The FCC has been holding closed-door talks with lobbyists to reach agreement on ways to regulate Internet traffic without making major changes to existing laws. However, Verizon Communications Inc. and Google Inc. reached an agreement of their own on Internet traffic rules that would allow Verizon to move some broadband traffic at higher speeds at premium prices. This has angered the FCC, which is seeking the power to dictate how Internet providers manage traffic on the networks they have built at great expense themselves.
The FCC was under attack about the closed-door meetings as another of many violations of the Obama pledge for transparency in government. The FCC called off these talks upon the announcement of the Verizon-Google agreement. The FCC very much wants the power to enforce what it calls Net Neutrality, which supposedly means that all broadband traffic must be carried at the same speed at the same price. This does not allow the investors in the broadband networks as much flexibility in pricing their services and as much opportunity to make a good return on their investments as they might have under other negotiated terms with customers. Net Neutrality would result in slower networks, lower volume handling capabilities, and if operated through a political gateway such as the FCC, almost certain restrictions on content, probably based upon a lowest common denominator viewpoint of morality and based upon the political viewpoints of the party in power.
Some inter-company private agreements may seem inconvenient to some of us at one time or another, but that inconvenience has historically proven minor compared to the inconvenience of government regulation. A good case in point is the regulation of the railroads because many people did not think it was "fair" for the railroads to charge less to large-volume shippers and to long-distance shippers. Regulation by the Interstate Commerce Commission of the railroads did much to bring on the long-term decline of the railroads. The result was a decrease in the growth of track mileage, a slowdown as regulations increased in the rate at which freight rates had been dropping under competition, a decrease in innovation, and the growth of a few very large rail systems because the ICC did not allow existing smaller railroads to pool their resources to handle a shipper's needs with agreed upon rates over longer distances on the tracks of multiple railroads. The long-term growth and the competitive nature of the railroads was stunted by the ICC. This is the usual pattern for industries regulated by government. For the moment, the Verizon-Google agreement may be a bump in the road for the FCC attempt to similarly manage the Internet.
It is also a victory for property rights, albeit momentarily. The government does not have the right to impose duties upon property owners which require them to offer services using that property which they do not voluntarily wish to perform, as things are customarily done in the free market. The government does not have the right to push investors and their operations managers into involuntary servitude either. Freedom in the market place is essential so that we will have as many personal choices as possible.
Showing posts with label investors. Show all posts
Showing posts with label investors. Show all posts
31 August 2009
The Real, Really High Unemployment Rate
The media has been happy to report to us that the unemployment rate in July 2009 was slightly improved to 9.4%, compared to a 9.5% rate in June. They also reported that the number of jobs lost was fewer than in most prior months. But this is an odd combination. For the real unemployment rate to drop, some number of net new jobs must be created, yet another 247,000 net jobs were lost in July. Some time ago, I remember that for the unemployment rate not to go up, 154,000 new net jobs had to be created in a month. So, the net number of new jobs appears to be about 401,000 jobs fewer than used to be needed to keep percent unemployed static.
Is this anything to crow about? Apparently it is not as bad as earlier in the year, but is it not awful nonetheless? Well apparently it is good if you are Obama and his Democrat Congress. It is improvement. Or maybe not. What if the recession long ago weeded out the worst employees and companies are simply reluctant to let their better employees go? And, what if the real unemployment rate is being very badly understated?
The unemployment rate does not count the underemployed or those who are involuntarily working fewer hours than they would like. It also does not count those "who have not searched for work in the last 4 weeks." In reality, no one really knows how many people want a job, but have not searched for it for 4 weeks. The government assumes that people who had been telling them they were searching for work while they were collecting unemployment benefits, but stopped doing so when their unemployment benefits ran out, are not searching for work. So they are not counted as unemployed. But, would you go down to an unemployment office looking for work for more than 26 weeks when they were not going to give you any money for doing so and when they had done nothing in 26 weeks to get you employed? Of course not. Thus, when things really get bad, the unemployment rate falls even when the number of really unemployed workers increases!
The number of people who were looking for work a while back, but have not done so recently, though they are still unemployed is estimated at 2.3 million. Adding them to the number in the official unemployment count at 9.4% unemployed, raises the real unemployment rate to 10.9%. So, Obama and the Democrat Congress now have a real unemployment rate of 10.9% and this rate is not going down!
Or, we could add in the 8.8 million workers who are on involuntary part time work. The total unemployed or underemployed would then be 16.6%. Nothing for the Democrats to crow about and hardly good evidence that the Stimulus Package is accomplishing much of anything.
In the 4th Quarter of 2008, the GDP shrank by 5.4%, in the 1st Quarter of 2009 by 6.4%, and in the 2nd Quarter of 2009 by 1.0%. Construction and manufacturing sectors have been hit very hard. They totaled 15% of jobs, but they account for 40% of the unemployment. 9.8% of adult men are unemployed, while 7.5% of adult women are unemployed. Asians are 8.3% unemployed, while whites are 8.6% unemployed, Hispanics are 12.3%, and blacks are 14.5% unemployed. All of these numbers are for the usual, under-reported statistics giving the 9.4% total unemployment rate.
Great job Obama. You really have been great at putting it to those terrible employers and wealthy investors. You scared the tar out of them even during the presidential campaign and with the known desire of the already Democrat Congress for increasing taxes and piling on regulations on businesses and investors, you made the recession worse long before you took office. Since then, your constant bad-mouthing and threats combined with those of the leadership of the House and Senate, has done a great job of keeping employers uncertain and scared. In such times, they are pulling themselves back into their shells. This is hardly surprising.
Guess what? It is all about being able to believe you will be allowed to make a reasonable profit, stupid! If you tell businessmen that they are going to taxed much more, but do not even tell them how they will be taxed, they cannot calculate whether a business operation can make money. If you tell them they will be more heavily regulated, but they do not know how they will be regulated, they cannot tell whether they can make money in those operations which may be restricted. If you tell them you will dictate management compensation, they do not know why they should bother to undertake new operations or even continue working hard on older operations. The value of the dollar is very uncertain, thanks to you. Increasing taxes and regulations are likely to make it harder for U.S. operations to make money relative to overseas operations. Besides, where will the energy come from for manufacturing and transportation and heating buildings in the U.S. with Waxman-Markey type carbon cap and trade? What on Earth are employee health insurance costs going to be when you have finished mandating many benefit additions?
It is unreasonable to expect employers and investors to hire workers under these circumstances. You must allow employers some reasonable level of certainty, but you, like FDR, love uncertainty, experimentation, and socialist redistribution and equalization. It is you who have given us 10.9% unemployment. Take credit for it and live up to it.
Is this anything to crow about? Apparently it is not as bad as earlier in the year, but is it not awful nonetheless? Well apparently it is good if you are Obama and his Democrat Congress. It is improvement. Or maybe not. What if the recession long ago weeded out the worst employees and companies are simply reluctant to let their better employees go? And, what if the real unemployment rate is being very badly understated?
The unemployment rate does not count the underemployed or those who are involuntarily working fewer hours than they would like. It also does not count those "who have not searched for work in the last 4 weeks." In reality, no one really knows how many people want a job, but have not searched for it for 4 weeks. The government assumes that people who had been telling them they were searching for work while they were collecting unemployment benefits, but stopped doing so when their unemployment benefits ran out, are not searching for work. So they are not counted as unemployed. But, would you go down to an unemployment office looking for work for more than 26 weeks when they were not going to give you any money for doing so and when they had done nothing in 26 weeks to get you employed? Of course not. Thus, when things really get bad, the unemployment rate falls even when the number of really unemployed workers increases!
The number of people who were looking for work a while back, but have not done so recently, though they are still unemployed is estimated at 2.3 million. Adding them to the number in the official unemployment count at 9.4% unemployed, raises the real unemployment rate to 10.9%. So, Obama and the Democrat Congress now have a real unemployment rate of 10.9% and this rate is not going down!
Or, we could add in the 8.8 million workers who are on involuntary part time work. The total unemployed or underemployed would then be 16.6%. Nothing for the Democrats to crow about and hardly good evidence that the Stimulus Package is accomplishing much of anything.
In the 4th Quarter of 2008, the GDP shrank by 5.4%, in the 1st Quarter of 2009 by 6.4%, and in the 2nd Quarter of 2009 by 1.0%. Construction and manufacturing sectors have been hit very hard. They totaled 15% of jobs, but they account for 40% of the unemployment. 9.8% of adult men are unemployed, while 7.5% of adult women are unemployed. Asians are 8.3% unemployed, while whites are 8.6% unemployed, Hispanics are 12.3%, and blacks are 14.5% unemployed. All of these numbers are for the usual, under-reported statistics giving the 9.4% total unemployment rate.
Great job Obama. You really have been great at putting it to those terrible employers and wealthy investors. You scared the tar out of them even during the presidential campaign and with the known desire of the already Democrat Congress for increasing taxes and piling on regulations on businesses and investors, you made the recession worse long before you took office. Since then, your constant bad-mouthing and threats combined with those of the leadership of the House and Senate, has done a great job of keeping employers uncertain and scared. In such times, they are pulling themselves back into their shells. This is hardly surprising.
Guess what? It is all about being able to believe you will be allowed to make a reasonable profit, stupid! If you tell businessmen that they are going to taxed much more, but do not even tell them how they will be taxed, they cannot calculate whether a business operation can make money. If you tell them they will be more heavily regulated, but they do not know how they will be regulated, they cannot tell whether they can make money in those operations which may be restricted. If you tell them you will dictate management compensation, they do not know why they should bother to undertake new operations or even continue working hard on older operations. The value of the dollar is very uncertain, thanks to you. Increasing taxes and regulations are likely to make it harder for U.S. operations to make money relative to overseas operations. Besides, where will the energy come from for manufacturing and transportation and heating buildings in the U.S. with Waxman-Markey type carbon cap and trade? What on Earth are employee health insurance costs going to be when you have finished mandating many benefit additions?
It is unreasonable to expect employers and investors to hire workers under these circumstances. You must allow employers some reasonable level of certainty, but you, like FDR, love uncertainty, experimentation, and socialist redistribution and equalization. It is you who have given us 10.9% unemployment. Take credit for it and live up to it.
09 May 2009
Hiring in the Extended Obama Recession
I hired a scientist in December 2008 and another in April 2009. As noted above, we are awaiting the graduation of a new materials scientist who will begin working in June, if he accepts our position offering. Hiring people in a recession is a risky business, but it is when a small laboratory has its best opportunity to hire good people.
Given all of the best efforts of Obama and his socialist cohorts to create investor uncertainty, I am not being a good example of Going Galt. My laboratory is neither in an industry in Obama's gunsights nor large enough yet for him to try to milk us of all of our equipment and human capital. Of course, when he has stolen all he can from the bigger fish in the commercial realm, he will come after us and all of the other small businesses. And since some of my clients are pretty big fish, they have reason to be very worried in the near future. This is especially true if they have union workers, since Obama has made it clear with his handling of Chrysler and Government Motors that he will serve the interests of union leaders even if it means breaking long-established contract and property-rights laws.
The card-check law the unions want may result in the unionization of many small businesses. This in turn will put those unionized small business more and more in the socialists' gunsights, since they wish to find every opportunity to strengthen the unions with goodies taken from dirty, rotten capitalist pigs, such as small businessmen or any other businessmen. The unions will try to devour small companies using card-check to get to these goodies.
But, there is a countervailing effect which is going to surprise the unions and the socialists who back their avarice for stolen goods. Investors will understand the connection between the unions and the theft of capital which they will practice with the help of the union-pandering socialist government. The moment a company is unionized or it is clear that an attempt to unionize it is underway, its investors will seek to dump it. Investor discrimination against unionized companies will become much stronger. Investors will still want to invest, but they will seek out companies which will be hard to unionize, seek out non-commercial bonds, and invest abroad. All Americans will be hurt by this, but what else can an investor do given the strong-arm of brutal socialist government? Unionized companies will not be able to get adequate capital in the free market and will become dependent upon government to prop them up. Of course, this has been the case to a considerable degree in the past, but the flight of private, voluntary capital will be more massive and more and more only government will be able to keep unionized companies on life-support.
American workers have already seen the connection between company failure and unionization. This is why labor union membership in the private sector has fallen so drastically as a percentage of the workforce in the last 55 years. 35.7% of all workers in the private sector were union members in 1953. Now only 7.6% of private sector workers are union members. This is why the labor union leadership is desperate for card check, as are those Democrat politicians who are dependent upon the union leaders for campaign money and labor. They must do something to force workers to join the private sector unions those workers recognize as the cause of a slow death for the companies that employ them.
Thus, both investors and able workers will shun companies that are unionized. There is nothing new in this. This is a tried and true pattern. We have seen the effects in the U.S. in the big steel companies who came out of the 1950s and 1960s thoroughly unionized. We have seen the effects upon the American automobile companies. We have seen the effects throughout Europe. There is no rocket science involved in understanding what will happen.
I believe this recession was caused by the oil-price shock which preceded it by 9 months as explained by Alan Reynolds. See my earlier post on 11 April 2009 on his excellent article. The recovery from this recession was delayed by the lack of confidence in the private sector and the panic of Paulson and Bernanke toward the end of the last Bush administration. Then, incredibly, the people elected Obama to bring on change, which he has done with a socialist vengence against American investors, American manufacturers, American financial institutions, business owners and managers, non-union American workers, and all of the consumers of American goods who will hereafter pay higher prices for almost everything. This massive mistake by the American people will cost them dearly with a much delayed recovery and many added deadwood drags on all commercial activities and most of our individual efforts to pursue our happiness.
I strongly advise you to do a great job of insulating your homes and business buildings, because all of us are soon going to be hit by much higher heating and cooling costs, thanks to Obama and his allies in the uncompetitive wind generation and solar power industries.
Given all of the best efforts of Obama and his socialist cohorts to create investor uncertainty, I am not being a good example of Going Galt. My laboratory is neither in an industry in Obama's gunsights nor large enough yet for him to try to milk us of all of our equipment and human capital. Of course, when he has stolen all he can from the bigger fish in the commercial realm, he will come after us and all of the other small businesses. And since some of my clients are pretty big fish, they have reason to be very worried in the near future. This is especially true if they have union workers, since Obama has made it clear with his handling of Chrysler and Government Motors that he will serve the interests of union leaders even if it means breaking long-established contract and property-rights laws.
The card-check law the unions want may result in the unionization of many small businesses. This in turn will put those unionized small business more and more in the socialists' gunsights, since they wish to find every opportunity to strengthen the unions with goodies taken from dirty, rotten capitalist pigs, such as small businessmen or any other businessmen. The unions will try to devour small companies using card-check to get to these goodies.
But, there is a countervailing effect which is going to surprise the unions and the socialists who back their avarice for stolen goods. Investors will understand the connection between the unions and the theft of capital which they will practice with the help of the union-pandering socialist government. The moment a company is unionized or it is clear that an attempt to unionize it is underway, its investors will seek to dump it. Investor discrimination against unionized companies will become much stronger. Investors will still want to invest, but they will seek out companies which will be hard to unionize, seek out non-commercial bonds, and invest abroad. All Americans will be hurt by this, but what else can an investor do given the strong-arm of brutal socialist government? Unionized companies will not be able to get adequate capital in the free market and will become dependent upon government to prop them up. Of course, this has been the case to a considerable degree in the past, but the flight of private, voluntary capital will be more massive and more and more only government will be able to keep unionized companies on life-support.
American workers have already seen the connection between company failure and unionization. This is why labor union membership in the private sector has fallen so drastically as a percentage of the workforce in the last 55 years. 35.7% of all workers in the private sector were union members in 1953. Now only 7.6% of private sector workers are union members. This is why the labor union leadership is desperate for card check, as are those Democrat politicians who are dependent upon the union leaders for campaign money and labor. They must do something to force workers to join the private sector unions those workers recognize as the cause of a slow death for the companies that employ them.
Thus, both investors and able workers will shun companies that are unionized. There is nothing new in this. This is a tried and true pattern. We have seen the effects in the U.S. in the big steel companies who came out of the 1950s and 1960s thoroughly unionized. We have seen the effects upon the American automobile companies. We have seen the effects throughout Europe. There is no rocket science involved in understanding what will happen.
I believe this recession was caused by the oil-price shock which preceded it by 9 months as explained by Alan Reynolds. See my earlier post on 11 April 2009 on his excellent article. The recovery from this recession was delayed by the lack of confidence in the private sector and the panic of Paulson and Bernanke toward the end of the last Bush administration. Then, incredibly, the people elected Obama to bring on change, which he has done with a socialist vengence against American investors, American manufacturers, American financial institutions, business owners and managers, non-union American workers, and all of the consumers of American goods who will hereafter pay higher prices for almost everything. This massive mistake by the American people will cost them dearly with a much delayed recovery and many added deadwood drags on all commercial activities and most of our individual efforts to pursue our happiness.
I strongly advise you to do a great job of insulating your homes and business buildings, because all of us are soon going to be hit by much higher heating and cooling costs, thanks to Obama and his allies in the uncompetitive wind generation and solar power industries.
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