Jesse Jackson Jr, a Congressman from Illinois, has a new idea to kill off some more jobs. He wants to raise the minimum wage from its current level, $ 7.25, to $ 10. As if unemployment, especially among youth, isn't high enough!
Remember what a $ 10 minimum wage law says. It says that it is against the law to hire anyone that you intend to pay less than $ 10 per hour. It outlaws a transaction between employer and potential employee. Basically, it makes criminals out of employers who offer jobs. So, why offer jobs anyway?
Jackson, of course, is among America's wealthiest individuals, which is typical of people that propose things like this that cut the legs out from under the poorest amongst us. What does he care if another million or so join the ranks of the unemployed? Might give him another voter or two.
If you want more apples, make it against the law to buy one for less than $ 10 apiece. That should do a lot for the consumption of apples! That's the Jesse Jackson Jr way to increased apple production.
Kamis, 07 Juni 2012
Rabu, 06 Juni 2012
Francois Hollande is Deluded
Like Scott Walker, Francois Hollande is delivering on his promises...unfortunately. His first real proposal is to lower the retirement age for social security back to 60 from 62, reversing the move, instituted by Sarcozy, from 60 to 62. This is really not as big a deal as it looks, since no one under the age of 50 will receive any benefits anyway, whether they retire at 60 or 62.
But, it does reveal the clear direction of Hollande's thinking. Like many French politicians who preceded him, he thinks France is rich and can afford to fund more than half of its population in a life of leisure. It turns out he's wrong, like many French politicians who preceded him, but if he can just fool enough people before he leaves office then I think he'll be happy.
France has been trying to slide into total decadence and chaos for several generations. Only the strength of the world economy has kept this sick puppy afloat. But, the world economy isn't likely to oblige this time around and it is probably over for France. So why not cut the retirement age. Why not take it to 55? If you're going to go bust anyway, what real difference does it make where you set the retirement age. Make it zero and cut to the chase. There are no funds set aside for it anyway and the shrinking work force can't possibly pay for it. So, why not go for it.
Hollande, of course, has found the magic elixir -- tax rich people -- the Obama theme song. But even if you confiscated all the wealth of every single French family with more than $ 1 million in assets, you still could not come close to funding their social security system, even if you left the age at 62. So really. What difference does it make whether the retirement age is 60 or 62. Not much.
Watch Greece carefully. Greece is everyone's future.
But, it does reveal the clear direction of Hollande's thinking. Like many French politicians who preceded him, he thinks France is rich and can afford to fund more than half of its population in a life of leisure. It turns out he's wrong, like many French politicians who preceded him, but if he can just fool enough people before he leaves office then I think he'll be happy.
France has been trying to slide into total decadence and chaos for several generations. Only the strength of the world economy has kept this sick puppy afloat. But, the world economy isn't likely to oblige this time around and it is probably over for France. So why not cut the retirement age. Why not take it to 55? If you're going to go bust anyway, what real difference does it make where you set the retirement age. Make it zero and cut to the chase. There are no funds set aside for it anyway and the shrinking work force can't possibly pay for it. So, why not go for it.
Hollande, of course, has found the magic elixir -- tax rich people -- the Obama theme song. But even if you confiscated all the wealth of every single French family with more than $ 1 million in assets, you still could not come close to funding their social security system, even if you left the age at 62. So really. What difference does it make whether the retirement age is 60 or 62. Not much.
Watch Greece carefully. Greece is everyone's future.
The Sun Shines in Wisconsin
A state known for its "progressive" politics rejected union bullying yesterday and, by re-electing Governor Scott Walker, cast a vote for fiscal sanity. Even in Wisconsin, government finances are still in serious peril. What Walker has done so far represents only a baby step toward getting Wisconsin's state financial house in order. They still have massive unfunded pension liabilities, both at the state level and at the local level. The size of these unfunded liabilities are several orders of magnitude worse than the $ 3.6 billion budget gap that Walker has closed in the last two years. But, still. It is a beginning and brings a glimmer of sunshine to a state that was careening off into disaster until Walker came along.
As in Europe, the situation in the various states in America is simply a question of numbers. This is not about politics. There is no political solution for Europe or for the American states. There is no set of circumstances that will enable them to pay their debts. So, it is time to acknowledge that their debts are unpayable. Once you do that, then there are solutions. But, there are no viable solutions if politicians continue to pretend that their are some grand solutions for the current problems. There are none.
Wisconsin will, sooner or later, have to change their retirement and health care deals for public employees. There is no set of taxes or rates of economic growth that will fund their current projected obligations. That is the same problem that is faced by California, Illinois, New York, New Jersey and, yes, even in Virginia. The sooner these liabilities are restructured, the less will be the pain for all.
As in Europe, the situation in the various states in America is simply a question of numbers. This is not about politics. There is no political solution for Europe or for the American states. There is no set of circumstances that will enable them to pay their debts. So, it is time to acknowledge that their debts are unpayable. Once you do that, then there are solutions. But, there are no viable solutions if politicians continue to pretend that their are some grand solutions for the current problems. There are none.
Wisconsin will, sooner or later, have to change their retirement and health care deals for public employees. There is no set of taxes or rates of economic growth that will fund their current projected obligations. That is the same problem that is faced by California, Illinois, New York, New Jersey and, yes, even in Virginia. The sooner these liabilities are restructured, the less will be the pain for all.
Selasa, 05 Juni 2012
"More Europe, Not Less"
So says Angela Merkel. The idea is that if only Europe will "centralize" fiscal decision making and commercial bank regulation," then Germany may be willing to participate in a Europeanization of member country debt. There are only two problems with this solution: 1) centralizing fiscal decision making makes no difference at all; 2) commercial bank regulation has never been known to prevent financial crises and bank failures. All this shows is that Merkel doesn't understand what the problem is. No politician seems to get it.
The problem is simple: the welfare state has undermined the fiscal health of the Eurozone. There are two reasons, both stemming the from the same principle: when you promise people that they can receive income and services without paying for them, then two things happen: 1) people quit working and saving to provide for themselves; 2) you have to borrow unlimited amounts of money to fund the promises that you have made to people since they no longer have any plans to provide for themselves.
No amount of "centralization" of fiscal decision making can possibly matter. This is an imaginary fig leaf designed to make sure that the ultimate collapse in Europe occurs after Merkel leaves office. It does nothing to prevent that collapse.
"Not on my watch" seems to be the only theme of European and US policy. No one seriously wants to tackle the fundamental problem. If you don't dismantle the welfare state, it will dismantle itself in a chaotic, dehumanizing way. We can see this taking place in Greece and Spain today. This same dismantling process will be visiting Illinois and California in the near future.
Contrary to the views of the Krugmans and Stiglitz's of the world, there are no simple answers that can turn "no revenues" into "revenues." Someone, somewhere, must foot the bill. Who is that to be? If I am not willing to pay for my old age and my medical care and my education, etc., then who pays? Bondholders?
Centralizing decision making and increasing regulation will have no effect on the European financial crisis, since it does not address the problems in the Eurozone. It simply provides politicians, like Merkel, cover while they prepare for their own comfortable retirement.
The problem is simple: the welfare state has undermined the fiscal health of the Eurozone. There are two reasons, both stemming the from the same principle: when you promise people that they can receive income and services without paying for them, then two things happen: 1) people quit working and saving to provide for themselves; 2) you have to borrow unlimited amounts of money to fund the promises that you have made to people since they no longer have any plans to provide for themselves.
No amount of "centralization" of fiscal decision making can possibly matter. This is an imaginary fig leaf designed to make sure that the ultimate collapse in Europe occurs after Merkel leaves office. It does nothing to prevent that collapse.
"Not on my watch" seems to be the only theme of European and US policy. No one seriously wants to tackle the fundamental problem. If you don't dismantle the welfare state, it will dismantle itself in a chaotic, dehumanizing way. We can see this taking place in Greece and Spain today. This same dismantling process will be visiting Illinois and California in the near future.
Contrary to the views of the Krugmans and Stiglitz's of the world, there are no simple answers that can turn "no revenues" into "revenues." Someone, somewhere, must foot the bill. Who is that to be? If I am not willing to pay for my old age and my medical care and my education, etc., then who pays? Bondholders?
Centralizing decision making and increasing regulation will have no effect on the European financial crisis, since it does not address the problems in the Eurozone. It simply provides politicians, like Merkel, cover while they prepare for their own comfortable retirement.
Senin, 04 Juni 2012
El-Erian Joins The Chorus
Mohammed El-Erian of PIMCO joined his voice to the chorus today by saying that "leaders should get their act together." Geez Mohammed. Haven't they done enough? They've imposed a welfare state, borrowed trillions of dollars that can't be paid, imposed regulations and laws that make business formation and expansion next to impossible, enacted labor laws that make it unattractive to expand or maintain employment. What more can they do, Mohammed?
At some point, folks like El-Erian need to recognize that employers make hiring decisions and that, absent a reason to hire anyone, they won't hire anyone. Employers have been give a host of good reasons not to hire anyone and they are acting accordingly, both in Europe and in the US. Hopefully, the "leaders will not get their act together."
Maybe, we should give all political leader 364 days of paid vacation annually. They can meet ceremoniously one day every four years. Then much less damage would be done and markets could function without their interference.
This idea that the world can be led by political hacks that have spent their formative years learning how to memorize a set of meaningless platitudes that can provide a path to an electoral victory is a joke. The world doesn't need political leaders "to get their act together." What they need is for the political leaders to get out of the way and let free markets work.
Only free markets can deliver economic growth. Western political leaders have done everything in their power to wage war on the free market. They win. The economy loses.
What in the world does El-Erian think they (political leaders) can do, if not more of the same?
El-Erian praised all the bailouts of the 2008-09 period, praised the stimulus package. He's been a consistent cheerleader for big government and high deficits. Now, I suppose he wants more of the same since it's worked so well so far.
At some point, folks like El-Erian need to recognize that employers make hiring decisions and that, absent a reason to hire anyone, they won't hire anyone. Employers have been give a host of good reasons not to hire anyone and they are acting accordingly, both in Europe and in the US. Hopefully, the "leaders will not get their act together."
Maybe, we should give all political leader 364 days of paid vacation annually. They can meet ceremoniously one day every four years. Then much less damage would be done and markets could function without their interference.
This idea that the world can be led by political hacks that have spent their formative years learning how to memorize a set of meaningless platitudes that can provide a path to an electoral victory is a joke. The world doesn't need political leaders "to get their act together." What they need is for the political leaders to get out of the way and let free markets work.
Only free markets can deliver economic growth. Western political leaders have done everything in their power to wage war on the free market. They win. The economy loses.
What in the world does El-Erian think they (political leaders) can do, if not more of the same?
El-Erian praised all the bailouts of the 2008-09 period, praised the stimulus package. He's been a consistent cheerleader for big government and high deficits. Now, I suppose he wants more of the same since it's worked so well so far.
Sabtu, 02 Juni 2012
Au Revior and All That
My stay in Paris comes to an end tomorrow morning -- all in all, nine days. So what's doing in modern France? How's the welfare state going? It's going great for rich people and entrenched bureaucrats -- they never had it so good. The rich and politically connected in France have the life style reminiscent of Louis the IVth. Their so-called "socialism" is essentially a giant cage for everyone else to live in.
Their are no jobs for young college educated, unless their parents are members of the elite. Opportunity is so bad for young people here that is not uncommon for youth to live with their parents until almost middle age. There are no Steve Jobs or Bill Gates or any of that. The best entrepreneurs here are street hustlers and con artists. The government doesn't seem to restrict their activity like they restrict the activities of ordinary legal businesses.
The newly elected President thinks you can create growth by raising marginal tax rates to 75 percent and protecting entrenched bureaucracies whose main role is to snuff out any hints of entrepreneurship. Good luck with that. This place is a throwback to the Middle Ages. But, when you ask a Frenchman, what's so great about France, the conversation inevitably drifts back a couple of hundred years to Napoleon or Voltaire or some such luminary.
This place is like the rest of Europe, frozen in time, with no future. Sooner or later this society will be swept into obscurity by its massive social obligations which, like every other European country, it cannot afford. Unfortunately for France and it's fellow Europeans, creditors are beginning to get wise. But, like Italy and Greece, it's a great place to visit. Lots of sights to see and its getting cheaper by the day.
Their are no jobs for young college educated, unless their parents are members of the elite. Opportunity is so bad for young people here that is not uncommon for youth to live with their parents until almost middle age. There are no Steve Jobs or Bill Gates or any of that. The best entrepreneurs here are street hustlers and con artists. The government doesn't seem to restrict their activity like they restrict the activities of ordinary legal businesses.
The newly elected President thinks you can create growth by raising marginal tax rates to 75 percent and protecting entrenched bureaucracies whose main role is to snuff out any hints of entrepreneurship. Good luck with that. This place is a throwback to the Middle Ages. But, when you ask a Frenchman, what's so great about France, the conversation inevitably drifts back a couple of hundred years to Napoleon or Voltaire or some such luminary.
This place is like the rest of Europe, frozen in time, with no future. Sooner or later this society will be swept into obscurity by its massive social obligations which, like every other European country, it cannot afford. Unfortunately for France and it's fellow Europeans, creditors are beginning to get wise. But, like Italy and Greece, it's a great place to visit. Lots of sights to see and its getting cheaper by the day.
Jumat, 01 Juni 2012
Don't Break Out the Champagne
The jobs release this morning confirms that the US economy has no real pep. This is bad news for anyone looking for a job or hoping to keep the job they have. I guess waging political war on capitalism isn't such a great economic policy after all.
Where are the economists? Why are they pretending that current economic policy makes any sense?
Obama spends a lot of time thinking about Europe these days. Schadenfreude I presume.
Surprise, surprise, Spain is beginning to be the next big story. Just wait. Italy and France will have their time in the sun. If you want jobs, then you have to make it attractive for business to hire people. Why is that so tough to see? If you wanted more apples would you put a $ 5 tax on every apple produced?
I'm beginning to think the world might be better off without economists. Economists come up with tortured explanations to support things like minimum wages, health care mandates, higher taxes, and oppressive regulation. Do they really think this will create jobs?
The stock market is getting cheaper, although nothing fundamental has really changed in the last two years. At some point the stock market may become a real buy again, even though the news background is depressing. The march toward disaster in Europe continues its predictable path and the US political war on the economy is reaping its harvest.
Where are the economists? Why are they pretending that current economic policy makes any sense?
Obama spends a lot of time thinking about Europe these days. Schadenfreude I presume.
Surprise, surprise, Spain is beginning to be the next big story. Just wait. Italy and France will have their time in the sun. If you want jobs, then you have to make it attractive for business to hire people. Why is that so tough to see? If you wanted more apples would you put a $ 5 tax on every apple produced?
I'm beginning to think the world might be better off without economists. Economists come up with tortured explanations to support things like minimum wages, health care mandates, higher taxes, and oppressive regulation. Do they really think this will create jobs?
The stock market is getting cheaper, although nothing fundamental has really changed in the last two years. At some point the stock market may become a real buy again, even though the news background is depressing. The march toward disaster in Europe continues its predictable path and the US political war on the economy is reaping its harvest.
Langganan:
Postingan (Atom)