EVER MORE LEARY OF O'S LACK OF ECONOMIC REALISM: Review & Outlook: Social Security Bait and Switch - WSJ.com: "- Sent using Google Toolbar"
Gee, I guess he's getting the economy his policies don't understand as their natural consequence - albeit the evidence is all around him in industry after industry (think UAW) and state after state (CA, NY, Michigan, etc.).
As the quote today from Obama about his fighting to restore the middle class, it's reflective of the way American's maintained their incomes this past decade by living off housing equity. It's also like the family keeping up their consumption by living on their credit cards.
Eventually, in both cases, the credit runs out and everything collapses. Sadly the collapse gets more severe the longer the delusional income is treated as current income.
There is a broad understanding that Obama doesn't have an economic clue and thus his posturing (and that of other Democrats) just makes those who really know how to produce and grow businesses ever more leary.
Tuesday, August 31, 2010
Battle of the Impotent Central Banks - WSJ.com
WHO IS RESPONSIBLE?: Battle of the Impotent Central Banks - WSJ.com: "- Sent using Google Toolbar"
Anyone focusing on the Fed or other central banks, as the article notes, is living in la-la-land.
The issue is the mismatch between incentives to produce (or in the case of most European countries and the US these are 'disincentives') and social policies.
Too much is being redistributed and taxed from producers. Regulations and bureaucracy hold back investment.
Taking one look at this week's Bloomberg graphic of the companies recently acquired by Google shows that there are lots of ideas turned into businesses.
However, there aren't enough of them. And, its all well and interesting to think of minimum wages, minimum social benefits, etc. - but then, why not require kids to finish high school? This past week the report was that 1/3 of US kids 'don't' finish high school.
Yet, we allow teachers unions to use seniority vs. skills and performance to determine who gets to teach children. And then, the teachers have extravagant retirements and benefits (see the articles on NYC teachers for example).
We've distorted the rewards and a as result the economy is stagnant (if not in absolute decline) - one can say logical regression. Why? Because government and unions are taking too much out of society from those who produce.
Look at California. There Obama-type policies have been in the forefront for years and the State's economy no longer leads the country.
Sadly, Obama seems utterly clueless. And, the Tea Party movement sadly mirrors the Republicans in CA - where the Republican base is happy but almost no Republicans get elected by the general public.
The issue at hand would seem to be whether we want to let the economy grow and whether to do this, we are willing to have fewer handouts. Thus, rejecting the idea that people can't and don't have a responsibility to improve their own lives.
Anyone focusing on the Fed or other central banks, as the article notes, is living in la-la-land.
The issue is the mismatch between incentives to produce (or in the case of most European countries and the US these are 'disincentives') and social policies.
Too much is being redistributed and taxed from producers. Regulations and bureaucracy hold back investment.
Taking one look at this week's Bloomberg graphic of the companies recently acquired by Google shows that there are lots of ideas turned into businesses.
However, there aren't enough of them. And, its all well and interesting to think of minimum wages, minimum social benefits, etc. - but then, why not require kids to finish high school? This past week the report was that 1/3 of US kids 'don't' finish high school.
Yet, we allow teachers unions to use seniority vs. skills and performance to determine who gets to teach children. And then, the teachers have extravagant retirements and benefits (see the articles on NYC teachers for example).
We've distorted the rewards and a as result the economy is stagnant (if not in absolute decline) - one can say logical regression. Why? Because government and unions are taking too much out of society from those who produce.
Look at California. There Obama-type policies have been in the forefront for years and the State's economy no longer leads the country.
Sadly, Obama seems utterly clueless. And, the Tea Party movement sadly mirrors the Republicans in CA - where the Republican base is happy but almost no Republicans get elected by the general public.
The issue at hand would seem to be whether we want to let the economy grow and whether to do this, we are willing to have fewer handouts. Thus, rejecting the idea that people can't and don't have a responsibility to improve their own lives.
Monday, August 30, 2010
Treasury Investors Seek Signs of Easing - WSJ.com
MORE NUMBING OF THE ELECTORATE AND POLITICIANS?: Treasury Investors Seek Signs of Easing - WSJ.com: "- Sent using Google Toolbar"
A question of 'numbing' comes to mind - i.e. is both the government and public being numbed into believing that the world is going to continue to allow the US government to borrow at Japanese type interest costs?
Policies coming out of Washington are much more like those of Greece than Germany - for example.
And, Greece is reeling from having to suddenly pay 11% vs. 3-4% for debt it issues (EU subsidies excluded).
Some of us recall when US interest rates were close to 20%.
Isn't it time to think more about tackling the problems holding the economy back rather than think they can be obfuscated and avoided by letting the government borrow even more money?
A question of 'numbing' comes to mind - i.e. is both the government and public being numbed into believing that the world is going to continue to allow the US government to borrow at Japanese type interest costs?
Policies coming out of Washington are much more like those of Greece than Germany - for example.
And, Greece is reeling from having to suddenly pay 11% vs. 3-4% for debt it issues (EU subsidies excluded).
Some of us recall when US interest rates were close to 20%.
Isn't it time to think more about tackling the problems holding the economy back rather than think they can be obfuscated and avoided by letting the government borrow even more money?
Saturday, August 28, 2010
The 1.6% Recovery - WSJ.com
THERE'S NONE SO BLIND...:The 1.6% Recovery - WSJ.com: "- Sent using Google Toolbar"
One does recall the old saying that runs something like, "There's none so blind as those that will not see!"
And, the biggest question of all would seem to be why are US companies sitting with huge amounts of cash and why is all the lending and savings going into government bonds vs. new jobs, new technologies, new ways to make life easier and better?
The iPad phenomenon shows that people will take up new things.
The tiny country of Portugal shows what can happen when you build a ‘smart grid’ (i.e. 40% of its energy demand now comes from renewable, per the NY Times last month).
Any modest read of science and technology pages on Google shows how much terrific creative stuff is out there.
One wants to ask why it isn’t being exploited? And, instead, why are we seeing governments raise taxes and go into hock to pay for social benefits that individuals can’t pay for on their own but feel entitled to?
Somehow, even a modest look at the big picture would start to suggest that too much is going into entitlements and too little is left to move the economy ahead.
After all, who provides the jobs of the future – entrepreneurs or 50 year old retirees getting 80% or more of their salaries paid by high taxes on producers?
One does recall the old saying that runs something like, "There's none so blind as those that will not see!"
And, the biggest question of all would seem to be why are US companies sitting with huge amounts of cash and why is all the lending and savings going into government bonds vs. new jobs, new technologies, new ways to make life easier and better?
The iPad phenomenon shows that people will take up new things.
The tiny country of Portugal shows what can happen when you build a ‘smart grid’ (i.e. 40% of its energy demand now comes from renewable, per the NY Times last month).
Any modest read of science and technology pages on Google shows how much terrific creative stuff is out there.
One wants to ask why it isn’t being exploited? And, instead, why are we seeing governments raise taxes and go into hock to pay for social benefits that individuals can’t pay for on their own but feel entitled to?
Somehow, even a modest look at the big picture would start to suggest that too much is going into entitlements and too little is left to move the economy ahead.
After all, who provides the jobs of the future – entrepreneurs or 50 year old retirees getting 80% or more of their salaries paid by high taxes on producers?
Democrats Face Economic Facts: Updraft Unlikely - WSJ.com
DO DEMOCRATS EVEN HAVE AN ECONOMIC CLUE?: Democrats Face Economic Facts: Updraft Unlikely - WSJ.com: "- Sent using Google Toolbar"
"Sen. Robert Menendez (D., N.J.), who leads the committee working to elect Democrats to the Senate, said there was no way Democrats could completely turn around the economy in two years."
One does wonder what Menendez thinks would turn around the economy?
Let's see:
? Raise the cost of capital.
? Increase regulatory risk.
? Increase the liklihood of further unionization of labor (and the attendant ignoring of costs of production).
? Do nothing to make it easier to bring capable foreign staff to meetings or for work in the US.
? Do little or nothing to make the teachers unions accountable for continuing comparative declines in the education of American workers.
? etc., etc.
Seems to me, everything the Administration has touched has exacerbated existing problems that continue to be ignored - at best.
"Sen. Robert Menendez (D., N.J.), who leads the committee working to elect Democrats to the Senate, said there was no way Democrats could completely turn around the economy in two years."
One does wonder what Menendez thinks would turn around the economy?
Let's see:
? Raise the cost of capital.
? Increase regulatory risk.
? Increase the liklihood of further unionization of labor (and the attendant ignoring of costs of production).
? Do nothing to make it easier to bring capable foreign staff to meetings or for work in the US.
? Do little or nothing to make the teachers unions accountable for continuing comparative declines in the education of American workers.
? etc., etc.
Seems to me, everything the Administration has touched has exacerbated existing problems that continue to be ignored - at best.
Friday, August 27, 2010
Heard on the Street: Bernanke's Mountain to Climb - WSJ.com
Heard on the Street: Bernanke's Mountain to Climb - WSJ.com: "- Sent using Google Toolbar"
Perhaps dropping hundred dollar bills from helicopters will make it appear as though the economy will recover; but, will those torrents of dollars encourage job creation?
One finds it hard to believe - read the comment by the head of Intel in today's paper saying it costs an extra billion dollars to locate a factory in the US. Or, read California Governor Swartzenagger's opinion piece on address public employee pension and benefit problems.
None of these 'problems' are on the Washington agenda. So what good would torrents of new cash do?
Also, it's worthwhile reading how Greece suddenly finds itself having an 11 point spread on debt. Within a year the cost to Greece of financing its debt didn't just go up 1 or 2% but, somewhere between 8 and 11%. What would this do to America's government budget?
Perhaps dropping hundred dollar bills from helicopters will make it appear as though the economy will recover; but, will those torrents of dollars encourage job creation?
One finds it hard to believe - read the comment by the head of Intel in today's paper saying it costs an extra billion dollars to locate a factory in the US. Or, read California Governor Swartzenagger's opinion piece on address public employee pension and benefit problems.
None of these 'problems' are on the Washington agenda. So what good would torrents of new cash do?
Also, it's worthwhile reading how Greece suddenly finds itself having an 11 point spread on debt. Within a year the cost to Greece of financing its debt didn't just go up 1 or 2% but, somewhere between 8 and 11%. What would this do to America's government budget?
Wednesday, August 25, 2010
Janice Nittoli: Our Blue-Collar Great Depression - WSJ.com
QA - IMMIGRANTS?: Janice Nittoli: Our Blue-Collar Great Depression - WSJ.com: "- Sent using Google Toolbar"
Question: Can't we put a lot of the blame for job losses on illegal immigrants?
Answer:
Not so simple. The immigrant may be willing to work for the true "clearing price" for labor.
Those who think the immigrant is stealing "their" job, should recognize that the price they want to receive for "their" job - and, this includes all the added costs mandated by government and unions - has made the labor market increasingly inflexible.
Add to this inflexibility and distortion of costs (the labor conundrum), the anti-business policies rampant at Federal and State levels.
Immigrants would help the US maintain and grow its standard of living if the labor market was freer of legislated and union-based distortions.
Ask yourself if there isn't a price at which you'd no longer pay a plumber to come and fix a problem - and, likewise, a price at which you might have some extra work to be done? This is the concept of "economic utility" - again something grossly distorted by (well-meaning, but counter productive in terms of job creation and economic growth) government policies.
Question: Can't we put a lot of the blame for job losses on illegal immigrants?
Answer:
Not so simple. The immigrant may be willing to work for the true "clearing price" for labor.
Those who think the immigrant is stealing "their" job, should recognize that the price they want to receive for "their" job - and, this includes all the added costs mandated by government and unions - has made the labor market increasingly inflexible.
Add to this inflexibility and distortion of costs (the labor conundrum), the anti-business policies rampant at Federal and State levels.
Immigrants would help the US maintain and grow its standard of living if the labor market was freer of legislated and union-based distortions.
Ask yourself if there isn't a price at which you'd no longer pay a plumber to come and fix a problem - and, likewise, a price at which you might have some extra work to be done? This is the concept of "economic utility" - again something grossly distorted by (well-meaning, but counter productive in terms of job creation and economic growth) government policies.
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