Shocker. Britain is poorer than every state except Mississippi. Britain has had the welfare state since the end of World War II but it clearly has not improved the welfare of the average Brit. I am not sure Washington is listening. But not even the Brits realize how bad they off they are. . .but ironically they do criticize the economic inequality in America.
I came across a striking fact while researching this piece: if Britain were to somehow leave the EU and join the US how would we rank? The answer is that we’d be the 2nd-poorest state in the union, poorer than Missouri. Poorer than the much-maligned Kansas and Alabama. Poorer than any state other than Mississippi, and if you take out the south east we’d be poorer than that too.
Showing posts with label Economy. Show all posts
Showing posts with label Economy. Show all posts
Monday, August 25, 2014
Thursday, August 14, 2014
FRACKING CAMPAIGN IN COLORADO
There are a number of very clever ads produced by those supporting fracking in Colorado.
Thursday, July 31, 2014
DO SANCTIONS WORK?
Elena Servettaz discusses the impact of sanctions on Russia in World Affairs. While sanctions can have an impact she shows how they sometimes hurt the wrong people and also how some people who are on the sanctions list can work around being sanctioned.
A highly placed European diplomat confided that a number of Russian officials are worried about a new package of sanctions and are calling European embassies to find out if their name will be added to the list. The official claim until now, that it is a badge of honor to be on that list, is starting to crumble—and fast. Even Vladimir Putin, during a three-and-a-half-hour appearance on Russian television, said the sanctions were a “human rights violation.” The Russian president was talking about people added to the sanctions list after the annexation of Crimea—people like his friend Gennady Timchenko, whose wife, after the sanctions, he said plaintively, “could not pay for her operation because her credit card was frozen.”
Putin should also be concerned about himself. According to the Times of London, the US government is contemplating adding his name to the list of targeted individuals and freezing his own fortune, often estimated at $40 billion, in Swiss banks, if he decides to invade eastern Ukraine. But Putin’s spokesperson, Dmitri Peskov, said that his boss had complete peace of mind about this possibility.
A highly placed European diplomat confided that a number of Russian officials are worried about a new package of sanctions and are calling European embassies to find out if their name will be added to the list. The official claim until now, that it is a badge of honor to be on that list, is starting to crumble—and fast. Even Vladimir Putin, during a three-and-a-half-hour appearance on Russian television, said the sanctions were a “human rights violation.” The Russian president was talking about people added to the sanctions list after the annexation of Crimea—people like his friend Gennady Timchenko, whose wife, after the sanctions, he said plaintively, “could not pay for her operation because her credit card was frozen.”
Putin should also be concerned about himself. According to the Times of London, the US government is contemplating adding his name to the list of targeted individuals and freezing his own fortune, often estimated at $40 billion, in Swiss banks, if he decides to invade eastern Ukraine. But Putin’s spokesperson, Dmitri Peskov, said that his boss had complete peace of mind about this possibility.
Monday, July 28, 2014
THE PROBLEM WITH BUREAUCRACIES AND CRONY CAPITALISM
Michael Barone goes back into the 17th century (using an historical work of Hugh Trevor-Roper) to show what happens when we have "parasitic bureaucracies and crony capitalism. The point is that the U.S. is acting like the no-growth states of the 17th century.
“Pare down the parasitic fringe” of government. “Favor a gospel of work” instead of aristocratic entitlement. “Rationalize finance” and “reverse the Parkinson’s law of bureaucracy.”
All that sounds like rhetoric from the Tea Party or reform conservatives who assail what they call crony capitalism.
But it's not a contemporary criticism. Those are phrases from a long essay, written more than half a century ago, by the British historian H. R. Trevor-Roper, entitled “The General Crisis of the Seventeenth Century.”
After 1660 the nation-states that pared back bureaucracies and allowed room for such trading cities to operate -- England, Holland and, for a while, France -- flourished, while Spain, Italy and Germany mostly languished.
“Pare down the parasitic fringe” of government. “Favor a gospel of work” instead of aristocratic entitlement. “Rationalize finance” and “reverse the Parkinson’s law of bureaucracy.”
All that sounds like rhetoric from the Tea Party or reform conservatives who assail what they call crony capitalism.
But it's not a contemporary criticism. Those are phrases from a long essay, written more than half a century ago, by the British historian H. R. Trevor-Roper, entitled “The General Crisis of the Seventeenth Century.”
After 1660 the nation-states that pared back bureaucracies and allowed room for such trading cities to operate -- England, Holland and, for a while, France -- flourished, while Spain, Italy and Germany mostly languished.
Thursday, July 24, 2014
PAUL RYAN ON HELPING PEOPLE IN POVERTY
Representative Paul Ryan (R, WI) has an interesting proposal to help people in poverty. . .give them what they need based on individual needs.
He described the case of a 24-year-old single mother of two with a high school education, two years of retail work experience and dreams of one day being a teacher. Instead of relying on food stamps, housing vouchers and welfare checks, she could go to a social services provider, sit down with a case manager to develop an "opportunity plan" to meet her goals, targeting money where it is needed most.
He described the case of a 24-year-old single mother of two with a high school education, two years of retail work experience and dreams of one day being a teacher. Instead of relying on food stamps, housing vouchers and welfare checks, she could go to a social services provider, sit down with a case manager to develop an "opportunity plan" to meet her goals, targeting money where it is needed most.
Makes a lot of sense to me.
Sunday, March 23, 2014
Wednesday, March 12, 2014
WHITE HOUSE FAVORITISM FOR GM
From the Fiscal Times. The question of whether the Obama administration was protecting GM from massive recalls while going after Toyota for its defects is being raised. The issue of "crony capitalism" seems to be pervading Washington. Some companies, who support Democrat policies, get favored treatment while others do not.
The House Energy and Commerce Committee announced two days ago that it would undertake an investigation into why it took GM until quite recently to address a decade of complaints about stalling problems with several car models, and why the National Highway Traffic Safety Administration did not demand a recall of the troubled lines earlier on. Reports of unexpected stalling in Chevy Cobalts began to trickle in as early as 2003 when 7 incidents were relayed to NHTSA. . .
Why would the Obama administration sanction such a tough crackdown on Toyota, while leaving GM in peace? Certainly, the White House wanted GM to succeed. Having handed out $86 billion in bailouts to GM, Chrysler and GMAC, Cash for Clunkers, the Warranty Commitment program, the Supplier Support program, $41.5 billion in TALF loans for auto finance companies, loans from the DOE for electric car development, Recovery Act funding for battery makers and research monies funneled though the Advanced Research Projects agency, the White House had gone all-in on the success of Detroit.
The House Energy and Commerce Committee announced two days ago that it would undertake an investigation into why it took GM until quite recently to address a decade of complaints about stalling problems with several car models, and why the National Highway Traffic Safety Administration did not demand a recall of the troubled lines earlier on. Reports of unexpected stalling in Chevy Cobalts began to trickle in as early as 2003 when 7 incidents were relayed to NHTSA. . .
Why would the Obama administration sanction such a tough crackdown on Toyota, while leaving GM in peace? Certainly, the White House wanted GM to succeed. Having handed out $86 billion in bailouts to GM, Chrysler and GMAC, Cash for Clunkers, the Warranty Commitment program, the Supplier Support program, $41.5 billion in TALF loans for auto finance companies, loans from the DOE for electric car development, Recovery Act funding for battery makers and research monies funneled though the Advanced Research Projects agency, the White House had gone all-in on the success of Detroit.
Tuesday, February 18, 2014
Tuesday, February 11, 2014
DEMOCRATS VIEW OF WORK
From Michael Goodwin:
"Opportunity created by affordable, quality health insurance allows families in America to make a decision about how they will work, or if they will work,” Jay Carney said. Harry Reid and Nancy Pelosi applauded the law for freeing people from “job-lock.”
"Opportunity created by affordable, quality health insurance allows families in America to make a decision about how they will work, or if they will work,” Jay Carney said. Harry Reid and Nancy Pelosi applauded the law for freeing people from “job-lock.”
Tuesday, February 04, 2014
CBO ANALYSIS OF OBAMACARE, 2014
The Congressional Budget Office (CBO) just looks at the facts--it is not a partisan group. Its analysis of the impact of Obamacare is grim. It is slowing growth and an estimated 2.3 million jobs will be lost.
CNBC.
The Hill.
Fox News.
The White House response. Jobs have been added because of Obamacare. A critique of the White House statement.
CNBC.
The Hill.
Fox News.
The White House response. Jobs have been added because of Obamacare. A critique of the White House statement.
AMERICA IN DECLINE
An interesting column by David Goldman on America's weakened condition economically. He has graphs to support his argument.
It’s hard to ignore a second signal that the U.S. economy is dead in the water, though: on Monday the Institute for Supply Management reported the steepest drop in manufacturing orders since December 1980.
The problem is NOT government spending, contrary to the well-meaning obsession of the Tea Party. That will BECOME the problem a decade or two from now. The problem now is obstacles to investment: the highest corporate tax rate in the world, onerous regulation, the crazyquilt uncertainty of Obamacare. America needs aggressive tax cuts and regulatory rollback. It also needs to spend more on infrastructure, which is becoming a major obstacle to growth. It needs to spend more on R&D, particularly on cutting-edge military R&D. The way to do this, I’ve argued for years, is to emulate Roosevelt’s alphabet-soup federal agencies and put unemployed Americans to work repairing infrastructure at $20 an hour, rather than paying $50 an hour to the construction unions. That’s heresy from a free-marketeer like me, but it makes economic sense and will drive the Democrats crazy.
It’s hard to ignore a second signal that the U.S. economy is dead in the water, though: on Monday the Institute for Supply Management reported the steepest drop in manufacturing orders since December 1980.
The problem is NOT government spending, contrary to the well-meaning obsession of the Tea Party. That will BECOME the problem a decade or two from now. The problem now is obstacles to investment: the highest corporate tax rate in the world, onerous regulation, the crazyquilt uncertainty of Obamacare. America needs aggressive tax cuts and regulatory rollback. It also needs to spend more on infrastructure, which is becoming a major obstacle to growth. It needs to spend more on R&D, particularly on cutting-edge military R&D. The way to do this, I’ve argued for years, is to emulate Roosevelt’s alphabet-soup federal agencies and put unemployed Americans to work repairing infrastructure at $20 an hour, rather than paying $50 an hour to the construction unions. That’s heresy from a free-marketeer like me, but it makes economic sense and will drive the Democrats crazy.
Saturday, January 18, 2014
DECLINE OF AMERICA
From Morningstar. A discussion of America's economic decline in the context of recent history by an investment advisor, Ray Dalio. The parallels between us and the United Kingdom in the early 20th century are quite similar.
Dalio is probably the best macro investor alive. He has made a fortune anticipating once-in-a-generation shifts, such as the financial crisis, the subsequent bull market in bonds, and the eurozone crisis. His hedge fund Bridgewater Associates is now the world's biggest, and its Daily Observations newsletter is devoured by policymakers and investors alike (your faithful editor included, when he can get his hands on a copy). Most importantly, his reasoning is transparent and sound.
A quality that sets Dalio apart is how he attempts to understand the economic "machine" by studying distant or extreme scenarios, such as the Weimar Republic's hyperinflationary economic implosion and the decline of the British Empire. He's synthesized his research into a five-stage model on the rise and fall of empires. And he thinks the U.S. is in the final stage. The implications are fascinating.
Dalio is probably the best macro investor alive. He has made a fortune anticipating once-in-a-generation shifts, such as the financial crisis, the subsequent bull market in bonds, and the eurozone crisis. His hedge fund Bridgewater Associates is now the world's biggest, and its Daily Observations newsletter is devoured by policymakers and investors alike (your faithful editor included, when he can get his hands on a copy). Most importantly, his reasoning is transparent and sound.
Monday, November 18, 2013
FED POLICY
Even the liberal Keynes would have been against quantitative easing. Conservatives don't like quantitative easing and if Keynes would not have approved of it, it is hard to understand why in the world the Fed is pursuing this policy. They seem to be creating some kind of new economic theory.
Tuesday, October 29, 2013
GENERAL MOTORS BAILOUT
The US government (taxpayer) took a $9.7 billion bath on the bailout of General Motors.
Monday, October 21, 2013
THE INCREASING FEDERAL DEBT
A very good article by Victor Davis Hanson on the impact of the growing national debt. As I read his analysis I couldn't help but the think of the hyperinflation in the Weimar Republic in the 1920s. The rich win because of their Wall Street connections and the poor win because of the welfare state, but the middle class is destroyed because they cannot protect its assets from inflation the way the wealthy can. This was the process that destroyed democracy in Germany in the 1920s.
If interest ever returned to 1997 levels, at say 6.6%, we’d be paying over a trillion dollars a year in debt service. In crude terms, the winners of this Ponzi scheme are the very wealthy connected to Wall Street, which is flooded with foreign and domestic capital. It need not do much of anything more than outperform a pathetic 1% return on savings accounts.
The poor benefit from the vast increase in federal spending and exemption from federal income taxes. In contrast, the middle class still pays high interest on its student loans, credit card, and, to a lesser extent, car debt, receives almost no interest on its meager savings accounts, and is not so ready, after 2008, to dabble in real estate and the stock market.
In some sense, holders of U.S. Treasury debt and passbook savers are giving up hundreds of billions of dollars in interest returns (cf. the difference, say, between 1% and a more normal 5%) to subsidize the redistributive policies of the federal government.
The lack of interest, or de facto negative interest, keeps the near-retired working and hampers job prospects of the young; discourages thrift, savings and investment; and plays an underappreciated role in the slow economic recovery. The Democrats must deal with the contradiction of needing zero interest rates to service their recent extra $6 trillion in debt, and higher interest to encourage savings, investment, and job growth.
If interest ever returned to 1997 levels, at say 6.6%, we’d be paying over a trillion dollars a year in debt service. In crude terms, the winners of this Ponzi scheme are the very wealthy connected to Wall Street, which is flooded with foreign and domestic capital. It need not do much of anything more than outperform a pathetic 1% return on savings accounts.
The poor benefit from the vast increase in federal spending and exemption from federal income taxes. In contrast, the middle class still pays high interest on its student loans, credit card, and, to a lesser extent, car debt, receives almost no interest on its meager savings accounts, and is not so ready, after 2008, to dabble in real estate and the stock market.
In some sense, holders of U.S. Treasury debt and passbook savers are giving up hundreds of billions of dollars in interest returns (cf. the difference, say, between 1% and a more normal 5%) to subsidize the redistributive policies of the federal government.
The lack of interest, or de facto negative interest, keeps the near-retired working and hampers job prospects of the young; discourages thrift, savings and investment; and plays an underappreciated role in the slow economic recovery. The Democrats must deal with the contradiction of needing zero interest rates to service their recent extra $6 trillion in debt, and higher interest to encourage savings, investment, and job growth.
Friday, October 18, 2013
INTERNATIONAL MONETARY FUND & CONFISCATION OF SAVINGS
Developed economies are going to be paying a heavy price according to the IMF. Watch our for your savings. Wealth confiscation has already taken place in places like Poland. And they are not just going after the filthy rich. Somebody has to pay the costs of an entitlement society and it will be people who have saved..
The International Monetary Fund (IMF) quietly dropped a bomb in its October Fiscal Monitor Report. Titled “Taxing Times,” the report paints a dire picture for advanced economies with high debts that fail to aggressively “mobilize domestic revenue.” It goes on to build a case for drastic measures and recommends a series of escalating income and consumption tax increases culminating in the direct confiscation of assets.
Note three takeaways. First, IMF economists know there are not enough rich people to fund today’s governments even if 100 percent of the assets of the 1 percent were expropriated. That means that all households with positive net wealth—everyone with retirement savings or home equity—would have their assets plundered under the IMF’s formulation.
The International Monetary Fund (IMF) quietly dropped a bomb in its October Fiscal Monitor Report. Titled “Taxing Times,” the report paints a dire picture for advanced economies with high debts that fail to aggressively “mobilize domestic revenue.” It goes on to build a case for drastic measures and recommends a series of escalating income and consumption tax increases culminating in the direct confiscation of assets.
Note three takeaways. First, IMF economists know there are not enough rich people to fund today’s governments even if 100 percent of the assets of the 1 percent were expropriated. That means that all households with positive net wealth—everyone with retirement savings or home equity—would have their assets plundered under the IMF’s formulation.
Saturday, September 28, 2013
MORE ON GOVERNMENT CONFISCATIONS
Another article on how governments are taking money from those who have savings in a bank account or money in a retirement fund to fund government deficits. This is expropriation of private savings.
Now that "bail-ins" have become accepted practice all over the planet, no bank account and no pension fund will ever be 100% safe again. In fact, Cyprus-style wealth confiscation is already starting to happen all around the world. As you will read about below, private pension funds were just raided by the government in Poland, and a "bail-in" is being organized for one of the largest banks in Italy. Unfortunately, this is just the beginning.
The precedent that was set in Cyprus is being used as a template for establishing bail-in procedures in New Zealand, Canada and all over Europe. It is only a matter of time before we see this exact same type of thing happen in the United States as well. From now on, anyone that keeps a large amount of money in any single bank account or retirement fund is being incredibly foolish.
Now that "bail-ins" have become accepted practice all over the planet, no bank account and no pension fund will ever be 100% safe again. In fact, Cyprus-style wealth confiscation is already starting to happen all around the world. As you will read about below, private pension funds were just raided by the government in Poland, and a "bail-in" is being organized for one of the largest banks in Italy. Unfortunately, this is just the beginning.
The precedent that was set in Cyprus is being used as a template for establishing bail-in procedures in New Zealand, Canada and all over Europe. It is only a matter of time before we see this exact same type of thing happen in the United States as well. From now on, anyone that keeps a large amount of money in any single bank account or retirement fund is being incredibly foolish.
Monday, September 16, 2013
IS AMERICA ROME?
An economist looks at Rome's economic system and compares it to what is happening in America today.
Saturday, August 17, 2013
THE FAMILY & ECONOMIC GROWTH
MereOrthodoxy discusses the importance of the family to economic growth. Unfortunately the media does not discuss this issue because it is politically incorrect in an age of when marriage commitments are not applauded and children are seen as interfering with one's life style hopes.
As Jason DeParle wrote last year in The New York Times that “changes in marriage patterns — as opposed to changes in individual earnings — may account for as much as 40% of the growth in certain measures of inequality.” David Leonhardt, also of the Times, noted a recent finding that “family structure was one of the four factors with a clear relationship to upward mobility.” As Schulz himself found, only 5% of married families were poor at any point this year, while 30% of single-parent households felt the blow of poverty. These data points paint a bleak portrait; those being raised without a mother and a father will face immense social and economic barriers.
As Jason DeParle wrote last year in The New York Times that “changes in marriage patterns — as opposed to changes in individual earnings — may account for as much as 40% of the growth in certain measures of inequality.” David Leonhardt, also of the Times, noted a recent finding that “family structure was one of the four factors with a clear relationship to upward mobility.” As Schulz himself found, only 5% of married families were poor at any point this year, while 30% of single-parent households felt the blow of poverty. These data points paint a bleak portrait; those being raised without a mother and a father will face immense social and economic barriers.
Monday, June 10, 2013
COLLEGE DEGREES vs. VOCATIONAL EDUCATION
Students in China and India are finding the jobs are not in fields with requiring university degrees, but in positions that would be considered more vocational. And college degrees don't always qualify a person for work.
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