The Occupy Wall Street crowd claims to stand with the 99% against the 1%. A conservative news service points out that the 1% earn more than $506,000 a year. But when it comes to figuring out legitimate government policy, we are not characterized sufficiently by our income. In fact, our income ought to be as irrelevant as race, religion, sex, or sexuality in government policy. Making it as important as it is commonly made is highly materialistic. Note that it is the socialist left that makes the most of income and in that shows its lack of spirituality and its extreme materialism.
Is it not odd that if a man takes the risks of owning his own company and works 70 hours a week and therefor someday may make a higher income than a man who takes a nice, safe 40 hour a week job as an employee and who watches TV for 30 hours a week, the hardworking businessman is taxed more? The businessman is required to be an unpaid tax collector, is held responsible for all of his employee's safety, is forced to pay for the unemployment of employees whether they ever worked for his company or not, and is supposed to see to it that his company complies with more than 200,000 pages of often-conflicting regulations or suffer crippling fines. The businessman may very well have 45 hours of his life each week taken by force from him for government purposes. The employee is more likely to have only 6 or 8 hours of his life claimed by government each week. These hours taken by force are the equivalent of slavery.
By what right does government enslave one man for many more hours a week than another? Worse yet, the government really only does it for the same reason that Willy Sutton robbed banks. That is where the money is. It just is not easy for the government to figure out how to take anything it wants out of the 30 hours a week our hypothetical employee is watching TV. The government simply wants to steal and it is easy to steal from the hardworking businessman, whether it is his mandated service to the government collecting taxes, complying with regulation, or as safety inspector and provider, or the money he earned with his time. The government is clearly just Willy Sutton.
It is absurd that people spend so much time characterizing themselves in terms of their income. Legitimate government has the sole purpose of protecting the equal, sovereign individual rights to life, liberty, property, and the pursuit of personal happiness. As far as government policy is concerned there are only two numbers that characterize each of us. They are 1 and 0.0000000032. You do know what the later number is, do you not?
20 October 2011
07 October 2011
Obama Jobs Bill Will Kill Jobs
The Obama Jobs Bill is supposed to cost $447 billion, create as many as 1.9 million jobs according to economists who have already proven they have no clue, and increase the GDP by 2%, again according to those same clueless economists. Let us examine the effects of the Obama Jobs Bill in a simple and rational manner.
The GDP in 2011 is estimated to be $15.012 trillion. Obama's clueless economists say that his jobs bill will increase the GDP by 2% because simply printing money you do not have always increases the size of the economy. Hmmm....., no wonder many of them keep saying we just need bigger stimulus packages and with an outpouring of enough newly printed dollars, the economy will grow and we will all have dream jobs. If this effect works, then the government should print up $15.012 trillion and the economy will take a Great Leap Forward! Apparently some us are just too timid to do this. But Paul Krugman would be happy to push us into it. OK, so yes, I do not believe this is the way the economy works for a minute, or even a second. But still, it is interesting to examine whether the Obama Jobs Bill makes some kind of sense even on the numbers given by the clueless Obama economists.
First, we need to note that the cost of the bill, $447 billion, is 2.98% of the GDP. That is more than the 2% growth of GDP claimed to result from this expenditure! In fact, we can calculate from these numbers that for every dollar spent by the government in this Obama Jobs Bill $0.33 simply vanishes into thin air. The Obama economists are claiming that this government expenditure is only 2/3 as effective as other money in the economy, which already includes huge inefficiencies due to the cost of overblown governments with their over-compensated employees and all of the mandates and regulations they impose without regard to cost upon the much more efficient private sector.
But, it gets worse. Assuming that, most unbelievably, Obama's Job Bill does create the wishful 1.9 million jobs, each job costs $235,263. This comes from dividing $447 billion by 1.9 million jobs. We can compare this number with the cost of the jobs we presently have. Of course the cost of those jobs is already grossly cranked skyward by the many prior costs of government, so we should remember that real private sector jobs cost less than the amount we are about to calculate because we are including all jobs and that includes all of those very expensive government jobs. At present, each job costs ($15.012 trillion)/(140,335,000 jobs) = $106,973, where the present number of jobs comes from the Bureau of Labor Statistics Unemployment Report for September 2011. So a new Obama job will cost 2.2 times as much as the composite of private sector and government jobs presently costs. Surely, taking 2.2 times as much money out of the private sector as it takes to create a job there and giving it to Obama to create a job is not a good idea. It is a great way to bankrupt America and many of its families.
Now, some economists believe in magic and they will disagree with me on what I am about to point out. When you remove 2.2 times as much from the private sector as it takes for the private sector to create a job, you actually destroy 2.2 jobs for every job you create. Yes, Obama will create jobs with his $447 billion expenditure of our money, but he will kill more than 2.2 jobs in the private sector for every job he will create for his campaign contributors. He will create some union jobs to build and repair infrastructure. He will maintain some teaching positions for the teachers unions in public schools. He will create some temporary green energy jobs, but the collapse of those businesses will still occur soon, as it did with Solyndra and numerous other green jobs companies producing expensive and unreliable energy products. Obama will try to point out the jobs created, so this is what will be seen. What will not be seen, except partially in the rising unemployment statistics, will be the 2.2 minimum number of jobs destroyed in the private sector. Obama is counting on our failing to see those jobs die.
What I am saying is based on recognizing that if government spends money, it is taken out of the private sector one way or another. Generally, it is either taken out in taxes, by borrowing it with the payment of interest paid with future taxes, by simply printing it and diluting the value of all other money and assets, and by imposing mandates upon the private sector that cost them time and money. In this case, Obama wants to raise taxes on the "rich" or companies which will remove money from the private sector in a simple and straightforward way to pay for this turkey bill.
Now I do not believe the Obama Jobs Bill will create 1.9 million jobs at all, even if we do not subtract the jobs killed by Obama. We can easily calculate the number of jobs that will be killed. These jobs are jobs that might well have been jobs long sustained by the private sector and they will be replaced by a smaller number of jobs that will not make economic sense once the immediate government expenditure runs out. The private sector jobs killed will be about $447,000,000,000 / $106,973 = 4,178,625 jobs, or more than 4 million jobs, to be replaced with maybe 1 million jobs for Obama's cronies.
As I said, it gets worse. Creating about 1 million temporary jobs while killing more than 4 million longer term jobs cannot be the act of rational men and women. But it is the way the wrongheaded Obama wants badly to drag the country. It is Obama who will throw most of us off the cliff.
Someone should make an ad of a jackbooted Obama marching shackled American workers to a cliff and then pushing them over the edge, one by one, with the calculations above overprinted on the images of a fascist Obama. This would only be justice to pay back the injustice done to Paul Ryan.
The GDP in 2011 is estimated to be $15.012 trillion. Obama's clueless economists say that his jobs bill will increase the GDP by 2% because simply printing money you do not have always increases the size of the economy. Hmmm....., no wonder many of them keep saying we just need bigger stimulus packages and with an outpouring of enough newly printed dollars, the economy will grow and we will all have dream jobs. If this effect works, then the government should print up $15.012 trillion and the economy will take a Great Leap Forward! Apparently some us are just too timid to do this. But Paul Krugman would be happy to push us into it. OK, so yes, I do not believe this is the way the economy works for a minute, or even a second. But still, it is interesting to examine whether the Obama Jobs Bill makes some kind of sense even on the numbers given by the clueless Obama economists.
First, we need to note that the cost of the bill, $447 billion, is 2.98% of the GDP. That is more than the 2% growth of GDP claimed to result from this expenditure! In fact, we can calculate from these numbers that for every dollar spent by the government in this Obama Jobs Bill $0.33 simply vanishes into thin air. The Obama economists are claiming that this government expenditure is only 2/3 as effective as other money in the economy, which already includes huge inefficiencies due to the cost of overblown governments with their over-compensated employees and all of the mandates and regulations they impose without regard to cost upon the much more efficient private sector.
But, it gets worse. Assuming that, most unbelievably, Obama's Job Bill does create the wishful 1.9 million jobs, each job costs $235,263. This comes from dividing $447 billion by 1.9 million jobs. We can compare this number with the cost of the jobs we presently have. Of course the cost of those jobs is already grossly cranked skyward by the many prior costs of government, so we should remember that real private sector jobs cost less than the amount we are about to calculate because we are including all jobs and that includes all of those very expensive government jobs. At present, each job costs ($15.012 trillion)/(140,335,000 jobs) = $106,973, where the present number of jobs comes from the Bureau of Labor Statistics Unemployment Report for September 2011. So a new Obama job will cost 2.2 times as much as the composite of private sector and government jobs presently costs. Surely, taking 2.2 times as much money out of the private sector as it takes to create a job there and giving it to Obama to create a job is not a good idea. It is a great way to bankrupt America and many of its families.
Now, some economists believe in magic and they will disagree with me on what I am about to point out. When you remove 2.2 times as much from the private sector as it takes for the private sector to create a job, you actually destroy 2.2 jobs for every job you create. Yes, Obama will create jobs with his $447 billion expenditure of our money, but he will kill more than 2.2 jobs in the private sector for every job he will create for his campaign contributors. He will create some union jobs to build and repair infrastructure. He will maintain some teaching positions for the teachers unions in public schools. He will create some temporary green energy jobs, but the collapse of those businesses will still occur soon, as it did with Solyndra and numerous other green jobs companies producing expensive and unreliable energy products. Obama will try to point out the jobs created, so this is what will be seen. What will not be seen, except partially in the rising unemployment statistics, will be the 2.2 minimum number of jobs destroyed in the private sector. Obama is counting on our failing to see those jobs die.
What I am saying is based on recognizing that if government spends money, it is taken out of the private sector one way or another. Generally, it is either taken out in taxes, by borrowing it with the payment of interest paid with future taxes, by simply printing it and diluting the value of all other money and assets, and by imposing mandates upon the private sector that cost them time and money. In this case, Obama wants to raise taxes on the "rich" or companies which will remove money from the private sector in a simple and straightforward way to pay for this turkey bill.
Now I do not believe the Obama Jobs Bill will create 1.9 million jobs at all, even if we do not subtract the jobs killed by Obama. We can easily calculate the number of jobs that will be killed. These jobs are jobs that might well have been jobs long sustained by the private sector and they will be replaced by a smaller number of jobs that will not make economic sense once the immediate government expenditure runs out. The private sector jobs killed will be about $447,000,000,000 / $106,973 = 4,178,625 jobs, or more than 4 million jobs, to be replaced with maybe 1 million jobs for Obama's cronies.
As I said, it gets worse. Creating about 1 million temporary jobs while killing more than 4 million longer term jobs cannot be the act of rational men and women. But it is the way the wrongheaded Obama wants badly to drag the country. It is Obama who will throw most of us off the cliff.
Someone should make an ad of a jackbooted Obama marching shackled American workers to a cliff and then pushing them over the edge, one by one, with the calculations above overprinted on the images of a fascist Obama. This would only be justice to pay back the injustice done to Paul Ryan.
19 September 2011
If Jobs are Foremost, This is How the Election Goes
It is often said that the need to create new jobs is priority one in the minds of Americans. This may be, but it is not obvious how much weight people are really putting on jobs versus other concerns. It also is not entirely obvious how many people correctly charge Obama with policies seriously destructive of jobs and which make it difficult for businessmen to calculate whether it makes sense to make a several year investment in a new hire or not.
I am going to make a quesstimate of what such a functional effect on the vote for a generic Republican presidential candidate might reasonably be and apply that function state by state based on the present unemployment rate to predict the shift in electoral votes from Obama's previous 2008 election result. In that campaign, many Americans bothered to learn little about him and his total commitment to socialism, leftist environmentalism, anti-business bias, and his anti-fossil fuel bias, all of which have proven highly destructive of the economy and jobs. I am proposing that many Americans have awoken to this reality. John McCain mounted a feckless campaign and lost big to Obama in the electoral vote. He lost many states that often vote for the Republican presidential candidate. Of course, some states are full of people who will refuse to blame Obama even now for the jobs situation or people who so share his political philosophy of collectivism and anti-man religious environmentalism that they will be little driven to address the jobs problem.
Let us assume that the strength of the vote switch is proportional to how high the unemployment rate in a state is. In fact, I will assume there is no effect for the purposes of this electoral vote projection if the unemployment rate is below 7%. This is unlikely to be the case, but I want to make a reasonably conservative estimate of the shift in electoral votes. Also, many people who recognize Obama as a jobs problem in the U.S. as a whole will still be more inclined to vote against him out of concern for those many Americans in states less fortunate than their own with respect to jobs. The function I will use is:
I am going to make a quesstimate of what such a functional effect on the vote for a generic Republican presidential candidate might reasonably be and apply that function state by state based on the present unemployment rate to predict the shift in electoral votes from Obama's previous 2008 election result. In that campaign, many Americans bothered to learn little about him and his total commitment to socialism, leftist environmentalism, anti-business bias, and his anti-fossil fuel bias, all of which have proven highly destructive of the economy and jobs. I am proposing that many Americans have awoken to this reality. John McCain mounted a feckless campaign and lost big to Obama in the electoral vote. He lost many states that often vote for the Republican presidential candidate. Of course, some states are full of people who will refuse to blame Obama even now for the jobs situation or people who so share his political philosophy of collectivism and anti-man religious environmentalism that they will be little driven to address the jobs problem.
Let us assume that the strength of the vote switch is proportional to how high the unemployment rate in a state is. In fact, I will assume there is no effect for the purposes of this electoral vote projection if the unemployment rate is below 7%. This is unlikely to be the case, but I want to make a reasonably conservative estimate of the shift in electoral votes. Also, many people who recognize Obama as a jobs problem in the U.S. as a whole will still be more inclined to vote against him out of concern for those many Americans in states less fortunate than their own with respect to jobs. The function I will use is:
[ 1 + 8 (State Unemployment % - 7%)/100 ] (% Vote for McCain)
If the projected percentage of the vote for a state becomes 50%, I shift that state's electoral votes to the generic Republican candidate, unless I judge the state's commitment to socialism to be so strong that I do not believe such a shift will occur. Among the factors I consider in making that assessment are which party now controls the Governor's office and the houses of the state legislature. Some states I believe will shift based on recent voting patterns in response to the Obama presidency and not entirely because of the state unemployment rate. The tables below provide the unemployment rate for August 2011 for each state, whether it has gone up or down in the last year, which party controls the governor's office and the legislature, how the state voted in the 2008 election, what the percentage of the vote for McCain was, and my allotment of the electoral votes each state will have in the 2012 election. The states that shift are in larger font. Those in gray and larger font shift because of high unemployment according to the above function.
I will discuss each state with a shift or which may refuse to switch even though the unemployment rate would cause a shift if the people of that state were not completely wrongheaded.
California: Unemployment is very high in CA and my function says the generic Republican should get 52.5% of the vote. He will not, though he will be very competitive, as California goes. No shift.
Colorado: The function says the Republican will get 50.3% of the vote, but the governor and the state senate are controlled by the Democrats and unemployment in CO is somewhat less than the national average. Colorado is full of religious environmentalists. I am not now willing to predict a shift for Colorado.
Florida: Unemployment is very high in Florida. If those on Social Security and Medicare do not get the wrong idea about Republican intentions on those programs, Florida will shift. Even McCain had 48.4% of the vote in 2008 and the formula based on the 10.7% unemployment says the generic Republican should be able to get 62.7% of the vote! Given that Republicans now control the governorship and both state houses, only a goofball Republican would fail to carry the state.
Indiana: The unemployment rate is less than the national average and McCain got 49.0% of the 2008 vote. The function says the generic Republican gets 55.7% of the vote. Since the governorship and both state houses are controlled by Republicans, Indiana will flip.
Maine: The unemployment rate in self-sufficient Maine is only 7.6%, but the state has recently become solidly Republican. I believe Maine will likely flip, but not only because of unemployment in the state.
Michigan: The unemployment rate of 11.2% is very high and the state has moved solidly Republican because of this already. Michigan should flip, since the formula says the generic Republican gets 54.6% of the vote.
Minnesota: Unemployment is only 7.2% so jobs will not be as strong a factor here as in many states. McCain did get 44.0% of the vote and both state houses are controlled by Republicans now. A reasonable Republican candidate should be able to carry Minnesota.
Nevada: The unemployment rate is the worst in the nation at 13.4%. Nevada was booming before the recession and has totally collapsed. It did vote Harry Reid back in, so I could be wrong about this one. But, the formula says the generic Republican could get 64.6% of the vote on jobs, so he has a very good cushion to lose votes on other issues. Nevada probably flips.
New Hampshire: Unemployment is relatively low in NH at 5.3%, but it is a state of relatively minimalist government with both houses controlled by Republicans. They are tired of the bumbling and big government Obama now and ready for a change. NH flips.
North Carolina: Unemployment is awful at 10.4% and McCain did get 49.5% of the vote. Both houses of the legislature are Republican. There should be no question that NC flips.
Ohio: Unemployment is at the national average of 9.1% and McCain received 47.2% of the vote. The Republicans have gained control of the governor's office and both state houses already. The formula says Ohio gives the generic Obama opponent 55.1% of the vote, so he can afford to lose some votes on other issues. Ohio flips.
Pennsylvania: Unemployment is below the national average, perhaps because of the Republicans having already gained control of the governorship and both state houses. Also, unlike Democrat controlled New York, Pennsylvania is eager to develop the rich gas fields in the massive Marcellus Formation and work on that is already providing significant new jobs. Of course Pennsylvania has also been hurt by Obama's anti-coal policies as well. PA flips, but not quite because of the formula.
Virginia: Unemployment is comparatively low at 6.3%, so Virginia does not flip due to the formula. But McCain did receive 46.4% of the vote here and VA has proven that it is not racist by having voted for Obama. The governor and the lower house are Republican. The state has been very actively fighting the constitutionality of ObamaCare. Virginia has no recent history of being so solidly Democrat Socialist that it will stick with the highly socialist Obama. Virginia corrects its prior mistake.
Wisconsin: The unemployment rate is below the national average at 7.9%, so Wisconsin does not flip merely due to the local unemployment. The flip is because the state has moved Republican generally with the Governor and both houses being Republican.
The end result is that the generic Republican, if he will keep the creation of private sector jobs the primary issue along with opposition to ObamaCare and growing government, will win by an electoral vote of 335 to Obama's 203. My prediction of Maine, Minnesota, and Nevada switching sides in Obama's re-election effort are the most questionable at this time. Giving them back to Obama still has him losing 315 to 223.
Of course, I am assuming a reasonable strength in American's interest in jobs here. It will be interesting to see if I have a good sense of what that interest strength is. I will be most interested in any readers thoughts on this.
07 September 2011
GDP and Industrial Output Comparisons by Country
I needed to find out if China was the number 1 manufacturing nation in the world or was it the United States? This proved a bit more difficult question than I thought it would be. But the CIA World Factbook had the information needed to determine this and to calculate the actual value of each of the three sectors into which they divide the GDP for the year 2010. These sectors are Agriculture, Industry, and Services. The results I found for the 7 nations with the largest GDPs expressed in dollars with purchasing power parity are given in the following table:
The answer to my original question is that the value of China's industrial output, which includes mining and construction, is $4.73 trillion, while that for the United States is $3.24 trillion. China's industrial output is 46% greater than that of the United States. No other nation comes close to having so much industrial output as China or the United States. The value of China's agricultural output is also the largest in the world. In this case, it is 6 times that of the United States. It is the delivery of services that the U.S. excels in doing.
The per capital GDP for the United States is more than 6 times that of China. Germany has the second highest per capita GDP on the list and that of the U.S. is 32% higher. The United Kingdom and Japan both have per capita GDPs very nearly as great as that of Germany. This group has a per capita GDP more than twice that of Russia, whose per capita GDP is more than twice that of China, whose per capita GDP is more than twice that of India.
Obama Kills Jobs and Resuscitates the Great Socialist Recession
Let us start off with a chart showing the number of jobs missing from our economy since January 2000 in thousands of jobs. The number of missing jobs in January 2000 was equal to the number of unemployed people then who were looking for jobs or in some cases were simply taking some time off between jobs. Jobs were plentiful then and had been for several years, so unemployment was only 4.0%. Because of the boom and bust nature of the economy since then due to the Federal Reserve setting very low interest rates, the deficits run by our governments, increasing regulations and taxes, added energy costs due to drilling prohibitions, recent added uncertainty caused by ObamaCare and Dodd-Frank financial reform, and considerable class warfare and anti-business rhetoric, the number of missing jobs has increased greatly in the course of the last 11 years.
The number of missing jobs is calculated assuming that the same percentage of Americans would work today as did in January 2000 if good jobs were available. The high tech bubble that burst in 2001 and 2002 had already created a situation with about 5 million more missing jobs than we had had at the beginning of the century. In December 2007, the United States had not yet been much affected by the recession due to a sharp increase in the price of oil that was already hurting most other countries of the world. But in 2008, companies began laying off employees and stopped hiring new employees. This never-ending Great Socialist Recession was underway.
Since Obama occupied the White House, there has been no substantial or sustained return to normalcy. The number of missing jobs for the last four months has been almost constant. There was actually a small increase in the number of missing jobs in August, though the statistics are not really good enough to consider that a real effect. What is real is that over the long term now, there has been no improvement. This is not surprising since almost every action the Federal Government and the Federal Reserve have taken was effective in killing jobs, not in creating them. Jobs are conserved in big businesses and many, many jobs are created by small businesses when the government does little to hurt their businesses. The Federal Government and many state governments have worked very hard to create very tough business conditions and much uncertainty when American business already faced a world largely in recession and stiff competition from abroad.
Obama's socialist viewpoint, his servitude to labor unions, and his academic economic advisers with their belief in Keynesian economic theory, led him and the Democrats down a very wrongheaded path. America is in misery because of this wrongheaded understanding of the economy and business by our ever more controlling central planners in Washington. The private sector and Capitalist free market can do much better.
The number of missing jobs is calculated assuming that the same percentage of Americans would work today as did in January 2000 if good jobs were available. The high tech bubble that burst in 2001 and 2002 had already created a situation with about 5 million more missing jobs than we had had at the beginning of the century. In December 2007, the United States had not yet been much affected by the recession due to a sharp increase in the price of oil that was already hurting most other countries of the world. But in 2008, companies began laying off employees and stopped hiring new employees. This never-ending Great Socialist Recession was underway.
Since Obama occupied the White House, there has been no substantial or sustained return to normalcy. The number of missing jobs for the last four months has been almost constant. There was actually a small increase in the number of missing jobs in August, though the statistics are not really good enough to consider that a real effect. What is real is that over the long term now, there has been no improvement. This is not surprising since almost every action the Federal Government and the Federal Reserve have taken was effective in killing jobs, not in creating them. Jobs are conserved in big businesses and many, many jobs are created by small businesses when the government does little to hurt their businesses. The Federal Government and many state governments have worked very hard to create very tough business conditions and much uncertainty when American business already faced a world largely in recession and stiff competition from abroad.
Obama's socialist viewpoint, his servitude to labor unions, and his academic economic advisers with their belief in Keynesian economic theory, led him and the Democrats down a very wrongheaded path. America is in misery because of this wrongheaded understanding of the economy and business by our ever more controlling central planners in Washington. The private sector and Capitalist free market can do much better.
05 September 2011
Everything in the Democrat Economic Central Planning Arsenal is a Dud
The government told us the GDP growth rate in the first quarter was 1.8%, which is not a healthy growth rate at any time and is especially weak if an economy is recovering from a recession. In May, the government increased that reported first quarter growth rate to 1.9%. This was still not good, but it seemed to leave the door open to optimism that while recovery was slower than in other recessions, it would occur. Then, the bottom fell out. The first quarter GDP growth was revised downward to 0.4% and the second quarter GDP growth was said to be an anemic 1.3%, which has just been revised down to 1.0%.
Jobs growth is not keeping up with the growth in population. The annual Consumer Price Index (CPI) stands at 3.6% and is running much higher in the last half year. The average American worker workweek decreased by 0.1 hours and earnings fell by $0.03, which is no way to keep up with the inflation. Labor productivity has very unusually been falling lately as well. These factors bode ill for further hiring.
The rest of the world economy is not in good shape either, so there is no chance that exports will do much to change the bleak picture of the American economy. The Purchasing Managers' Index (PMI), a measure of business purchasing activity, fell to a two-year low in August to 49.0. Numbers below 50.0 mean contraction of business activity is going on. Among the European countries with reduced activity are Great Britain, France, Spain, Italy, Ireland, and Greece. The positive PMI's of Germany, Sweden, and Switzerland dropped. The PMI of Japan is at a 3-month low and Taiwan's PMI is very negative at 45.2, its lowest value since January 2009. Canada's GDP contracted, largely due to a 2.1% drop in exports. The leading retailer in Australia expects falling sales. China has a PMI on the edge of contraction and its exports to the U.S. have fallen. The world economy is staggering.
In the U.S., the favorite Democrat central planning tools of stimulus spending and quantitative easing, or creating money from thin air, have not worked. What a surprise! Despite the GDP growth of the first half of the year being only 0.7%, the White House is telling us that GDP growth for the year will be 1.7%. Wow, what a howler that is! This means they are predicting growth in the second half of this year at an annual rate of 2.7%. I suppose they think that growth will occur because businessmen and consumers are trusting that Obama's speech on his economic recovery plans this week will solve all of our problems! For that to be so, all Americans would have to regress to the point that they believed that he could stop the oceans from rising and cure all of the diseases of the world, as many did when they first voted for him. I think many even of those favorable voters have learned something since! Even if that were the case, that growth which has not been evident through August, would have to occur entirely in the last 4 months of the year.
Let us examine a few issues with the stimulus approach loved by socialists. The CBO, not really a very reliable source, recently released a report saying that the $787 billion American Reinvestment and Recovery Act has really cost us a $825 billion increase in debt. They claim that they cannot figure out how many jobs were created by it, but it was somewhere between 1.4 million and an unbelievably generous 4 million. I do not think they seriously try to estimate the number of jobs lost due to the bill. So let us divide $825 billion by 1.4 million jobs and we find each job cost $589,300. While some investment is needed to create meaningful jobs, that is enough money to pay someone the median income of $46,300 for 12.7 years! I could readily provide several scientists with jobs with that amount of money, but the federal government is always incompetent and inefficient! While I do not believe there is even a 1% chance that the stimulus bill created 4 million jobs, even if it did, each job would have cost $206,250 which would have allowed me to provide at least 1.5 long-term new jobs in my laboratory instead of a mythical job.
The CBO report claims that printing up $0.825 trillion in a $15 trillion economy added between 0.8% and 2.5% to the GDP in real, inflation-adjusted growth. Printing this amount of money diluted the value of all money by at least 5.5% since 0.825/15 = 0.055. One could argue that the dilution of money value is proportional to the smaller value of money in circulation, making the dilution much greater than this. The act of printing that money did nothing to add to productivity so its effects upon production are transitory. Worse yet, that monetary dilution devalued all property, including the already depressed housing market, and all commodities, such as oil, cotton, corn, wood, and metals. Despite these huge negative effects, the CBO tells us that the expenditure increased the GDP by something in the range from 0.8% to a totally unbelievable 2.5%. Well, this is another instance of the very bad track record of the CBO showing its lack of understanding of economics or its adherence to rules which do not correspond to reality.
The CBO then goes on to say that direct government purchases of goods and services have a multiplier effect of 1.0 to 2.5 for every dollar spent! Well that is very interesting. If that were so then the stimulus bill expenditure of $825 billion would have increased the GDP by between 5.5% and 13.75%! Clearly, direct expenditures by government have no advantageous multiplier effect. In fact, we can calculate the effect from their own numbers for the GDP growth they claim for the stimulus bill. 0.8/5.5 = 0.145 for the lower bound multiplier and the upper bound multiplier would be 2.5/5.5 = 0.45. These calculated multipliers ranging from 0.14 to a clearly too high 0.45 are way below 1.0, which is more like what one expects from an incompetent and inefficient government with no real interest in human productivity.
Alan Reynolds, an unusually insightful economist, has written an excellent article entitled The Fed vs. the Recovery, which first appeared in the Wall Street Journal on 26 August 2011. It is on the CATO Institute website here. He says:
Alan Reynolds notes that
One of the commodities whose price was driven up by QE2 with important and devastating consequences was that of oil. As I have pointed out many times (thanks to reading Alan Reynolds), every postwar recession except that of 1960 has been triggered by a sudden increase in the price of oil. From August 2007 to July 2008 we had such an oil price spike as the value of the dollar fell and oil prices doubled. We had another large oil price increase due to the dollar losing value from late August 2010 when Bernanke announced QE2 until the end of April 2011. The price of oil increased from $72.91 to $112.30, an increase of 54%. Just the price of oil increasing suddenly has a very negative impact on our economy. This is aggravated by our refusal to allow reasonable increases in domestic production, which makes us more vulnerable to fluctuations in the value of the dollar relative to other currencies.
Both the Stimulus and the Quantitative Easing efforts have depressed the growth of the GDP and resulted in giving companies every incentive to hire aboard and every disincentive for hiring at home. Meanwhile, the regulatory, tax, anti-business, promotion of labor cost increases, and anti-energy policies and rhetoric of the Obama cabal has been added to the wrongheaded policies of the Federal Reserve to put us into a never-ending recession.
Jobs growth is not keeping up with the growth in population. The annual Consumer Price Index (CPI) stands at 3.6% and is running much higher in the last half year. The average American worker workweek decreased by 0.1 hours and earnings fell by $0.03, which is no way to keep up with the inflation. Labor productivity has very unusually been falling lately as well. These factors bode ill for further hiring.
The rest of the world economy is not in good shape either, so there is no chance that exports will do much to change the bleak picture of the American economy. The Purchasing Managers' Index (PMI), a measure of business purchasing activity, fell to a two-year low in August to 49.0. Numbers below 50.0 mean contraction of business activity is going on. Among the European countries with reduced activity are Great Britain, France, Spain, Italy, Ireland, and Greece. The positive PMI's of Germany, Sweden, and Switzerland dropped. The PMI of Japan is at a 3-month low and Taiwan's PMI is very negative at 45.2, its lowest value since January 2009. Canada's GDP contracted, largely due to a 2.1% drop in exports. The leading retailer in Australia expects falling sales. China has a PMI on the edge of contraction and its exports to the U.S. have fallen. The world economy is staggering.
In the U.S., the favorite Democrat central planning tools of stimulus spending and quantitative easing, or creating money from thin air, have not worked. What a surprise! Despite the GDP growth of the first half of the year being only 0.7%, the White House is telling us that GDP growth for the year will be 1.7%. Wow, what a howler that is! This means they are predicting growth in the second half of this year at an annual rate of 2.7%. I suppose they think that growth will occur because businessmen and consumers are trusting that Obama's speech on his economic recovery plans this week will solve all of our problems! For that to be so, all Americans would have to regress to the point that they believed that he could stop the oceans from rising and cure all of the diseases of the world, as many did when they first voted for him. I think many even of those favorable voters have learned something since! Even if that were the case, that growth which has not been evident through August, would have to occur entirely in the last 4 months of the year.
Let us examine a few issues with the stimulus approach loved by socialists. The CBO, not really a very reliable source, recently released a report saying that the $787 billion American Reinvestment and Recovery Act has really cost us a $825 billion increase in debt. They claim that they cannot figure out how many jobs were created by it, but it was somewhere between 1.4 million and an unbelievably generous 4 million. I do not think they seriously try to estimate the number of jobs lost due to the bill. So let us divide $825 billion by 1.4 million jobs and we find each job cost $589,300. While some investment is needed to create meaningful jobs, that is enough money to pay someone the median income of $46,300 for 12.7 years! I could readily provide several scientists with jobs with that amount of money, but the federal government is always incompetent and inefficient! While I do not believe there is even a 1% chance that the stimulus bill created 4 million jobs, even if it did, each job would have cost $206,250 which would have allowed me to provide at least 1.5 long-term new jobs in my laboratory instead of a mythical job.
The CBO report claims that printing up $0.825 trillion in a $15 trillion economy added between 0.8% and 2.5% to the GDP in real, inflation-adjusted growth. Printing this amount of money diluted the value of all money by at least 5.5% since 0.825/15 = 0.055. One could argue that the dilution of money value is proportional to the smaller value of money in circulation, making the dilution much greater than this. The act of printing that money did nothing to add to productivity so its effects upon production are transitory. Worse yet, that monetary dilution devalued all property, including the already depressed housing market, and all commodities, such as oil, cotton, corn, wood, and metals. Despite these huge negative effects, the CBO tells us that the expenditure increased the GDP by something in the range from 0.8% to a totally unbelievable 2.5%. Well, this is another instance of the very bad track record of the CBO showing its lack of understanding of economics or its adherence to rules which do not correspond to reality.
The CBO then goes on to say that direct government purchases of goods and services have a multiplier effect of 1.0 to 2.5 for every dollar spent! Well that is very interesting. If that were so then the stimulus bill expenditure of $825 billion would have increased the GDP by between 5.5% and 13.75%! Clearly, direct expenditures by government have no advantageous multiplier effect. In fact, we can calculate the effect from their own numbers for the GDP growth they claim for the stimulus bill. 0.8/5.5 = 0.145 for the lower bound multiplier and the upper bound multiplier would be 2.5/5.5 = 0.45. These calculated multipliers ranging from 0.14 to a clearly too high 0.45 are way below 1.0, which is more like what one expects from an incompetent and inefficient government with no real interest in human productivity.
Alan Reynolds, an unusually insightful economist, has written an excellent article entitled The Fed vs. the Recovery, which first appeared in the Wall Street Journal on 26 August 2011. It is on the CATO Institute website here. He says:
In demand-side theorizing, monetary stimulus means the Fed buys more bonds. The Treasury has certainly been selling a lot of bonds, and the Fed has been buying (monetizing) a huge share of those bonds. That helped push the broad M2 money supply up at a 6.8% rate over the past six months. Yet the only thing we have to show for all that stimulus over the past year has been rapid inflation of producer prices and a simultaneous slowdown in the growth of the private economy. Consumer price inflation also accelerated to 5.2% in the first quarter and 4.1% in the second, from just 1.4% in the third quarter of 2010.He notes that industrial supplies and materials account for 34.5% of our imported goods so far this year and capital equipment and parts add another 23% of imports. Because of the second quantitative easing (QE2) which began in November 2010 and ended in June of 2011, the value of the dollar fell about 15% relative to the Euro. The Economist's commodity-price index went up 50.9% in a year in dollars, but 22.8% in Euros. Our import prices rose by a 15.1% annual rate and our export prices rose by an annual 11.4% over the last three quarters under QE2. These effects reduced the growth of real GDP.
Alan Reynolds notes that
The net effect was to reduce the profitability of manufacturing and distributing products in the United States, and therefore to shift such activities (and jobs) to other countries which were less handicapped by the dollar's weakness.Fortunately for the S&P 500 companies, 46% for their sales came from other countries! As a result, their operating earnings per share rose from $20.40 a year earlier to $24.86 by June 2011. Thanks to our government's policy of printing money, this did most Americans little good.
One of the commodities whose price was driven up by QE2 with important and devastating consequences was that of oil. As I have pointed out many times (thanks to reading Alan Reynolds), every postwar recession except that of 1960 has been triggered by a sudden increase in the price of oil. From August 2007 to July 2008 we had such an oil price spike as the value of the dollar fell and oil prices doubled. We had another large oil price increase due to the dollar losing value from late August 2010 when Bernanke announced QE2 until the end of April 2011. The price of oil increased from $72.91 to $112.30, an increase of 54%. Just the price of oil increasing suddenly has a very negative impact on our economy. This is aggravated by our refusal to allow reasonable increases in domestic production, which makes us more vulnerable to fluctuations in the value of the dollar relative to other currencies.
Both the Stimulus and the Quantitative Easing efforts have depressed the growth of the GDP and resulted in giving companies every incentive to hire aboard and every disincentive for hiring at home. Meanwhile, the regulatory, tax, anti-business, promotion of labor cost increases, and anti-energy policies and rhetoric of the Obama cabal has been added to the wrongheaded policies of the Federal Reserve to put us into a never-ending recession.
04 September 2011
Is the U.S. More Socialist than Scandinavia?
It is in that we have a more progressive overall tax system than the Scandinavian countries of Denmark, Norway, and Sweden do.
In Denmark, the poorest 30% pay 14.1% of all taxes. In the United States, the poorest 30% pay only 6.1% of taxes. In Denmark, the richest 30% pay 48.7% of all taxes. But in the United States, the richest 30% are soaked for 65.3% of all taxes.
Our poorest 30% in the U.S. pay only 43% of the portion of all taxes paid by the poorest 30% in Denmark, which most Americans assume is much more socialist than we are. Meanwhile, our richest 30% pay 34% more of the total tax burden than do the richest 30% in Denmark. These are not small differences in the degree of our socialism. They are Titanic, with Titanic consequences. We are more into the envy of class warfare than are the Scandinavians!
The United States has one of the most progressive tax systems in the world. None of the Scandinavian countries are as bad at soaking their richer citizens and at giving their poorer citizens a pass in taking responsibility for the costs of the very government programs on which they have an equal vote. Americans are clearly living the socialist dream that those with the greatest income will carry those with less income. We are living by the socialist mantra that each shall provide to the rulers according to their means. The rulers will then use the money to subsidize those they who will support them politically with votes or money and to provide distracting circuses.
As with all countries that have tried to live by socialist principles, we are finding that many of the more able or willing to produce are having second thoughts. We are finding that some of the more able and responsible shrug and retire early. Or that some simply slowdown and hold their cards until such blithering fools as Obama and Harry Reid are removed from their positions in the 2012 elections. The majority of businessmen are in such a holding phase just now. Our economy is in the doldrums as a result and we will not see any growth either until after the November 2012 elections with an Obama loss or until it is absolutely clear that he will lose. Atlas has Shrugged and is waiting to see if he should put the World back on his shoulder at a later time.
The tax comparisons come from Government vs. Markets: The Changing Economic Role of the State (2011) by Vito Tanzi. Tanzi is a senior economic official of the IMF. The tax burden numbers for Denmark and the United States are given by Richard W. Rahn from an article published in the Washington Times on 31 August 2011. That article also appears on the CATO Institute website here.
In Denmark, the poorest 30% pay 14.1% of all taxes. In the United States, the poorest 30% pay only 6.1% of taxes. In Denmark, the richest 30% pay 48.7% of all taxes. But in the United States, the richest 30% are soaked for 65.3% of all taxes.
Our poorest 30% in the U.S. pay only 43% of the portion of all taxes paid by the poorest 30% in Denmark, which most Americans assume is much more socialist than we are. Meanwhile, our richest 30% pay 34% more of the total tax burden than do the richest 30% in Denmark. These are not small differences in the degree of our socialism. They are Titanic, with Titanic consequences. We are more into the envy of class warfare than are the Scandinavians!
The United States has one of the most progressive tax systems in the world. None of the Scandinavian countries are as bad at soaking their richer citizens and at giving their poorer citizens a pass in taking responsibility for the costs of the very government programs on which they have an equal vote. Americans are clearly living the socialist dream that those with the greatest income will carry those with less income. We are living by the socialist mantra that each shall provide to the rulers according to their means. The rulers will then use the money to subsidize those they who will support them politically with votes or money and to provide distracting circuses.
As with all countries that have tried to live by socialist principles, we are finding that many of the more able or willing to produce are having second thoughts. We are finding that some of the more able and responsible shrug and retire early. Or that some simply slowdown and hold their cards until such blithering fools as Obama and Harry Reid are removed from their positions in the 2012 elections. The majority of businessmen are in such a holding phase just now. Our economy is in the doldrums as a result and we will not see any growth either until after the November 2012 elections with an Obama loss or until it is absolutely clear that he will lose. Atlas has Shrugged and is waiting to see if he should put the World back on his shoulder at a later time.
The tax comparisons come from Government vs. Markets: The Changing Economic Role of the State (2011) by Vito Tanzi. Tanzi is a senior economic official of the IMF. The tax burden numbers for Denmark and the United States are given by Richard W. Rahn from an article published in the Washington Times on 31 August 2011. That article also appears on the CATO Institute website here.
17 August 2011
Socialized Medicine and a Doctor's Moral Obligation
A friend asked this question:
If the person has an entitlement mentality, then the doctor generally has no rational reason to help that person without remuneration. It is perfectly moral for him to walk away. In the context of a society of largely productive and benevolent people, a doctor may be rationally inclined to provide help to those who cannot afford to pay for their care, especially if they have become ill or hurt through no great fault of their own. But, even that depends on context, such as the expense the doctor will have in helping him and whether his helping the unfortunate person means that he is not able to help someone else who can pay. He is not obliged to save the poor man, while letting the financially prepared man die! If he gives too much of his time to helping the poor, he may not be able to generate enough income to buy the medical equipment that will enable him to save many lives in the future or he may simply go out of business. The doctor must make difficult moral decisions based on a very complex context. Some may appear to make a greater effort in benevolent acts than others, but still may not be saving the most lives possible.
Rational men are going to balance these difficult decisions differently and we should be careful in our appraisals of their morality. A doctor may be willing to give his services free in a given case, but he may be unable to convince a nurse and other assistants to give their time free. Or the hospital may be unwilling to make an operating room available. Now the proponent of socialized medicine will want to use force to make all of these needed experts and facilities available, but this is a violation of everyone's rights and cannot be tolerated in a civilized society.
My grandfather was a physician in the Great Depression. He was a surgeon who operated in the Mayo Clinic and all of the hospitals of Minneapolis and St. Paul. He did a very unusual number of operations on people who could not pay for them. But, people were different back then. A farmer might not have any money, but he would give Harry Christianson a chicken, which to the farmer was his fortune. Then very likely for 20 years after, when he could, he would stop by grandpa's home and leave a bag of potatoes or a bushel of corn. This was very welcome when rationing was going on in WWII for instance. Harry and his wife Bess always had free food and there was so much that Bess and her daughter Betty organized ways to get it into the hands of those in need in the city. One man decided he would paint grandpa's house in payment for an operation, but while he was painting the upper part of the exterior, union thugs knocked him off the ladder and shattered his leg. The man was not a union painter. He was just a farmer who wanted to pay a debt he believed he had. Harry and Bess put him up in one of their rooms until he was healed. The union later burned down their home because they did this.
So this is another important issue of context. There is value in helping people who put value on the help they receive. There is value in helping people who fundamentally believe that one should trade values for value.
There is little value in helping the ungrateful, however. Any deserving person, any person whose welfare one has reason to care about, will recognize the value they have received and will not presume that they have the rights of a master, while the doctor who worked so hard to develop his healing skills and knowledge is treated as his slave. A doctor or any other service provider has the right to choose his own values and to pursue his own happiness in terms of his values.
The need of a poor person does not deprive him of this equal individual right to pursue his happiness. Every man, whether poor or rich, whether a professional or a low-skilled worker, has this magnificent right to pursue his happiness. No one has the right to dictate the values or the moral code which will define what his happiness will be. All that can be required of another is that they are not allowed to initiate the use of force as a means to pursue their happiness.
This is very adequate for each of us when we exercise our freedoms and act within the private sector of our society. In the private sector we have a wealth of potential opportunities to cooperate with others whose values are sufficiently similar to ours or in some way complementary so that each of us can pursue our goals defined by our individually chosen values. When our values are not approved of by others, they are free to choose not to associate with us. This is the realm of the voluntary and is relished by those who want rich choices and who abhor being forced to bend to the will of others.
In contrast to this natural realm of freedom, we have the realm of the government. The principal property of government is its monopoly on the use of force in a society. Because a wise society seeks to minimize the use of force and seeks to maximize individual freedom of choice and association with others, such a society has a minimal government. Such a limited and legitimate government uses force only for the purpose of protecting the equal, sovereign rights of the individual to life, liberty, and the pursuit of happiness.
When government attempts to do more, it must necessarily do violence to the rights of the individual as it imposes values and moral codes upon the People. With this loss of freedom to choose one's values, one loses many of the freedoms to use one's own mind. One loses the choice of one's own goals. With the loss of one's own goals, one loses all hope. It is no accident that unfree societies become depressed societies with large increases in drug use, excessive alcohol use, and increased numbers of suicides. Big governments do much harm to individuals and are notable in the brutally of their violence against their people should any insist on exercising their sovereign rights. We see the party of biggest government verging close to a desire to let loose the hounds of hell upon the Tea Party people for just this reason. Over and over they have tried to label the Tea Party people who simply want to preserve some of their individual rights as terrorists and subversives. This makes the brutal nature of unlimited government all the more clear in our time.
One of the arguments I have heard from proponents of socialized medicine is that it is immoral to stand by while someone dies, and therefore society is obligated to help when someone is facing a life threatening illness but can't afford the treatment. Although there is much to refute in this type of statement, I am wondering about the more difficult refutation. As a personal decision of each doctor, is it rational to make the decision to deny treatment based upon the fact of a patient's inability to pay?The moral argument against socialized medicine, or ObamaCare in particular, is based on our equal, sovereign individual rights. It is not dependent upon whether a particular doctor decides that he must act to save a life independent of remuneration or not. It is an important moral principle that he is free to either be benevolent or not be benevolent. Now, I do believe benevolence is an important virtue, but benevolence is virtuous in the context that the person helped has value to the doctor. Benevolence is not about self-sacrifice, since that would hardly be benevolent to oneself.
If the person has an entitlement mentality, then the doctor generally has no rational reason to help that person without remuneration. It is perfectly moral for him to walk away. In the context of a society of largely productive and benevolent people, a doctor may be rationally inclined to provide help to those who cannot afford to pay for their care, especially if they have become ill or hurt through no great fault of their own. But, even that depends on context, such as the expense the doctor will have in helping him and whether his helping the unfortunate person means that he is not able to help someone else who can pay. He is not obliged to save the poor man, while letting the financially prepared man die! If he gives too much of his time to helping the poor, he may not be able to generate enough income to buy the medical equipment that will enable him to save many lives in the future or he may simply go out of business. The doctor must make difficult moral decisions based on a very complex context. Some may appear to make a greater effort in benevolent acts than others, but still may not be saving the most lives possible.
Rational men are going to balance these difficult decisions differently and we should be careful in our appraisals of their morality. A doctor may be willing to give his services free in a given case, but he may be unable to convince a nurse and other assistants to give their time free. Or the hospital may be unwilling to make an operating room available. Now the proponent of socialized medicine will want to use force to make all of these needed experts and facilities available, but this is a violation of everyone's rights and cannot be tolerated in a civilized society.
My grandfather was a physician in the Great Depression. He was a surgeon who operated in the Mayo Clinic and all of the hospitals of Minneapolis and St. Paul. He did a very unusual number of operations on people who could not pay for them. But, people were different back then. A farmer might not have any money, but he would give Harry Christianson a chicken, which to the farmer was his fortune. Then very likely for 20 years after, when he could, he would stop by grandpa's home and leave a bag of potatoes or a bushel of corn. This was very welcome when rationing was going on in WWII for instance. Harry and his wife Bess always had free food and there was so much that Bess and her daughter Betty organized ways to get it into the hands of those in need in the city. One man decided he would paint grandpa's house in payment for an operation, but while he was painting the upper part of the exterior, union thugs knocked him off the ladder and shattered his leg. The man was not a union painter. He was just a farmer who wanted to pay a debt he believed he had. Harry and Bess put him up in one of their rooms until he was healed. The union later burned down their home because they did this.
So this is another important issue of context. There is value in helping people who put value on the help they receive. There is value in helping people who fundamentally believe that one should trade values for value.
There is little value in helping the ungrateful, however. Any deserving person, any person whose welfare one has reason to care about, will recognize the value they have received and will not presume that they have the rights of a master, while the doctor who worked so hard to develop his healing skills and knowledge is treated as his slave. A doctor or any other service provider has the right to choose his own values and to pursue his own happiness in terms of his values.
The need of a poor person does not deprive him of this equal individual right to pursue his happiness. Every man, whether poor or rich, whether a professional or a low-skilled worker, has this magnificent right to pursue his happiness. No one has the right to dictate the values or the moral code which will define what his happiness will be. All that can be required of another is that they are not allowed to initiate the use of force as a means to pursue their happiness.
This is very adequate for each of us when we exercise our freedoms and act within the private sector of our society. In the private sector we have a wealth of potential opportunities to cooperate with others whose values are sufficiently similar to ours or in some way complementary so that each of us can pursue our goals defined by our individually chosen values. When our values are not approved of by others, they are free to choose not to associate with us. This is the realm of the voluntary and is relished by those who want rich choices and who abhor being forced to bend to the will of others.
In contrast to this natural realm of freedom, we have the realm of the government. The principal property of government is its monopoly on the use of force in a society. Because a wise society seeks to minimize the use of force and seeks to maximize individual freedom of choice and association with others, such a society has a minimal government. Such a limited and legitimate government uses force only for the purpose of protecting the equal, sovereign rights of the individual to life, liberty, and the pursuit of happiness.
When government attempts to do more, it must necessarily do violence to the rights of the individual as it imposes values and moral codes upon the People. With this loss of freedom to choose one's values, one loses many of the freedoms to use one's own mind. One loses the choice of one's own goals. With the loss of one's own goals, one loses all hope. It is no accident that unfree societies become depressed societies with large increases in drug use, excessive alcohol use, and increased numbers of suicides. Big governments do much harm to individuals and are notable in the brutally of their violence against their people should any insist on exercising their sovereign rights. We see the party of biggest government verging close to a desire to let loose the hounds of hell upon the Tea Party people for just this reason. Over and over they have tried to label the Tea Party people who simply want to preserve some of their individual rights as terrorists and subversives. This makes the brutal nature of unlimited government all the more clear in our time.
15 August 2011
Actions Speak Louder than Words: Obama Hates Small Business
For each of the last five months, the National Federation of Independent Businesses (NFIB) has found that the business optimism of small business owners has fallen. With First Quarter 2011 GDP growth dropped to 0.4% and Second Quarter GDP growth presently said to be 1.3%, some earlier optimism that this never-ending Great Socialist Recession was showing some signs of recovery has vanished. Indeed, it is not even clear that if price inflation were taken into account properly that the so-called growth of the first two quarters of this year was not really a contraction of the economy. We may very well actually have had the second dip of this recession already. The Manufacturing Index has also been very disappointing. Real estate values show no sign of recovery and consumer spending is still limping along.
Every time Obama and the Democrats push to provide extended unemployment benefits to the unemployed, the states have to continue using much higher than normal unemployment tax rates on the employees of businesses. My company's rate in 2010 and 2011 is 7.33 times higher than it was 2008, despite our never having let an employee go who was eligible to collect unemployment insurance benefits. This is not an incentive to small businesses to hire more employees and makes it harder to keep the employees they have. Being forced to let a good employee go is definitely an optimism killer when you are running a small business.
Small businesses are also hit by the increased costs and bureaucracy they will have to expect with ObamaCare. The Dodd-Frank financial industry reform bill has especially cut them off from the big lenders with assets in excess of $100 billion. The increased regulatory burdens imposed by Obama's EPA, FDA, FTC, DOD, FDIC, Consumer Protection Agency, the NLRB, and the restrictions on oil and gas drilling have been hardest on small businesses who cannot afford legions of lawyers to deal with the government bureaucracy. When the FDA or DOD require a business to become ISO-certified as proof of quality controls, that cost is proportionally much greater on a small business than on a larger business. This is a very real discrimination against small businesses and often has only cosmetic effects on real quality controls since the business owner and upper management in a small firm are much more likely to be on top of quality issues than the corresponding management is in a big business. New FDA oversight of small food retailers and producers is another major cost escalator for many small businesses. Since few people were dying of food poisoning, there is no significant benefit to this new Obama cost.
Falling demand has been the biggest problem for small businesses which are less likely to participate heavily in the export markets as the large multinational companies do. There are better opportunities for profits and sales abroad in many areas than here in the U.S., thanks to the Obama administration economy-wrecking policies. Small business owners are also very worried about the uncertainties caused by excessive government spending and the rapid increase in the national debt. The more spending government does, the more it interferes with business activity. Since 2001, the GDP has grown by 46%, but the national debt has grown by 146%! The Federal Reserve bought about three-quarters of U.S. Treasury Bonds in 2009 and 2010, thereby increasing its balance sheet from $896 billion in August 2007 at the start of the housing bubble collapse to $2.9 trillion now. This is clearly not sustainable, yet there is no end in sight to this method of "covering" the absurd spending of the government. The excessive spending and debt both cause pressure of increased taxes or inflation in the near future. Business taxes are already much too high.
While only about 8% of small businesses name access to credit as their primary problem in NFIB surveys, it is clear that the credit needs of many small businesses are not being met. Interest rates were increased on many lines of credit, business loans, and business credit cards. 40% of small businesses attempting to borrow in 2009 were able to meet their credit needs, 10% had most of their needs met, 21% had some, and 23% had none of their credit needs met. With the gathering worries of satisfying the Dodd-Frank finance reform bill, this situation is becoming worse as this recession drags on and on and on. Small businesses commonly do not have the resources to last through multiple years of recession. Banks are especially refusing to lend money to fill in cash flow problems.
Small business owners generally own real estate. In the NFIB 2009 study, 95% had real estate. The fact that most real estate has lost considerable value has deprived many small business owners of the collateral they would commonly use to secure credit. 13% of small business owners had at least one property worth less than what they owed on it. The loss of property values has left many small businesses much more vulnerable.
Into this sorry picture of woes for small businesses, the Obama administration FDIC has been squeezing banks to loan less money to small businesses, which it regards as less credit worthy as a group. On that they may be right, but as is the rule with government, the assessment is a one-size-fits-all assessment. Main Street Bank of Kingwood, Texas specializes in small business loans. Main Street Bank has a $175 million loan portfolio and 90% of it goes to small businesses. Most of these businesses have annual revenue less than $1 million. The average loan size is $100,000. Main Street had a profit of $1 million in the Second Quarter and wrote off 1.25% of its loans as bad. The failure rate of loans in the FDIC insured banks in the First Quarter was 1.82%. The FDIC has not released the bad loan rate for the Second Quarter yet. Government is slow.
Despite the success of Main Street Bank in its small business loan strategy, the FDIC slapped it in July 2010 with an order to increase its capital and reduce the proportion of its small business loans from 90% to 25%. The bank was also ordered to hire another bank executive. It had to sell a business and shrink its loan portfolio to meet the increased capitalization requirement. This increase in capitalization was a large one, from 9.5% in June 2010 to 17.3% in June 2011. As a result of this FDIC interference in their business, Main Street Bank is working hard to turn in its bank charter. A new company is being set up, Ascentium Capital, which will have backing from a private group of investors and will no longer take customer deposits. This business will not be regulated and will be able to continue to specialize in small business loans. They plan to increase the loan portfolio to $500 million.
The reduction from 90% of Main Street Bank loans to 25% for small businesses, removed $114 million of small business credit from the market. Now imagine this kind of thing happening all over the country as the FDIC goes from bank to bank and prescribes lowered small business loan exposure. The impact on small business credit will be huge. This is very important, because a large fraction of American workers are employed by small firms and much innovation occurs in these companies. A lack of access to credit during an extended recession makes these myriad small businesses more likely to fail. The Obama administration policy is clearly to subsidize and bailout big businesses, but to slash and plunder small businesses.
Interestingly enough, the Small Business Administration has been repeatedly cited for guaranteeing lenders loans at 85% of the loan for which the lenders are considered to be at high risk in 80% of SBA 7(a) loans. Their loan failures run many times higher than those of Main Street Bank! While their loans go to only 0.2% of small businesses, they have an outlandish failure rate of 19.4%. Perhaps the Obama crew should be more concerned with controlling this loan failure rate than that of a private bank which knows its business very well.
That tendency to plunder small business could not be made more clear than by Obama's constant effort to raise taxes on those earning more than something between $200,000 and $250,000 a year. His efforts to widen the death tax is another indicator of his evil intentions with respect to small businesses. It is politically much easier to plunder small businesses than it is to tackle big businesses with their many savvy lawyers and lobbyists. It is also easier to over-regulate small businesses. Socialists do not like business owners and managers. They are equated with labor exploiters, no matter how many goods and services they produce for free consumers and no matter how many jobs they may provide. Obama and his crew of insiders are nothing if they are not true socialists. Small businesses are made to pay a heavy price as a result of their present power.
Every time Obama and the Democrats push to provide extended unemployment benefits to the unemployed, the states have to continue using much higher than normal unemployment tax rates on the employees of businesses. My company's rate in 2010 and 2011 is 7.33 times higher than it was 2008, despite our never having let an employee go who was eligible to collect unemployment insurance benefits. This is not an incentive to small businesses to hire more employees and makes it harder to keep the employees they have. Being forced to let a good employee go is definitely an optimism killer when you are running a small business.
Small businesses are also hit by the increased costs and bureaucracy they will have to expect with ObamaCare. The Dodd-Frank financial industry reform bill has especially cut them off from the big lenders with assets in excess of $100 billion. The increased regulatory burdens imposed by Obama's EPA, FDA, FTC, DOD, FDIC, Consumer Protection Agency, the NLRB, and the restrictions on oil and gas drilling have been hardest on small businesses who cannot afford legions of lawyers to deal with the government bureaucracy. When the FDA or DOD require a business to become ISO-certified as proof of quality controls, that cost is proportionally much greater on a small business than on a larger business. This is a very real discrimination against small businesses and often has only cosmetic effects on real quality controls since the business owner and upper management in a small firm are much more likely to be on top of quality issues than the corresponding management is in a big business. New FDA oversight of small food retailers and producers is another major cost escalator for many small businesses. Since few people were dying of food poisoning, there is no significant benefit to this new Obama cost.
Falling demand has been the biggest problem for small businesses which are less likely to participate heavily in the export markets as the large multinational companies do. There are better opportunities for profits and sales abroad in many areas than here in the U.S., thanks to the Obama administration economy-wrecking policies. Small business owners are also very worried about the uncertainties caused by excessive government spending and the rapid increase in the national debt. The more spending government does, the more it interferes with business activity. Since 2001, the GDP has grown by 46%, but the national debt has grown by 146%! The Federal Reserve bought about three-quarters of U.S. Treasury Bonds in 2009 and 2010, thereby increasing its balance sheet from $896 billion in August 2007 at the start of the housing bubble collapse to $2.9 trillion now. This is clearly not sustainable, yet there is no end in sight to this method of "covering" the absurd spending of the government. The excessive spending and debt both cause pressure of increased taxes or inflation in the near future. Business taxes are already much too high.
While only about 8% of small businesses name access to credit as their primary problem in NFIB surveys, it is clear that the credit needs of many small businesses are not being met. Interest rates were increased on many lines of credit, business loans, and business credit cards. 40% of small businesses attempting to borrow in 2009 were able to meet their credit needs, 10% had most of their needs met, 21% had some, and 23% had none of their credit needs met. With the gathering worries of satisfying the Dodd-Frank finance reform bill, this situation is becoming worse as this recession drags on and on and on. Small businesses commonly do not have the resources to last through multiple years of recession. Banks are especially refusing to lend money to fill in cash flow problems.
Small business owners generally own real estate. In the NFIB 2009 study, 95% had real estate. The fact that most real estate has lost considerable value has deprived many small business owners of the collateral they would commonly use to secure credit. 13% of small business owners had at least one property worth less than what they owed on it. The loss of property values has left many small businesses much more vulnerable.
Into this sorry picture of woes for small businesses, the Obama administration FDIC has been squeezing banks to loan less money to small businesses, which it regards as less credit worthy as a group. On that they may be right, but as is the rule with government, the assessment is a one-size-fits-all assessment. Main Street Bank of Kingwood, Texas specializes in small business loans. Main Street Bank has a $175 million loan portfolio and 90% of it goes to small businesses. Most of these businesses have annual revenue less than $1 million. The average loan size is $100,000. Main Street had a profit of $1 million in the Second Quarter and wrote off 1.25% of its loans as bad. The failure rate of loans in the FDIC insured banks in the First Quarter was 1.82%. The FDIC has not released the bad loan rate for the Second Quarter yet. Government is slow.
Despite the success of Main Street Bank in its small business loan strategy, the FDIC slapped it in July 2010 with an order to increase its capital and reduce the proportion of its small business loans from 90% to 25%. The bank was also ordered to hire another bank executive. It had to sell a business and shrink its loan portfolio to meet the increased capitalization requirement. This increase in capitalization was a large one, from 9.5% in June 2010 to 17.3% in June 2011. As a result of this FDIC interference in their business, Main Street Bank is working hard to turn in its bank charter. A new company is being set up, Ascentium Capital, which will have backing from a private group of investors and will no longer take customer deposits. This business will not be regulated and will be able to continue to specialize in small business loans. They plan to increase the loan portfolio to $500 million.
The reduction from 90% of Main Street Bank loans to 25% for small businesses, removed $114 million of small business credit from the market. Now imagine this kind of thing happening all over the country as the FDIC goes from bank to bank and prescribes lowered small business loan exposure. The impact on small business credit will be huge. This is very important, because a large fraction of American workers are employed by small firms and much innovation occurs in these companies. A lack of access to credit during an extended recession makes these myriad small businesses more likely to fail. The Obama administration policy is clearly to subsidize and bailout big businesses, but to slash and plunder small businesses.
Interestingly enough, the Small Business Administration has been repeatedly cited for guaranteeing lenders loans at 85% of the loan for which the lenders are considered to be at high risk in 80% of SBA 7(a) loans. Their loan failures run many times higher than those of Main Street Bank! While their loans go to only 0.2% of small businesses, they have an outlandish failure rate of 19.4%. Perhaps the Obama crew should be more concerned with controlling this loan failure rate than that of a private bank which knows its business very well.
That tendency to plunder small business could not be made more clear than by Obama's constant effort to raise taxes on those earning more than something between $200,000 and $250,000 a year. His efforts to widen the death tax is another indicator of his evil intentions with respect to small businesses. It is politically much easier to plunder small businesses than it is to tackle big businesses with their many savvy lawyers and lobbyists. It is also easier to over-regulate small businesses. Socialists do not like business owners and managers. They are equated with labor exploiters, no matter how many goods and services they produce for free consumers and no matter how many jobs they may provide. Obama and his crew of insiders are nothing if they are not true socialists. Small businesses are made to pay a heavy price as a result of their present power.
07 August 2011
A Glacial July Employment Growth
Amid the chaos and the great effort of our federal government to sabotage the private sector, that often heroic and under-appreciated sector of our society struggled to create a few jobs. The number of missing jobs fell from 13.30% to 13.21%. This continues the pattern throughout the Great Socialist Recession of worsening and then briefly bettering job growth, but with the job creation never vigorous.
The number of missing jobs decreased by 132,000 jobs in July. At this rate of net job creation, the number of missing jobs will be as few as the 11,023,000 of December 2007 in a mere 78.4 months or 6.5 years. Of course, that assumes that even this anemic rate of job creation can be sustained. Between now and the 2012 election, I doubt that it will be.
The job statistics table is given below. The missing jobs are calculated in comparison to January 2000 when there are plenty of good jobs available for those who wanted to work. At that time, 67.49% of the total non-institutional civilian working age population was working or looking for work. The unemployment rate was only 4.04% then. Many of the unemployed were actually just switching jobs with a little time off in between. How we long for those times!
I would expect the August jobs report to show some deterioration based on the fact that from the time a company decides to hire someone to the time they have and that person starts work, is usually a number of weeks. Four weeks prior to mid-July was a time when the growth in GDP in the First Quarter was still thought to be 1.9%, not the second revision downward to 0.4%. The Second Quarter disappointing growth rate of 1.3% was also unknown. That was also a time when many major corporations, many of whom are doing better than most small businesses, were reporting fairly good earnings, largely made abroad. The effort of Obama and the Democrats to once again raise taxes in the debt ceiling negotiations and their winning of a nearly blank check to continue mad government spending levels, will further discourage business activity. Many a small businessman has simply decided to wait until after the 2012 election to see if there will be any hope for expansion of their business.
Obama's continued talk of creating jobs with high speed trains, green energy projects, electric cars, stimulus spending on infrastructure, extended unemployment benefits, and job training programs is just a continuation of ruinous transfers of wealth from the private sector to the government sector. The actions are all job-destroyers.
It is not a help to businesses to hire if extending jobless benefits means that states will continue the high unemployment insurance rates charged to companies on every employee they have. Because of these unemployment funds, my company tax rate went up by a factor of 7.33 in 2009 and has continued there since. This is not the way to encourage companies to hire more people. But it is among Obama's crazy prescriptions.
The number of missing jobs decreased by 132,000 jobs in July. At this rate of net job creation, the number of missing jobs will be as few as the 11,023,000 of December 2007 in a mere 78.4 months or 6.5 years. Of course, that assumes that even this anemic rate of job creation can be sustained. Between now and the 2012 election, I doubt that it will be.
The job statistics table is given below. The missing jobs are calculated in comparison to January 2000 when there are plenty of good jobs available for those who wanted to work. At that time, 67.49% of the total non-institutional civilian working age population was working or looking for work. The unemployment rate was only 4.04% then. Many of the unemployed were actually just switching jobs with a little time off in between. How we long for those times!
I would expect the August jobs report to show some deterioration based on the fact that from the time a company decides to hire someone to the time they have and that person starts work, is usually a number of weeks. Four weeks prior to mid-July was a time when the growth in GDP in the First Quarter was still thought to be 1.9%, not the second revision downward to 0.4%. The Second Quarter disappointing growth rate of 1.3% was also unknown. That was also a time when many major corporations, many of whom are doing better than most small businesses, were reporting fairly good earnings, largely made abroad. The effort of Obama and the Democrats to once again raise taxes in the debt ceiling negotiations and their winning of a nearly blank check to continue mad government spending levels, will further discourage business activity. Many a small businessman has simply decided to wait until after the 2012 election to see if there will be any hope for expansion of their business.
Obama's continued talk of creating jobs with high speed trains, green energy projects, electric cars, stimulus spending on infrastructure, extended unemployment benefits, and job training programs is just a continuation of ruinous transfers of wealth from the private sector to the government sector. The actions are all job-destroyers.
It is not a help to businesses to hire if extending jobless benefits means that states will continue the high unemployment insurance rates charged to companies on every employee they have. Because of these unemployment funds, my company tax rate went up by a factor of 7.33 in 2009 and has continued there since. This is not the way to encourage companies to hire more people. But it is among Obama's crazy prescriptions.
15 July 2011
Obama Cruelly Threatens to Withhold Social Security Payments
There is no cruelty to match that of a frustrated socialist yearning for control over the People. Obama has told tens of millions of very frightened seniors on Social Security that if the Republicans do not cave-in and give him a blank check to continue spending massive amounts of taxpayer money and then add much more to the national debt, he may not send out Social Security checks in August. This is probably an empty threat, but that does not diminish the brutality of it.
By any rational analysis, it is also an absurd threat. In 2010, Social Security income was $677.1 billion according to the Social Security Fund Trustee's Report. Social Security outgo was $584.9 billion, which means it had a surplus of income over outgo of $92.2 billion. That surplus was used to help fund the massive deficit spending on all other government programs, as the Social Security surplus has been used for decades. Because of this, of the $677.1 billion of income, $108.2 billion is interest on government bonds the Social Security Trust Fund bought to help the government finance its deficits in the general fund for decades.
The Obama administration wants to keep spending money it does not have on such things as
Let us suppose that he chooses not to use the federal income from income taxes, corporate taxes, capital gains taxes, tariffs, gasoline and cigarette taxes, and many other taxes to pay the $108 billion owed the Social Security Fund in current interest payments. In other words, he might make payments on interest to the Chinese and to investors, but not to the Social Security Fund. The Social Security surplus of $92.2 billion would then be turned into a small deficit of $16.0 billion. If he then did not send out that $16.0 billion, but did send out the remaining $568.9 billion of checks, this would mean that 2.8% of Social Security payments would not go out. But, there is no way that $16 billion shortfall due to the default on the interest payment would not be made up by any President not grasping at power as a lust-driven would-be dictator.
Obama's threat really has struck terror into the hearts of many Americans on Social Security. This was a totally irresponsible and pernicious act on the part of this cruel and evil man. It seems to take such people to be the strongest advocates of socialism. Despite its pretenses of caring for the needs of some of the People, those who pursue this so-called ideal as a career are never actually caring people.
This entire fuss about the debt ceiling is due to the failure of the Senate to produce a budget for over two years. The House would not produce one either until the Republicans took it over. But, the Senate and the President have ignored their budget. Since no agreement has been reached on what the government will spend in 2012, there is no basis for an agreement on what spending cuts will be made to reduce the deficit to some manageable proportion of our GDP. All we know is that the record over the last three years was for the government to spend an average of more than 24% of GDP, while before 2008, the spending was below 20% of GDP. Obama and the Democrats appear to want to continue spending much more than 20% of GDP even though that will mean huge on-going deficits. Apparently, they intend that this funding will be the result of many more continuing resolutions on spending, so they will never have to recognize that the welfare and crony mercantilist government they want is not sustainable. They can ignore the failure of big government socialism as long as they do not have to produce an actual budget. Unless, of course, we collapse as Greece is and Italy may be on the verge of doing.
A 4% of GDP reduction in government spending is more than a $600 billion reduction per year. It is clearly easy for the government to function at its 2007 spending levels, so there is no excuse for spending cuts that are not in the $600 to $700 billion per year range relative to the spending of this year and the two previous years.
By any rational analysis, it is also an absurd threat. In 2010, Social Security income was $677.1 billion according to the Social Security Fund Trustee's Report. Social Security outgo was $584.9 billion, which means it had a surplus of income over outgo of $92.2 billion. That surplus was used to help fund the massive deficit spending on all other government programs, as the Social Security surplus has been used for decades. Because of this, of the $677.1 billion of income, $108.2 billion is interest on government bonds the Social Security Trust Fund bought to help the government finance its deficits in the general fund for decades.
The Obama administration wants to keep spending money it does not have on such things as
- the expenses of setting up the bureaucracy and rules for ObamaCare,
- setting up the bureaucracy and rules for the Dodd-Frank finance "reform",
- paying ethanol, windmill, electric vehicle, solar, and other "green" energy subsidies,
- paying higher electric and gasoline bills because it is foolishly convinced by its own propaganda that man is causing a catastrophic global warming,
- paying hordes of scientists to prove this false catastrophic man-made global warming hypothesis,
- persecuting business with reinvigorated threats of anti-trust actions,
- putting more people on Medicaid and Medicare,
- paying bloated union wages on federal contracts,
- using the Labor Department to provide site requirements to companies for their expansions while considering only Union Shop states,
- using the Justice Department to promulgate injustice against the states and the people and discrimination against those not in government-favored minorities,
- funding universities that long ago became bloated with government money and stopped educating students,
- promulgating tens of thousands of new regulations which serve no useful purpose but to increase the power of bureaucrats over the People who do not have the time to read the regulations,
- and providing funding to the United Nations, the IMF, the World Bank and many other international institutions that do not like the U.S. and hate our Constitution and concept of individual rights.
Let us suppose that he chooses not to use the federal income from income taxes, corporate taxes, capital gains taxes, tariffs, gasoline and cigarette taxes, and many other taxes to pay the $108 billion owed the Social Security Fund in current interest payments. In other words, he might make payments on interest to the Chinese and to investors, but not to the Social Security Fund. The Social Security surplus of $92.2 billion would then be turned into a small deficit of $16.0 billion. If he then did not send out that $16.0 billion, but did send out the remaining $568.9 billion of checks, this would mean that 2.8% of Social Security payments would not go out. But, there is no way that $16 billion shortfall due to the default on the interest payment would not be made up by any President not grasping at power as a lust-driven would-be dictator.
Obama's threat really has struck terror into the hearts of many Americans on Social Security. This was a totally irresponsible and pernicious act on the part of this cruel and evil man. It seems to take such people to be the strongest advocates of socialism. Despite its pretenses of caring for the needs of some of the People, those who pursue this so-called ideal as a career are never actually caring people.
This entire fuss about the debt ceiling is due to the failure of the Senate to produce a budget for over two years. The House would not produce one either until the Republicans took it over. But, the Senate and the President have ignored their budget. Since no agreement has been reached on what the government will spend in 2012, there is no basis for an agreement on what spending cuts will be made to reduce the deficit to some manageable proportion of our GDP. All we know is that the record over the last three years was for the government to spend an average of more than 24% of GDP, while before 2008, the spending was below 20% of GDP. Obama and the Democrats appear to want to continue spending much more than 20% of GDP even though that will mean huge on-going deficits. Apparently, they intend that this funding will be the result of many more continuing resolutions on spending, so they will never have to recognize that the welfare and crony mercantilist government they want is not sustainable. They can ignore the failure of big government socialism as long as they do not have to produce an actual budget. Unless, of course, we collapse as Greece is and Italy may be on the verge of doing.
A 4% of GDP reduction in government spending is more than a $600 billion reduction per year. It is clearly easy for the government to function at its 2007 spending levels, so there is no excuse for spending cuts that are not in the $600 to $700 billion per year range relative to the spending of this year and the two previous years.
11 July 2011
California Cities Cool in Last Decade
Meteorologist Jan Null compared the temperature and precipitation records of the National Climatic Data Center for many California cities for the earlier period of 1971-2000 to the period from 1981-2010. The later period generally was cooler, with increased precipitation. The temperature records of rural areas commonly do not show the temperature increases commonly seen in cities due to the urban heat island effect. When even the temperature of cities is going down on most of our West Coast, this is a dramatic event. It must have been an especially unwelcome outcome for Jan Null, who is an ardent catastrophic man-made global warming booster. The results of his study were published in the San Francisco newspaper The Chronicle on 6 July with a very nice graphic by Todd Trumbull.
Null claimed that man-made global warming caused the warming in Redding and Fresno and the warmth there caused cool air to be drawn in from the sea to cool the coastal cities. Why they would have a cooling effect on Los Angeles and San Diego is surely unclear. Indeed, warm temperatures in the Central Valley usually are caused by high pressure systems that actually cause winds along the coast to go out to sea and the warming of the coastal areas. Null was apparently desperate to null out the use of his analysis of the data as a refutation of man-made global warming.
One also has to wonder why the data sets used have a 20-year period of overlap. That 20-year overlap with only 10 years on the earlier end or on the later end, should cause any net cooling effect from 2001 to 2010 compared to the start period for the last cycle of warming claimed generally from 1971 to 1980 to be minimized. Perhaps that was the point of the long overlap.
Given California's problems with insufficient water supply, the increased precipitation in most of the areas ought to be a positive thing, rather than a catastrophe. I will not claim the drop in temperatures is a good thing, but it sure does take some wind out of the sails of the catastrophic man-made global warming alarmists who are always using temperature increases, either real or due to urban heat island effects, as evidence that CO2 emissions are going to kill the planet.
Actually, if the increased precipitation is raising the humidity enough, it is possible that the lowered temperatures do not actually mean a reduction of heat energy. This is because more humid air can hold a lot more energy at a given temperature than drier air. But, the man-made global warming alarmists do not take note of this when they use any warming of air to claim that it was caused by man's CO2 emissions.
Null claimed that man-made global warming caused the warming in Redding and Fresno and the warmth there caused cool air to be drawn in from the sea to cool the coastal cities. Why they would have a cooling effect on Los Angeles and San Diego is surely unclear. Indeed, warm temperatures in the Central Valley usually are caused by high pressure systems that actually cause winds along the coast to go out to sea and the warming of the coastal areas. Null was apparently desperate to null out the use of his analysis of the data as a refutation of man-made global warming.
One also has to wonder why the data sets used have a 20-year period of overlap. That 20-year overlap with only 10 years on the earlier end or on the later end, should cause any net cooling effect from 2001 to 2010 compared to the start period for the last cycle of warming claimed generally from 1971 to 1980 to be minimized. Perhaps that was the point of the long overlap.
Given California's problems with insufficient water supply, the increased precipitation in most of the areas ought to be a positive thing, rather than a catastrophe. I will not claim the drop in temperatures is a good thing, but it sure does take some wind out of the sails of the catastrophic man-made global warming alarmists who are always using temperature increases, either real or due to urban heat island effects, as evidence that CO2 emissions are going to kill the planet.
Actually, if the increased precipitation is raising the humidity enough, it is possible that the lowered temperatures do not actually mean a reduction of heat energy. This is because more humid air can hold a lot more energy at a given temperature than drier air. But, the man-made global warming alarmists do not take note of this when they use any warming of air to claim that it was caused by man's CO2 emissions.
09 July 2011
The Obama Jobs Catastrophe Continues in June
Once again this June's unemployment numbers, offer no indication that the very high employment rates of the last three and a half years are abating or improving. Despite the wild-eyed claims of the Obama administration, the Stimulus Bills and the drunken spending of the federal government over this period has resulted in no jobs growth improvements. Combining these wasteful transfers of wealth from the private sector to the control of the government with the expenses and uncertainties of ObamaCare, the Dodd-Frank finance reform bill, the concerted efforts to force us to go abroad more and more for oil and gas while leaving extensive fields undeveloped at home and rejecting Canadian offers of tar sand oil, the efforts to bankrupt all of the coal-fired electric plants, the increased threat of anti-trust lawsuits, the developed world's highest corporate tax rate, a Justice Department bent only upon injustice, mandates for the use of unreliable and very expensive energy at unattainable levels in the near future, and myriad other anti-business and anti-earning-a-living efforts, has had just the impact on employment anyone not brain-dead would expect.
The employment numbers for June 2011 are shown in the table below based on the more job-inclusive household survey data, which is not here seasonally adjusted. The Jun 2011 data is best compared to the July 2010 data to see if there has been any improvement in jobs creation over the past year under Obama's watch.
In making that comparison, the unemployment rate seems to have fallen from 13.75% in July 2010 to the June 2011 rate of 9.32%. Unfortunately, this is only because many more people have given up on finding employment in that time. It is more significant to note that 140,134,000 people were employed full-time in July 2010, while only 140,129,000 were employed in June 2011. This is an actual decrease in the number of Americans employed by 5,000. That is not a significant decrease, unless you take it in the context that the civilian working age population increased by 1.6 million people in that time! A stagnant economy at least creates jobs enough to employ those of the growing population who want to work. The effects of the socialist policies to remove vast wealth and decision-making power from the private sector to the government have produced an economy that cannot even keep up with population growth, let alone actually make progress on recovering from the Great Socialist Recession.
Based on January 2000 when the economy was robust and the existence of good jobs enticed many Americans to take jobs and the unemployment rate was a meaningful 4.0%, we can calculate how many jobs we would need now to have a similar good job economy. The number of missing jobs now is 21,502,000, which is 1,084,000 more missing jobs than in July 2010. One would have to say that Obama's so-called effort to "create jobs" is actually a job-destruction effort, which is very effective in doing that. After any normal recession, the private sector makes adjustments and comes roaring back. Obama has strangled the lion's roar.
An unemployment rate of 13.3% based on the number of missing jobs is a much more realistic unemployment rate than the 9.2% rate given by the Bureau of Labor Statistics of the Obama administration. To that we have to add the 8.9 million employed only part time for economic reasons, according to the BLS. They want full-time jobs, but cannot find them. This makes a full-time job shortage of at least 18.8%. This still does not count the many millions of Americans working at jobs for which they are educationally and by experience over-qualified.
As has been historical demonstrated over and over, socialism is a disaster for people who want to earn a decent living, over and above the value many of us attach to our liberties and other aspects of being able to manage our own lives.
The employment numbers for June 2011 are shown in the table below based on the more job-inclusive household survey data, which is not here seasonally adjusted. The Jun 2011 data is best compared to the July 2010 data to see if there has been any improvement in jobs creation over the past year under Obama's watch.
In making that comparison, the unemployment rate seems to have fallen from 13.75% in July 2010 to the June 2011 rate of 9.32%. Unfortunately, this is only because many more people have given up on finding employment in that time. It is more significant to note that 140,134,000 people were employed full-time in July 2010, while only 140,129,000 were employed in June 2011. This is an actual decrease in the number of Americans employed by 5,000. That is not a significant decrease, unless you take it in the context that the civilian working age population increased by 1.6 million people in that time! A stagnant economy at least creates jobs enough to employ those of the growing population who want to work. The effects of the socialist policies to remove vast wealth and decision-making power from the private sector to the government have produced an economy that cannot even keep up with population growth, let alone actually make progress on recovering from the Great Socialist Recession.
Based on January 2000 when the economy was robust and the existence of good jobs enticed many Americans to take jobs and the unemployment rate was a meaningful 4.0%, we can calculate how many jobs we would need now to have a similar good job economy. The number of missing jobs now is 21,502,000, which is 1,084,000 more missing jobs than in July 2010. One would have to say that Obama's so-called effort to "create jobs" is actually a job-destruction effort, which is very effective in doing that. After any normal recession, the private sector makes adjustments and comes roaring back. Obama has strangled the lion's roar.
An unemployment rate of 13.3% based on the number of missing jobs is a much more realistic unemployment rate than the 9.2% rate given by the Bureau of Labor Statistics of the Obama administration. To that we have to add the 8.9 million employed only part time for economic reasons, according to the BLS. They want full-time jobs, but cannot find them. This makes a full-time job shortage of at least 18.8%. This still does not count the many millions of Americans working at jobs for which they are educationally and by experience over-qualified.
As has been historical demonstrated over and over, socialism is a disaster for people who want to earn a decent living, over and above the value many of us attach to our liberties and other aspects of being able to manage our own lives.
05 July 2011
American Exceptionalism in the Moral Foundation of the Declaration of Independence
The United States of America is unusual in that it became a nation comparatively recently and its People have maintained a similar philosophy of government, at least implicitly, throughout its lifetime. For decades, however, the Progressive Elitists have been working hard to change that philosophy to one more like that of most nation-states and their societies. What is the keystone of the American philosophy of government and why would Progressive Elitists want to change it?
The Declaration of Independence clearly spelled out the central fact of the exceptional American Principle of Government. Without this great and noble document, our Constitution cannot be viewed in its proper context and becomes a much weakened limit on the scope and powers of government. The United States of America were declared independent of Great Britain on 4 July 1776 with a very exceptional purpose in the annals of nations. Other nations simply had a government controlled by aristocrats, commonly in an alliance with high-level clergy, who were empowered to protect the people and take care of them, at least in theory. Our first founding document, The Declaration of Independence, clearly and emphatically states that a legitimate government is the tool of the People as the holders of sovereign, equal individual rights to protect and defend their rights. This is the first part of the exceptional American Principle of Government.
Let us read this straight from the Declaration of Independence:
The Constitution was ordained and established by the People as our second form of government in 1789 after they had found that the first form of government under the Articles of Confederation was somewhat too weak. The People wanted a federal government more capable of providing defense, without too heavy a dependence upon the states. They found it necessary to prevent the states from violating the property rights of the People and from prohibiting or impeding their trading with one another in commerce. They needed a government more capable of dealing with foreign powers. They needed a government to help them establish courts to handle disputes across state lines, nationwide postal service with post roads, patent laws, provide a common coinage, and common weights and measures so that the People in the various states might have some basic rules and means to develop more commerce with one another.
This was still a government of very limited scope and with a few, carefully enumerated powers. This was not a government that gave the People certain rights. It was the People, with their rights already in hand, who ordained and established the government. That government had such limited powers precisely because the People knew that strong governments with wide-ranging powers become the greatest threat to individual rights. Such governments always seek to expand their powers. The People knew from history that freedom was lost in Greece and in Rome, for instance, to governments which had acquired too much power. They knew of many other abuses of government power from British history. The Americans were fortunate to know these things and fortunate to generally have escaped the indoctrination of government-run schools.
The Constitution has its moral foundation in the Declaration of Independence. The Constitution had to provide for a government with no more than minimal powers and scope or the government operating under it would necessarily become an instrument to violate the rights of the individual to Life, Liberty, and the Pursuit of Happiness. This is the second part of the exceptional American Principle of Government, which was explained in the Declaration of Independence somewhat and enacted in the Constitution. This must happen because the Rule of Law must apply to all, but few laws can be written to accommodate the highly differentiated and complex natures of thinking Men. The Rule of Law requires that every law apply equally to every Man.
There are only a few laws that can comply with this requirement, however. For instance, a law might say that no Man may initiate the use of force against another. Such a law is consistent with the General Welfare since it is necessary for the protection of each and every Man's rights. But once government takes on powers beyond the protection of the rights of every man, then every law becomes one to promote a special interest rather than the General Welfare. For instance, a law of the form: Every Man with an income greater than $250,000 will pay a higher tax rate on his income than any Man with a lower income, is a special interest law, which violates the General Welfare by only addressing the welfare of those making less than $250,000 of income a year. A law that requires a doctor to treat a patient who does not have enough money to pay for his treatment is another such special interest law which does not satisfy the condition that it provide for the General Welfare. The doctor's right to his own Life and how he will spend the hours of it is violated. He is not at Liberty to Pursue his own Happiness under such law. This is a clear violation of the doctor's equal and sovereign individual rights. The requirement by law that one must purchase a health insurance plan approved by government is a clear violation of the right of every Man to own his own life and to manage his own health care needs. Some, for instance, might rationally be wealthy enough to be self-insured. Others might have no need for a low-deductible policy or for mental health care. Some may not need pre-natal care. Individuals have differing needs and their values will differ accordingly. Government laws under progressive governments deny these basic facts of reality.
The Constitution recognizes the importance of the Rule of Law applying equally to everyone many times. It refers to the General Welfare as a requirement that must be provided for whenever any of the limited powers of government are executed. The government is authorized to build military facilities, but it is not authorized to have the Speaker of the House give the construction contract to his son-in-law at three times the lowest responsible bid cost. For him to do so, would be a violation of the General Welfare and of the Rule of Law. The many laws that apply to all Americans except the members of Congress and/or their staff, are another example of special interest law in violation of the General Welfare and the Rule of Law. Similarly, the award of government contracts only to those paying union wages is another obvious violation of the moral rule stated in the Declaration of Independence.
There is a presumption of liberty for the individual in both the Declaration of Independence and the Constitution. The long list of grievances against the interferences of Great Britain make this clear in the Declaration of Independence. The entire effort to limit the powers and scope of government in the Constitution makes this clear in that document. The long list of rights the government acknowledged in the Bill of Rights is another recognition of this fact, especially given the 9th Amendment which says:
The Declaration of Independence is a critically foundational document of the exceptional American Principle of Government. Its moral principles provide the real backbone to the Constitution. If one can eliminate the Declaration of Independence from our understanding of our moral duty as citizens and as a definition of legitimate government, then the Constitution is greatly weakened and becomes more subject to changing interpretations and tortured mutations of constitutional law and precedent.
The central purpose of the Progressive Elitist is to make government much more powerful and to put it to the endless task of providing goodies for an endless list of special interests. That list presently includes government employees, labor unions, big financial and car outfits with special protection by government against their bad business decisions, trial lawyers, government-run school teachers, non-competitive energy providers, ethanol refiners and blenders, farmers with subsidized crops, tariff-protected industries, low income housing users, high income housing owners who want green space, zoning laws, and building codes to keep lower income people away from their neighborhoods, and the unemployed who like sitting at home on unemployment benefits. None of this is consistent with the General Welfare or the Rule of Law. It is just faction against faction to win special interests at the expense of violating the individual rights of others.
Obama very clearly explained that he does not like the Constitution which is a barrier to his central purpose of redistributing the wealth by taking some of the People's time, money, and property and giving it to others of his choosing. Vice President Biden explicitly stated that there are no such things as Natural Rights. Rights are given to People by the government he says. Of course, this means that People do not have unalienable rights. If the Declaration of Independence is wrong about that, then it is also perhaps wrong in claiming that the People have equal rights. It is certainly wrong in the minds of such Progressive Elitists for the Declaration of Independence to define legitimate government as that government that protects the equal rights of the individual to Life, Liberty, and the Pursuit of Happiness. These two men are very aware that the Declaration of Independence and the Constitution form a very strong front against their idea of government. Indeed, Progressive Elitists very often claim the Declaration of Independence has no standing in the law. How odd a claim this is given that it is the moral foundation upon which the Constitution rests. But, as with a fortress, the Constitution is no stronger than its foundation.
The 9th Amendment has been virtually struck from the Constitution by Progressive judges. Even the explicitly enumerated rights of the individual in the Bill of Rights have been split into categories which deserve strong protection and those which are mere after-thoughts. Any right to pursue one's happiness through commerce is now completely subject to the whim of the government. That means that the People have lost all of their economic rights, which most people spend many hours a day pursuing. Clearly, such rights must be denied by a government that presumes to choose the People's values and to micromanage their lives with Central Planners. This is the goal of the Progressive Elitists. Obama is particularly derogatory about people who pursue their happiness in part by making money or creating wealth. This predilection against commerce explains why he has proven so effective in destroying the jobs many Americans once had in the private sector.
Note also that the Declaration of Independence says the People have a moral duty to change the form of their government if it becomes illegitimate by violating their rights. This is a very scary idea for a Progressive Elitist who desperately wants to dictate our values to us and force us to live in accordance with those mandated values. He believes the People are generally unable to wisely choose their values and are not up to managing their own lives well. He lacks the faith of the Declaration of Independence in the People.
It is interesting in this light to note the study by two Harvard University professors, David Yanagizawa-Drott and Andreas Madestam in which they found that
It is a fine thing to remember the great deeds of our veterans on the 4th of July, but let us also remember that we are celebrating the great and critically important ideas of the Declaration of Independence on that wonderful day. They are the moral foundation of our Constitution and they inform of us of when our government is legitimate and when it is our moral duty to reform it. It is clear that our present government is not legitimate and that we must reform it. We must carry this realization with us into the election of 2012 and do our duty as defined by the most exceptional and moral American Principle of Government. It is time to stand for that American Principle of Government as the Winter Soldiers did in our Great American Revolution.
The Declaration of Independence clearly spelled out the central fact of the exceptional American Principle of Government. Without this great and noble document, our Constitution cannot be viewed in its proper context and becomes a much weakened limit on the scope and powers of government. The United States of America were declared independent of Great Britain on 4 July 1776 with a very exceptional purpose in the annals of nations. Other nations simply had a government controlled by aristocrats, commonly in an alliance with high-level clergy, who were empowered to protect the people and take care of them, at least in theory. Our first founding document, The Declaration of Independence, clearly and emphatically states that a legitimate government is the tool of the People as the holders of sovereign, equal individual rights to protect and defend their rights. This is the first part of the exceptional American Principle of Government.
Let us read this straight from the Declaration of Independence:
WE hold these Truths to be self-evident, that all Men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty, and the Pursuit of Happiness -- That to secure these Rights, Governments are instituted among Men, deriving their just Powers from the Consent of the Governed, that whenever any Form of Government becomes destructive of these Ends, it is the Right of the People to alter or to abolish it, and to institute new Government, laying its Foundation on such Principles, and organizing its Powers in such Form, as to them shall seem most likely to effect their Safety and Happiness. Prudence, indeed, will dictate that Governments long established should not be changed for light and transient Causes; and accordingly all Experience hath shewn, that Mankind are more disposed to suffer, while Evils are surfferable, than to right themselves by abolishing the Forms to which they are accustomed. But when a long Train of Abuses and Usurpations, pursuing invariably the same Object, evinces a Design to reduce them under absolute Despotism, it is their Right, it is their Duty, to throw off such Government, and to provide new Guards for their future Security.Legitimate government secures our individual unalienable rights. Government cannot take our rights away from us and it certainly cannot give them to us. Our rights are the result of our nature as thinking individuals who must use our independent minds to survive and to choose the values that we will act to gain or to keep. At that time, it was assumed that the nature of man was given to man by a god, so therefore God was the giver of rights. Prior to the French and Indian War, or the Seven Years War in Europe, Americans had long been neglected by the government of Great Britain. They had developed their own legislatures and had taxed themselves very lightly under local governments of very limited scope for a long time. When Great Britain awoke to the fact that the Colonies had become rather well off and could be taxed to help pay off the huge war debt from the Seven Years War, they levied new taxes and sent of a swarm of new officers to the Colonies to tell Americans what they could and could not do. By the standards of Americans then, the government of Great Britain had become illegitimate because it was violating the individual rights of the People.
The Constitution was ordained and established by the People as our second form of government in 1789 after they had found that the first form of government under the Articles of Confederation was somewhat too weak. The People wanted a federal government more capable of providing defense, without too heavy a dependence upon the states. They found it necessary to prevent the states from violating the property rights of the People and from prohibiting or impeding their trading with one another in commerce. They needed a government more capable of dealing with foreign powers. They needed a government to help them establish courts to handle disputes across state lines, nationwide postal service with post roads, patent laws, provide a common coinage, and common weights and measures so that the People in the various states might have some basic rules and means to develop more commerce with one another.
This was still a government of very limited scope and with a few, carefully enumerated powers. This was not a government that gave the People certain rights. It was the People, with their rights already in hand, who ordained and established the government. That government had such limited powers precisely because the People knew that strong governments with wide-ranging powers become the greatest threat to individual rights. Such governments always seek to expand their powers. The People knew from history that freedom was lost in Greece and in Rome, for instance, to governments which had acquired too much power. They knew of many other abuses of government power from British history. The Americans were fortunate to know these things and fortunate to generally have escaped the indoctrination of government-run schools.
The Constitution has its moral foundation in the Declaration of Independence. The Constitution had to provide for a government with no more than minimal powers and scope or the government operating under it would necessarily become an instrument to violate the rights of the individual to Life, Liberty, and the Pursuit of Happiness. This is the second part of the exceptional American Principle of Government, which was explained in the Declaration of Independence somewhat and enacted in the Constitution. This must happen because the Rule of Law must apply to all, but few laws can be written to accommodate the highly differentiated and complex natures of thinking Men. The Rule of Law requires that every law apply equally to every Man.
There are only a few laws that can comply with this requirement, however. For instance, a law might say that no Man may initiate the use of force against another. Such a law is consistent with the General Welfare since it is necessary for the protection of each and every Man's rights. But once government takes on powers beyond the protection of the rights of every man, then every law becomes one to promote a special interest rather than the General Welfare. For instance, a law of the form: Every Man with an income greater than $250,000 will pay a higher tax rate on his income than any Man with a lower income, is a special interest law, which violates the General Welfare by only addressing the welfare of those making less than $250,000 of income a year. A law that requires a doctor to treat a patient who does not have enough money to pay for his treatment is another such special interest law which does not satisfy the condition that it provide for the General Welfare. The doctor's right to his own Life and how he will spend the hours of it is violated. He is not at Liberty to Pursue his own Happiness under such law. This is a clear violation of the doctor's equal and sovereign individual rights. The requirement by law that one must purchase a health insurance plan approved by government is a clear violation of the right of every Man to own his own life and to manage his own health care needs. Some, for instance, might rationally be wealthy enough to be self-insured. Others might have no need for a low-deductible policy or for mental health care. Some may not need pre-natal care. Individuals have differing needs and their values will differ accordingly. Government laws under progressive governments deny these basic facts of reality.
The Constitution recognizes the importance of the Rule of Law applying equally to everyone many times. It refers to the General Welfare as a requirement that must be provided for whenever any of the limited powers of government are executed. The government is authorized to build military facilities, but it is not authorized to have the Speaker of the House give the construction contract to his son-in-law at three times the lowest responsible bid cost. For him to do so, would be a violation of the General Welfare and of the Rule of Law. The many laws that apply to all Americans except the members of Congress and/or their staff, are another example of special interest law in violation of the General Welfare and the Rule of Law. Similarly, the award of government contracts only to those paying union wages is another obvious violation of the moral rule stated in the Declaration of Independence.
There is a presumption of liberty for the individual in both the Declaration of Independence and the Constitution. The long list of grievances against the interferences of Great Britain make this clear in the Declaration of Independence. The entire effort to limit the powers and scope of government in the Constitution makes this clear in that document. The long list of rights the government acknowledged in the Bill of Rights is another recognition of this fact, especially given the 9th Amendment which says:
The enumeration in the Constitution of certain rights shall not be construed to deny or disparage others retained by the people.This amendment clearly states that the government is not the source of individual rights. The government has the duty to recognize and honor the unalienable rights of the every individual to Life, Liberty, and the Pursuit of Happiness. The Declaration of Independence even implied that there were other rights not covered by that very broad combination of Life, Liberty, and the Pursuit of Happiness when it precedes that list of rights with "among these are." I am not sure what rights are not covered by that list, which does cover many rights not listed in the Bill of Rights, but this is another strong example of the presumption of liberty which legitimate government must not violate.
The Declaration of Independence is a critically foundational document of the exceptional American Principle of Government. Its moral principles provide the real backbone to the Constitution. If one can eliminate the Declaration of Independence from our understanding of our moral duty as citizens and as a definition of legitimate government, then the Constitution is greatly weakened and becomes more subject to changing interpretations and tortured mutations of constitutional law and precedent.
The central purpose of the Progressive Elitist is to make government much more powerful and to put it to the endless task of providing goodies for an endless list of special interests. That list presently includes government employees, labor unions, big financial and car outfits with special protection by government against their bad business decisions, trial lawyers, government-run school teachers, non-competitive energy providers, ethanol refiners and blenders, farmers with subsidized crops, tariff-protected industries, low income housing users, high income housing owners who want green space, zoning laws, and building codes to keep lower income people away from their neighborhoods, and the unemployed who like sitting at home on unemployment benefits. None of this is consistent with the General Welfare or the Rule of Law. It is just faction against faction to win special interests at the expense of violating the individual rights of others.
Obama very clearly explained that he does not like the Constitution which is a barrier to his central purpose of redistributing the wealth by taking some of the People's time, money, and property and giving it to others of his choosing. Vice President Biden explicitly stated that there are no such things as Natural Rights. Rights are given to People by the government he says. Of course, this means that People do not have unalienable rights. If the Declaration of Independence is wrong about that, then it is also perhaps wrong in claiming that the People have equal rights. It is certainly wrong in the minds of such Progressive Elitists for the Declaration of Independence to define legitimate government as that government that protects the equal rights of the individual to Life, Liberty, and the Pursuit of Happiness. These two men are very aware that the Declaration of Independence and the Constitution form a very strong front against their idea of government. Indeed, Progressive Elitists very often claim the Declaration of Independence has no standing in the law. How odd a claim this is given that it is the moral foundation upon which the Constitution rests. But, as with a fortress, the Constitution is no stronger than its foundation.
The 9th Amendment has been virtually struck from the Constitution by Progressive judges. Even the explicitly enumerated rights of the individual in the Bill of Rights have been split into categories which deserve strong protection and those which are mere after-thoughts. Any right to pursue one's happiness through commerce is now completely subject to the whim of the government. That means that the People have lost all of their economic rights, which most people spend many hours a day pursuing. Clearly, such rights must be denied by a government that presumes to choose the People's values and to micromanage their lives with Central Planners. This is the goal of the Progressive Elitists. Obama is particularly derogatory about people who pursue their happiness in part by making money or creating wealth. This predilection against commerce explains why he has proven so effective in destroying the jobs many Americans once had in the private sector.
Note also that the Declaration of Independence says the People have a moral duty to change the form of their government if it becomes illegitimate by violating their rights. This is a very scary idea for a Progressive Elitist who desperately wants to dictate our values to us and force us to live in accordance with those mandated values. He believes the People are generally unable to wisely choose their values and are not up to managing their own lives well. He lacks the faith of the Declaration of Independence in the People.
It is interesting in this light to note the study by two Harvard University professors, David Yanagizawa-Drott and Andreas Madestam in which they found that
The political right has been more successful in appropriating American patriotism and its symbols during the 20th century. Survey evidence also confirms that Republicans consider themselves more patriotic than Democrats. According to this interpretation, there is a political congruence between the patriotism promoted on Fourth of July and the values associated with the Republican party. Fourth of July celebrations in Republican dominated counties may thus be more politically biased events that socialize children into Republicans.There are plenty of Progressive Elitists in the Republican Party, but they tend to be less radical than those in the Democrat Party and fewer in percentage. The impact of 4th of July parades on the People that pushes them toward the Republicans is due to there being less resistance among Republicans to the ideas of our Declaration of Independence. These ideas are still more in sync with those of the Tea Party. It is these ideas that make Americans exceptional. The Democrats have a great deal of difficulty seeing American principles as exceptional because they have dismissed all of our American principles and hold none that are unique to America. Their core values all hinge on an aristocracy of college-indoctrinated elitists running the country by controlling its all-powerful government. This is a variant of the Medieval concept of government that long-preceded the Scottish and French Enlightenment philosophy found in the Declaration of Independence. The peasants in their society are the many who received just enough indoctrination in the government-run schools that they will be docile in obeying the government they are told has only their best interest at heart. Such docile peasants bear no resemblance to the Americans of our founding period.
It is a fine thing to remember the great deeds of our veterans on the 4th of July, but let us also remember that we are celebrating the great and critically important ideas of the Declaration of Independence on that wonderful day. They are the moral foundation of our Constitution and they inform of us of when our government is legitimate and when it is our moral duty to reform it. It is clear that our present government is not legitimate and that we must reform it. We must carry this realization with us into the election of 2012 and do our duty as defined by the most exceptional and moral American Principle of Government. It is time to stand for that American Principle of Government as the Winter Soldiers did in our Great American Revolution.
03 July 2011
The Hidden Grimness of the State Unemployment Numbers
The government's Bureau of Labor Statistics (BLS) has released the state by state unemployment figures for May 2011 and compared them to May 2010. In the 15 states they reported a significant change in jobs, they reported lower unemployment rates. Changes in jobs in the other 35 states were not significant according to the BLS and will not be discussed here. A critical review of the numbers shows this interpretation of the unemployment situation to be the work of flim-flam artists.
Perhaps this should not surprise us in view of the control over the Dept. of Labor exercised by labor unions and the partisanship widely on the loose in the Obama administration. The reality of the state by state review here is a grim one, but one with some useful information for job seekers. Of course this analysis is also important for anyone deceived by the impression that the jobs situation is slowly improving. It is actually getting worse. At the national level I showed this to be the case here, noting that there are 693,000 more missing jobs in May 2011 than there were in May 2010. There is no job creation adequate to keep up with the population growth of the nation.
The BLS reported that 665,400 more people were employed in May 2011 compared to May 2010 in these 15 states. They reported that 87,300 more people were employed in California in May 2011 than in May 2010. They used seasonally adjusted job numbers, but that should not matter given that they were comparing a May to a May. I decided to check whether the same result would be found using the Work Force numbers and the Unemployed numbers which were not seasonally adjusted. Since the Work Force is the sum of the Employed and the Unemployed (as recognized by the BLS), one can subtract the Unemployed from the Work Force and find the seasonally unadjusted Employed numbers for each state. One wonders why the Employed numbers are not given directly if one expects transparency. Transparency, much promised by Obama, is the last thing one gets from Obama and his followers.
So, what do we find for the jobs added in California over the last year? We find that there are 40,100 fewer people employed, not 87,300 more people employed. The state of Washington is another for which positive change in net jobs is reported as 19,600, but there was actually a loss of 32,100 jobs from May to May! Overall, in the 15 states the BLS says added 665,400 jobs, only 333,100 were actually added. This is almost exactly half the reported number of jobs added. Of the 15 states reported to have lower unemployment, only 3 created as many jobs as the BLS said they did. Examine the numbers in the table below:
The next to the last column provides the change in the Civilian Labor Force. In any case in which the number is negative, people have either given up looking for employment or they have left the state, presumably for employment or in the hope of employment elsewhere. In 9 of the 15 states in which Obama's BLS has claimed an improvement in the unemployment rate, this number is negative. The only large positive number belongs to the state of Texas. Nebraska's positive number is significant given the small population of the state. But, note that California lost 149,500 people in its workforce, which means the situation in California is particularly grim. The loss of 58,500 people in the workforce in Washington and of 76,600 in Michigan are also very grim signs. Illinois, Pennsylvania, and Oklahoma also had large losses. For the 15 states that supposedly had improvements in their unemployment rates, there was a net reduction in the civilian labor force of 247,000 people.
Of course this could mean our population is shrinking, but that is most unlikely. What it means in net is that people have given up on finding a job and the BLS no longer counts them in the workforce. If they are no longer in the workforce, then they do not count in the calculation of the unemployment rate. State by state, it could mean that people simply moved out of a state. But if this list really has all of the states in it with statistically significant changes in jobs and they are all reported as positive changes, then it would be very odd of people to migrate to those states which are statistically known not to be creating jobs. No, it is clear that the effect is that the unemployed have lost all Hope under the regime of this most hyped Hope President.
At this point, you might be thinking that the Obama administration just exaggerated the job additions by a factor of two, but there was still a bit of improvement in the job situation. If so, you have missed a very important consideration. From 2000 to 2010, our population grew at an average rate of 0.94% a year. Assuming that each state on our list of 15 significant job growth states according to the BLS grew at the national average, each of those states would have to add 0.0094 times the number of employed people in May 2010 just to provide the jobs needed to keep up with the growing population. I calculated that number in the last column. California needed 150,196 added jobs to tread water, but it lost 40,100 jobs to fall behind by 190,296 jobs. The state of Washington needed to add a net of 30,042, but it lost 32,100 to fall behind by a total of 62,142 jobs. Failures such as these are why the jobs situation for the young is particularly awful.
Only 6 of the 15 states the BLS told us had an improving unemployment situation have created more jobs than they needed to to stay even with expected population growth. They are, with the number of jobs they added above the number needed to accommodate average population growth:
Ohio, 21,807 jobs
Oregon, 16,076 jobs
Texas, 9,439 jobs
Nebraska, 4,480 jobs
North Dakota, 1,418 jobs
Wyoming, 38 jobs
It should be noted that Wisconsin almost met its goal to keep up with normal population growth.
First of all, noting that we were missing 21,484,000 jobs in May 2011, these six states creating more jobs than they need to keep up with population growth actually have very few jobs to meet the demand for jobs. In addition, these states have their own unemployed. But, if you are able to relocate to a state where the job situation is not hopeless, you may want to consider these states. The North Dakota and Wyoming job markets are very small, so you should go to one of the top four states on the list baring unusual job preferences and skills. Ohio and Oregon are somewhat surprising. Everyone knows that Texas has been a job creator, but once you discount the false claim by the BLS that Texas created 205,400 jobs from May to May with the actual number of 114,300 jobs, the Texas phenomena is reduced to its being one of the few states to simply keep up with expected average population growth in job creation.
Now you can appreciate how truly ludicrous it is for Obama and his administration and his Democrat allies to make the claim that they are making progress on reducing the horrific unemployment. It is their determined anti-business and anti-wealth-creation mindset that has kept us from recovering from this Great Socialist Recession and kept business from hiring. Obama and those who share his socialist viewpoint have made a lifetime point of not understanding business and economics because they believe creating money is immoral. But, earning money by offering others the values they want in the private sector is both moral and necessary. The results of the Obama vendetta against people earning a livelihood have been brutal to the General Welfare in the extreme. Not surprisingly, they do not want us to understand just how brutal they have been.
We must make every effort to remember these painful facts throughout this coming election cycle and work hard at explaining the reality to others. If we are not successful, Obama and his Democrat allies will continue to wreck havoc on the People of the United States.
Perhaps this should not surprise us in view of the control over the Dept. of Labor exercised by labor unions and the partisanship widely on the loose in the Obama administration. The reality of the state by state review here is a grim one, but one with some useful information for job seekers. Of course this analysis is also important for anyone deceived by the impression that the jobs situation is slowly improving. It is actually getting worse. At the national level I showed this to be the case here, noting that there are 693,000 more missing jobs in May 2011 than there were in May 2010. There is no job creation adequate to keep up with the population growth of the nation.
The BLS reported that 665,400 more people were employed in May 2011 compared to May 2010 in these 15 states. They reported that 87,300 more people were employed in California in May 2011 than in May 2010. They used seasonally adjusted job numbers, but that should not matter given that they were comparing a May to a May. I decided to check whether the same result would be found using the Work Force numbers and the Unemployed numbers which were not seasonally adjusted. Since the Work Force is the sum of the Employed and the Unemployed (as recognized by the BLS), one can subtract the Unemployed from the Work Force and find the seasonally unadjusted Employed numbers for each state. One wonders why the Employed numbers are not given directly if one expects transparency. Transparency, much promised by Obama, is the last thing one gets from Obama and his followers.
So, what do we find for the jobs added in California over the last year? We find that there are 40,100 fewer people employed, not 87,300 more people employed. The state of Washington is another for which positive change in net jobs is reported as 19,600, but there was actually a loss of 32,100 jobs from May to May! Overall, in the 15 states the BLS says added 665,400 jobs, only 333,100 were actually added. This is almost exactly half the reported number of jobs added. Of the 15 states reported to have lower unemployment, only 3 created as many jobs as the BLS said they did. Examine the numbers in the table below:
The next to the last column provides the change in the Civilian Labor Force. In any case in which the number is negative, people have either given up looking for employment or they have left the state, presumably for employment or in the hope of employment elsewhere. In 9 of the 15 states in which Obama's BLS has claimed an improvement in the unemployment rate, this number is negative. The only large positive number belongs to the state of Texas. Nebraska's positive number is significant given the small population of the state. But, note that California lost 149,500 people in its workforce, which means the situation in California is particularly grim. The loss of 58,500 people in the workforce in Washington and of 76,600 in Michigan are also very grim signs. Illinois, Pennsylvania, and Oklahoma also had large losses. For the 15 states that supposedly had improvements in their unemployment rates, there was a net reduction in the civilian labor force of 247,000 people.
Of course this could mean our population is shrinking, but that is most unlikely. What it means in net is that people have given up on finding a job and the BLS no longer counts them in the workforce. If they are no longer in the workforce, then they do not count in the calculation of the unemployment rate. State by state, it could mean that people simply moved out of a state. But if this list really has all of the states in it with statistically significant changes in jobs and they are all reported as positive changes, then it would be very odd of people to migrate to those states which are statistically known not to be creating jobs. No, it is clear that the effect is that the unemployed have lost all Hope under the regime of this most hyped Hope President.
At this point, you might be thinking that the Obama administration just exaggerated the job additions by a factor of two, but there was still a bit of improvement in the job situation. If so, you have missed a very important consideration. From 2000 to 2010, our population grew at an average rate of 0.94% a year. Assuming that each state on our list of 15 significant job growth states according to the BLS grew at the national average, each of those states would have to add 0.0094 times the number of employed people in May 2010 just to provide the jobs needed to keep up with the growing population. I calculated that number in the last column. California needed 150,196 added jobs to tread water, but it lost 40,100 jobs to fall behind by 190,296 jobs. The state of Washington needed to add a net of 30,042, but it lost 32,100 to fall behind by a total of 62,142 jobs. Failures such as these are why the jobs situation for the young is particularly awful.
Only 6 of the 15 states the BLS told us had an improving unemployment situation have created more jobs than they needed to to stay even with expected population growth. They are, with the number of jobs they added above the number needed to accommodate average population growth:
Ohio, 21,807 jobs
Oregon, 16,076 jobs
Texas, 9,439 jobs
Nebraska, 4,480 jobs
North Dakota, 1,418 jobs
Wyoming, 38 jobs
It should be noted that Wisconsin almost met its goal to keep up with normal population growth.
First of all, noting that we were missing 21,484,000 jobs in May 2011, these six states creating more jobs than they need to keep up with population growth actually have very few jobs to meet the demand for jobs. In addition, these states have their own unemployed. But, if you are able to relocate to a state where the job situation is not hopeless, you may want to consider these states. The North Dakota and Wyoming job markets are very small, so you should go to one of the top four states on the list baring unusual job preferences and skills. Ohio and Oregon are somewhat surprising. Everyone knows that Texas has been a job creator, but once you discount the false claim by the BLS that Texas created 205,400 jobs from May to May with the actual number of 114,300 jobs, the Texas phenomena is reduced to its being one of the few states to simply keep up with expected average population growth in job creation.
Now you can appreciate how truly ludicrous it is for Obama and his administration and his Democrat allies to make the claim that they are making progress on reducing the horrific unemployment. It is their determined anti-business and anti-wealth-creation mindset that has kept us from recovering from this Great Socialist Recession and kept business from hiring. Obama and those who share his socialist viewpoint have made a lifetime point of not understanding business and economics because they believe creating money is immoral. But, earning money by offering others the values they want in the private sector is both moral and necessary. The results of the Obama vendetta against people earning a livelihood have been brutal to the General Welfare in the extreme. Not surprisingly, they do not want us to understand just how brutal they have been.
We must make every effort to remember these painful facts throughout this coming election cycle and work hard at explaining the reality to others. If we are not successful, Obama and his Democrat allies will continue to wreck havoc on the People of the United States.
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