Having just discussed who does the most searches on Ayn Rand related topics and who visited the website of the Ayn Rand Institute the most in my previous post, I thought it might be interesting to share where the readers of this blog come from. Of course, this blog is not primarily about Ayn Rand. It is about many topics of interest to me, which I discuss in a manner consistent with my own commitment to reason and to morality. I believe my values are very consistent with those of Ayn Rand, but I do not claim they are identical. And it must be said that my selection of topics is quite different than was Ayn Rand's.
The pageviews of the last month have been by:
United States, 7002
Russia, 941
United Kingdom, 699
Canada, 221
France, 177
Germany, 155
India, 126
Australia, 98
Spain, 62
Netherlands, 48
The pageviews history for all time have been by:
United States, 86,960
Russia, 8252
United Kingdom, 7455
Canada, 5486
Germany, 2989
India, 2985
Australia, 2822
South Korea, 2272
France, 939
Slovenia, 777
It would be of great interest to me to know who my readers are and why they read this blog. I wish to invite my readers to either make comments or to tell me why they read this blog in e-mails sent to charles.r.anderson@gmail.com
It is a rather curious thing to me that I have had so many readers in Russia, for instance. If readers there would be kind enough to shed light on that, I would be most appreciative. I suspect that part of the reason is that I discuss man-made global warming and energy issues with some frequency and Russia is a giant energy producer and many Russians are rather skeptical about catastrophic man-made global warming. Either personal reasons for being a reader or general insight into why Russians might read this blog would be welcome information.
While Scandinavians may be big readers of the Ayn Rand Institute website, they are not such big readers of this blog. Sweden, Denmark, Norway, and Finland do pop up on the list occasionally when I look at the statistics of pageviews for a given week, but this is not a regular thing. I see South Africa fairly often in such shorter timescales also. Spain and the Netherlands are also frequently on the list for shorter timescales.
22 October 2012
Article on Ayn Rand in the Economist
The Economist of 20 - 26 October 2012 has an article called Ayn Rand: Who's shrugging now? Sub-headed: The individualist philosopher has fans in some unlikely countries
The article reports that the movie Atlas Shrugged Part I cost $8 million and earned less than $5 million. Atlas Shrugged Part II was funded with $20 million and it is hoped it will earn $10 million.
Ed Hudgins of the Atlas Society says they have 11,000 non-American monthly visits to the Atlas Society website now, which is up from 7,000 two years ago. Yaron Brook of the Ayn Rand Institute says their website's visitors are mostly from Britain, Canada, India, and Scandinavia.
Excluding English speakers, Swedes are the leading "Ayn Rand" searchers on Google. A free-market think-tank in Stockholm named Timbro has sold 30,000 copies of Ayn Rand's books since 2005, which compares very well to sales of 90,000 copies in Britain with six times the population. Despite this, when Annie Loof, the enterprise minister called Rand "one of the greatest thinkers of the 20th century", she was given a very hard time about it.
After the U.S. and Canada, India leads the world in English-language searches on topics relating to Ayn Rand. There is a massive market in pirated copies of her books in India, according to Barun Mitra of the Liberty Institute, an Indian think-tank.
The article closes by noting that Ayn Rand's books outsell those of Karl Marx by a factor of 16.
The article reports that the movie Atlas Shrugged Part I cost $8 million and earned less than $5 million. Atlas Shrugged Part II was funded with $20 million and it is hoped it will earn $10 million.
Ed Hudgins of the Atlas Society says they have 11,000 non-American monthly visits to the Atlas Society website now, which is up from 7,000 two years ago. Yaron Brook of the Ayn Rand Institute says their website's visitors are mostly from Britain, Canada, India, and Scandinavia.
Excluding English speakers, Swedes are the leading "Ayn Rand" searchers on Google. A free-market think-tank in Stockholm named Timbro has sold 30,000 copies of Ayn Rand's books since 2005, which compares very well to sales of 90,000 copies in Britain with six times the population. Despite this, when Annie Loof, the enterprise minister called Rand "one of the greatest thinkers of the 20th century", she was given a very hard time about it.
After the U.S. and Canada, India leads the world in English-language searches on topics relating to Ayn Rand. There is a massive market in pirated copies of her books in India, according to Barun Mitra of the Liberty Institute, an Indian think-tank.
The article closes by noting that Ayn Rand's books outsell those of Karl Marx by a factor of 16.
21 October 2012
Misdirection on Medicare by Obama Ad
Obama is running an ad now that claims that Romney is going to cut $6000 from seniors Medicare benefits and shows various seniors in the ad. First of all, Romney is not proposing any cut for anyone 55 years or older. Second, in the future for those less than 55 years old, should legislation be passed to make Medicare sustainable, it is by no means clear that seniors will lose $6,000 of benefits many years from now. That number has little credibility. It is simply pulled from a hat. But it works to scare people.
It works to create a division between the young and the elderly. The AARP is quoted by Obama's ad, but this group specializes in inter-generational warfare. It is at war with the children of the elderly. The young cannot possibly be taxed heavily enough to continue to pay the costs of Medicare given the demographics of the huge Baby Boomer generation and the too small generations following them, unless changes are made. The best way to control medical costs is to give individuals a stake in how much those services cost. Vouchers are the means to do this critical task. You need them to decide that pointless visits to the doctor are expendable. You need them to put pressure on medical service providers not to overcharge them. When government says it will control costs, we know that to be nonsense.
The Democrats refuse to deal with the reality that Medicare is not sustainable, much as they refuse to deal with Social Security's problems or to recognize that several terrorist attacks were just that. The Republicans are manning up and are willing to make the changes needed to make these programs sustainable. The pretense-given Democrats are standing by as both Medicare and Social Security are spending more money than they are taking in. We have switched from a situation in which excess Medicare and Social Security tax revenues were used to fund irresponsible general government spending to one in which general income tax income has to be used to make up the shortfall in Medicare and Social Security expenditures.
It works to create a division between the young and the elderly. The AARP is quoted by Obama's ad, but this group specializes in inter-generational warfare. It is at war with the children of the elderly. The young cannot possibly be taxed heavily enough to continue to pay the costs of Medicare given the demographics of the huge Baby Boomer generation and the too small generations following them, unless changes are made. The best way to control medical costs is to give individuals a stake in how much those services cost. Vouchers are the means to do this critical task. You need them to decide that pointless visits to the doctor are expendable. You need them to put pressure on medical service providers not to overcharge them. When government says it will control costs, we know that to be nonsense.
The Democrats refuse to deal with the reality that Medicare is not sustainable, much as they refuse to deal with Social Security's problems or to recognize that several terrorist attacks were just that. The Republicans are manning up and are willing to make the changes needed to make these programs sustainable. The pretense-given Democrats are standing by as both Medicare and Social Security are spending more money than they are taking in. We have switched from a situation in which excess Medicare and Social Security tax revenues were used to fund irresponsible general government spending to one in which general income tax income has to be used to make up the shortfall in Medicare and Social Security expenditures.
Misleading Obama Claims About Romney's Effective Tax
Obama keeps claiming that most people pay more taxes than Romney does. Actually, Romney's 14.1% effective tax rate is higher than that of 97% of Americans. It is probably very similar to Obama's own effective tax rate, so Obama is being quite the hypocrite. But Obama will make any claim if he thinks he can take advantage of people not thinking things through.
When pressed, Obama will claim that he is right because he will say the average person pays Social Security and Medicare taxes at such a high rate that their effective tax rate is higher than Romney's is. This is perhaps true, since most of Romney's income exceeds the upper limit on income taxed by these payroll taxes. But, these taxes are supposed to be rather like insurance premiums, or at least that is what Democrats have always told us. It is not clear that they should be compared to income taxes.
If you insist on counting the Social Security and Medicare taxes, not reported on any 1040 tax forms, one might just as well include real estate taxes also. I am sure that very few of Obama's average tax payers pay anywhere near as much real estate tax as Romney does. In any case, Obama's claims that it is unfair that Romney does not pay a higher effective tax rate also ignores the fact that most of Romney's income is due to dividends and capital gains. Consequently, this form of income is what is left after a corporation pays corporate income taxes.
You really have to hunt for a very peculiar viewpoint to make the claim that Romney does not pay his fair share of taxes.
When pressed, Obama will claim that he is right because he will say the average person pays Social Security and Medicare taxes at such a high rate that their effective tax rate is higher than Romney's is. This is perhaps true, since most of Romney's income exceeds the upper limit on income taxed by these payroll taxes. But, these taxes are supposed to be rather like insurance premiums, or at least that is what Democrats have always told us. It is not clear that they should be compared to income taxes.
If you insist on counting the Social Security and Medicare taxes, not reported on any 1040 tax forms, one might just as well include real estate taxes also. I am sure that very few of Obama's average tax payers pay anywhere near as much real estate tax as Romney does. In any case, Obama's claims that it is unfair that Romney does not pay a higher effective tax rate also ignores the fact that most of Romney's income is due to dividends and capital gains. Consequently, this form of income is what is left after a corporation pays corporate income taxes.
You really have to hunt for a very peculiar viewpoint to make the claim that Romney does not pay his fair share of taxes.
Appendicitis in Nova Scotia and Single-Payer Medicine
A materials physicist friend of mine told me how his socialist sister lost her desire for a single-payer nationalized medical system. She was on temporary business assignment in Nova Scotia, Canada and a neighbor began having severe pains. She took her neighbor to the hospital and they entered the emergency room, where concern was expressed that her pain was caused by appendicitis. The woman was screaming with pain. She was told to wait for Triage and after a long wait, the examiner declared that yes, the pain was due to appendicitis. My friend's sister assumed they would rush her to surgery. But no, the doctor announced that she was not yet close enough to death to warrant surgery.
For 36 hours the woman screamed and writhed in pain. My friend's sister stayed with her and helplessly listened to her screams for 36 hours. Finally, the doctors decided she was close enough to death that they were willing to operate on her, and presumably to shove aside the many patients who had been waiting months for operations. She did survive the operation, but my friend's sister's desire for a nationalized single-payer medical system did not. She is now a furious opponent of single-payer nationalized health care systems.
Obama and many of his friends who want ObamaCare, really ObamaUncaringTax, to fail so it can be replaced with a fully nationalized single-payer system should have been with her. Yes, I do understand that some of his friends are so callous that such an event would not have changed their minds, but no one can listen to a woman scream for 36 hours without at least being miserable. At least, I cannot imagine that they would not be miserable. But, that may be a failure of imagination on my part, because after all, they are Obama's friends.
The story above is anecdotal and scary. Studies of larger populations are certainly useful in testing whether such stories are consistent with the Big Picture. So, here is a Daily Mail report on the National Health Service in Great Britain:
For 36 hours the woman screamed and writhed in pain. My friend's sister stayed with her and helplessly listened to her screams for 36 hours. Finally, the doctors decided she was close enough to death that they were willing to operate on her, and presumably to shove aside the many patients who had been waiting months for operations. She did survive the operation, but my friend's sister's desire for a nationalized single-payer medical system did not. She is now a furious opponent of single-payer nationalized health care systems.
Obama and many of his friends who want ObamaCare, really ObamaUncaringTax, to fail so it can be replaced with a fully nationalized single-payer system should have been with her. Yes, I do understand that some of his friends are so callous that such an event would not have changed their minds, but no one can listen to a woman scream for 36 hours without at least being miserable. At least, I cannot imagine that they would not be miserable. But, that may be a failure of imagination on my part, because after all, they are Obama's friends.
The story above is anecdotal and scary. Studies of larger populations are certainly useful in testing whether such stories are consistent with the Big Picture. So, here is a Daily Mail report on the National Health Service in Great Britain:
Patients having major surgery in NHS hospitals face a much higher risk of dying than those in America, research has revealed.
Doctors found that people who have treatment here are four times more likely to die than US citizens undergoing similar operations.
The most seriously ill NHS patients were seven times more likely to die than their American counterparts.
Experts blame the British fatality figures on a shortage of specialists and lack of intensive care beds for post-operative recovery.
They also suggest that long waiting lists mean diseases are more advanced before they are treated.
Researchers from University College London and Columbia University, in New York, studied 1,000 surgery patients at the Mount Sinai Hospital, Manhattan, and compared them to nearly 1,100 people who had similar operations at the Queen Alexandra Hospital, in Portsmouth.
The results showed that just under ten per cent of British patients died in hospital afterwards compared to 2.5 per cent in America. Among the most seriously ill cases there was a seven-fold difference in the death rates.
The New York patients had paid for treatment through private medical insurance and were therefore likely to be "wealthier and healthier", whereas the NHS patients were from all social classes.
However, the study aimed to "iron out" these differences by rating each patient on their clinical status.We Americans really must get rid of ObamaCare before it collapses and we get the almost inevitable rush by the Democrats to replace it with a fully nationalized single-payer system similar to that of Great Britain or Canada.
19 October 2012
Creating a Republican Senate
As a libertarian, albeit one often in disagreement with the defense policy of the Libertarian Party, I am well aware that the best check on the growth of the federal government has been to have a Republican President and a Congress with one house in the control of each party. In the upcoming election, the House of Representatives will remain solidly Republican. My prediction that Mitt Romney and Paul Ryan will replace Obama and Biden because the American people would finally get over the celebrity status of Obama and see him and Biden as the empty socialist suits they are is finally clearly happening. In ordinary times, it might be best that the Democrats retain a narrow control of the Senate, but this is not an ordinary time.
It is absolutely essential that ObamaCare, really the ObamaUncaringTax, be repealed. It is also very important to repeal the Dodd-Frank Too-Big-to-Fail Crony Mercantilism Act. It is essential to reform and control the EPA and finally kill the myth of catastrophic man-made global warming. We must free business to develop our huge oil and gas deposits and to make use of our rich supply of coal. We must end the waste of taxpayer dollars fed into uneconomic green energy companies with no viable markets and the electricity mandates for green energy that are driving up our electric bills and making our electricity supply unreliable. We also need to push back the government employee unions, the abuses of the Obama National Labor Relations Board (NRLB), and try to provide national Right to Work legislation. We need the opportunity to replace one or more of the five Supreme Court Justices who so falsely read the Constitution that they could vote to uphold ObamaCare. To accomplish this critical mission, we have to have a Republican Senate for the next two years.
According to the present Rasmussen Reports on the state of the Senate contests in the November 2012 election, the situation is:
Held by Republicans, not up for re-election, 37
Safe Republicans, up for election, 6
Leaning Republican, 4
Toss-ups, 5
Leaning Democrat, 6
Safe Democrat, 12
Held by Democrats, not up for re-election, 30
If all of the safe and leaning Senate races go as Rasmussen predicts, then the Republicans will have 47 seats and the Democrats will have 48 seats in the Senate. Consequently, the Republicans have to win 3 of the 5 toss-up seats for there to be a 50-50 split of the Senate, with tie votes to be decided by Paul Ryan. Of course, it would be much better for the Republicans to win at least four of the five toss-up races. These toss-up races are:
Massachusetts, Scott Brown (R) v. Elizabeth Warren (D)
Montana, Denny Rehberg (R) v. Jon Tester (D)
Ohio, Josh Mandel (R) v. Sherrod Brown (D)
Virginia, George Allen (R) v. Tim Kaine (D)
Wisconsin, Tommy Thompson (R) v. Tammy Baldwin (D)
Scott Brown (R) and Elizabeth Warren (D) have generally been running a very close race for the Massachusetts Senate seat for a long time. She is an ultra-socialist who likes to say to small business owners that they did not create and build their businesses, the government and maybe the community did. She is mad to redistribute as much income as she can. Of course, she is determined to keep Americans from developing the new riches in oil and gas deposits that fracking has opened up. She is also aligned with Obama in determination to kill the coal industry. If she wins, she will be developed as a likely 2016 presidential candidate. So, though Scott Brown is a moderate Republican who is often a friend of big government, she is a much greater danger as a friend of huge government. This is an election contest which the Republicans can win. Please support Scott Brown with a strategic contribution.
The Montana Senate seat race has incumbent Jon Tester (D) against Denny Rehberg (R), with the momentum in Rehberg's favor. Rehberg is a rancher and small businessman who has long served as Montana's soul member of the House of Representatives. In the 2011 Club for Growth Ratings of the financial responsibility of House members, Rehberg's rating was a rather low one for Republicans at 58%. However, almost no Democrats scored more than 20% and not one came close to getting a 58% rating. In the Club for Growth Senate Ratings, Jon Tester had a 17% score. Denny Rehberg would be a decided upgrade and he is needed badly to repeal ObamaCare, Dodd-Frank, and to reset the EPA and the NRLB. A donation to his campaign would be a wise and strategic investment in America.
The Ohio Senate race features Josh Mandel (R) running against incumbent Sherrod Brown (D), who is commonly called the most socialist Senator, now that Obama is no longer the most socialist Senator. Supporting Josh Mandel has the effect of also adding to ads and get out the vote efforts that will help push Romney over the top in this critical swing state. Josh is all about good government. Please read his bio, which is a hard-nosed description of what he has done as Treasurer of the state of Ohio and when he was in the Ohio House. This is not a fluff politician. He won his election as Treasurer as the biggest vote-getter in the state, winning 80 of 88 counties in Ohio. Standard and Poor rated his $4 billion government investment fund with its highest rating. His General Obligation bond fund has Fitch's highest rating. He expanded the Ohio liquidity portfolio by $2.3 billion since he took office. Josh is pro-free enterprise and a strong supporter of the Constitution. He has the strongest possible endorsement from the Club for Growth. Josh Mandel will be a super good Senator. In comparison, Sherrod Brown had a 2011 Senate Club for Growth rating of 0%. Donating to the campaign of Josh Mandel is a super strategic investment in good government!
In Virginia, George Allen (R) is pitted against Tim Kaine (D), a former spend-thrift governor who left the finances of the state of Virginia in disarray. Virginia is a swing state, so supporting Allen will tend to also support Romney. George Allen is not the strongest Republican candidate, but the election is starting to swing in his direction. The people of the state of Virginia are beginning to wake up to the sad state of the Obama economy, though their very highly populated northern Virginia Washington suburbs have benefited greatly from the mindless federal government spending under Obama. They are beginning to also learn that the Defense sequestration of budgeted funds to run DoD and the armed forces looming to take effect in January is going to shatter defense contractors and leave DoD employees without pay for about two months. Government spending reductions by all other government agencies are being spread out over a period of time to minimize the impact of the upcoming spending reductions, but DoD has been told by Obama that it has to continue spending its allocations of funding at the originally specified rate and take all of the hit in January on the sequestration. In other words, DoD is to take a nose-dive over the cliff onto the rocks below at Obama's command. Since deployed armed forces cannot be stood down, this means that incredibly drastic cuts in money going out to contractors and to civilian DoD employees has to occur. This will shatter the economies of Northern Virginia, Norfolk, Virginia Beach, and Hampton Roads. In addition, Obama has ordered the defense contractors, who are required by law to notify employees 60 days prior to termination, to ignore the law. The termination notices are due the week before the election. The government has promised to pay the fines that the companies will be subjected to for ignoring the law. This is completely lawless behavior by Obama to help his re-election chances. Tim Kaine is very supportive of Obama in this dastardly and destructive plan. George Allen, for all his limitations, will be much the better Senator and he is critically needed to repeal ObamaCare and the other accumulated mischief of the Democrats over the four years from 2007 through 2010 when they controlled both houses of Congress. Again, please make a strategic donation to George Allen.
The Wisconsin Senate race features Tommy Thompson (R) against Tammy Baldwin (D). Tommy Thompson was a former Wisconsin governor and cut income and property taxes and eliminated the inheritance tax. Tammy Baldwin is a Madison liberal who serves in the House of Representatives. Her Club for Growth rating in 2011 was a miserable 9%. Giving Tammy Baldwin one of the contested Senate seats would be an unmitigated disaster. Making a donation to Tommy Thompson is another strategic investment toward turning the ship of state enough to avoid an imminent crash upon the socialist rocks.
Despite my materials analysis laboratory small business being in the fourth year of greatly reduced company earnings due to the never-ending Great Socialist Recession, I have just made donations to each of the Republican Senate candidates above in these toss-up races. I hope that the recent rise in the polls of Romney and the rise of a number of these Republican candidates in their states, will result in the combination of Senate control with a Republican President needed to undo most of the damage done by a Democrat Congress for four years, followed by a Democrat Senate with four years of a Democrat President. May the healing begin.
It is absolutely essential that ObamaCare, really the ObamaUncaringTax, be repealed. It is also very important to repeal the Dodd-Frank Too-Big-to-Fail Crony Mercantilism Act. It is essential to reform and control the EPA and finally kill the myth of catastrophic man-made global warming. We must free business to develop our huge oil and gas deposits and to make use of our rich supply of coal. We must end the waste of taxpayer dollars fed into uneconomic green energy companies with no viable markets and the electricity mandates for green energy that are driving up our electric bills and making our electricity supply unreliable. We also need to push back the government employee unions, the abuses of the Obama National Labor Relations Board (NRLB), and try to provide national Right to Work legislation. We need the opportunity to replace one or more of the five Supreme Court Justices who so falsely read the Constitution that they could vote to uphold ObamaCare. To accomplish this critical mission, we have to have a Republican Senate for the next two years.
According to the present Rasmussen Reports on the state of the Senate contests in the November 2012 election, the situation is:
Held by Republicans, not up for re-election, 37
Safe Republicans, up for election, 6
Leaning Republican, 4
Toss-ups, 5
Leaning Democrat, 6
Safe Democrat, 12
Held by Democrats, not up for re-election, 30
If all of the safe and leaning Senate races go as Rasmussen predicts, then the Republicans will have 47 seats and the Democrats will have 48 seats in the Senate. Consequently, the Republicans have to win 3 of the 5 toss-up seats for there to be a 50-50 split of the Senate, with tie votes to be decided by Paul Ryan. Of course, it would be much better for the Republicans to win at least four of the five toss-up races. These toss-up races are:
Massachusetts, Scott Brown (R) v. Elizabeth Warren (D)
Montana, Denny Rehberg (R) v. Jon Tester (D)
Ohio, Josh Mandel (R) v. Sherrod Brown (D)
Virginia, George Allen (R) v. Tim Kaine (D)
Wisconsin, Tommy Thompson (R) v. Tammy Baldwin (D)
Scott Brown (R) and Elizabeth Warren (D) have generally been running a very close race for the Massachusetts Senate seat for a long time. She is an ultra-socialist who likes to say to small business owners that they did not create and build their businesses, the government and maybe the community did. She is mad to redistribute as much income as she can. Of course, she is determined to keep Americans from developing the new riches in oil and gas deposits that fracking has opened up. She is also aligned with Obama in determination to kill the coal industry. If she wins, she will be developed as a likely 2016 presidential candidate. So, though Scott Brown is a moderate Republican who is often a friend of big government, she is a much greater danger as a friend of huge government. This is an election contest which the Republicans can win. Please support Scott Brown with a strategic contribution.
The Montana Senate seat race has incumbent Jon Tester (D) against Denny Rehberg (R), with the momentum in Rehberg's favor. Rehberg is a rancher and small businessman who has long served as Montana's soul member of the House of Representatives. In the 2011 Club for Growth Ratings of the financial responsibility of House members, Rehberg's rating was a rather low one for Republicans at 58%. However, almost no Democrats scored more than 20% and not one came close to getting a 58% rating. In the Club for Growth Senate Ratings, Jon Tester had a 17% score. Denny Rehberg would be a decided upgrade and he is needed badly to repeal ObamaCare, Dodd-Frank, and to reset the EPA and the NRLB. A donation to his campaign would be a wise and strategic investment in America.
The Ohio Senate race features Josh Mandel (R) running against incumbent Sherrod Brown (D), who is commonly called the most socialist Senator, now that Obama is no longer the most socialist Senator. Supporting Josh Mandel has the effect of also adding to ads and get out the vote efforts that will help push Romney over the top in this critical swing state. Josh is all about good government. Please read his bio, which is a hard-nosed description of what he has done as Treasurer of the state of Ohio and when he was in the Ohio House. This is not a fluff politician. He won his election as Treasurer as the biggest vote-getter in the state, winning 80 of 88 counties in Ohio. Standard and Poor rated his $4 billion government investment fund with its highest rating. His General Obligation bond fund has Fitch's highest rating. He expanded the Ohio liquidity portfolio by $2.3 billion since he took office. Josh is pro-free enterprise and a strong supporter of the Constitution. He has the strongest possible endorsement from the Club for Growth. Josh Mandel will be a super good Senator. In comparison, Sherrod Brown had a 2011 Senate Club for Growth rating of 0%. Donating to the campaign of Josh Mandel is a super strategic investment in good government!
In Virginia, George Allen (R) is pitted against Tim Kaine (D), a former spend-thrift governor who left the finances of the state of Virginia in disarray. Virginia is a swing state, so supporting Allen will tend to also support Romney. George Allen is not the strongest Republican candidate, but the election is starting to swing in his direction. The people of the state of Virginia are beginning to wake up to the sad state of the Obama economy, though their very highly populated northern Virginia Washington suburbs have benefited greatly from the mindless federal government spending under Obama. They are beginning to also learn that the Defense sequestration of budgeted funds to run DoD and the armed forces looming to take effect in January is going to shatter defense contractors and leave DoD employees without pay for about two months. Government spending reductions by all other government agencies are being spread out over a period of time to minimize the impact of the upcoming spending reductions, but DoD has been told by Obama that it has to continue spending its allocations of funding at the originally specified rate and take all of the hit in January on the sequestration. In other words, DoD is to take a nose-dive over the cliff onto the rocks below at Obama's command. Since deployed armed forces cannot be stood down, this means that incredibly drastic cuts in money going out to contractors and to civilian DoD employees has to occur. This will shatter the economies of Northern Virginia, Norfolk, Virginia Beach, and Hampton Roads. In addition, Obama has ordered the defense contractors, who are required by law to notify employees 60 days prior to termination, to ignore the law. The termination notices are due the week before the election. The government has promised to pay the fines that the companies will be subjected to for ignoring the law. This is completely lawless behavior by Obama to help his re-election chances. Tim Kaine is very supportive of Obama in this dastardly and destructive plan. George Allen, for all his limitations, will be much the better Senator and he is critically needed to repeal ObamaCare and the other accumulated mischief of the Democrats over the four years from 2007 through 2010 when they controlled both houses of Congress. Again, please make a strategic donation to George Allen.
The Wisconsin Senate race features Tommy Thompson (R) against Tammy Baldwin (D). Tommy Thompson was a former Wisconsin governor and cut income and property taxes and eliminated the inheritance tax. Tammy Baldwin is a Madison liberal who serves in the House of Representatives. Her Club for Growth rating in 2011 was a miserable 9%. Giving Tammy Baldwin one of the contested Senate seats would be an unmitigated disaster. Making a donation to Tommy Thompson is another strategic investment toward turning the ship of state enough to avoid an imminent crash upon the socialist rocks.
Despite my materials analysis laboratory small business being in the fourth year of greatly reduced company earnings due to the never-ending Great Socialist Recession, I have just made donations to each of the Republican Senate candidates above in these toss-up races. I hope that the recent rise in the polls of Romney and the rise of a number of these Republican candidates in their states, will result in the combination of Senate control with a Republican President needed to undo most of the damage done by a Democrat Congress for four years, followed by a Democrat Senate with four years of a Democrat President. May the healing begin.
16 October 2012
Germans Face Skyrocketing Electricity Bills
Let us recall that Obama has promised us skyrocketing electricity bills. He wants to do to us what is already happening to the German people. Electricity costs are even worse in Denmark.
The German government is aiming to have 80% of German energy produced by renewable sources by 2050. It has also decided to close down all nuclear power plants by 2022. Older fossil fuel plants are being shut down already. Solar, wind, and biomass energy now are a quarter of the country's electricity supply. The levy subsidizing the green energy electricity sources instituted with the Renewable Energy Sources Act (EEG), has caused electricity costs to skyrocket. Electricity now costs about 85% more than in 2000, when EEG was passed. The EEG is to be increased by 47% next year to a toll of 5.3 cents per kilowatt hour. Already, electricity is less expensive in many European and Asian countries by 30%. It is 50% less expensive in the U.S. and Russia. This will cost Germany jobs.
The subsidy next year for renewable energy to be paid by German consumers is about 20 billion Euros. The Technical University of Berlin just issued a study that predicts that the subsidies crushing German consumers will be more than 300 billion Euros by 2030, which is unsustainable. Already, as many as 800,000 German households are unable to pay their electric bills. In 2009, German households spent an average of 2,500 Euros a year for energy. At the 2009 average monthly exchange rate to dollars, this was the equivalent of $3,474 a year. German households are now paying about 41% of their total bills for heating and hot water costs. After the electricity rate increases already scheduled for next year, further increases from 30 to 50% are expected over the next ten years.
Costs are not the only major problem. A very cold period in February 2011, was more than the electric grid could handle. A number of heavy industry plants in the Hamburg area were forced to shut-down. There is reason for concern that further shut-downs will be needed this winter and next winter.
The story for investors has been bleak. Wind and solar power system manufacturers are among the worst -performing stocks in the last few years. Vestas, the Danish wind turbine manufacturer, had a fantastic 20 times increase in stock value from 2003 to 2008. The value of the stock has now returned to the 2003 value. In 2012, Vestas is losing money and has had to reduce its workforce around the world by 3,735. Vestas America has cut jobs this year, hurting Obama's claim of creating many green jobs.
Solar panel makers have had a similarly hard time. SunTech of China is the largest photovoltaic panel manufacturer. Its private equity investors, including Goldman Sachs, made 10 times their original investment. When SunTech shares were initially launched on the stock market, they went from $20 to $79 in late 2007. The stock has crashed since to $0.92! Similarly, First Solar was at $308 in April 2008 and now is about $23. Falling prices due to a surplus of manufacturing capacity and sinking government subsidies have caused the solar industry to become unprofitable.
Yet, Obama still thinks he is going to create millions of green jobs in America. If he uses subsidies to do so, they will have to be huge. Huge subsidies will kill other jobs in greater numbers than those created in the green industries. The green industries have very brown thumbs.
The German government is aiming to have 80% of German energy produced by renewable sources by 2050. It has also decided to close down all nuclear power plants by 2022. Older fossil fuel plants are being shut down already. Solar, wind, and biomass energy now are a quarter of the country's electricity supply. The levy subsidizing the green energy electricity sources instituted with the Renewable Energy Sources Act (EEG), has caused electricity costs to skyrocket. Electricity now costs about 85% more than in 2000, when EEG was passed. The EEG is to be increased by 47% next year to a toll of 5.3 cents per kilowatt hour. Already, electricity is less expensive in many European and Asian countries by 30%. It is 50% less expensive in the U.S. and Russia. This will cost Germany jobs.
The subsidy next year for renewable energy to be paid by German consumers is about 20 billion Euros. The Technical University of Berlin just issued a study that predicts that the subsidies crushing German consumers will be more than 300 billion Euros by 2030, which is unsustainable. Already, as many as 800,000 German households are unable to pay their electric bills. In 2009, German households spent an average of 2,500 Euros a year for energy. At the 2009 average monthly exchange rate to dollars, this was the equivalent of $3,474 a year. German households are now paying about 41% of their total bills for heating and hot water costs. After the electricity rate increases already scheduled for next year, further increases from 30 to 50% are expected over the next ten years.
Costs are not the only major problem. A very cold period in February 2011, was more than the electric grid could handle. A number of heavy industry plants in the Hamburg area were forced to shut-down. There is reason for concern that further shut-downs will be needed this winter and next winter.
The story for investors has been bleak. Wind and solar power system manufacturers are among the worst -performing stocks in the last few years. Vestas, the Danish wind turbine manufacturer, had a fantastic 20 times increase in stock value from 2003 to 2008. The value of the stock has now returned to the 2003 value. In 2012, Vestas is losing money and has had to reduce its workforce around the world by 3,735. Vestas America has cut jobs this year, hurting Obama's claim of creating many green jobs.
Solar panel makers have had a similarly hard time. SunTech of China is the largest photovoltaic panel manufacturer. Its private equity investors, including Goldman Sachs, made 10 times their original investment. When SunTech shares were initially launched on the stock market, they went from $20 to $79 in late 2007. The stock has crashed since to $0.92! Similarly, First Solar was at $308 in April 2008 and now is about $23. Falling prices due to a surplus of manufacturing capacity and sinking government subsidies have caused the solar industry to become unprofitable.
Yet, Obama still thinks he is going to create millions of green jobs in America. If he uses subsidies to do so, they will have to be huge. Huge subsidies will kill other jobs in greater numbers than those created in the green industries. The green industries have very brown thumbs.
14 October 2012
Jack Rakove: Revolutionaries - A New History of the Invention of America
One of my greatest concerns is that few Americans know very much about American history. Most are especially ignorant of American history covering the period of the 1700s, when Americans generally came to believe in the American Principle of highly limited government devoted only to the protection of the equal, sovereign rights of the individual to life, liberty, property, the ownership of one's own mind, body, and labor, and to the pursuit of happiness. Few Americans today seem to understand that my explanation of individual rights is especially redundant, because at that time most Americans would have expressed the same idea as the right to life, liberty, and the pursuit of happiness or as life, liberty, and property.
I am finding considerable pleasure in reading Revolutionaries: A New History of the Invention of America by Jack Rakove, the William Robertson Coe Professor of History and American Studies and a professor of political science at Stanford University. This will not be a general effort to review the book, since I am still in the process of reading it. Instead, I am going to offer an interesting quote from the book.
Professor Rakove discusses the role of the moderates in the period leading up to the Declaration of Independence. The men he focuses on in this group are from the Middle Atlantic colonies of New York, Pennsylvania, New Jersey, and Maryland who were especially interested in the constructive economic development of America as entrepreneurs. He names the business partners Robert Morris and Thomas Willing of Pennsylvania and the lawyer they sometimes hired, James Wilson; John Jay, James Duane, Robert Livingston, and Gouverneur Morris of New York; William Livingston of New Jersey; and Thomas Johnson and Charles Carroll of Carrollton of Maryland as belonging to this group. He points out that moderate did not mean that they were just relatively undecided between the more radical patriots such as Samuel Adams, John Adams, and Richard Henry Lee and the Loyalists, but that they had their own very definite viewpoint. They were men of property, from that part of America with the most diverse population which might be torn apart in war, they understood that the colonies had much to benefit from the use of British capital, and they were appalled by Britain's rejection of their efforts to promote accommodation with an "obstinate commitment to repression and force."
We must understand that the General Welfare of our Constitution was not a fulfillment of the wishes of some fraction, possibly occasionally a majority, of Americans to take the property of others for their benefit, but an assertion that government was to secure the property each of us has in our individual rights and all that implies. The General Welfare therefore does not imply and require that the People go to war with some among them, but implies quite the opposite. We the People and our government must respect the property right that each and every American has in his individual rights. Only then is the General Welfare secured.
I am finding considerable pleasure in reading Revolutionaries: A New History of the Invention of America by Jack Rakove, the William Robertson Coe Professor of History and American Studies and a professor of political science at Stanford University. This will not be a general effort to review the book, since I am still in the process of reading it. Instead, I am going to offer an interesting quote from the book.
Professor Rakove discusses the role of the moderates in the period leading up to the Declaration of Independence. The men he focuses on in this group are from the Middle Atlantic colonies of New York, Pennsylvania, New Jersey, and Maryland who were especially interested in the constructive economic development of America as entrepreneurs. He names the business partners Robert Morris and Thomas Willing of Pennsylvania and the lawyer they sometimes hired, James Wilson; John Jay, James Duane, Robert Livingston, and Gouverneur Morris of New York; William Livingston of New Jersey; and Thomas Johnson and Charles Carroll of Carrollton of Maryland as belonging to this group. He points out that moderate did not mean that they were just relatively undecided between the more radical patriots such as Samuel Adams, John Adams, and Richard Henry Lee and the Loyalists, but that they had their own very definite viewpoint. They were men of property, from that part of America with the most diverse population which might be torn apart in war, they understood that the colonies had much to benefit from the use of British capital, and they were appalled by Britain's rejection of their efforts to promote accommodation with an "obstinate commitment to repression and force."
This strong commitment to the productive development and improvement of property helped distinguish the moderate political leaders of the middle colonies from their counterparts from other regions. Yet there was a deeper sense in which their attachment to the rights of property identified a value that all Americans shared. For property was one of the strongest words of the Anglo-American political vocabulary. Its security from unlawful taxation had been a dominant value of their common constitutional culture since the previous century. John Locke had grounded an entire theory of government -- and the right to resist tyranny -- on the concept of property in his Second Treatise of Government. But Locke only gave philosophical rigor to a belief that already permeated Anglo-American law and politics.
For Locke, as for his American readers, the concept of property encompassed not only the objects a person owned but also the ability, indeed the right, to acquire them. Just as men had a right to their property, so they held a property in their rights. Men did not merely claim their rights, but also owned them, and their title to their liberty was as sound as their title to the land or to the tools with which they earned their livelihood. Furthermore, Americans believed that they truly owned these rights because their ancestors had fairly purchased them through the arduous work of colonization. Just as Locke had grounded his theory of property on the labor through which men expropriate the fruits of nature for their personal use, making the earth more productive and thus fulfilling the divine injunction to preserve mankind, so the colonists looked back to their ancestor's pioneering and saw that it was good -- and legal too. Property was a birthright, a legal entitlement and material legacy that one industrious generation transmitted to another. ... Property, defined in this way, was the vital right that Parliament would infringe upon, even destroy, if it made good its claim to legislate for Americans "in all cases whatsoever."I have quoted this because modern Americans do not understand that our most fundamental property is in the ownership of our rights, our bodies, our minds, and our labor and the fruits of that labor. The concept of such property was and is central to the understanding of the American Principle. If we do not understand this, then we will surely be ruled by tyrannical government and be reduced to serfs.
We must understand that the General Welfare of our Constitution was not a fulfillment of the wishes of some fraction, possibly occasionally a majority, of Americans to take the property of others for their benefit, but an assertion that government was to secure the property each of us has in our individual rights and all that implies. The General Welfare therefore does not imply and require that the People go to war with some among them, but implies quite the opposite. We the People and our government must respect the property right that each and every American has in his individual rights. Only then is the General Welfare secured.
An outline of my approach to reviving the economy
In mentioning that the Obama economy made it much more difficult for small businesses such as my materials analysis laboratory to continue to operate, a scientist with whom I had been corresponding about his analytical needs claimed that no one could do the job of reviving the economy better than Obama. He then asked what I would do. Here is my 13-point reply with minor embellishments:
1) Kill ObamaUncaringTax, too nicely called ObamaCare.
2) Kill the Dodd-Frank Too-Big-to-Fail Act which is stultifying the loan markets and setting up the next colossal financial bubble.
3) Enforce the work requirement on government charity programs and begin rapidly phasing them out. The private sector can pick up whatever programs it wants to.
4) Stop the EPA's vendetta against the use of coal. The mercury and other pollution arguments are greatly exaggerated and really mostly an excuse to act on the failed hypothesis that man's CO2 emissions are causing a catastrophic global warming.
5) Recognizing that the catastrophic man-made global warming hypothesis is wrong, stop discouraging other fossil fuel use and freely allow the development of new sources of oil and gas. Open up leases on federal land and offshore for development. End federal subsidies and mandates for green energy development.
6) Kill the federal CAFE requirement for 54.5 mpg by 2025 or any other date.
7) Authorize the building of the Keystone XL pipeline so the Gulf of Mexico refineries are fed plenty of Bakken shale oil and Albertan tar sands oil.
8) Increase the retirement age for Social Security and the coverage age for Medicare.
9) Eliminate the Dept. of Education, the Dept. of Energy, the Dept. of Housing and Urban Development, the Labor Dept., most of the functions of the Dept. of Health and Human Services, the Agriculture Dept., reduce the Dept. of the Interior, eliminate the Transportation Dept., and reduce the Dept. of Homeland Security. Fold the legitimate functions of the Labor, Agriculture, and Transportation Departments into the Commerce Dept. Eliminate corporate welfare programs in the Commerce Dept., as well as the labor union welfare programs now in the Labor Dept. Kill the Davis-Bacon Act and federal requirements that union wages be paid on federal contracts.
10) Convert the Medicare program into a defined benefits program so that Medicare patients care about how much they spend and will not allow overcharging. All government fraud, waste, and abuse programs are a pretense and are only used selectively to occasionally prosecute someone who is not playing the game to the liking of the powers that be in government.
11) Sell most of the federal lands with mineral rights and use payments to pay down the debt. The main purpose of this is to see that the land will be used more productively.
12) Convert the Social Security program over time from a Ponzi scheme to a tax-deferred personal investment program with the investment truly held by the investing individual.
13) Reduce tax revenues as drastic spending cuts are enacted and simplify the tax laws and codes. Preferably move to consumption taxes as opposed to taxes that inhibit production. Consumption taxes will eliminate almost all reporting of financial information to the government. Eliminate Sarbanes-Oxley. Government spending will be quickly reduced to 18% or less of GDP and then cuts will continue until it is no more than 10% of GDP. The economy will grow by leaps and bounds as the cost of government is kept growing somewhere between the rate of population increase and the rate of GDP increase, but definitely significantly less than the rate of GDP increase.
That is the gist of my program to transform the American economy consistent with the American Principle of government limited to the protection of our equal, sovereign individual rights to life, liberty, property, the ownership of our minds, bodies, and labor, and the pursuit of happiness. The key to the preservation of our rights is a rich and vibrant private sector where we are free to pursue our own values, to trade goods, services, and ideas, and to associate with others of our choice for the purposes of our choice.
There are many other reforms needed to fully protect all of the rights of the individual. Some of these will have major economic implications as well. For instance, all education should become private education. It is not the business of the government to educate the people, since that would be an infringement of the rights of many and government has a very serious conflict-of-interest problem with respect to teaching about its legitimate functions, about ethical matters that must enter into issues affecting the freedom of conscience of the People, and about the history of failure of big government and the success of highly limited government. Much more needs to be done to protect privacy, the freedom of movement, freedom of speech and the written word whether in press or on the Internet, freedom of assembly, freedom of association, freedom of contract, freedom of trade and the ownership of one's own labor and its fruits, the freedom to create a domestic partnership contract with any consenting adults of one's choice, and the freedom of property ownership, including that in one's mind and body.
1) Kill ObamaUncaringTax, too nicely called ObamaCare.
2) Kill the Dodd-Frank Too-Big-to-Fail Act which is stultifying the loan markets and setting up the next colossal financial bubble.
3) Enforce the work requirement on government charity programs and begin rapidly phasing them out. The private sector can pick up whatever programs it wants to.
4) Stop the EPA's vendetta against the use of coal. The mercury and other pollution arguments are greatly exaggerated and really mostly an excuse to act on the failed hypothesis that man's CO2 emissions are causing a catastrophic global warming.
5) Recognizing that the catastrophic man-made global warming hypothesis is wrong, stop discouraging other fossil fuel use and freely allow the development of new sources of oil and gas. Open up leases on federal land and offshore for development. End federal subsidies and mandates for green energy development.
6) Kill the federal CAFE requirement for 54.5 mpg by 2025 or any other date.
7) Authorize the building of the Keystone XL pipeline so the Gulf of Mexico refineries are fed plenty of Bakken shale oil and Albertan tar sands oil.
8) Increase the retirement age for Social Security and the coverage age for Medicare.
9) Eliminate the Dept. of Education, the Dept. of Energy, the Dept. of Housing and Urban Development, the Labor Dept., most of the functions of the Dept. of Health and Human Services, the Agriculture Dept., reduce the Dept. of the Interior, eliminate the Transportation Dept., and reduce the Dept. of Homeland Security. Fold the legitimate functions of the Labor, Agriculture, and Transportation Departments into the Commerce Dept. Eliminate corporate welfare programs in the Commerce Dept., as well as the labor union welfare programs now in the Labor Dept. Kill the Davis-Bacon Act and federal requirements that union wages be paid on federal contracts.
10) Convert the Medicare program into a defined benefits program so that Medicare patients care about how much they spend and will not allow overcharging. All government fraud, waste, and abuse programs are a pretense and are only used selectively to occasionally prosecute someone who is not playing the game to the liking of the powers that be in government.
11) Sell most of the federal lands with mineral rights and use payments to pay down the debt. The main purpose of this is to see that the land will be used more productively.
12) Convert the Social Security program over time from a Ponzi scheme to a tax-deferred personal investment program with the investment truly held by the investing individual.
13) Reduce tax revenues as drastic spending cuts are enacted and simplify the tax laws and codes. Preferably move to consumption taxes as opposed to taxes that inhibit production. Consumption taxes will eliminate almost all reporting of financial information to the government. Eliminate Sarbanes-Oxley. Government spending will be quickly reduced to 18% or less of GDP and then cuts will continue until it is no more than 10% of GDP. The economy will grow by leaps and bounds as the cost of government is kept growing somewhere between the rate of population increase and the rate of GDP increase, but definitely significantly less than the rate of GDP increase.
That is the gist of my program to transform the American economy consistent with the American Principle of government limited to the protection of our equal, sovereign individual rights to life, liberty, property, the ownership of our minds, bodies, and labor, and the pursuit of happiness. The key to the preservation of our rights is a rich and vibrant private sector where we are free to pursue our own values, to trade goods, services, and ideas, and to associate with others of our choice for the purposes of our choice.
There are many other reforms needed to fully protect all of the rights of the individual. Some of these will have major economic implications as well. For instance, all education should become private education. It is not the business of the government to educate the people, since that would be an infringement of the rights of many and government has a very serious conflict-of-interest problem with respect to teaching about its legitimate functions, about ethical matters that must enter into issues affecting the freedom of conscience of the People, and about the history of failure of big government and the success of highly limited government. Much more needs to be done to protect privacy, the freedom of movement, freedom of speech and the written word whether in press or on the Internet, freedom of assembly, freedom of association, freedom of contract, freedom of trade and the ownership of one's own labor and its fruits, the freedom to create a domestic partnership contract with any consenting adults of one's choice, and the freedom of property ownership, including that in one's mind and body.
12 October 2012
The Movie Atlas Shrugged, Part II, Either-Or
The movie Atlas Shrugged, Part II on the second of three sections of the great novel by Ayn Rand is opening in theaters today. The second section of the novel, Either-Or, is full of action and crises brought on by big government and the irrational and immoral ideas that support it. It also features important developments in the lives of many of the principle characters who have long been taken advantage of and for granted. The task of a movie to develop the ideas, the evolutions of character and understanding, and the mystery plot is beyond the reasonably possible in a movie format. But, a movie should be able to achieve an interesting and enjoyable experience in its own terms. I am expecting that from this movie, especially since my friends David Kelley and Laurie Rice of the Atlas Society helped to advise the producers, writers, director, and actors in this production.
Anna and I will be going to see it this weekend. It would have been nice to have gone out to see it tonight, but I am incredibly busy in my laboratory and have worked stretches of 29 and 19 continuous hours straight this week as a result. Postings due to the critical need to thwart the re-election of the damaging socialist Obama and a remodeling of our laboratory website have been poured on top of a surge in laboratory projects. Tonight, I had a visitor who was interested in filming an advertisement for a university pushing its program in forensic sciences. He concluded that the Anderson Materials Evaluation laboratory would be a perfect location for this project, which may be scheduled for next week. Movie cameras and actors may be invading my lab next week!
Anna also falls short on sleep during the week, so Friday night is her catch-up night. Tomorrow we will see Atlas Shrugged, Part II in a refreshed mode. I will comment on it here afterwards.
Anna and I will be going to see it this weekend. It would have been nice to have gone out to see it tonight, but I am incredibly busy in my laboratory and have worked stretches of 29 and 19 continuous hours straight this week as a result. Postings due to the critical need to thwart the re-election of the damaging socialist Obama and a remodeling of our laboratory website have been poured on top of a surge in laboratory projects. Tonight, I had a visitor who was interested in filming an advertisement for a university pushing its program in forensic sciences. He concluded that the Anderson Materials Evaluation laboratory would be a perfect location for this project, which may be scheduled for next week. Movie cameras and actors may be invading my lab next week!
Anna also falls short on sleep during the week, so Friday night is her catch-up night. Tomorrow we will see Atlas Shrugged, Part II in a refreshed mode. I will comment on it here afterwards.
10 October 2012
Explanation for the Huge Surge in Part-Time Jobs in September
It has been pointed out that in years past, employment of 18 to 25 year olds has fallen drastically in September as students returned to college and gave up their summer jobs. Not this September. Also not last
September.
I suspect three things are going on here. One is that these last two summers, many fewer students were able to find jobs in the summer, so the student drop in employment in September was much less due to them returning to college. Another effect is that with college expenses having increased much more than family incomes have for many years and the actual loss of real family incomes over the last few years, many more students may have very part-time work-aid assignments at their colleges as part of their student-aid package. Finally, in the past, the BLS was inclined to ignore these very part-time college jobs and not count these students as employed while in college. What if they are now very assiduously counting these work aid students as part-time employed in the household survey? This would account for the strange increase in employment of 18 - 25 year olds these last two Septembers and for the huge increase in part-time jobs precisely in the month of September.
This is a very natural way for the Obama administration to make use of the students to help save his re-election chances. The Democrats have been very assiduous in courting students by forcing their parent's health insurance to allow them to be kept on their parent's policies until they are 26, by ever more heavily subsidizing their student loans, and by carefully indoctrinating them in the beliefs of the Progressive Elitists in dominant control of virtually every college campus. These students are in turn generally very enthusiastic supporters. The Democrats are child molesters, though in this case molesters of their underdeveloped minds. They give a great deal of thought of how to take advantage of them, so it is a natural thing that they thought of using their work-aid as a means to bolster the employment numbers just prior to the election.
Update, Afternoon of 10 October 2012:
That was an interesting idea, but on looking deeper into the BLS numbers in Table A-8 and Table A-9 in the September employment report, it does not hold water. Instead, we find something very different and still disturbing. First let us look at the change in employed by age from Table A-9 in September compared to August using the Not Seasonally Adjusted Numbers:
16-17 years, -130,000
18-19 years, -455,000
20-24 years, +101,000
25-34 years, +291,000
35-44 years, +249,000
45-54 years, +238,000
55 & older, +483,000
College students are mostly 18 - 21, so it is fairly clear that there is a net decrease in employment in those ages, so the work-study part-time work is not the explanation. The explanation is found in Table A-8, where we find that the major change in employment was in government workers. Government workers increased by 934,000!!!!! The more complete story in the Not Seasonally Adjusted numbers is:
Government workers, +934,000
Self-employed workers, unincorporated, +90,000
Agriculture and related industries, -53,000
Private households, +15,000
Other Industries, -221,000
So much as one would expect given the general sorry state of the economy, industry is shedding employees in large numbers and some of the unemployed are setting up their own micro-businesses. What on Earth is going on with this massive hiring of government workers though?
Teachers are mostly government workers and they do massively become employed again in September after being off for the summer. However, any seasonal adjustment should eliminate the annual effect of re-hiring teachers in September. So, we can examine the seasonally adjusted number of government employees and should see this number wiped out to the degree that it is teachers. It turns out that the seasonally adjusted number is only 106,000 lower! Now this makes no sense, since there are clearly many times 106,000 teachers who go back to public school jobs in September. Maybe if the adjustment was formulated over many years, the fact that more teachers may have found summer jobs in the past than could now might make for a smaller adjustment projected from the past onto the present.
The federal government has not been hiring massive numbers of new employees and the state and local governments are having trouble paying the employees they already have. It would appear that there was no adequate seasonal adjustment for the annual return of government-employed teachers to public schools! Whatever the case of the surge in the numbers of government workers, this is not an indication of any sort of recovery in the economy. On the contrary, the numbers indicate a worsening of the economy with the loss of 221,000 more jobs in industry. A gain of 934,000 government workers, even if actual, would not be indicative of an improving economy.
How could the BLS fail to make a seasonal adjustment on teachers that would not make their annual return to school look like a boom in hiring? How convenient for Obama that in the last employment report prior to the election they did not make this annual correction? All of those claims that the BLS is staffed with professional and incorruptible people are hard to support now.
I suspect three things are going on here. One is that these last two summers, many fewer students were able to find jobs in the summer, so the student drop in employment in September was much less due to them returning to college. Another effect is that with college expenses having increased much more than family incomes have for many years and the actual loss of real family incomes over the last few years, many more students may have very part-time work-aid assignments at their colleges as part of their student-aid package. Finally, in the past, the BLS was inclined to ignore these very part-time college jobs and not count these students as employed while in college. What if they are now very assiduously counting these work aid students as part-time employed in the household survey? This would account for the strange increase in employment of 18 - 25 year olds these last two Septembers and for the huge increase in part-time jobs precisely in the month of September.
This is a very natural way for the Obama administration to make use of the students to help save his re-election chances. The Democrats have been very assiduous in courting students by forcing their parent's health insurance to allow them to be kept on their parent's policies until they are 26, by ever more heavily subsidizing their student loans, and by carefully indoctrinating them in the beliefs of the Progressive Elitists in dominant control of virtually every college campus. These students are in turn generally very enthusiastic supporters. The Democrats are child molesters, though in this case molesters of their underdeveloped minds. They give a great deal of thought of how to take advantage of them, so it is a natural thing that they thought of using their work-aid as a means to bolster the employment numbers just prior to the election.
Update, Afternoon of 10 October 2012:
That was an interesting idea, but on looking deeper into the BLS numbers in Table A-8 and Table A-9 in the September employment report, it does not hold water. Instead, we find something very different and still disturbing. First let us look at the change in employed by age from Table A-9 in September compared to August using the Not Seasonally Adjusted Numbers:
16-17 years, -130,000
18-19 years, -455,000
20-24 years, +101,000
25-34 years, +291,000
35-44 years, +249,000
45-54 years, +238,000
55 & older, +483,000
College students are mostly 18 - 21, so it is fairly clear that there is a net decrease in employment in those ages, so the work-study part-time work is not the explanation. The explanation is found in Table A-8, where we find that the major change in employment was in government workers. Government workers increased by 934,000!!!!! The more complete story in the Not Seasonally Adjusted numbers is:
Government workers, +934,000
Self-employed workers, unincorporated, +90,000
Agriculture and related industries, -53,000
Private households, +15,000
Other Industries, -221,000
So much as one would expect given the general sorry state of the economy, industry is shedding employees in large numbers and some of the unemployed are setting up their own micro-businesses. What on Earth is going on with this massive hiring of government workers though?
Teachers are mostly government workers and they do massively become employed again in September after being off for the summer. However, any seasonal adjustment should eliminate the annual effect of re-hiring teachers in September. So, we can examine the seasonally adjusted number of government employees and should see this number wiped out to the degree that it is teachers. It turns out that the seasonally adjusted number is only 106,000 lower! Now this makes no sense, since there are clearly many times 106,000 teachers who go back to public school jobs in September. Maybe if the adjustment was formulated over many years, the fact that more teachers may have found summer jobs in the past than could now might make for a smaller adjustment projected from the past onto the present.
The federal government has not been hiring massive numbers of new employees and the state and local governments are having trouble paying the employees they already have. It would appear that there was no adequate seasonal adjustment for the annual return of government-employed teachers to public schools! Whatever the case of the surge in the numbers of government workers, this is not an indication of any sort of recovery in the economy. On the contrary, the numbers indicate a worsening of the economy with the loss of 221,000 more jobs in industry. A gain of 934,000 government workers, even if actual, would not be indicative of an improving economy.
How could the BLS fail to make a seasonal adjustment on teachers that would not make their annual return to school look like a boom in hiring? How convenient for Obama that in the last employment report prior to the election they did not make this annual correction? All of those claims that the BLS is staffed with professional and incorruptible people are hard to support now.
07 October 2012
Making Sense of the Rasmussen Presidential Tracking Poll
According to a three-day average over 3 - 5 October, the daily Rasmussen Presidential Poll reports that Romney was leading by 49% to 47%. However, Rasmussen also says that Romney has the vote of 89% of Republicans and Obama has the vote of 88% of Democrats, while Romney is up 16% on Obama among those not affiliated with the Republican or Democrat Parties. The report I have seen does not say how many Republicans are planning to vote for Obama or how many Democrats plan to vote for Romney. The report also does not say what percentage of Republicans, Democrats, and unaffiliated voters were sampled.
The Rasmussen party affiliation survey for September is now available. According to it party affiliation is as follows:
Republicans, 36.8%
Democrats, 34.2%
Other, 29.0%
Democrats have increased by 0.9% since August, Republicans have decreased by 0.6%, and Others have decreased by 0.2%. I expect the media claims that the Romney campaign was losing and Romney did nothing but make gaffes had pushed down the Republican affiliations and boosted the Democrat affiliation. Romney's debate performance may reverse that trend in October.
I will assume that 4% of the 29.0% may vote for the micro-parties such as Libertarian, Green, Constitution, and Socialist Workers. This leaves 25.0% of non-affiliated voters to pick either Romney or Obama and Romney is up by +16, so this implies that 58% will vote for Romney and 42% will vote for Obama. The last two Washington Post/ABC News polls I adjusted for party affiliation had about 7% of each party voting for the candidate of the other party, so I will assume that here, to the advantage of Obama. So, how does the adjusted vote turn out then:
Romney: (0.89)(36.8%) + (0.07)(34.2%) + (0.58)(25.0%) = 49.6%
Obama: (0.07)(36.8%) + (0.88)(34.2%) + (0.42)(25.0%) = 43.2%
Thus, Romney had a 6.4% advantage in a poll including the day of the debate and the two days after the debate. How on Earth Rasmussen manages to reduce this to a 2% Romney advantage, I have no idea.
If the pollsters are thinking that Republicans and anti-Obama unaffiliated voters are not going to vote in this election, I think they are out of their minds. What is more, Rasmussen reported that this poll gave Romney a double-digit advantage with voters over 40 years of age and these voters do turn up at the polls. Obama on the other hand had a double-digit advantage with voters under 40. That part of his pool under 25 are represented among the unemployed in large numbers. Many of them cannot afford the high Obama gasoline costs to fuel their overly expensive clunkers (thanks to the Cash for Clunkers Obama program that made old cars scarce) to get to the polling places. In general, the younger voters do not vote in the same percentages as older voters, so my adjusted results probably understate the extent of the Romney advantage.
In my lifetime, no presidential candidate has won the electoral vote when behind in the popular vote by more than a few tenths of a percent. Even before the debate, there was considerable evidence that the polls of the swing states were heavily over-sampling Democrats and the reported leads by Obama in many of those states were fallacious. An evaluation of polls for the states of Florida, Ohio, and Virginia made before the debate indicated that they were highly misleading and that Romney was really ahead in each of them. I think Romney is going to win the election despite the best efforts of most of the media to throw the election to Obama.
I am quite disappointed in Scott Rasmussen and his polls. I thought he usually did a good job polling, but the evidence here is that he is not doing so now.
The Rasmussen party affiliation survey for September is now available. According to it party affiliation is as follows:
Republicans, 36.8%
Democrats, 34.2%
Other, 29.0%
Democrats have increased by 0.9% since August, Republicans have decreased by 0.6%, and Others have decreased by 0.2%. I expect the media claims that the Romney campaign was losing and Romney did nothing but make gaffes had pushed down the Republican affiliations and boosted the Democrat affiliation. Romney's debate performance may reverse that trend in October.
I will assume that 4% of the 29.0% may vote for the micro-parties such as Libertarian, Green, Constitution, and Socialist Workers. This leaves 25.0% of non-affiliated voters to pick either Romney or Obama and Romney is up by +16, so this implies that 58% will vote for Romney and 42% will vote for Obama. The last two Washington Post/ABC News polls I adjusted for party affiliation had about 7% of each party voting for the candidate of the other party, so I will assume that here, to the advantage of Obama. So, how does the adjusted vote turn out then:
Romney: (0.89)(36.8%) + (0.07)(34.2%) + (0.58)(25.0%) = 49.6%
Obama: (0.07)(36.8%) + (0.88)(34.2%) + (0.42)(25.0%) = 43.2%
Thus, Romney had a 6.4% advantage in a poll including the day of the debate and the two days after the debate. How on Earth Rasmussen manages to reduce this to a 2% Romney advantage, I have no idea.
If the pollsters are thinking that Republicans and anti-Obama unaffiliated voters are not going to vote in this election, I think they are out of their minds. What is more, Rasmussen reported that this poll gave Romney a double-digit advantage with voters over 40 years of age and these voters do turn up at the polls. Obama on the other hand had a double-digit advantage with voters under 40. That part of his pool under 25 are represented among the unemployed in large numbers. Many of them cannot afford the high Obama gasoline costs to fuel their overly expensive clunkers (thanks to the Cash for Clunkers Obama program that made old cars scarce) to get to the polling places. In general, the younger voters do not vote in the same percentages as older voters, so my adjusted results probably understate the extent of the Romney advantage.
In my lifetime, no presidential candidate has won the electoral vote when behind in the popular vote by more than a few tenths of a percent. Even before the debate, there was considerable evidence that the polls of the swing states were heavily over-sampling Democrats and the reported leads by Obama in many of those states were fallacious. An evaluation of polls for the states of Florida, Ohio, and Virginia made before the debate indicated that they were highly misleading and that Romney was really ahead in each of them. I think Romney is going to win the election despite the best efforts of most of the media to throw the election to Obama.
I am quite disappointed in Scott Rasmussen and his polls. I thought he usually did a good job polling, but the evidence here is that he is not doing so now.
Further Comments on the Dismal September Jobs Report
Here are some further comments on the September jobs report we should all be aware of:
On the other hand, the household survey data says many more new jobs were created, so most of those additional jobs are self-employed or in the farm sector. We also know most of those jobs are part-time jobs due to that 600,000 increase in part-time jobs. My expectation is that many of these jobs are due to people who have been long out of work setting up their own business at home. We know this to have been the case for a very large fraction of the new jobs created since the depths of the recession. Desperate families may also have wives who are raising children setting up more businesses to earn a few dollars to pay for the rising cost of living and to supplement the falling incomes of husbands. We know that women have been setting up their own small businesses in record numbers.
Median household income adjusted for the official, understated cost-of-living was down to $50,054 in 2011, or 8% less than in 2007. Properly adjusted, household incomes were even more degraded. This should drive people into the part-time workforce who would not normally be there. So, while capitalized start-up businesses have been way down, home businesses with no real capital have been growing in numbers. Unfortunately, most of them generate considerably less income than would a job at an established business.
It has been pointed out that in years past, employment of 18 to 25 year olds has fallen drastically in September as students returned to college and gave up their summer jobs. Not this September. Also not last September. I suspect two things are going on here. One is that these last two summers, many fewer students were able to find jobs in the summer, so the student drop in employment in September was much less due to them returning to college. The other effect is that with college expenses having increased much more than family incomes have for many years and the actual loss of real family incomes over the last few years, many more students may have very part-time work-aid assignments at their colleges as part of their student-aid package. In the past, the BLS was inclined to ignore these very part-time college jobs and not count these students as employed while in college. What if they are now very assiduously counting these work aid students as part-time employed in the household survey? This would account for the strange increase in employment of 18 - 25 year olds these last two Septembers and for the huge increase in part-time jobs precisely in the month of September. [Update on morning of 10 October 2012.]
We are also hearing more and more reports that many businesses such as restaurants and other service businesses are more and more reluctant to hire full-time employees with the onset of the ObamaUncaringTax program, sympathetically called ObamaCare. There is already a switch to hiring part-time workers. Restaurants are adopting the policy of mostly hiring people for 28 hours a week. An employer needs to hire about 43% more people at 28 hours a week compared to at 40 hours a week. That is good for a major surge in hiring which Obama is happy to claim is all his doing. In a way it is, since he gave us ObamaUncaringTax. Of course that program will ultimately also cost Americans not just full-time jobs, but it will also decrease the total number of hours for which people are hired across the nation.
Overall economic activity will slow as a result of ObamaUncaringTax. In addition to discouraging the optimal use of employees, it will also be adding to the corporation tax and making us still less competitive with the corporations of other countries. It adds to our medical care and insurance costs, redirecting the additional money we are forced to spend on overburdened doctors and hospitals from other parts of the economy. There was already going to be considerable redirection of money into the medical sector due to the aging of the Baby Boomers. That was already going to cause many problems in our society, including people losing jobs in other industries as a result.
Now Obama and the Democrats have decided to make that problem and the wrenching effects much worse by adding many more medical service demands from younger, more healthy Americans. After all, if you have to pay for a government approved plan with a low deduction and with many services most Americans have not previously thought were worth paying for, you are going to use more medical services. Doctor visits for reasons of low importance will go way up. Pity the frazzled doctors, except those with enough intelligence to refuse to take time for such patients. In practice, that will mean that more doctors will be refusing to take Medicaid patients and those on ObamaCare insurance that pays them less than the free market would under their still more over-worked conditions.
- The increased employment of Americans only affected white Americans. The employment rates for blacks, Hispanics, and teenagers were unchanged at their much higher rates.
- The long-term unemployed number changed little. 40.1% of the unemployed have been unemployed for more than 27 weeks.
- The number of people employed part-time for economic reasons increased by 600,000, which is equal to most of the 775,000 new jobs that were supposed to have been created in September according to the household survey!
- The establishment survey total non-farm payroll employment was up by only 114,000 in September, which is way below the anemic 2012 average of 146,000 per month and still more below the pitiful average per month in 2011 of 153,000. It is important to note that 114,000 establishment jobs is far, far less than the household survey number of 775,000.
- Employment rose in health care, transportation, and warehousing. The increase in transportation and warehousing at this time of year may be in anticipation of Christmas.
- Manufacturing employment dropped by 16,000 jobs.
On the other hand, the household survey data says many more new jobs were created, so most of those additional jobs are self-employed or in the farm sector. We also know most of those jobs are part-time jobs due to that 600,000 increase in part-time jobs. My expectation is that many of these jobs are due to people who have been long out of work setting up their own business at home. We know this to have been the case for a very large fraction of the new jobs created since the depths of the recession. Desperate families may also have wives who are raising children setting up more businesses to earn a few dollars to pay for the rising cost of living and to supplement the falling incomes of husbands. We know that women have been setting up their own small businesses in record numbers.
Median household income adjusted for the official, understated cost-of-living was down to $50,054 in 2011, or 8% less than in 2007. Properly adjusted, household incomes were even more degraded. This should drive people into the part-time workforce who would not normally be there. So, while capitalized start-up businesses have been way down, home businesses with no real capital have been growing in numbers. Unfortunately, most of them generate considerably less income than would a job at an established business.
It has been pointed out that in years past, employment of 18 to 25 year olds has fallen drastically in September as students returned to college and gave up their summer jobs. Not this September. Also not last September. I suspect two things are going on here. One is that these last two summers, many fewer students were able to find jobs in the summer, so the student drop in employment in September was much less due to them returning to college. The other effect is that with college expenses having increased much more than family incomes have for many years and the actual loss of real family incomes over the last few years, many more students may have very part-time work-aid assignments at their colleges as part of their student-aid package. In the past, the BLS was inclined to ignore these very part-time college jobs and not count these students as employed while in college. What if they are now very assiduously counting these work aid students as part-time employed in the household survey? This would account for the strange increase in employment of 18 - 25 year olds these last two Septembers and for the huge increase in part-time jobs precisely in the month of September. [Update on morning of 10 October 2012.]
We are also hearing more and more reports that many businesses such as restaurants and other service businesses are more and more reluctant to hire full-time employees with the onset of the ObamaUncaringTax program, sympathetically called ObamaCare. There is already a switch to hiring part-time workers. Restaurants are adopting the policy of mostly hiring people for 28 hours a week. An employer needs to hire about 43% more people at 28 hours a week compared to at 40 hours a week. That is good for a major surge in hiring which Obama is happy to claim is all his doing. In a way it is, since he gave us ObamaUncaringTax. Of course that program will ultimately also cost Americans not just full-time jobs, but it will also decrease the total number of hours for which people are hired across the nation.
Overall economic activity will slow as a result of ObamaUncaringTax. In addition to discouraging the optimal use of employees, it will also be adding to the corporation tax and making us still less competitive with the corporations of other countries. It adds to our medical care and insurance costs, redirecting the additional money we are forced to spend on overburdened doctors and hospitals from other parts of the economy. There was already going to be considerable redirection of money into the medical sector due to the aging of the Baby Boomers. That was already going to cause many problems in our society, including people losing jobs in other industries as a result.
Now Obama and the Democrats have decided to make that problem and the wrenching effects much worse by adding many more medical service demands from younger, more healthy Americans. After all, if you have to pay for a government approved plan with a low deduction and with many services most Americans have not previously thought were worth paying for, you are going to use more medical services. Doctor visits for reasons of low importance will go way up. Pity the frazzled doctors, except those with enough intelligence to refuse to take time for such patients. In practice, that will mean that more doctors will be refusing to take Medicaid patients and those on ObamaCare insurance that pays them less than the free market would under their still more over-worked conditions.
06 October 2012
Glacial Obama Jobs Growth Will Take a Complete Generation to Return to 5% Missing Jobs
The September employment numbers from the Bureau of Labor Statistics indicate a glacial increase in employment. The Obama jobs recovery over the last two years is at a rate adequate to return the U.S. to a real 5% rate of missing jobs in 18.5 years! Add this to the four years under his presidency so far with awful unemployment and a complete generation will have passed before we return to a real 5% unemployment rate. The real unemployment rate now is 12.88% and in September 2010 it was 13.73%. The real rate of jobs growth under Obama in the last two years is at a rate of 0.425% a year. Thus, to go from 12.88% missing jobs to 5.00% missing jobs will take (12.88% - 5.00%)/(0.425%/yr.) = 18.54yr. Add the almost four years of the Obama presidency to this and one has a complete generation mired in a very sorry jobs economy.
Of course, Obama is presently holding back on many of the jobs-killing policies he wants to implement after he is re-elected. These will likely wipe out the meager jobs growth we are presently seeing. We also have to remember that the Federal Reserve is pouring $40 billion a month into the economy now, which should be able to purchase a few jobs upon the first pulse of that money surge.
The number of missing jobs and the real unemployment rate are given in the table below using the BLS Household Survey Data without seasonal adjustments:
The classical unemployment rate has fallen considerably, but it is substantially due to people quitting their job search. The working age and available population increased from August to September by 206,000 people. The number employed increased by 775,000 according to these Obama administration BLS numbers, though given the state of the economy, I find that number rather difficult to believe. Unless, there are a lot of small business people out there who decided in September that Obama was not going to be re-elected and they are hiring on that belief!
Looking at the numbers of people unemployed, we see an even bigger decrease of 954,000 people. If we assume that none of the 206,000 new working age people wanted jobs and 775,000 of the officially recognized unemployed found jobs, then another 179,000 people gave up looking for a job. Does it not seem very unlikely that if 775,000 found a job in one month, that 179,000 who had just been looking for work would choose that time to stop looking for work? There is something rather out of kilter in these numbers. It may be that a lot more people really stopped looking for a job and decided they were by default self-employed. These days, many of the self-employed are not able to pay themselves a salary.
But even if we use these numbers, there are 21,189,000 missing jobs now. This is more missing jobs than were missing in September 2010! Thanks to the population growth, the percentage of missing jobs has come down slightly though as noted above. Here is the missing jobs chart:
Obviously the missing jobs chart does not show any major breakout in the rate of jobs creation once again in the last two and half years.
But, there may have been some jobs growth due to the decrease in savings rate and the increase in spending of Americans over the last two months. A good part of that spending increase went to pay for higher gasoline prices, however. The Economic Confidence Index improved in August, though many more Americans are still pessimistic about the economy than are optimistic. The Institute for Supply Management Manufacturing Index rose to 51.5 in September from 49.6 in August, indicating expansion for the first month since May. This expansion is based on the American economy alone, since world trade is decreasing. Europe is importing less and while China is claiming to have a GDP growth rate of 7.5%, its real growth rate is about zero. The service sector has been expanding all year, though it did the same in 2011. In September, it was at 55.1 up from 53.7 in August. Some of this service sector expansion is likely to have been generated by that $40 billion pumped into the economy in September by the Federal Reserve. Mortgage rates have continued to fall as well and are now averaging 3.36% for a 30-year mortgage. While mortgages are still hard to get, home sales have increased slightly.
I cannot see any reason whatsoever to give Obama any credit for the slight improvement implied by the latest jobs report, however. We should long ago have had much better jobs growth. Obama has worked overtime to cut down the U.S. economy with his wrongheaded economic policies. The 1.3% GDP growth claimed in the second quarter is surely a zero or negative growth rate in terms of real real per capita GDP. The cost of living index being used by the government understates our real cost of living so that the real GDP growth is overstated. The adjustment for per capita GDP means that a 1% growth in GDP is just that due to the population growing at a 1% rate a year. GDP has to grow faster than 1% so that our average standard of living will not fall.
The slightly higher 1.6% growth rate of GDP for the first half of the year is likely about a zero real real per capita growth rate. This is a highly stagnant economy. When Obama tries to brag about it and claim he is responsible for it, he is just showing his ignorance of the economy. We do not have to share that ignorance. If enough people do and he is re-elected, we will not see any significant improvement in the economy over the next four years. His plan to increase taxes by another $1 trillion and to implement ObamaUncaringTax will be a great kick to the head for the economy. Who knows how much more damage he will do as the rules for Dodd-Frank financial industry regulations are fixed or left unfixed so that no one can safely undertake any significant financial activity. He is also about to march his EPA brown shirts out to strangle all coal-fired power plants and he will take more actions to generally impede the use of fossil fuels. Of course, he will also continue the mal-investment of our tax money in impractical green energy schemes doomed to failure and run by his parasitic campaign donors.
Of course, Obama is presently holding back on many of the jobs-killing policies he wants to implement after he is re-elected. These will likely wipe out the meager jobs growth we are presently seeing. We also have to remember that the Federal Reserve is pouring $40 billion a month into the economy now, which should be able to purchase a few jobs upon the first pulse of that money surge.
The number of missing jobs and the real unemployment rate are given in the table below using the BLS Household Survey Data without seasonal adjustments:
The classical unemployment rate has fallen considerably, but it is substantially due to people quitting their job search. The working age and available population increased from August to September by 206,000 people. The number employed increased by 775,000 according to these Obama administration BLS numbers, though given the state of the economy, I find that number rather difficult to believe. Unless, there are a lot of small business people out there who decided in September that Obama was not going to be re-elected and they are hiring on that belief!
Looking at the numbers of people unemployed, we see an even bigger decrease of 954,000 people. If we assume that none of the 206,000 new working age people wanted jobs and 775,000 of the officially recognized unemployed found jobs, then another 179,000 people gave up looking for a job. Does it not seem very unlikely that if 775,000 found a job in one month, that 179,000 who had just been looking for work would choose that time to stop looking for work? There is something rather out of kilter in these numbers. It may be that a lot more people really stopped looking for a job and decided they were by default self-employed. These days, many of the self-employed are not able to pay themselves a salary.
But even if we use these numbers, there are 21,189,000 missing jobs now. This is more missing jobs than were missing in September 2010! Thanks to the population growth, the percentage of missing jobs has come down slightly though as noted above. Here is the missing jobs chart:
But, there may have been some jobs growth due to the decrease in savings rate and the increase in spending of Americans over the last two months. A good part of that spending increase went to pay for higher gasoline prices, however. The Economic Confidence Index improved in August, though many more Americans are still pessimistic about the economy than are optimistic. The Institute for Supply Management Manufacturing Index rose to 51.5 in September from 49.6 in August, indicating expansion for the first month since May. This expansion is based on the American economy alone, since world trade is decreasing. Europe is importing less and while China is claiming to have a GDP growth rate of 7.5%, its real growth rate is about zero. The service sector has been expanding all year, though it did the same in 2011. In September, it was at 55.1 up from 53.7 in August. Some of this service sector expansion is likely to have been generated by that $40 billion pumped into the economy in September by the Federal Reserve. Mortgage rates have continued to fall as well and are now averaging 3.36% for a 30-year mortgage. While mortgages are still hard to get, home sales have increased slightly.
I cannot see any reason whatsoever to give Obama any credit for the slight improvement implied by the latest jobs report, however. We should long ago have had much better jobs growth. Obama has worked overtime to cut down the U.S. economy with his wrongheaded economic policies. The 1.3% GDP growth claimed in the second quarter is surely a zero or negative growth rate in terms of real real per capita GDP. The cost of living index being used by the government understates our real cost of living so that the real GDP growth is overstated. The adjustment for per capita GDP means that a 1% growth in GDP is just that due to the population growing at a 1% rate a year. GDP has to grow faster than 1% so that our average standard of living will not fall.
The slightly higher 1.6% growth rate of GDP for the first half of the year is likely about a zero real real per capita growth rate. This is a highly stagnant economy. When Obama tries to brag about it and claim he is responsible for it, he is just showing his ignorance of the economy. We do not have to share that ignorance. If enough people do and he is re-elected, we will not see any significant improvement in the economy over the next four years. His plan to increase taxes by another $1 trillion and to implement ObamaUncaringTax will be a great kick to the head for the economy. Who knows how much more damage he will do as the rules for Dodd-Frank financial industry regulations are fixed or left unfixed so that no one can safely undertake any significant financial activity. He is also about to march his EPA brown shirts out to strangle all coal-fired power plants and he will take more actions to generally impede the use of fossil fuels. Of course, he will also continue the mal-investment of our tax money in impractical green energy schemes doomed to failure and run by his parasitic campaign donors.
04 October 2012
How Could One Replace a $5 Trillion Tax Revenue Reduction Due to Reduced Tax Rates?
Obama claimed that one cannot replace a loss of revenue from taxes of $5 trillion due to a reduction of tax rates such as Romney plans simply by closing loopholes. He is probably right, but what was not entirely adequately discussed is that Romney's understanding of the economy allows him to change many policies which will allow the economy to grow much more rapidly than it has or will in the future under Obama policies.
Democrats have a habit of making tax projections which ignore the benefit of growth. But, it is absolutely a critical component of rational tax policy. Tax revenues are a function of the tax rate, the amount the tax is applied to, and the frequency with which the tax rate is applied. Lowering the tax rate will bring in less money on a given transaction amount each time the tax is collected. However, lower rates allow greater growth of the economy, which means that the amount on which the tax is levied increases and the frequency of application in many cases also increases. The interaction of these three factors affecting the tax revenue is not nearly as simple as the common consideration of only the tax rate.
It was not made clear in the debate, but all of the numbers on tax revenue were apparently based on the next ten years of tax revenue. We have a $15 trillion GDP now. Under Obama, whose policies presently are allowing a government-claimed growth rate of only 1.6% so far this year which does not adequately adjust for price increases due to an understated government adjustment for the Consumer Price Index. The real real GDP growth is probably not even 1%, despite the fact that with a population growing at about 1% a year, a 1% growth rate in GDP is a give-me.
A combination of lower tax rates for business owners and for corporations will allow them to grow more and increase the GDP more. Lowering the rate for corporations, which is the opposite of what Obama has done despite his claim he wants to reduce corporate taxes, will allow multi-national corporations to bring home many profits they have made outside the US. Lower business tax rates will allow many companies to invest more in equipment, facilities, R&D, and training employees which will allow them to grow more rapidly. Allowing a much greater freedom to realize our huge fossil fuel resources will add considerable growth to our economy. Bringing down electricity costs by not forcing power companies to use expensive and unreliable wind, solar, and biomass energy will allow increased growth. Eliminating the requirement to use ethanol in gasoline would save a great deal of money and allow that to go to growth. Sensible relief from some of the excessive regulations of the EPA, the FDA, the SEC, the NRLB, and a host of other regulatory agencies will allow more growth. Repealing ObamaUncaringTax and Dodd-Frank will allow greater growth of the economy. The opportunities to improve GDP growth are many, but Obama has been and will continue to be on a stagnation path.
Let us look at the difference in the size of the economy over ten years at the Obama growth rate of 1% and at a reasonably attainable 4% growth rate which a President knowledgeable about the economy and business could manage. Here is the economy or GDP in trillions of dollars at the Obama growth rate:
2012, $15.00 trillion
2013, $15.15
2014, $15.3015
2015, $15.454515
2016, $15.609060
2017, $15.765151
2018, $15.922802
2019, $16.082030
2020, $16.242851
2021, $16.405279
2022, $16.569332
The cumulative 10 years of GDP to be taxed from 2013 through 2022 is then $158.50252 trillion. With a doable Romney growth rate of 4%, the growth of GDP looks like this:
2012, $15.00 trillion
2013, $15.60
2014, $16.224
2015, $16.87296
2016, $17.54788
2017, $18.249794
2018, $18.979785
2019, $19.738977
2020, $20.528536
2021, $21.349677
2022, $22.203664
The cumulative 10 years of GDP under the Romney growth rate of 4% is $187.29527 trillion. This is a cumulative $28.79275 advantage in a dynamic, growth economy. This is 1.9195 times our present GDP, from which the government has tax revenues of about $2.4686 trillion. If Romney were to reduce the effective tax rate by 20%, then the tax take on $15 billion would be $1.9749 trillion. So, the increased growth over 10 years at a 20% lower tax rate would add (1.9195)($1.9749 trillion) = $3.7908 trillion. This is most of the $5 trillion that Obama says Romney cannot make up by eliminating deductions. This does not even take into account the added tax revenues due to a higher frequency of application of some taxes. So, ignoring that additional tax revenue, reductions in tax deductions over ten years only need to recover $1.2092 trillion. That should be easy to do without changing the deductions of the middle class, as Romney claims he can do.
The difference in tax revenues for a healthy and growing economy compared to those of a stagnant economy such as we have now under Obama is huge. Given the future liabilities of Medicare and Social Security, not to mention paying interest on the national debt at a higher interest rate than the historically low rates now being paid, this much higher rate of growth is critical.
Democrats have a habit of making tax projections which ignore the benefit of growth. But, it is absolutely a critical component of rational tax policy. Tax revenues are a function of the tax rate, the amount the tax is applied to, and the frequency with which the tax rate is applied. Lowering the tax rate will bring in less money on a given transaction amount each time the tax is collected. However, lower rates allow greater growth of the economy, which means that the amount on which the tax is levied increases and the frequency of application in many cases also increases. The interaction of these three factors affecting the tax revenue is not nearly as simple as the common consideration of only the tax rate.
It was not made clear in the debate, but all of the numbers on tax revenue were apparently based on the next ten years of tax revenue. We have a $15 trillion GDP now. Under Obama, whose policies presently are allowing a government-claimed growth rate of only 1.6% so far this year which does not adequately adjust for price increases due to an understated government adjustment for the Consumer Price Index. The real real GDP growth is probably not even 1%, despite the fact that with a population growing at about 1% a year, a 1% growth rate in GDP is a give-me.
A combination of lower tax rates for business owners and for corporations will allow them to grow more and increase the GDP more. Lowering the rate for corporations, which is the opposite of what Obama has done despite his claim he wants to reduce corporate taxes, will allow multi-national corporations to bring home many profits they have made outside the US. Lower business tax rates will allow many companies to invest more in equipment, facilities, R&D, and training employees which will allow them to grow more rapidly. Allowing a much greater freedom to realize our huge fossil fuel resources will add considerable growth to our economy. Bringing down electricity costs by not forcing power companies to use expensive and unreliable wind, solar, and biomass energy will allow increased growth. Eliminating the requirement to use ethanol in gasoline would save a great deal of money and allow that to go to growth. Sensible relief from some of the excessive regulations of the EPA, the FDA, the SEC, the NRLB, and a host of other regulatory agencies will allow more growth. Repealing ObamaUncaringTax and Dodd-Frank will allow greater growth of the economy. The opportunities to improve GDP growth are many, but Obama has been and will continue to be on a stagnation path.
Let us look at the difference in the size of the economy over ten years at the Obama growth rate of 1% and at a reasonably attainable 4% growth rate which a President knowledgeable about the economy and business could manage. Here is the economy or GDP in trillions of dollars at the Obama growth rate:
2012, $15.00 trillion
2013, $15.15
2014, $15.3015
2015, $15.454515
2016, $15.609060
2017, $15.765151
2018, $15.922802
2019, $16.082030
2020, $16.242851
2021, $16.405279
2022, $16.569332
The cumulative 10 years of GDP to be taxed from 2013 through 2022 is then $158.50252 trillion. With a doable Romney growth rate of 4%, the growth of GDP looks like this:
2012, $15.00 trillion
2013, $15.60
2014, $16.224
2015, $16.87296
2016, $17.54788
2017, $18.249794
2018, $18.979785
2019, $19.738977
2020, $20.528536
2021, $21.349677
2022, $22.203664
The cumulative 10 years of GDP under the Romney growth rate of 4% is $187.29527 trillion. This is a cumulative $28.79275 advantage in a dynamic, growth economy. This is 1.9195 times our present GDP, from which the government has tax revenues of about $2.4686 trillion. If Romney were to reduce the effective tax rate by 20%, then the tax take on $15 billion would be $1.9749 trillion. So, the increased growth over 10 years at a 20% lower tax rate would add (1.9195)($1.9749 trillion) = $3.7908 trillion. This is most of the $5 trillion that Obama says Romney cannot make up by eliminating deductions. This does not even take into account the added tax revenues due to a higher frequency of application of some taxes. So, ignoring that additional tax revenue, reductions in tax deductions over ten years only need to recover $1.2092 trillion. That should be easy to do without changing the deductions of the middle class, as Romney claims he can do.
The difference in tax revenues for a healthy and growing economy compared to those of a stagnant economy such as we have now under Obama is huge. Given the future liabilities of Medicare and Social Security, not to mention paying interest on the national debt at a higher interest rate than the historically low rates now being paid, this much higher rate of growth is critical.
03 October 2012
Overall Impression of the First Presidential Debate
Romney was Chairman of the Board and Obama was a mid-level government bureaucrat.
Subscribe to:
Posts (Atom)
Posts
