Wednesday, February 27, 2013
Hammer Time
News Item:
WASHINGTON (AP) -- Ben Bernanke sent a message Tuesday to Congress: The Federal Reserve's low-interest-rate policies are giving crucial support to an economy still burdened by high unemployment.
The Fed chairman acknowledged the risks of keeping rates low indefinitely. But he expressed confidence that such risks pose little threat now.Bernanke was asked whether the Fed's bond buying could push its balance sheet to $4 trillion. He said that it has no target for how much in bonds it plans to buy.
(...)
He noted that the Fed's balance sheet is less than that of the Bank of Japan, which has battled for more than two decades to strengthen the sluggish Japanese economy.
"Trust me, I know what I'm doing" -- Sledge Hammer
Monday, February 25, 2013
Thursday, February 21, 2013
Wizer looks at the SoTU #6
Item #6: Minimum Wage
President Obama used the word "jobs" 31 times in his recent speech. You can't really be sure it is what he wants, though. He also advocates against jobs. He mentioned wages 9 times in the same speech, and made a big pitch for a higher minimum wage. He is evidently unaware of the simple economic relationship between wages and jobs. If wages go up, jobs go down. If he understands it differently, he is certainly not making a case why he his ideas should be adopted.
Your Wizer has long advocated the elimination of all wage and price controls so that the real economy can kick in. Even so, quite simply, it is the best possible outcome for the lower class. Everybody does better when everybody is working. Everybody works when the government doesn't prevent them from working. The government prevents working by eliminating the possibility of employment of low skilled workers. Why is the government outlawing jobs?
If a worker isn't worth hiring at $7.25, how is he going to get a job at $9.00? How? How does that open up even an opportunity for him to feed his family? The simple economic truth is he is then that much further away from getting a job. Then, there's the inflationary effect of the higher wages paid to people who survive the layoffs. All prices go up to meet the new minimum wage. The beneficiaries are not the people who got a 75 cent raise, when the cost of their burger has gone up 75 cents too. Nobody benefits from that, except maybe the investor who has bet on inflation. Perhaps that is Obama's target beneficiary.
Even though Obama's message was 31 for jobs and 9 against jobs, the fight against jobs is the one he appears ready to fight.
President Obama used the word "jobs" 31 times in his recent speech. You can't really be sure it is what he wants, though. He also advocates against jobs. He mentioned wages 9 times in the same speech, and made a big pitch for a higher minimum wage. He is evidently unaware of the simple economic relationship between wages and jobs. If wages go up, jobs go down. If he understands it differently, he is certainly not making a case why he his ideas should be adopted.
Your Wizer has long advocated the elimination of all wage and price controls so that the real economy can kick in. Even so, quite simply, it is the best possible outcome for the lower class. Everybody does better when everybody is working. Everybody works when the government doesn't prevent them from working. The government prevents working by eliminating the possibility of employment of low skilled workers. Why is the government outlawing jobs?
If a worker isn't worth hiring at $7.25, how is he going to get a job at $9.00? How? How does that open up even an opportunity for him to feed his family? The simple economic truth is he is then that much further away from getting a job. Then, there's the inflationary effect of the higher wages paid to people who survive the layoffs. All prices go up to meet the new minimum wage. The beneficiaries are not the people who got a 75 cent raise, when the cost of their burger has gone up 75 cents too. Nobody benefits from that, except maybe the investor who has bet on inflation. Perhaps that is Obama's target beneficiary.
Even though Obama's message was 31 for jobs and 9 against jobs, the fight against jobs is the one he appears ready to fight.
Wednesday, February 20, 2013
Wizer looks at the SoTU #5
Item #5: Immigration
I've long thought that one difference between republicans and democrats was actually a similarity. Both wanted to open up immigration without changing immigration laws. The difference is that the dems wanted the immigrants so they could fill the rolls of the dependent class, while the republicans wanted immigrants to fill the rolls of the productive class. Either way, both really wanted the same thing, so only one outcome was guaranteed. Both parties would continue non-enforcement until one eventuality or the other was met.
I see we have a winner.
By bringing new residents in, and making it easy for them to live here without working or learning the language, the democrats got what they wanted.
From here the only win-win is to turn these residents into productive citizens. That means teaching them the language, and upgrading their productive skills. And, to make sure they pay their taxes like everyone else (which has a way of making them more intelligent voters, by the way).
You have to stop with the "citizenship gauntlet" talk. If the people are here, get them into society, and make that productive society, pronto.
In the SoTU, Obama talked about "skilled immigrants", as if those were the only ones we were interested in. A hypothetical good president would talk about increasing the skills of the immigrants who are already here.
I've long thought that one difference between republicans and democrats was actually a similarity. Both wanted to open up immigration without changing immigration laws. The difference is that the dems wanted the immigrants so they could fill the rolls of the dependent class, while the republicans wanted immigrants to fill the rolls of the productive class. Either way, both really wanted the same thing, so only one outcome was guaranteed. Both parties would continue non-enforcement until one eventuality or the other was met.
I see we have a winner.
By bringing new residents in, and making it easy for them to live here without working or learning the language, the democrats got what they wanted.
From here the only win-win is to turn these residents into productive citizens. That means teaching them the language, and upgrading their productive skills. And, to make sure they pay their taxes like everyone else (which has a way of making them more intelligent voters, by the way).
You have to stop with the "citizenship gauntlet" talk. If the people are here, get them into society, and make that productive society, pronto.
In the SoTU, Obama talked about "skilled immigrants", as if those were the only ones we were interested in. A hypothetical good president would talk about increasing the skills of the immigrants who are already here.
Tuesday, February 19, 2013
Wizer looks at the SoTU #4
Item #4: PreSchool for all.
If there's one area that the federal government has failed in, it is education. Your Wizer has recounted many times why federal government involvement in education is unproductive, and even dangerous. Obama now wants to double down on governments education bet by taking the last couple of developmental years out of parents' hands.
Either the government is desperate enough to go for an even earlier socialistic indoctrination, or it's the only area of growth left for an outdated big-government program. At a time when we really should be rethinking the federal role in education, Obama wants to push on through to a bigger, more intrusive government protected entity.
It's for the children, they'll say.
Don't be fooled. They've been saying that for years, and every year, the children are worse off. No it's not for the children; it's for the department of education. The department of education. What did we do before there was a department of education? We did a lot more math, science, reading, and arithmetic. What do we do now that there is a department of education? We do diversity studies. We do self esteem seminars. We create gun-free target zones.
The department of education, started by Jimmy Carter has 3000 employees and a budget of $12B. Not much by federal spending standards. But elimination would free up the states to run a more efficient school system. That's where the real savings are.
It's time to retire the education department. return all the money to the states. Let them figure out the best way to teach their students what they need to know. A natural diversity of education systems is the more resilient path.
Most importantly, do not turn over your pre-school kids to this government. Instead, use that time more productively by spending this important time with your child.
If there's one area that the federal government has failed in, it is education. Your Wizer has recounted many times why federal government involvement in education is unproductive, and even dangerous. Obama now wants to double down on governments education bet by taking the last couple of developmental years out of parents' hands.
Either the government is desperate enough to go for an even earlier socialistic indoctrination, or it's the only area of growth left for an outdated big-government program. At a time when we really should be rethinking the federal role in education, Obama wants to push on through to a bigger, more intrusive government protected entity.
It's for the children, they'll say.
Don't be fooled. They've been saying that for years, and every year, the children are worse off. No it's not for the children; it's for the department of education. The department of education. What did we do before there was a department of education? We did a lot more math, science, reading, and arithmetic. What do we do now that there is a department of education? We do diversity studies. We do self esteem seminars. We create gun-free target zones.
The department of education, started by Jimmy Carter has 3000 employees and a budget of $12B. Not much by federal spending standards. But elimination would free up the states to run a more efficient school system. That's where the real savings are.
It's time to retire the education department. return all the money to the states. Let them figure out the best way to teach their students what they need to know. A natural diversity of education systems is the more resilient path.
Most importantly, do not turn over your pre-school kids to this government. Instead, use that time more productively by spending this important time with your child.
Monday, February 18, 2013
Wizer looks at the SoTU #3
Item #3: Executive action on climate change
Obama claims to be concerned about global warming. He has inexplicably bought into the myth that CO2 causes hurricanes to hit Staten Island.
It's the new paradigm, don't you know? If you don't like the weather, spend a trillion, it will change. The most misguided of all his proposals, he wants to drag Congress kicking and screaming into this economic blizzard. ... and if they won't go with him? Why he'll just do everything he can with executive money-printing for this.
You get the impression that he doesn't want pesky old Congress involved in his plans in any case. Believe me, I know how he feels. Unfortunately, the US Constitution (which I understand he has twice promised to uphold) is also very pesky.
Obama takes a patently ridiculous notion that we can do something about the weather, and wants to build a massive federal program around it. It's his version of a big idea. Kennedy goes to the moon, Obama cools the earth. Then go play 18.
The reality is we could burn every last drop of oil known to man, and the planet will do what it always does, which is regulate its own temperature. I only wish Obama himself would be as self regulating. As it is, the only thing overheating right now is executive branch hubris.
A hypothetical good president would realize that the planet will save itself. Our job is to make sure its inhabitants are taken care of. Such a president would clearly be striving for more freedom and less government spending on follies like this.
Obama claims to be concerned about global warming. He has inexplicably bought into the myth that CO2 causes hurricanes to hit Staten Island.
It's the new paradigm, don't you know? If you don't like the weather, spend a trillion, it will change. The most misguided of all his proposals, he wants to drag Congress kicking and screaming into this economic blizzard. ... and if they won't go with him? Why he'll just do everything he can with executive money-printing for this.
You get the impression that he doesn't want pesky old Congress involved in his plans in any case. Believe me, I know how he feels. Unfortunately, the US Constitution (which I understand he has twice promised to uphold) is also very pesky.
Obama takes a patently ridiculous notion that we can do something about the weather, and wants to build a massive federal program around it. It's his version of a big idea. Kennedy goes to the moon, Obama cools the earth. Then go play 18.
The reality is we could burn every last drop of oil known to man, and the planet will do what it always does, which is regulate its own temperature. I only wish Obama himself would be as self regulating. As it is, the only thing overheating right now is executive branch hubris.
A hypothetical good president would realize that the planet will save itself. Our job is to make sure its inhabitants are taken care of. Such a president would clearly be striving for more freedom and less government spending on follies like this.
Sunday, February 17, 2013
Wizer looks at the SoTU #2
Item # 2: New manufacturing jobs
A lot of people make the mistake of thinking that the loss of manufacturing jobs is both a disease and a symptom. In a productive economy, the most useful work is done at a very high level. Machine repair, CAD design, research, testing, etc. Manufacturing skills are easily taught. Manufacturing as an activity is most economical when it lifts the least skilled persons into a position of added value. Currently, those skills are more economically provided in China, Thailand, and Burma. If it were more economical here, this is where the jobs will be.
At $7.25+ / hour going rate for US workers (more on this later, as you might guess), it will continue to be more economical to make things somewhere else.
The return of manufacturing jobs may not be an indication that the economy is improving. It could actually be an indication that we are not efficiently allocating the resources to the work. If it costs $6 to make a part in China and $8 to make it here, the company that is making in the US is at a distinct disadvantage in the global market. The market has a way of equalizing this type of imbalance.
The president brought up the "manufacturing institute" in Youngstown OH. Said they were doing something unique and fundamentally important. The truth is that there are thousands of Youngstowns now that are competing against government money now, yet are further advanced in the development of 3D manufacturing equipment. Why does Youngstown get subsidized? Because Obama likes to pick winners and losers.
The only worthwhile jobs are ones that add value. Obama wants to blindly chase after manufacturing jobs, without consideration of whether there is clear economic value. He now wants to spend borrowed money on 15 new "manufacturing hubs" of very dubious benefit, as if they have any sense of what might be successful in manufacturing development. A hypothetical good president would retire the labor department, free up the economy to create its own manufacturing hubs, and would eliminate the minimum wage. Then, anyone who wants to operate a manufacturing plant or work in manufacturing can do so without artificial restriction, and might even find a formula hat works economically.
A lot of people make the mistake of thinking that the loss of manufacturing jobs is both a disease and a symptom. In a productive economy, the most useful work is done at a very high level. Machine repair, CAD design, research, testing, etc. Manufacturing skills are easily taught. Manufacturing as an activity is most economical when it lifts the least skilled persons into a position of added value. Currently, those skills are more economically provided in China, Thailand, and Burma. If it were more economical here, this is where the jobs will be.
At $7.25+ / hour going rate for US workers (more on this later, as you might guess), it will continue to be more economical to make things somewhere else.
The return of manufacturing jobs may not be an indication that the economy is improving. It could actually be an indication that we are not efficiently allocating the resources to the work. If it costs $6 to make a part in China and $8 to make it here, the company that is making in the US is at a distinct disadvantage in the global market. The market has a way of equalizing this type of imbalance.
The president brought up the "manufacturing institute" in Youngstown OH. Said they were doing something unique and fundamentally important. The truth is that there are thousands of Youngstowns now that are competing against government money now, yet are further advanced in the development of 3D manufacturing equipment. Why does Youngstown get subsidized? Because Obama likes to pick winners and losers.
The only worthwhile jobs are ones that add value. Obama wants to blindly chase after manufacturing jobs, without consideration of whether there is clear economic value. He now wants to spend borrowed money on 15 new "manufacturing hubs" of very dubious benefit, as if they have any sense of what might be successful in manufacturing development. A hypothetical good president would retire the labor department, free up the economy to create its own manufacturing hubs, and would eliminate the minimum wage. Then, anyone who wants to operate a manufacturing plant or work in manufacturing can do so without artificial restriction, and might even find a formula hat works economically.
Wizer looks at the SoTU #1
We all knew that what Mitt Romney wanted was not necessarily the best for the country. He wanted to be the President. You could see that in his heart. In telling us his story, we saw the issues lurking in his proposals. He would run the government like a business. He would make our choices for us, but tried not to say "we weren't in a position" to make them for ourselves. He didn't have any particular problem with Obamacare, and thought Obama himself was an upstanding citizen who meant well, but he was just just a little over his head. In fact, Romney was clearly misjudging Obama, Obamacare, and the serious issues of the day. His own plans for micromanagement of the US economy,had been tried before by Hoover, and we had just already gone through George (Hoover) Bush and Barry (FDR) Obama for the last twelve years and didn't need to start anew down that path.. In the spirit of "better the devil you know", enough people voted against that kind of change to prevent it from happening.
So, what did we get instead? Instead, we got liberalism on steroids. Our first look at Obama unchained came this week with the annual State of the Union address. As we have in the past, it is instructive to strike a contrast between what the president is talking about doing, and what a hypothetical good president would do instead. As we will show, the gap between Obama and a hypothetical good president couldn't possible be any wider than it is now.
Item #1. You can get ahead no matter who you love.
Was it really necessary in the first 3 minutes to attempt a pander to a special interest group? It is mindless and vapid to advocate for unity by calling attention to differences. If Obama really wanted everybody to unite, then why does he say things that underline those differences? Obama routinely chooses to identify people along his pet categories. It's as if he tells them that they don't really belong, but he's throwing them a bone anyway. Shouldn't he be inclusive to a fault? A hypothetical good president already has everybody in mind when he says something like "you can get ahead". You can get ahead because you're an American. period.
So, what did we get instead? Instead, we got liberalism on steroids. Our first look at Obama unchained came this week with the annual State of the Union address. As we have in the past, it is instructive to strike a contrast between what the president is talking about doing, and what a hypothetical good president would do instead. As we will show, the gap between Obama and a hypothetical good president couldn't possible be any wider than it is now.
Item #1. You can get ahead no matter who you love.
Was it really necessary in the first 3 minutes to attempt a pander to a special interest group? It is mindless and vapid to advocate for unity by calling attention to differences. If Obama really wanted everybody to unite, then why does he say things that underline those differences? Obama routinely chooses to identify people along his pet categories. It's as if he tells them that they don't really belong, but he's throwing them a bone anyway. Shouldn't he be inclusive to a fault? A hypothetical good president already has everybody in mind when he says something like "you can get ahead". You can get ahead because you're an American. period.
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