikely.
Almost all of the European efforts to reduce deficits do nothing to encourage capital or entrepreneurship (just the opposite). The US is clearly trying to pay for more social spending by reducing the capital available for investment and the returns on capital as well.
Just a question; but, it would seem the above deserve some greater attention!
The question G should be asking (both in Europe and at home in the US) is whether we've gone through a period in which liberal thinking, concentrating on benefits rather than incentives for job creation, can work in today's environment.
As an example, Ford recently announced the creation of approximately 220 jobs at a private sector cost per job of just over $600,000. One assumes these are productive, sustainable jobs.
So question 1 would be: What are the capital costs of creating the jobs that these different countries want? (ancillary to this is the level of income they'd like for each job - since higher value (read: paid) jobs probably take more capital).
Question 2 would be: How does society raise this capital? (Just back from China, G certainly must have seen that this capital is raised by entrepreneurs - of whatever relation to the Communist Party).
It would surely seem that the heavy spending of Western democracies on what can be referred to as 'social goods' but not job creation, makes the creation of real, sustainable jobs in this economic environment very unlikely.
Almost all of the European efforts to reduce deficits do nothing to encourage capital or entrepreneurship (just the opposite). The US is clearly trying to pay for more social spending by reducing the capital available for investment and the returns on capital as well.
Just a question; but, it would seem the above deserve some greater attention!
Monday, May 24, 2010
John Rutledge: Congress's Carried Interest Tax Folly - WSJ.com
CAPITAL PER JOB (FORD): John Rutledge: Congress's Carried Interest Tax Folly - WSJ.com
An interesting footnote to this is that Ford announced it was going to invest "$135 million" for 220 new jobs in Michigan.
To give this a rough number, it's something like $600,000 in capital for (what one assumes is) a permanent job.
Thus, if the US wants jobs, it had better find ways to let this capital be accumulated! Or, at least one would think so.
An interesting footnote to this is that Ford announced it was going to invest "$135 million" for 220 new jobs in Michigan.
To give this a rough number, it's something like $600,000 in capital for (what one assumes is) a permanent job.
Thus, if the US wants jobs, it had better find ways to let this capital be accumulated! Or, at least one would think so.
Saturday, May 22, 2010
U.S. Jobless Rate Edges Up Despite Declines in 34 States - WSJ.com
WHAT THE NUMBERS AREN'T TELLING US: U.S. Jobless Rate Edges Up Despite Declines in 34 States - WSJ.com
There used to be discussions about the amount of capital behind each job.
I'm not sure where that number is today (and where it would be to create 'new' jobs); esp. with outsourcing, etc.
But, it would have a certain logic to see that with the government basically absorbing all of society's savings and investment dollars, and having to import large amounts of those dollars as well, that there would be less investment dollars around to create jobs.
And, jobs created with less capital behind them would also probably be LOWER PAYING jobs. Which is one fact everyone seems to agree is happening now!
So, one might question where jobs are going to come from?
Also, if more capital needs to be put into R&D, where the US has a competitive edge globally, then capital would need to be allocated there. As such, there'd likely be less for those with jobs that could be substituted for by using, say Chinese, capital to produce things. Again, this would appear to be what's happening.
Etc., etc.
There used to be discussions about the amount of capital behind each job.
I'm not sure where that number is today (and where it would be to create 'new' jobs); esp. with outsourcing, etc.
But, it would have a certain logic to see that with the government basically absorbing all of society's savings and investment dollars, and having to import large amounts of those dollars as well, that there would be less investment dollars around to create jobs.
And, jobs created with less capital behind them would also probably be LOWER PAYING jobs. Which is one fact everyone seems to agree is happening now!
So, one might question where jobs are going to come from?
Also, if more capital needs to be put into R&D, where the US has a competitive edge globally, then capital would need to be allocated there. As such, there'd likely be less for those with jobs that could be substituted for by using, say Chinese, capital to produce things. Again, this would appear to be what's happening.
Etc., etc.
Friday, May 21, 2010
The Fear Returns - WSJ.com
LIKE MAGIC MUSHROOMS?: The Fear Returns - WSJ.com
From the comments on other articles in this paper over recent days, it would appear as though undying Keynsian liberals are still abundant.
One more reason to worry. They were also probably the biggest buyers of houses during the bubble.
Sadly, the cost of correcting and overcoming the excesses of unions and too much government are increasing every day.
It would be nice to think the economy would grow and jobs would be created when the money to do so is being taken by government to be given to the 'socially deserving' - and, clearly that's the belief of liberals. But is it so?
From the comments on other articles in this paper over recent days, it would appear as though undying Keynsian liberals are still abundant.
One more reason to worry. They were also probably the biggest buyers of houses during the bubble.
Sadly, the cost of correcting and overcoming the excesses of unions and too much government are increasing every day.
It would be nice to think the economy would grow and jobs would be created when the money to do so is being taken by government to be given to the 'socially deserving' - and, clearly that's the belief of liberals. But is it so?
Thursday, May 20, 2010
Alan S. Blinder: Return of the Bond Market Vigilantes - WSJ.com
SUSPENDED BELIEF:Alan S. Blinder: Return of the Bond Market Vigilantes - WSJ.com
The lesson Mr. Blinder might have discussed re: Europe is how socialism leads to stagnation (at best).
If he wanted to look at home, he could have looked at what the UAW did to GM with its excessive and socialist demands.
The idea of stimulating the economy re: Blinder is like giving a shopaholic another credit card.
If there is a lesson the housing bubble should have taught it is that something is wrong with the balance between taxes and transfer payments and the ability of the economy to produce enough good jobs.
Investing (i.e. taking tax money and giving it to those with social needs) is nothing more than hoping the shopaholics credit card will be discharged in bankruptcy.
Now the sovereign debt bubble is the next stage of trying to create 'magic money'.
More taxes are absolutely NOT the answer! As shown with Europe, there is no incentive to business or to grow the economy in all these fiscal changes. In fact, raising taxes is a further discouragement.
So Blinder and the Dems get what they want, only the government can really provide jobs because that's where cost/benefit, supply/demand live in a suspended state.
The lesson Mr. Blinder might have discussed re: Europe is how socialism leads to stagnation (at best).
If he wanted to look at home, he could have looked at what the UAW did to GM with its excessive and socialist demands.
The idea of stimulating the economy re: Blinder is like giving a shopaholic another credit card.
If there is a lesson the housing bubble should have taught it is that something is wrong with the balance between taxes and transfer payments and the ability of the economy to produce enough good jobs.
Investing (i.e. taking tax money and giving it to those with social needs) is nothing more than hoping the shopaholics credit card will be discharged in bankruptcy.
Now the sovereign debt bubble is the next stage of trying to create 'magic money'.
More taxes are absolutely NOT the answer! As shown with Europe, there is no incentive to business or to grow the economy in all these fiscal changes. In fact, raising taxes is a further discouragement.
So Blinder and the Dems get what they want, only the government can really provide jobs because that's where cost/benefit, supply/demand live in a suspended state.
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