Archives for September 2011

Obama Nation: Lower Living Standards, Rising Poverty

The Dow ended down almost 400 points today. But that’s not the real measure of prosperity or how the U.S. economy is doing. The real measure is per-capita income – i.e. income per person or the quantity and quality of goods and services per person. That’s what separates us from third-world countries. Our per-capita income of course is a lot higher, and over the decades it has increased faster. It’s also what separates us from Europe. Western Europe’s average per-capita income is equivalent to that of our lowest-income state (Mississippi). Europe’s per-capita income used to be equal or higher than ours, 40 years ago. But their welfare state has taken its toll – slower economic growth over the decades since, which really adds up.

But the welfare state is really taking hold here in the U.S., especially under Obama who has raised government’s share of the GDP from about 20 percent to 25 percent, and who has added more to our national debt in two-and-a-half years than George Bush did in eight years (which was bad enough as it was).

And it shows: our per-capita income here in 2011 has fallen to 1996 levels. That’s scary – usually per-capita income rises over time. It may fall during recessions, but then during the rapid economic growth that usually follows recessions, per-capita income spikes up.

In this Obama economy, however, post-recession growth is anemic. It was less than 1 percent at last count, which is slower than population growth, meaning there are fewer and fewer goods and services per person. Normally after deep recessions, growth is in the neighborhood of 5 to 8 percent. But when it comes to the economy, Obama doesn’t know what he’s doing (assuming he genuinely wants to help the economy, in contrast to many hard leftists who want to see growth come to a halt).

What more evidence do we need to show that big government solutions don’t work? They only make our standard of living decline. The main driver of rising per-capita income isn’t government, but the people outside of government who are producing the goods and services. It’s government’s job to make sure there are good ground rules. But too often, they go overboard on the rules, and coerce too much out of the private sector.

Another frightening bit of news: the percentage of Americans living below the poverty level is the highest since 1993.

What more evidence to we need to show that poverty is alleviated by private-sector-driven economic growth, and not clumsy government programs? It’s the latter that exacerbate poverty.

If government programs were the main alleviators of poverty, then practically all third world countries would now be first world, given that most of them have socialist governments. But they’re third world precisely because of their bloated governments. It takes months or years to just get permission to open a business in many of those countries.

So poverty in America reaches an all-time high, even though Barack Obama was expected by the economically naive to bring it to an all-time low.

Hopefully the Obama experience will squeeze that naïveté out of some of them.

Yes, the main cause of poverty is a shortage of goods and services in society. That’s what separates us from a third world country like Haiti. Yet now, goods and services per person are decreasing. Of course we’ll never become like Haiti (except perhaps in certain pockets like Democrat-controlled inner cities), but our standard of living will be a lot lower than what it could have been, had we had fewer economically illiterate people running our country.

 

 

Bill Clinton: Don’t Raise Taxes Now

Even Bill Clinton disagrees with Obama’s desire to raise taxes now. In a Face the Nation interview, he indicated that we shouldn’t raise taxes when the economy is so sluggish. He said to wait “a year or two” for economic growth to return, and then tackle the deficit by raising taxes.

The best plan of action is to not raise taxes at all across the board, or if you’re going to raise taxes, do so by closing loopholes like the mortgage interest deduction (which drives up interest rates and penalizes renters). And close loopholes in exchange for an across the board rate cut, which will help spur economic growth. Economic growth is the biggest generator of tax revenue.

Lest there be any doubt that tacking the deficit is best achieve through spending cuts and not through tax increases, two Harvard economists analyzed 107 separate attempts at fiscal reform in OECD (developed) countries from 1970 to 2007. The goals in each case was to lower debt-to-GDP ratios.

Their study confirmed the obvious: Instances that failed mainly relied on large tax increases and only modest spending decreases, if any.  Instances that succeeded mainly relied on large spending decreases and only modest tax increases, if any.

They also found that instances that relied on spending cuts rather than tax increases are less likely to create recessions.

Obama is setting us up for failure yet again.

The country needs a new CEO. Fast.

Criminalizing Scientists for Inexact Earthquake Predictions

I thought litigation was out of control in America. In Italy, seems it’s even worse. They’re putting scientists on trial for failing to predict an earthquake.

Do you realize how hard it is to predict an earthquake? It’s impossible to predict exactly when “the big one” will it.

This will have a chilling effect on Italian scientists. Many of them won’t want to get into the business of predicting earthquakes. Those who do may overcompensate and over-predict them, leading to widespread evacuations, then turn out to be wrong. That could open them up to litigation for causing needless evacuations, and also bring on a boy-who-called-wolf effect, where a number of false alarms are sounded, then people don’t evacuate when the big one does happen.

Let’s hope they don’t start doing the same thing to scientists here.

Want Health and Happiness? Try Church

It is counter-intuitive that religious people would be healthier and live longer than atheists (and agnostics). After all, this life is the only life that atheists have. This is it. In their view there’s no afterlife. So you’d think that they’d work harder on exercising and eating right in order to extend their lifetimes to the fullest extent possible, since, in their view, there’s nothing beyond this life. You’d think that instead of going to church for an hour on Sunday morning, using that time instead to go jogging would be much more effective in extending their longevity. You’d think they’d also do everything in their power to achieve happiness – reaching heaven on earth, since they don’t think there’s anything beyond.

Conversely, you’d think that religious people wouldn’t be as concerned about diet and exercise or living longer, because the sooner one dies, the sooner one can go to heaven. And you’d think that they wouldn’t be as concerned about achieving happiness in this life because they believe that that’s what awaits them in the next.

But you’d be wrong in those assumptions. It’s just the opposite from that described above. Religious people, on average, are healthier, happier, and live longer than atheists or agnostics.

For the lowdown, click here.

WaPo: If you don’t get it, you ain’t missin’ much

Has the Washington Post gone down hill or what?

In today’s paper, the Outlook section – a special Sunday section with extended-length opinion pieces – has as its lead article, taking up three-quarters of the page including the illustration, a story on how more and more celebrities and other folks are wearing retro thick-framed glasses.

Just what I always wanted learn about.

I could see an article like that being in the Style section. But in Outlook?

There were two other articles on the Outlook front page. One urges someone named Elizabeth Warren, a Harvard Law professor who’s thinking of running for Senate in Massachusetts, to work on Wall Street (and “fix it”) instead. Yep, just what I always wanted to read about.

The third article is a book review titled “A Palin Tell-All With Nothing Much to Say”.

So if it has nothing much to say, then why even write an article about it?

All three articles are wastes of valuable newspaper-page real estate.

The inside articles aren’t much to write home about either, including one titled “5 Myths About the Redskins”. Nothing against articles on the Redskins, but that belongs in the Sports section.

The front page today’s Post isn’t too exciting either. With tons of important news going on in the world, all they feature on the front page was something about tax breaks piling up, China’s thirst for oil, cameras in Fairfax County schools, and a poll on how people feel about the Redskins and its owner.

The Post has an advertising slogan that goes, “If you don’t get it, you don’t get it.”

How about changing it to, “If you don’t get it, you ain’t missin’ much.”

Update, Oct. 30, 2011:

Subsequent Sunday issues of the Post revealed that the articles both in Outlook and on the front page were more substantive. Still not the most riveting content (a lot of mush, especially in the Outlook/opinion section), but more substantive nevertheless. So maybe the above was a fluke. We’ll keep an eye on it.

Monica Lewinsky: Both Victim and Transgressor

Looks like Monica Lewinsky is having a tough go of it these days; lonely, struggling with business, and afraid of going out for fear of insensitive comments from strangers.

She’s a victim of technology – mass communications that propelled her to instant fame. The type of thing she’s going through today never would have happened a hundred years ago when there was no TV or Internet. Few among the masses would have recognized her.

She’s also a victim of the philanderer Bill Clinton. Philandering is bad enough as it is, but doing it when you’re the president of the United States is a lot worse because of: the immense national security risks your exposing the country to (blackmail, etc.); the harm you’re doing to your country by derailing your presidential agenda (it is rumored that Clinton was considering taking up Social Security reform but put the kibosh on it due to the scandal); the terrible example you’re setting for your country’s citizens and especially its youth; and in Lewinsky’s case, the risk that you could permanently upend a young and naive girl’s life, which of course is what happened.

She’s a victim of the lax sexual mores of society today (and in the nineties). The people in our oversexualized media and culture who have no problem with casual sex and adultery foisted their values, or lack thereof, on the childhoods and adolescences of Lewinsky and countless millions of others. That rubbed off on Lewinsky, who had no problem with sex in the White House (a place that should be treated with the utmost reverence and respect), who had no problem with sex with a married man, and evidently gave no thought to hurting the wife and daughter of that man.

In addition to being a victim, Lewinsky was a transgressor. Even with the myriad influences mentioned above, when you get right down to it, she only has herself to blame. She’s got free will, and she could have chosen to not to even think about the possibility of having an affair with Clinton. Yet she did the opposite. In fact it was she who reportedly initiated the whole thing, decadently flashing her thong underwear to Clinton. Of course ol’ Bill jumped at the opportunity.

Millions of young people are resolute enough to delay gratification and steer well clear of casual sex, even while being bombarded by sexual influences in popular culture. But Lewinsky wasn’t among them. On the contrary, while interning at the White House, she helped perpetuate those influences.

Maybe she should take up a new calling in life – like teaching young people about the dangers of casual sex.

 

News Flash: NBC News Report That’s Critical of Obama Administration

I don’t turn on the tube much, including the news, but whenever I do, when they talk about politics it’s usually slanted left.

But this morning was an exception. I think it’s the first time I remember seeing NBC’s Lisa Meyers report a story that’s critical of a Democrat, in this case the Obama administration. (I’m sure she has reported other stories critical of Democrats while I wasn’t watching, but I doubt it’s just coincidence that whenever I do tune in, that’s usually not the case. I bet if you ran the numbers, there would be far more negatives for righties than for lefties.)

The story in question was Solyandra – the solar energy company that’s going bankrupt and that’s under investigation for wrongdoing, after receiving money (or loan guarantees) from President Obama’s spendulous package. Meyers pointed out that the Obama administration rushed through the aid to the company without adequately vetting it, even against the advice of some advisors. It appears it was done for political reasons, Meyers reported.

Good going NBC and Lisa Meyers – it shows that you can be balanced at least some of the time!

Sometimes They Get Through the Gates

Yep, VP Biden said it best the other day when he told a union crowd, “You are the only folks keeping the barbarians from the gates.”

As pointed out in an earlier post, by that he apparently meant: You are the only folks keeping yourselves from the gates.

But sometimes they let them through. Like today, when hundreds of unionistas stormed a port in Washington state, holding security guards hostage, damaging property, and dumping grain.

 

 

Explaining Econ 101 to a Big Labor Fan

In a mass-recipient e-mail that I received today from a labor union advocate, the writer lamented that employers don’t pay employers more. I e-mailed him back shedding light on why employers can’t pay their employees more than they or the writer would like.

An employer hired an employee to make widgets. The employer paid her $11 per hour. But he found that the amount he was paying her was more than the revenue he was generating from the widgets. So when she quit, he decided not to hire a replacement, because paying someone to do it would be the same as giving away money. Why not instead give away money to charity? Meantime, the employer just resorted to making the widgets himself.

Why not just charge higher prices to customers in order to cover the salary of an employee and hopefully have a little left over for the employer, one may ask. Well the employer already charges $13 for a widget, and customers already think that’s too high, especially when they want a lot of them. Were he to charge a higher price the customers likely would disappear and his revenues would be even less. (This is based on a real-life experience. Names have been changed to protect the innocent.)

So that’s a microcosm of why employers can’t pay more money to employees than they or labor union advocates would like.

The writer of the e-mail also lamented that welfare benefits aren’t higher. I replied that that would be tough now because the federal government is borrowing over 40 cents of every dollar that it spends, up from a historical average of about 15 cents, pre-Obama. That’s just not sustainable. Raising taxes wouldn’t help much because even confiscating all of the top 1 percent’s earnings would net about a trillion dollars, which wouldn’t even cover a year’s deficit. And a 100 percent tax rate wouldn’t be workable in any event because no one would work if they couldn’t keep any of their earnings. In fact, economists are saying that we’re headed for a 70 percent marginal tax rate (i.e. marginal tax rate is the rate on the additional income you earn, e.g. if you earn $50,000 per year and decide to work a little extra harder to make an extra $1,000, you’d have to pay $700 of that in taxes.) Few people would be willing to work that additional amount, and tax revenues would be way lower than projected, and you’d still be $14 trillion or more in debt.

People are only willing to pay so much in taxes before they either 1) find loopholes to avoid those taxes or 2) refuse to work because the tax rate makes it not worth it to work. So jacking up tax rates won’t result in much additional revenue, if any. And certainly not enough to even make a dent in the deficit and debt. For that, you need to cut spending. A good place to start is to reduce or eliminate the welfare benefits (i.e. government payments to individuals, including entitlements) that go to the upper middle class and rich. Often Republicans try to reform that (“means-testing”), but it always gets shot down by Democrats.

For example, instead of giving rich people Social Security and Medicare money, how about phase out that system so that they finance their retirement and medical benefits out of their own savings – where they’d be mandated to set up a Social Security and/or Medicare savings account during their working lives. (Oh but we can’t have that! That would be “privatization!” – the anti-reformers would howl.)

It’s a tragedy, and a gross injustice, that the Social Security and Medicare contributions of low-income workers are being transferred to middle-class, upper-middle-class, and rich retirees. Instead, the latter should fund their own retirement through their own savings. They tried fixing that a few years ago, but too many people howled “privatization!” so it never got anywhere.

 

Barbarians At the Gates

Gotta love the irony. Labor union leader Jimmie Hoffa, to a cheering crowd, declares “war” on Republicans and the Tea Party, telling President Obama, “this is your army. We are ready to march. Let’s take these son of bitches out…”

Barbarian, eh?

And then Vice-President Biden, at another rally, tells a labor union crowd that “You are only folks keeping the barbarians from the gates.”

So I guess by that he means, You are the only folks keeping yourselves from the gates.

Even more alarming is that President Obama was only steps away from Hoffa during the latter’s invectives. He didn’t attempt to temper Hoffa’s words, and didn’t even condemn or express disapproval at the remarks afterwards. In fact he said after the remarks that he’s “proud” of Hoffa.

I’m sure in his heart of hearts Obama feels the same way as Hoffa, based on his hard-left roots. But as president one should do the grown-up thing, abandon one’s extreme impulses, and act as a peacemaker once in a while.