San Francisco Discriminates Against Teens/Unskilled

You'd think San Francisco would be the last place you'd find blatant discrimination against the young and the under-trained... But there's no denying this one... Effective January 1stits minimum wage was bumped to $10.24 an hour - making it the only city in America to breach the $10 mark, and the toughest place for a kid to get a job (not to mention what it does to the welfare rolls)... Bummer!

I didn't even know this until I heard yesterday that Subway will no longer do the $5 footlong in The City Where You Pay... Going forward, $5 will only buy you 9.74 inches of sandwich... The new jingle - "five dollar half-a-foot plus three-and-three-quarter-inch long" - just doesn't stick in your brain like the old "five dollar foot long" did...

But that's the way of it folks... When we're talking basic economics, politicians are either profoundly ignorant, or they assume we are...

Again (from yesterday's column), here's Walter Williams:

When forced, are "better" labor conditions really better?

Under pressure, Apple's Chinese manufacturer, Foxconn, has vowed to make vast improvements to its labor conditions... Substantially fewer hours and better pay, in a nutshell...

So what do you think?

*Will, in the long run, such moves (resulting from political, as opposed to market, forces) help or hurt the lifestyle of the average Chinese citizen? Will there be greater or fewer employment opportunities going forward (after an initial hiring surge to cover the now fewer per-employee work hours)?

*Will higher prices for consumer electronics inspire faster or slower global employment growth?

*Is Foxconn ultimately making life better for the citizen of some other emerging nation, as production migrates to lower-cost labor markets?

*Historically speaking, who's been society's true benefactor - the businessman or the bureaucrat?

Per Henry Hazlitt: "The art of economics consists in looking not merely at the immediate but at the longer effects of any act or policy; it consists in tracing the consequences of that policy not merely for one group but for all groups."

Per Walter Williams:

Nobody's Perfect....

For me, seeing the Supreme Court in action is truly inspiring - of utter disillusionment that is... Clearly these folks are more motivated by ideology than they are the Constitution... And I'm talking all nine of them... Sadly, the Court is a mere microcosm of the group occupying the building across the street (The Capitol Building)... It's just too bad that intellectual honesty is an extinct commodity in Washington these days. And it's too bad there's no Santa Clause and no Tooth Fairy either...

Seriously folks, nobody's perfect, least of all those who'd see themsleves on the verge... They're just human beings, as susceptible to the whims of their egos as the rest of us... And would you expect humility from a "Supreme" (superior to all others by definition)? Of course not...

NY Times columnist Thomas Friedman penned an article in yesterday's issue titled Elephants Down Under... He either just visited or is still visiting Australia and New Zealand... He reports that "there is a place in the world where moderate Republicans still exist"... He tells of a land where politicians work together, where they cross the aisle for compromise, where they make firm decisions on the issues of the day... Like the U.S. of the 60s and 70s*...

Why can't we have that? I mean how awesome would it be if the members of the U.S. Congress could all just get along? You know; get together, meet in the middle, come to terms on a few win wins, scratch each other's backs for crying out loud... Can you imagine what they'd accomplish? Seriously can you imagine what they'd do?

Well I can, and it scares the bejeebers out of me! I'd prefer to see them as polarized as possible... I want them politicking themselves right into their respective corners and coming out with as little as possible... I'd prefer you and I toil away at our respective vocations, meandering through the consequences of their past successes... Forever, in our individual pursuits, promoting market-based solutions to the pressing issues of the day...

Of course when our policymakers propose government-limiting legislation, which they'll have to eventually, we'll be having an altogether different conversation...

*Speaking of those wonderful 60s and 70s, here's an interesting expos

Oil Subsidies (whiteboard lesson)

Here's my two cents, in two minutes, on oil subsidies...

March 28, 2012 Market Commentary (audio)

CLICK HERE FOR TODAY'S COMMENTARY...

March 28, 2012 TV Segment (video)

Makes Me Nervous...

The following, from this morning's NY Times article A Moment of Truth for Health Care Reform, caught my attention: "The critics insist that the mandate is unconstitutional because it regulates inaction. But the distinction they draw between inaction and action makes little sense. Refusing to pay a tax, for instance, is "inaction" that is clearly subject to government regulation. Choosing not to have health insurance is just as clearly a financial action - one that could shift future medical expenses onto others in the health system."

So by forcing individuals to carry medical insurance (private or public) we circumvent "the shift of one's medical expenses onto others in the health system." Really? Now I certainly don't have the answers to "our" health care problems, but I do know who pays for public programs... And I know who pays when insurance companies are forced to cover individuals they wouldn't otherwise cover...

And what then will we do about the gentleman who sits at Mickeydee's drive-thru window in his idled Oldsmobile (spewing exhaust fumes into the lungs of the children eating McNuggets and guzzling Pepsi in Ronald's playground) as he, after flicking the unfiltered Camel butt into the flower bed, orders two Big Macs, a large order of fries, three hot apple pies and a large vanilla shake? Think maybe his actions (not to mention the actions of the parents of the nugget-stuffed kids) will put a little pressure on "our" health care system? If the constitutional question is all about regulating inaction, we'll have no problem regulating this man's choice of automobile, his nicotine intake and his food... For "clearly these are financial actions - ones that could shift future medical expenses onto others" - with or without health care reform... Imagine the headline, A Moment of Truth for The Personal Choices Reform Act...

You may be a fan of The Affordable Care Act, and you may have it right - like I said, I don't have the answers... The fiscal question is, will this intervention ultimately produce the savings the CBO projects over the next ten years? I.e., will we save in the long run by spending more in the short run? The moral question is, do we continue to allow tens of millions of Americans to go without health coverage? Of course some would say the moral question is, do we force hundreds of millions of Americans to pay for the tens of millions who go without health coverage? Yes, I know, they already do... And at what point, in the interest of the greater good, do we force some bureaucrat's idealized lifestyle onto ourselves? Ridiculous? Let's hope so...

As for me, I'm a fan of freedom, and this one makes me nervous...

China's cheating, but hey!

The Department of Commerce said it will impose tariffs on solar panels coming from China...

The Chinese government has apparently been subsidizing the manufacture of panels, bringing their prices down to unfairly (to U.S. manufacturers) low levels...

In other words, China has been (stupidly*) using its own taxpayers' money to make solar panels more affordable for the U.S. consumer...

Those dirty bastards!! I'm referring to the Commerce Department by the way...

*Here's a 2 minute illustration on subsidies...

"Our" can be a very dangerous word....

Collectivism is a condition that creeps up on an unsuspecting society...

My client, in a recent friendly debate, agreed in concept with my defending of oil companies' rights to sell anywhere on the planet they choose. But he disagreed in practice; "We're talking about something the citizen has to have" he explained. And for that reason, he suggested that government should impose an export tax on oil companies, in essence disincentivizing the shipping of "our" oil outside our borders and, in theory, bringing our prices down.

But here’s the problem. If, by some government act to discourage exports, domestic prices initially come down—oil companies, with less incentive to produce, will in fact cut production—at a time when, due to cheaper gas, domestic demand would pick up.  And what happens when supply shrinks relative to demand? That’s right, prices rise. Net result; consumer saves nothing on a gallon of gas and the producer—whose global competitiveness has been zapped by the politician—takes the hit. The hit that eventually gets passed on to the consumer.

And what about this notion that it's "our" oil to begin with? I don't know about you, but, other than what cycles through my car, I don't own any. No mineral rights, no grasshopper in Coalinga, no nothing. Although shares in Chevron, Exxon Mobile, etc., are prominent positions in some of the mutual funds I invest in. So I guess I do own oil companies —as do you and every other gas-guzzling American with a 401(k) or an IRA. Thus, in this context,you could say indeed that the oil drilled out of America's bedrock is "ours", but based solely on our stock certificates, not (think capitalism now) our birth certificates.

However the "our", in the context of my conversation with my client, speaks to "our" rights, "our" entitlement (by virtue of our birth certificates) to oil. And that my friends is where the politician steps in and where the trouble begins.

Market Commentary (audio)

CLICK HERE FOR TODAY'S COMMENTARY...

Blinders and Earplugs - or - The Tebow Factor...

There's this perpetual campaign going on 24/5, 261 (minus a few holidays) days a year - every year... And it's very much like any other political race... Two camps, each efforting to convince the voter that theirs is the correct formula for the nation-at-large...

However this battle doesn't pit elephants against donkeys, this one's between bulls and bears... And the players can be every bit as passionate and preposterous as a presidential candidate promising he'll colonize the moon in eight years, or a sitting president promising mortgages for all...

Listening to an interview with a bear during a bull market is like watching MSNBC half-way into a Republican presidency... Or Fox News in the vice versa... And make no mistake, the stakes are huge for either camp...

The hedge-fund guru got spanked in 2011, goes long (buys stocks) late December, scores an interview on CNBC and offers up ten reasons why losing in stocks this year is about as likely as Ron Paul winning the White House...

Being fair and balanced, CNBC's next segment features an interview with a spokesman for the opposing party; the guru who succumbed last November to the prevailing trend and went short... This gentleman, in panic mode, his professional life in the balance, paints the world red with fear over Red China's slowing growth, with Portugal's pending collapse, with flat first-quarter earnings, and the most frightening factoid of all; the market drops at least ten-percent every time the Broncos trade away their starting QB...

Bottom line folks; the experts have skin in the game - they stand to win if they can get you to act on their advice...

Long-term investment success requires patience, diversification, rebalancing periodically and, most importantly, blinders and earplugs...

March 21, 2012 TV Segment (video)

Which Form of "Capitalism" Will Win?

In last Tuesday's New York Times, columnist Thomas Friedman poses the question, "which version of capitalism will win ("the great struggle in the 21st century"), which one will prove the most effective at generating growth and become the most emulated? Will it be Beijing's capitalism with Chinese characteristics? Will it be the democratic developmental capitalism of India and Brazil? Will it be entrepreneurial small-state capitalism of Singapore and Israel? Will it be European safety-net capitalism? Or will it be American capitalism?"

He goes on to share the view of David Rothkopf, author of Power Inc.; "the thing others have most admired and tried to emulate about American capitalism is precisely what we've been ignoring: America's success for over 200 years was largely due to its healthy, balanced public-private partnership - where government provided the institutions, rules, safety nets, education, research and infrastructure to empower the private sector to innovate, invest and take the risks that promote growth and jobs. When the private sector overwhelms the public, you get the 2008 subprime crisis. When the public overwhelms the private, you get choking regulations." "Capitalism thrives when you have this balance," and "when you lose the balance, you get into trouble."

To suggest that the 2008 crisis was the result of the 'private sector overwhelming the public' I think entirely ignores, among other things, government's role over Fannie and Freddie and thirty years of financial sector bailouts... To imply that Capitalism thrives when balance is struck between the private sector and self-seeking politicians, might lead the reader to believe the scales would indeed be balanced (equally by someone's definition)... World history provides irrefutable evidence that societies thrive when the size of government remains small relative to the size of the economy... When, in essence, bureaucrats stay out of the way of the private sector...

As to Friedman's question, "which version of capitalism will win?" It would be the true version - free market capitalism - I assure you (if we'd for once give it a shot), as described below:

Within an ideal free market, property rights are voluntarily exchanged at a price arranged solely by the mutual consent of sellers and buyers. By definition, buyers and sellers do not coerce each other, in the sense that they obtain each other

Careful What You Ask For...

Letter to Mary Beth Senkewicz, former Florida deputy insurance commissioner...

Dear Ms. Senkewicz,

You're quoted in this morning's New York Times article Gender Gap Persists in Cost of Health Insurance as stating "The gender gap continues. If insurers voluntarily began to narrow the gap, they could reduce the impact that will occur in 2014 when rates are expected to increase for many men under the age of 55." You went on to suggest: "This is a business decision. Insurers may not want to raise rates for men because they might lose some customers."

I don't know if you're married Ms. Senkewicz, but suffice it to say that a large percentage of American women are... And therefore, raising rates on men to satisfy someone's definition of equality, would, in effect, negatively (and very directly) impact women... I do agree with you that insurers are "making a business decision", however I do not agree with your presumption as to what that decision would be... I suspect it has to do with the insurers' claims experience, as opposed to fear over losing the male customer...

Please, on behalf of women everywhere, do not lobby for the increase in rates on husbands gradually over the next 19 months... Trust me, their wives will prefer to pay the lower rate for as long as possible...

Sincerely,
Martin L. Mazorra

Today's Stock Market 3/2012 (video)

To reemphasize an important point I make in the following: While, as you'll see below, the market, from a current earnings standpoint, bears little resemblance to the markets of Dow 13,000, S&P 1,300 and NASDAQ 3,000 past, a correction (or bear market) can occur at anytime for a variety of reasons...

Also, I can see potential confusion where I go from talking about earnings per share for the S&P, to price-to-earnings (P/E) ratio for the NASDAQ... In essence; where I mention the S&P/share earnings being $67 in 2000 and $90+ in 2012 (while the index sat at 1,300 in both instances), that means the P/E in 2000 was substantially higher than in 2012... When I say the NASDAQ's P/E was 155 in 2000 and under 20 in 2012 (while the index sat at 3,000 in both instances), I'm saying the earnings per share in 2000 were a lot lower than they are in 2012... I.e., same argument as with the S&P, just different way of saying it...

CLICK HERE TO VIEW...

You Can't Un-Teach Morality...

Greg Smith’s New York Times exposé of his last days at Goldman Sachs tells a disturbing story of the once-venerable firm’s modern-day culture. In good conscience, Mr. Smith could not remain with a firm whose leaders, he alleges, possess none.

In his Op-Ed he suggests that today’s junior analysts’ indoctrination by grossly-unethical superiors will surely mold them into greedy, “muppet”-exploiters, out for nothing other than making money off their clients. I happen to disagree. I believe that by the age one might be granted an interview at Goldman, the putty’s already dry. I don’t believe you can un-teach morality.

Take Mr. Smith for example; he, by all appearances, is a person of high moral character—and I suspect that’s who he was as a 22 year-old neophyte to the ways of Wall Street. But should we assume, as he does, that had his indoctrination subjected him to the utter disdain for clients he describes, that today he’d be the one referring to them as “muppets’, and talking about “ripping eyeballs out” and “getting paid”? I suspect not. I suspect he’d either be happily employed in a different industry, or perhaps blowing the whistle on some other corruption (maybe catching his green energy firm boss planning his six-digit taxpayer-funded bonus and the firm’s bankruptcy both at the same time). I therefore wouldn’t worry about today’s youngsters stepping onto Goldman’s ladder. If they’re of good character, and they find their instructors aren’t, they’ll either step off, or aspire to one-day replace the characters who currently occupy the higher rungs.

As for the junior analysts he refers to who seem concerned only with how much money they “make off the client”, I would argue that they’re the types, going in, who are drawn to the glitz, greed, and grasp on Washington (the connections are too numerous to list here) of the Goldman of today. The highly ethical prospects, like the Mr. Smith of 13 years ago, are no doubt finding their way to other firms, if not other industries, where they can utilize their talents to the benefit of the customer while earning their fortunes and sleeping like babies in the process.

As for Goldman Sachs, it has a huge PR problem. And CEO Lloyd Blankfein’s first attempt at damage control, in my estimation, was a miserable failure. His response to Mr. Smith’s allegations was little more than a simple “that’s not how we see things”. If Mr. Blankfein is to at least band-aid his firm’s now-shattered (was already tattered) reputation, he’ll be back [soon] with something like the following:

“We are profoundly troubled by Mr. Smith’s accusations, and we will perform a thorough and intense internal investigation. We will begin by looking into all of the firm’s trading practices to determine if indeed our traders are abusing our clients. And if that is the case, upon discovery, we will terminate the abusers and take measures to make certain that that sort of thing never again occurs at Goldman Sachs. If we find that any of our personnel have ever once uttered the insults Mr. Smith describes, they will be fired immediately as well.  At the conclusion of our investigation, and consequent actions, I will give serious consideration (as will the board I suspect) to whether I should remain as CEO. Clearly, if Mr. Smith is right, the legitimacy of my leadership should be called into serious question.”

Don’t hold your breath…

One last point: While you can’t teach morality, the system, if we allow it, can indeed teach prudence. Without the bailouts of the last few decades, the likes of those who’d otherwise seek an easy street to riches and political influence, would’ve learned in U.S. Modern History 101 that outright greed leads to outright destruction. But, alas, when it comes to [supposedly] systemically important and politically influential employers, they’ve been taught that ours is a unique profit and loss system. One of privatized profits and socialized losses.

Related Articles:

Pain is Essential

Want to Make Big Bucks on Wall Street?

March 14, 2012 TV Segment...

Pain is Essential...

In Ayn Rand’s book The Virtue of Selfishness (Rand & Branden 1964), she made brief reference to people with a rare condition that renders them insensitive to pain. My immediate thought upon reading her reference was how such a condition might be analogous to the players in the 2008 credit crisis. So I did a little research. And while it was easy to make my point in the following, I must say that the articles I read and the videos I watched on congenital insensitivity to pain with anhidrosis syndrome (CIPA) were anything but easy to take in; in fact, they were utterly heartbreaking. There are precious children in this world (seldom surviving childhood) who are otherwise as vibrant and beautiful as children can be who literally feel no physical pain. I would never have imagined how truly tragic this turns out to be.

Pain Is Essential
How would you like to be one of the few hundred people in the world who live literally pain free? Never to experience a headache, a bad back, or pulled muscle. Never to need a pain pill, not even an aspirin. To never suffer the aches of an aging body. Think about it: the sheer bliss. The excitement. What would you try? What risks would you take, knowing you’d feel no physical pain?

How would you like to have been a CEO of a major Wall Street firm at virtually anytime over the past thirty years? Your senses numbed by the knowledge that Uncle Sam would steal away your pain if you banged your head too hard. Knowing you could lever-up to unheard-of multiples and never truly lose. Stay in business, get your bonus, pay the staff at your Swiss chalet—or, at the very worst, walk away with a few dozen (if not a few hundred) million, while the taxpayer buys the mistakes off your firm’s balance sheet. Leaving you, or your successors, with billions of crisp new dollars with which to leverage the next bets. My, the risks you would take.

Better to have been the latter. For while the notion of never feeling physical pain may, at first blush, seem amazing, the lives of children with congenital insensitivity to pain with anhidrosis (CIPA) are anything but. Their fingertips are missing, their tongues are mangled, they get heatstroke often (they don’t sweat), fractured bones go unnoticed, and, tragically, their lifespans are shortened. Parents of the CIPA child never rest. They can’t turn their backs for a second, for there’s no physical limit to the harm their child might inflict, unwittingly, upon himself.

As for the Wall Street exec of 2008, he maintains ten finely manicured fingertips and suffers zero fractured bones. Not that his reckless actions didn’t inflict great pain; on the contrary, they did indeed—just not, alas, onto himself. The unavoidable (natural) consequences of his egregious risk-taking and overleveraging were relegated, at the hands of politicians and Central Bankers, to the taxpayer.

As for the moral hazard of bailouts: they’d have us believe that with all the new regulations, too-big-to-fail is no longer a possibility—that, like the CIPA parent, Washington has Wall Street under strict surveillance. But make no mistake: mistakes will be made. As long as we persist in appointing career politicians concerned with merely the immediate term (their term in office, that is), Washington will crony-up to corporate America, unions, etc., and vice versa.

Simply put: pain in life, and in business, is essential.

The Chicken Came First...

One could argue that government stimulus programs, including unemployment insurance extensions, resulted in greater iPhone sales over the past three years than otherwise would've occurred... Therefore the theory (Keynesianism) that promotes government intervention [to boost consumption] as the best method of aiding a weak economy has indeed been proven... Right?

Question: Was there demand for cell phones before the first one was produced? Were consumers lined up outside Ma Bell's door at the crack of every dawn to get first crack at the first mobile phone? Or was it the foresight of some genius and the audacity [and capital] of some tech firm that brought the first cell phone to market?

The age-old debate, supply-side vs demand-side economics, rages on... Those who would advocate direct government intervention (deficit spending) during an economic contraction make the, at first blush, logical case that handing out money to the populace stimulates spending, which stimulates production, which stimulates jobs, which stimulates the economy back into the black... The all-wise Nancy Pelosi even stated "those unemployment checks are the best possible form of stimulus", or words to that effect...

Those (of us) who would advocate no stimulus programs, but rather producer (supply-side) incentives (such as lowering corporate and capital gains tax rates), make the case that the chicken indeed precedes the egg... That rather than budgeting a $trillion-five annual deficit (resulting in a culture of dependency that, once established, is virtually [politically] impossible to reverse), simply cut taxes (across the board even)... Thus leaving capital in the private sector, where the market determines its allocation... If we'd done that, I assure you, I would not have had the material to post yesterday's Time To Break Out the Bongs, and untold $$$,$$$,$$$,$$$'s would've funded the production of goods of real value for a growing workforce...

'NOT' A Greek Tragedy After All...

A little over a week ago in Could've Been a Greek Tragedy I announced that Credit Default Swaps (insurance) on Greek debt would be triggered, indemnifying the insureds the amount of the hit they'd take when Greece reneges... Three days later I regrettably followed up with A Greek Tragedy After All... The committee charged with determining whether a triggering event had occurred voted nay... Leaving swap-buyers holding the proverbial bag... I did add that the committee "could come back later and reverse that decision"...

I'm pleased to report that, as a result of today's events, they have indeed come back and reversed their decision... To get the bond exchange deal done, Greece had to enforce so-called Collective Action Clauses on the hold-outs (creditors who wouldn't volunteer to take massive haircuts)...Which turned out to be the triggering event...

The market gave back a modest gain on the news... Clearly this wasn't the disaster some had predicted...

This Is A Good Thing!!

It's Getting Better All the Time...

"Hmm" I responded to my good friend's confession that he seldom reads the blog... He [hesitantly] explained that while he finds me to be the sensitive, optimistic sort in conversation, he discovers a less-appealing, somewhat negative side of me in my writings...

The other day, while (still) struggling through my next-to-be-published work, I came across a column I wrote in 2010 titled The Good Old Days, and recalled my buddy's comment...While there may be truth (particularly of late) in Jim's assessment, it is indeed not always the case, damn it!

In fact, as Paul McCartney entertains below, I do believe, in a big way, It's Getting Better All the Time... Or I should say; it gets better, then a little worse, then better, then a lot worse, then a lot better, then a little worse, then better... And of course the getting-worse is the season for planting the seeds of the next getting-better...

I'm guessing Paul's concert took place some 30 years after the song was written... And my what an incredibly good 30 years it was!!

"If you want to be known as a great economist in America, predict growth. If you predict growth you'll be right seventy percent of the time. And if you're wrong temporarily, you'll be right pretty soon." Brian Tracy

http://www.youtube.com/watch?v=2TbZPiwyX1k&feature=youtube_gdata_player

Time to break out the bongs...

Memo to The Occupation...

Attention Members!!It's time to break out your tents, barbecues, bongos and bongs... We must once again mobilize The Occupation!! While we were focusing on Wall Street, we entirely missed what Washington was doing with windmills (we musta been smokin somethin... Oh wait, we were)... They were giving huge handouts to their green-energy cronies, who turned right around and bonused themselves $millions (in total), moments before filing for bankruptcy...

Read ABC's expos

The Manufacturing Sector Snafu - and - The Voters' Values...

So what's all this hullabaloo over manufacturing? Listening to Obama, Santorum and Romney you'd think our manufacturing sector is being Chinese-water-tortured to death...

Obama's going to tax foreign and reward domestic production... Santorum's going to tax manufacturers zip, and everyone else 17%... Romney has an 11 thousand point plan that'll create 11 million jobs, a bunch in manufacturing, during his first four years as president... Romney's kind of like Obama's healthcare plan (a la Nancy Pelosi); we need to elect him first, then find out what he's all about... All I know about Gingrich is he's going to colonize the moon by the end of his second term... I'm not sure what that means... Who [on earth] would want to live on the moon? And how many manufacturing jobs would that create? And as for Ron Paul, he'd cut the corporate tax rate to 15% initially, allow companies to repatriate foreign-held capital free of tax, and he'd cut a trillion dollars of spending by immediately closing 5 government departments - and he'd put all that money back into the business community (i.e., leave it there by cutting taxes)... And why isn't he in the lead?

Allow me a moment to digress:

Under President Obama we've seen government intervention (spending, borrowing, regulating, legislating) beyond our wildest dreams... Bush presided over a doubling of our national debt in just 8 years... Obama matched him, then trumped him, by a few hundred billion, in 3...

I know, I'm not being fair; Obama inherited a nightmare of an economy - the Bush recession... Yea but Bush was dealt 9/11 and inherited the Clinton tech bubble... They both, alas, turned out to be Keynesians... Their answer to declining revenue was higher spending... I.e., get out of trouble by going into debt... Huh???... And don't we always seem to forget that Congress has a little something to do with allocating taxpayer money as well?

Now I've heard all the stories, all the conspiracy theories, and I just don't buy the notion that President Obama is out to communize the United States of America... I do however see him as a man with little clue when it comes to the economy or to business in general... But I can't blame him, he has no experience... He's simply doing what good community organizers do; spend other people's money on other [select] people... And apparently there's been enough voters who either are, or aspire to be, "select"- and who, believing wealth redistribution to be the path to prosperity, support the cause... That's why he won... He was simply the candidate who best reflected the values of the majority of U.S. voters... The question is, does he still? If so, pray for gridlock!!

Back to our topic:

The aforementioned policymakers (save for Mr. Paul) are either profoundly union-inspired, profoundly influenced by some other select group, or profoundly ignorant to reality... According to the U.S. Census Bureau, manufacturing in America is off the bloody charts; $5 trillion last year... Our manufacturing output is larger than Germany's entire economy... And these blokes would have you believe we're experiencing a manufacturing-sector depression... It simply isn't so...

So what then are they talking about? Manufacturing jobs!! Yep, that's the hook...

Now PLEASE, take a couple minutes and read George Mason University's Walter Williams' enlightening article It Just Ain't So... He does a wonderful job putting this into perspective... Click here...

Profoundly Uninspired...

When I say "free" enterprise, you take that to mean a system where producers and consumers come together and agree, un-coerced, on the terms of exchange... Of course the word "free" has two meanings; "free" as in freedom, and "free" as in no cost... The latter, in a material sense, is an unequivocal myth...

When your bank offers to refinance your mortgage at zero points (i.e., "free"), you pay for it with a higher interest rate...

When your landlord tells you he's never passed the cost of building-code-compliance onto his tenants, as you inquire as to why some guy just affixed braille signs all over your [2nd-story] office (happened here btw), you know better... I.e., while you won't get the bill, you know that if your landlord wasn't coerced into financing unproductive govt. employment (your blind clients will never make it to your [2nd-story] door without a sighted-human's assistance), there'd be more resources to make legitimate, business-enhancing, improvements to your building (financing productive private-sector employment), and/or he'd offer you better terms when it's time to re-up...

And you know the story when it comes to government spending... I.e., every dollar spent is a dollar taxed, borrowed or inflated (all at the citizen's expense)...

As for freedom, it's anything but "free"... It comes at great expense to bureaucrats... I.e., the more freedoms you and I enjoy the fewer administrators, regulators, etc., we employ... Which is why the countries ranking highest on The Economic Freedom Index impose substantially less (yet strictly enforced) regulation onto the private sector, and spend less, relative to GDP, than the lower ranks...

Okay then, assuming the higher-ranking (the freer) countries perform better than us (which, by-and-large, they do), how do we make ourselves freer? Now that's a tough one... Think about it, we'd be asking career politicians (our current cast of characters) to take measures that would ultimately reduce the size of government... That's like asking a CPA to lobby for a flat tax... Like asking the life insurance industry to lobby for a zero estate tax... Like asking an environmentalist to lobby for more water to farmers, or for a new pipeline... Like asking an oil exec to lobby for higher fuel-efficiency mandates... Like asking a union-rep to lobby for right-to-work laws... Like asking the football stadium lawn-guy to lobby for artificial turf... Etcetera, etcetera, etcetera...

Two words, "career politicians" (right and left), sums up the problem... We desperately need career privatesectorans who can afford to take a break and break into politics... Whose life's ambitions were never to rule the world, but, once they've achieved their private-sector objectives, to apply their talents to bettering the world...

Now you may think, given the current slate of potentials, that this is my endorsement of the one who professes these qualities... Truly, it's not... For what it's worth, I am profoundly uninspired at the moment...

March 7, 2012 TV Segment (video)

March 6, 2012 Audio Commentary

Click here for today's commentary...

"Mostly Free" just ain't good enough...

Since 1995 the Wall Street Journal and think tank The Heritage Foundation have published The Index of Economic Freedom... The Heritage Foundation discloses up front that the theories of Adam Smith, author of the 1776 masterpiece, The Wealth of Nations, are the single greatest influence on the benchmarks that determine country rankings...

There's been much ado (right here in fact) about the United States' plunge from #5 to #10 (out of 187) over just the past three years... And of course The Heritage Foundation has been vilified by the left... Now I couldn't (without a little research) confirm nor deny the liberals' claim that the foundation sports only hardcore right-wingers, given that the index and a few related videos sums up my exposure... So I Google'd "Heritage Foundation", and, sure enough, the first hit was an ad soliciting membership with none other than Rush Limbaugh's mug prominently featured... Thus, if only by nature of their ads, they're worthy of skepticism...

That said, notwithstanding my limited (and their Limbaugh) exposure, if I were to pin an ideology on The Heritage Foundation (based on how the index is compiled, and the content of their videos), it'd be Libertarian, as opposed to conservative...

And with regard to the U.S.'s past performance; our ranking actually improved 3 of the last 4 years of the Clinton Administration and under GW Bush we bounced up-and-down between #5 and #8 (if indeed playing partisan politics [with the index] is their aim, we'd have surely seen steady declines under Clinton and gains under Bush)... I conclude then, based on this lack of correlation with the party in office, and the fact that the same 10 benchmarks are applied at all times, it's legit... Although a truly free-market-aimed administration, assuming it could effectively forward its cause, would [legitimately] move the U.S. back into the group of nations (currently the top 5) the index labels "FREE"... We currently sit in the "MOSTLY FREE" category...

The above prelude is my attempt to validate the following - which I hope you'll take very seriously... This is The Heritage Foundation's summation of our current state of economic affairs:

The United States

Take Morality Out of the Equation...

My inspiration, the oft-quoted Nobel laureate and NY Times columnist Paul Krugman comes at you directly from the playbook of famed economist John Maynard Keynes...

In one of his latest he warns that those who would suggest Europe's woes have to do with over-spending, over-borrowing, over-enabling and under-producing have "no idea what they're talking about"... The Euro Zone's problems, according to Krugman, have to do with its common currency... I.e., its members can't print their way out of trouble... He implies that countries able to print, such as Britain, the U.S. and Japan, can run deficits and grow debt ad infinitum...

I'm afraid Mr. Krugman and I are, in one sense, very much alike; in that we reside within our own echo chambers... We're not seeking truth, we're seeking to confirm our respective biases... He sees countries with higher deficits and debt/GDP ratios than those currently suffering, not currently suffering, and says "see!"... I see Britain's, U.S.'s and Japan's printing-induced sanguinity (if unchecked) eventually giving way to spiking interest rates and desperate deficit-cutting measures, like Greece, and say "see!"...

(And of course manic money printing didn't save Latin America in the '80s and Asia in the '90s from their respective currency crises)...

Krugman would view me as mean-spirited; not willing, un-coerced, to sacrifice for those in need... I see Krugman as someone who loathes the middle and lower income classes... Someone who sees the common man as intellectually ill-equipped to make his own decisions, to provide for himself and his family... Someone so disingenuous as to display himself as the working-man's champion, while promoting more government and less personal freedom...

But here's the thing, Krugman and I (each nobly) are attempting to appeal to your morality; he calls free-market advocates "cruel and destructive", I point the same accusing finger at central-planners... In either case we're altogether missing the point... We can't base the efficacy of any given system on moral grounds... Morality is not a societal, but an individual, affair... We should simply ask therefore; what system, throughout history, has best-served the masses (at every rung of the income ladder)? And that, far and away, would be capitalism... See!!!!

A Greek Tragedy After All...

Dang! I spoke too soon yesterday (should've known better)... Apparently the Determinations Committee decided Thursday that a "credit event", triggering CDS payments on Greek debt, did not occur (although they could come back later and reverse that decision)...

So let's get this straight; Greece gets to pay bondholders 50% of what they originally borrowed, and those who bought protection against Greece paying bondholders less than what they borrowed will not get what they paid for...

It's like buying life insurance that stipulates, even long after purchased, that it won't pay if you commit suicide... Your murderer (hired by the insurer) then wipes clean his weapon and presses it onto your dead finger tips, making it appear as if you did yourself in...

That, alas, is precisely what's going on here - and it is indeed a tragedy...