Category Archives: economy

Destruction Compared: Atom Bomb Vs. Government

Seared on the minds of the American psyche like permanent light etchings on metal from the blast of an atomic bomb is the horror that was our annihilation of Hiroshima and Nagasaki in an ultimately successful attempt to strike the final death-blow to the god-complex surrounding the Japanese Prime Minister necessary to end World War 2.

With these two ominous mushroom clouds forever hanging in our collective memory, it is easy to forget that is history now and Hiroshima and Nagasaki might not be what we Americans expect them to be.

And conversely, in our hotbed of industrialization and commercialization and progress, it is easy to forget that those places the government has lavished substantial attention on may not be the paradises we envision they ought to be.

First, there is the cloud we all know so well. That evidence of ultimate destruction, the mushroom cloud. But where we see this eternal spectre, the enterprising Japanese, freed from their oppressive military/industrial complex serving the whims of sycophantic minions of the Emperor-god Hirohito, have turned a thousand-year wasteland into this:

Hiroshima Japan

Where is that man-made desert of radioactive fallout we’d expect? Not here apparently.

Compare that thriving scene with this image that is becoming all too common in that cesspool of government largesse, Detroit:

Detroit Michigan

Depressed is a charitable description.

Maybe we should drop a few more A-bombs?

Just kidding. And honestly, the Japanese government tends to be significantly more meddlesome on average and for a longer time than the US government. But when you look at the wasteland and tragedy that once was this shining city of American ability and pride, the automobile capital of the world, that is now an also-ran laughing stock for most and a hell-hole and increasingly decrepit pit for many of those unfortunate enough to live there, there really is little comparison between this place that ought to be surging and that place, which we generally write off in our mind’s eye.

Enhanced by Zemanta

Today’s Interesting Stuff

Speecy Spiicy, Hotsy Totsy

American parents tend to feed their children bland foods to avoid potential allergies or just because that’s what Dr Spock or the latest parenting magazine told them. Easy on the stomach, and the poop ain’t so bad.

Parents in other countries tend to feed their infants whatever they are having, and their children experience the full gamut of cultural flavors from very early ages.

And yes, I’m advocating for American parents to be more like foreign parents. Look out the windows, there be pigs in the air!

First, bland doesn’t necessary mean easier for the stomach. Take ginger, for instance. A very sharp and strong flavor, nobody would call it bland. But is the natural and effective remedy for upset stomachs? Ginger. No citations here, just try this: Purchase a bottle of Reed’s Ginger Brew. If you can handle the Extra Strength, get that. Then fast, and when your stomach is most uncomfortable, usually just after the normal time for the next meal, drink the Reed’s. Instant stomach relief.

Second, you’re limiting your child’s future ability to eat and enjoy wide varieties of food, including many foods you and I take for granted.

This article chronicles the embarrassment, the worries, the challenges of being an adult picky eater. One telling comment?

Amber Scott, of Enon, Ohio, has eaten only about 10 different foods since she was 3 years old.

Not that exposing your children, when young, to significant varieties of food will totally preclude such problems, but they would take a significant bite out of them.

The Office

Empty office space keeps rising. This is not a good sign for the economy that is on the mend, according to certain people whose grand plans are fully in swing here. Corporations are using less and less office space, which means they aren’t hiring.

The really scary part?

Job growth and office-space use are closely intertwined. While some major users of offices, such as federal regulatory agencies, have been expanding, big banks and corporations have lagged behind in increasing their real-estate footprint, according to some analysts. That is a sign that these larger companies have been slow to return to their pre-recession staffing levels, a contributing factor to the persistently high U.S. unemployment rate.

Yea, that’s a sure sign of a growing and recovering economy. Regulators are gearing up for more business. Only one problem, regulators business is to keep real businesses out of business.

My Buddy Hugo

The ones really benefiting from the drilling moratorium? National oil companies. That means President Obama’s marxist buddy Hugo Chavez is loving us right now. Was this a quid pro quo? Or was it yet another unintended consequence of a short sighted and dishonestly supported policy? I’d say the latter, but wouldn’t be too surprised at the former.

Oh, and this would be the same Venezuela that just stole oil rigs from US corporations and we heard nary a peep in protest for this thuggish thievery from the government that is supposed to be supporting US interests abroad.

Muhammed In Space

Perhaps a new round of “Let’s Draw Muhammed” is in order. It would probably improve our chances of NASA actually being less irrelevant than it already is going forward.

NASA has apparently been ordered to reach out to Muslim nations in an effort to improve goodwill. And NASA is the right agency for this why?

Former NASA director Michael Griffin says sympathetic nations will be drawn to us when NASA succeeds at great things, not when they’re given an inflatable space shuttle and commemorative plaque.

Griffin said Tuesday that collaboration with other countries, including Muslim nations, is welcome and should be encouraged — but that it would be a mistake to prioritize that over NASA’s “fundamental mission” of space exploration.

“If by doing great things, people are inspired, well then that’s wonderful,” Griffin said. “If you get it in the wrong order … it becomes an empty shell.”

Griffin added: “That is exactly what is in danger of happening.”

And the coup de’ etat?

He also said that while welcome, Muslim-nation cooperation is not vital for U.S. advancements in space exploration.

“There is no technology they have that we need,” Griffin said.

Once again, why is it NASA’s job to reach out to any nation?

I’d draw Muhammed in space alongside the Muppets.

Just A Reminder

Some people still claim that Liberals are the bigger and better givers, both of time and money. They’re wrong. Badly wrong.

People who said they were “very conservative” gave 4.5% of their income to charity, on average; “conservatives” gave 3.6%; “moderates” gave 3%; “liberals” gave 1.5%; and “very liberal” folks gave 1.2%.

And this cannot be explained by religious versus secular giving:

The 2008 data tell us that secular conservatives are now outperforming their secular liberal counterparts. Compare two people who attend religious services less than once per year (or never) and who are also identical in terms of income, education, sex, age and family status — but one is on the political right while the other is on the left. The secular liberal will give, on average, $1,100 less to charity per year than the secular conservative. The conservative charity edge cannot be explained away by gifts to churches.

Or by giving of time versus giving of money:

Q. Monetary giving doesn’t tell us much about total charity, does it? People who don’t give money probably tend to give in other ways instead, right?
A. Wrong. First of all, there is a bright line between people who give and people who don’t give. People who do give time and money tend to give a lot of it. According to the Center on Philanthropy, the percentage of givers donating less than $50 to charity in 2000 was the same as the percentage giving more than $5,000. Similarly, the same percentage of people who only volunteered once volunteered on 36 or more occasions in 2000.

Second, people who give away their time and money to established charities are far more likely than non-givers to act generously in informal ways as well. For example, one nationwide survey from 2002 tells us that monetary donors are nearly three times as likely as non-donors to give money informally to friends and strangers. People who give to charity at least once per year are twice as likely to donate blood as people who don’t give money. They are also significantly more likely to give food or money to a homeless person, or to give up their seat to someone on a bus.

And it is not offset by political giving either:

Perhaps you suspect that the vast political contributions given to the Obama campaign — $742 million, according to the Center for Responsive Politics, versus $367 million for the McCain campaign — were crowding out charitable giving by the left. But political donations, impressive as they were this year by historical standards, were still miniscule compared to the approximately $300 billion Americans gave charitably in 2008. Adding political and charitable gifts together would not change the overall giving patterns.

Conservatives continue giving more in economically difficult times, decreasing their giving by less than their liberal counterparts:

Economists measure the “income elasticity of giving” to predict how much people change their giving in response to a particular percentage change in their income. It turns out the response in 2008 was dramatically different for left and right. For instance, a 10% decrease in family income for a conservative was associated with a 10% decrease in giving. The same income decrease for a liberal family led to a 16% giving drop. In other words, if this relationship continues to hold, the recession will almost certainly exacerbate the giving differences between left and right.

The proof, as they say, is in the pudding: Modern liberal ideas are selfish ideas.

Enhanced by Zemanta

Threat Of Tax And Regulation Is No Stimlus

Allan Meltzer calls it like it is with the sub head on this article:

Why Obamanomics Has Failed
Uncertainty about future taxes and regulation is enemy No. 1 of economic growth

Let us put our minds together and imagine for a moment, a world in which we ran businesses.

We must buy and sell and add value. We must hire and employ and sometimes even fire. We must take what we have and mix all the depths of our creativity along with every ounce of our passion and most of our effort and life into the raw materials of labor and goods to develop a product. And then we must sell that product for more than it cost us to make it.

Let us say we’ve found that point at which enough people who want it can afford it. That’s something we learned in economics years ago in college when our professors went gaga for a whole semester over these two curved lines and we spent the whole semester trying to figure out where they met.

And we’ve controlled out costs until they are just below that point where the curves of cost and demand meet. That is called a profit. We’re a small outfit and don’t spend too much effort on innovation except to encourage it when and where we can. And so with our costs mostly flat, we can’t really increase the quality or complexity of the product without making it more expensive, which would take us out of that sweet spot in pricing and we’d lose customers as a result.

This is where many small businesses are. This is also where many medium and even a few large businesses are. In fact, most companies who employ most of the people and shuffle the most money around most efficiently are in this boat, right alongside us.

Most businesses don’t operate from malicious greed, despite what Hollywood and the popular culture will try to get us to believe. Most businesses operate with the understand that they can only make money so long as they are making  sufficient numbers of other people sufficiently happy.

Some people don’t get this.

Most professors outside of business school don’t get this. And many professors inside business school don’t either. It’s a curse of our amazing educational system that it has attracted and nurtured minds that are as closed to facts of life as any that walk this earth and still remain sentient.

Most people who get into politics and become successful at it are the same, though they are for a different reason.

You get what you ask for and what you deserve. And because many people in America, average Joes and Janes alike, do not get this, politicians take what is called a populist stance, and become whatever they must in order to win a few more votes.

Sock it to ’em, the little man says on the corner. And the big Man, because he wants to keep that little man needing him and thus voting for him, echoes the cry. But when the big Man speaks, things may actually happen.

Regulation, taxation, “fair shares” and “spreading the wealth” all sound so very good to those of us living on the dole or spending too much time gazing up the tall ladder above us filled with so many other people and wishing there were an easier way than taking it one step at a time.

In hopes of making it easier to climb the ladder, and perhaps out of a little jealousy at those who have gotten higher on the ladder than you or I, we subscribe to the notion that the government ought to be the arbiter of the “fair share”, the decider of “enough”. Actually, it’s mostly out of jealousy. We don’t want to climb the ladder, we’re content in our squalor and mediocrity. We just want everybody else to roll in the same mud we are.

So there is the promise of taxation and regulation, making it harder and more expensive to make those products and to deliver those services than it was before. We hope that the extra taxes and regulation will fill the government purses and that we’ll benefit from the largesse, but we’re not expecting to buy a new house based on the unearned raise.

Or maybe we are.

The problem is, instead of helping everybody up the ladder, taxation and regulation only chop the ladder a little shorter. Sure, you’re nearer the top, but only because the top was lowered, not because you’re any higher.

So that company we’re each running in our heads right now, it has the costs balanced carefully with the price to hit that sweet spot where we can attract the most people possible. But now you have to task Sally and Harriet and Jim and Larry to filling out these forms and making sure these reports are run. Why? Because the government decided they know better how to run your company than you do. Except, instead of these forms and reports benefiting you, you’re paying 4 people just to fill out forms and run reports instead of produce goods and improve your services.

That’s dead weight.

You have to spend resources without a corresponding benefit to you. Of course you raise prices but you can’t raise the quality, but now fewer people can afford it. Or you cut quality but keep the prices level, and now fewer people buy it because it’s not as attractive.

You have to lay people off. Now you’ve sloughed off your dead weight onto the general economy. Your taxes and everybody else’s taxes are now paying for the employees you used to pay independently.

That’s the reality of taxation and regulation.

Productive businesses don’t like taxes and regulation, and they’ll seek ways to avoid and minimize their exposure to them.

Now, what about the threat of taxes and regulation?

The threat of taxation and regulation is the same effect as the fact of taxation and regulation, except magnified.

Once the taxation and regulation are in place, there is little the business can do. If it wants to survive it does the best it can to manage costs. Quality suffers, but because it suffers for most other companies too, it’s only the consumer (you and I) who lose out in the crap we pay real money for in the stores. That’s inflation. The same dollar used to by a real sweet whiz bang that is still whiz banging away 20 years later and now that dollar just buys a whiz, and a cheap one at that. But the costs have stabilized and now we just have to keep pressing ahead if we’re going to survive as a business.

When the taxation and regulation are threatened, companies go into protection mode. Any ejectable dead weight is ejected. Any loose operations are cut. Anything that can be jettisoned is jettisoned. And real people are fired. And real lives are hurt.

Just for the threat of taxation and regulation.

It’s not that the businesses are mean and vengeful. In your mind-business you know you’re a good employer. You’re caring and you’ve got a great little family growing out of all the individuals you’ve hired. But with your costs already high and threatening to go higher, you’ve got to let someone go. If you don’t let someone go, you’ll be forced to let all of them go when you’re bankrupt. You have to cut their pay or fire them, there’s no middle ground. And even though they say they understand and are glad to still have a job even if it doesn’t pay quite as many bills as it did, you know you’ve hurt them deeply and they really are upset at you.

Were you a fool for getting into business in the first place?

Those who claim to love the most and care the most and feel the most are often guided by uneducated and ignorant feelings into callous and silly actions with effects that are not silly.

Allan Meltzer has seen silly people’s desires ignored to the benefit of entire nations:

In 1980, I had the privilege of advising Prime Minister Margaret Thatcher to ignore the demands of 360 British economists who made the outrageous claim that Britain would never (yes, never) recover from her decision to reduce government spending during a severe recession. They wanted more spending. She responded with a speech promising to stay with her tight budget. She kept a sustained focus on long-term problems. Expectations about the economy’s future improved, and the recovery soon began.

That’s what the U.S. needs now. Not major cuts in current spending, but a credible plan showing that authorities will not wait for a fiscal crisis but begin to act prudently and continue until deficits disappear, and the debt is below 60% of GDP. Rep. Paul Ryan (R., Wisc.) offered a plan, but the administration and Congress ignored it.

We don’t need feelers and healers at the head of this nation. We need heads, brains, experienced and opinionated people with strength of character and resolve. But mostly, experienced and sound.

When there is a strong plan there is hope. Real hope, not in change, but in the future.

For just as the threat of taxation and regulation stagnate and stifle and strangle and hurt, a sure and steady plan which shows how those in authority will not abuse their power but will shrink themselves and leave to the businesses the running of those businesses and leave to the people the living of lives and leave to the churches the telling of morals and leave to the press, the real press and not these buffoons gasping for relevancy in front of their unblinking cyclopses, the telling of the truth, will result in growth as sure as if that plan were in effect.

So throw out the buffoons who don’t know the bitter end from the over priced breadstick they had on your dime at some gala affair list night. Throw out the scoundrels who’d rather take your child’s inheritance than force their own children to work honestly. Hamstring the bums who prefer the golf course to the desk, the courts to the shoreline, make then 1st term lame ducks, the whole lot of them.

After all, we’ve got businesses to run.

Jefferson On Limited Government

Both darling and nemesis of Liberals, the Libertarian Thomas JeffersonThomas Jefferson, Liberals favorite founding father, has this to say about the proper scope of government:

“A wise and frugal government,” Thomas Jefferson declared in his first inaugural address in 1801, “which shall restrain men from injuring one another, shall leave them otherwise free to regulate their own pursuits of industry and improvement, and shall not take from the mouth of labor the bread it has earned. This is the sum of good government.”

And on redistribution of wealth:

“To take from one, because it is thought that his own industry and that of his fathers has acquired too much, in order to spare to others, who, or whose fathers, have not exercised equal industry and skill, is to violate arbitrarily the first principle of association, the guarantee to every one of a free exercise of his industry and the fruits acquired by it.”

Read Arthur C. Brooks’ article America’s New Culture War.

The Ugly Head Of Good Intentions

Henry Waxman and... his brother?

Pro-Abortion Democrat Bart Stupak joined Henry Waxman in chiding AT&T, Caterpillar, and several other large corporations who have adjusted their balance sheets in response to some of the first changes of the Health Care Socialization bill to take affect.

These large corporations have been enjoying a substantial tax deduction in return for their paying for their retirees prescription drugs. Because they had built their budgets around the savings this program gave them, as this program ends, they have to report the loss of this expected revenue.

And it’s significant amounts we’re talking here. After all, several hundred million here, a billion there, and pretty soon we’re talking real cash.

So Henry Waxman, from California (“sorry folks” says this former Californian)…

…sent AT&T, Caterpillar and Deere a sharp letter, questioning the charges and saying he wanted top officials from those companies to testify at an April 21 hearing he has scheduled on the issue.

What, he didn’t get enough validation of his supposed superiority after grilling Mr Toyoda of Toyota motors?

Congress is on a power trip the likes of which I haven’t seen before.

Bart Stupak joined in sending the letter which, among other things presumably, said:

The new law is designed to expand coverage and bring down costs, so your assertions are a matter of concern.

Ah, the ugly head of good intentions.

Some studies (which no doubt the Congress-people held to savagely in order to assuage their own consciences for this dastardly deed) projects savings of $3000/employee for employers under this bill.

Unlike the government, though, businesses have to abide by what are called Generally Accepted Accounting Principles, or GAAP (pronounced “gap”) which requires, among other things, that expenses be reported in the financial quarter in which they are incurred. A significant loss of revenue cannot be offset, on the books, with a hoped for or expected long term savings. The company can report that expected savings in their reports to shareholders in order to rally them up and encourage them to keep their investments. But to use a hoped-for (not even really expected) long term savings to offset a current expense is a serious No-No. And if the government were held accountable for it’s accounting, it might actually know that.

So AT&T and these other companies did what they were supposed to do.

Even the AFL-CIO isn’t very enthusiastic about this particular provision:

Gerry Shea, the A.F.L.-C.I.O.’s chief strategist on health care, stopped short of calling for a repeal of the provision. “We’re very concerned about the disruption that could be caused because of this, with people being pushed out of employer plans,” he said. “With all the changes we’re looking at because of the new health legislation, we feel you don’t need this.”

And the President’s response?

White House officials said the provision would not affect job creation because it does not take effect for three years and any charge for a given year would not be large.

They’re reflecting the reality of the situation reflected, in turn, badly on those who jammed this travesty of a Health Care bill through. And one thing we can be sure about, people on power kicks don’t like being shown to be liars and cheats. And since their on a power kick, in all likelihood they’ll use that power kick to try and arm-twist until they get what they please.

So, word of advice to AT&T and Caterpillar and all those other companies writing down significant losses: Don’t go to Washington. They’re out for your head and they’ll stage a show and the MSM will go along because they don’t like you either. You’ll not get a fair shake.

Instead, take your message to the masses. Use that advertising budget to do PSAs on TV, radio, newspapers, and internet. Go viral with your message on Youtube and the like. I’ll even post it here if you do it.

Show the hollow nature of these good intentions. Show how blinded the Congress was by their own ambition and greed that they crafted this nightmare. Show that it’s not just a nightmare for you and others with large pocketbooks, show that it’ll be a nightmare for us as you have to cut benefits and trim payroll.

Good intentions have once again reared their ugly head. Lets cut it off this time.

Quotes from NYTimes article “Companies Push To Repeal Provision Of Health Law”.