Archive for category Government Regulation
Help Not Wanted
Posted by Tom in Business, Government Regulation, Statism on August 9, 2010
Michael Fleischer posted a hard hitting op-ed in today’s WSJ, “Why I’m Not Hiring.” In it he tells about a valued, long term, mid-level employee at his audio systems company in New Jersey. He details the pay and benefits and discusses the taxes, insurance and fees involved in her compensation. “When you add it all up, it const $74,000 to put $44,000 in Sally’s pocket and give her $12,000 in benefits.”
But that’s only part of the story. Hussein Obama’s statism has businesses guessing, wondering when the next shoe will drop in terms of tax, regulation or restriction. The uncertainty principal is paramount in business today. Why should I invest, why should I hire, when I don’t know what these tzars will do next? Obamacare is omnipresent, yet unknown in scope and effect. Financial re-regulation is all encompassing, yet unknown in scope and effect. Cap and Trade is a dormant threat of gigantic proportions. Obama and his Reid-Pelosi comrades have set up bureaucratic rule-making to an extent not seen in modern memory. Using the Tom Cargill analogy, when the chess umpire announces in the middle of the match that the rules are being reconsidered and that an announcement will be made in the near future, what is going to happen to the match? Will the contestants continue to play?
Likewise in business, whether the company is a rent seeker like GE or a small business like Michael Fleischer playing by the rules, growth stops, risks are avoided, in short, the game stops. No investment. No hiring. No growth!
I met this afternoon with the owner of a multinational small business who handles major relocations; his business is a barometer of future business activity. He has reduced staff significantly and has no incentive to ramp back up. Just a reaffirmation of Michael Fleischer’s “Why I’m Not Hiring.”
It is imperative that we rid ourselves of this scum come November.
Obama Economy
Posted by Tom in Centrally Managed Economy, Employment, Government Regulation, Statism on August 8, 2010
Interesting video on unemployment growth in the era of Obama big government statism. Note that this dose not include those who have given up looking for work. (Click on the full screen icon for larger view.)
July Hayek Dinner: State of the Economy
Posted by Tom in Centrally Managed Economy, Deficit, Economics, Employment, Financial Crisis, Financial Policy, Government Regulation, Individual Freedom, Monetary Policy, National Character, National Debt, Statism, Yucca Mountain on July 21, 2010
Our thanks to Tom Cargill for the excellent presentation last evening and to Jerry O’Driscoll for arranging the meeting in my absence.
Jerry opened with a snapshot on employment trends from selected countries since 2008. The US is at the bottom of the pile and trending down!
Tom picked it up from there with a quick look back on the first decade of this century focusing on four remarkable points: 1. US homeland is vulnerable to attack since 911; the first since the war of 1812. 2. Critics of the market are strong despite the increase in standard of living in the last quarter century. 3. Failures of the welfare state notwithstanding, the US is moving toward socialism. And, 4. the political force toward socialism can be traced to our current great recession.
Technically, the recession is still in full force. The question is what kind of recovery will come, weak flat “U” or “J,” or a double dip. Ten key points are apparent:
- the US has not seen more economic, financial, and political distress since the Great Depression.
- our recession was not caused by market failure but mainly by government failure, both monetary with low rates too long and fiscally with housing policies of Fannie-Freddie.
- yet, the public hypnotized by Obama rhetoric believes market failure was the cause.
- admittedly, the $700 billion financial bailout was necessary to prevent a liquidity crisis.
- but the five “stimulus” packages ignored history and had a negative effect, negative Keynesian multiplier, on the GDP. Wasteful spending directed to leftist programs.
- while we now see some GDP growth, the private sector is not creating jobs and budget pressures will force a decline in public sector employment.
- the private market is not creating jobs due to the great uncertainty of the rules of the game; we are going to state directed allocation of resources not market directed allocation.
- Adam Smith calls man an economic animal, “truck, barter, and exchange” but the uncertainty of the rules creates inefficiencies that lower growth potential.
- the economic game becomes even more uncertain because of the greater role of government; what happens to the chess game if it is announced in the middle of the game that there will be a rule change; Obama is regularly announcing rule changes to come!
- QED, the most likely “recovery” is a flat “J” over the next several years with a chance of a double dip.
Tom now thinks the chance of a double dip is 50/50, an increase from his earlier thinking. Potential economic shocks which will push toward a double dip are: the dramatic increase in taxes next year, and the questionable stability of the European Union. The current divergence in fiscal policy between the overspending US and the rapid austerity in Europe may well be a third negative shock. Tom concluded saying that only a change in the US congress and administration will offer hope of a solid recovery.
We thank Beth Powers and her crew for her comments and patriotic efforts with LibertyInAmerica.org. Please consider a donation to help continue the fine bus treck.
John Dunn provided a positive report on Yucca mountain efforts, see NV4CFE.org.
Finally, our thanks to Mike Herring for treating the group to dinner and drinks, this an an inducement to make contributions to Sharron Angle’s campaign to retire Dirty Harry.
Steve Wynn on the Leftist Democrats Killing the Economy
Posted by Tom in Business, Centrally Managed Economy, Congress, Democrats, Economics, Government Regulation, National Debt, Statism on July 21, 2010
This CNBC interview with Steve Wynn is well worth your time:
SEC Regulation Fails to Stimulate–Staff Opts For Porn
Posted by Tom in Centrally Managed Economy, Financial Crisis, Government Regulation on April 24, 2010
During one of the worst financial crises, while Madoff was making his millions and Wall Street making its billions, senior SEC officials making over $200,000 per year were using government computers to watch porn over the internet!
Obama and the Democrats want to give them more regulatory authority and greater responsibility. So whether it’s “too big to fail,” bail out slush fund, consumer protection agency or general total control of financial services, regulatory incompetence is the issue.
Dodd and company ignore one of the primary causes of the financial debacle, Fannie and Freddie incompetence, and proceed to give more regulatory authority to our failing regulators.
We over pay government employees to watch porn while the financial system collapses. What’s not to like about big government? Thank you Hussein Obama.
O’Driscoll’s Shot at Crony Capitalism
Posted by Tom in Economics, Financial Policy, Government Regulation on April 19, 2010
Our own Jerry O’Driscoll has in his April 20 WSJ article given an economist’s perspective on “crony capitalism,” An Economy of Liars. He argues that the current “reform bill” simply multiplies regulations in a failed regulatory environment. One reason for the failure is the incestuous relationships between regulator and regulated. Examples of regulatory failure abound. Causes are more subtle. Jerry argues for a more common law approach, an affirmatively duty to correctly represent. Let the free market and its pricing mechanism work. His article linked above is well worth the read.
Wall Street + Democrats = Crony Capitalism at Taxpayer Expense
Posted by Tom in Centrally Managed Economy, Deficit, Democrats, Economics, Financial Policy, Government Regulation, Unions, Wall Street, Welfare on April 18, 2010
In 2008 to elect, inter alia, Barack Hussein Obama and other Democrats, Goldman Sachs contributed $4,463,788; that’s 75% of its total contributions to the Democrats, the party of Wall Street. Also the party of public employee unions and unions in general. Also the party of trial lawyers. These three groups together with sundry “rent seeking” corporations like GE have cost the U.S. economy, particularly the taxpayers, billions of dollars. A little money buys a lot from Democratic whores like financial perks to Goldman from selling structured phony investments, more government employment union dues for union bosses, and contingency fees for trial lawyers from phony lawsuits. The economic cost hurts us in inflated deficits and debt, higher capital costs and exploding taxes and higher medical costs from inflated malpractice insurance rates.
The Wall Street payoff continues with Sen. Dodd’s financial ”reform” package. It is a bailout at taxpayer expense waiting to happen. With Obama and Democratic lips moving in support of the Dodd security blanket for Wall Street you know the denial of future bailouts is bold face lie. What Dodd has done is to institutionalize future bailouts garnering more power to the federal (DEMOCRATIC) regulators. Just another step in big government. Just another money getting lever for the Democrats. Just another vote buying lever for the leftists.
The problem is twofold and all bad: One: More control of the economy, main street as well as big business, because the general economy works with the financial lubricants provided by the financial industry. More control means bigger government. More control means more opportunity for rent seeking behavior and less competition. More control means more incumbent power.
(Definition: rent seeking behavior is the business behavior to obtain unfair competitive advantage from government regulation, subsidy, or taxation against competition without such advantage. Examples: subsidy of environmental devices, ethanol, and government bond agency.)
Two: Just as bad from an overall economic perspective is the moral hazard enshrined in the Dodd bill. Moral hazard is the real or imagined sense that there is a safety net protecting business from adverse risk. If I feel the government will always be there to bail me out, I will take more and more undue risk to gain greater profit because I have nothing or little to lose in the process. This is a guaranteed bubble generator and when the s__t hits the fan, the necessary cleanup will fall on the taxpayer. Fannie and Freddie are perfect examples of this phenomena.
As a recent WSJ editorial notes the Dodd bill is improving draft by draft at a glacial pace so we still have hope. But the mindset of the Obama control freaks is opposite the welfare of the American people.The solution is to separate high risk businesses like proprietary trading from government guarantee businesses like bank deposits or alternatively, eliminate all government business guarantees. We must have the freedom to fail as well as succeed without government interference in either case. That is what makes us competitive and what has made us great.
Welfare be it individual or corporate only makes us dependent in a world that will not tolerate dependence. It puts us near the end of the road to serfdom.
Bitten By GAAP, Obama Threatens
Posted by Tom in Centrally Managed Economy, Democrats, Government Regulation, Politics on March 29, 2010
Bravo DayByDayCartoon.com
Odd Couple Plus One
Posted by Tom in Centrally Managed Economy, Congress, Deficit, Democrats, Government Regulation, Nationalized Health Care, Nevada, Politics, Statism on March 21, 2010
Today this May-December couple managed to pull off one of the largest scams ever foisted on the American public. It is the last critical step in government’s take over of the U.S. economy and perhaps the largest expansion of government ever, certainly in absolute terms. It creates a growing dependency which puts us on a clear path to European socialism.
It Should Be Easy
Let's Stay Close
The protracted process showed these masterful politicians’ lies, tricks, obfuscation and backroom dealmaking as some of the best or worst, depending on you point of view, in history.
But Harry's SLOW
That Puppet
Throughout the process the Pelosi-Obama relationship was key. It is truly amazing how close these two stayed. They called the shots and Reid did as he was told; in the process he took most of the credit for the one-off deals that mis-apportioned the taxpayers’ money.
Harry Dictating
We Won Together
It is hard to understate the damage done in terms of jobs lost, welfare recipients created, standards of living lowered, and national health damaged. With this statists victory the leftists ruling class has deeply damaged our nation and impoverished our grandchildren for generations to come.
A sad day for America.
Net Neutrality, Empowerment Nevada, NV4CFE.org, and the Cato Summit
Posted by Tom in Constitution, Democrats, Economics, Energy Facts & Policies, Environment, Government Regulation, Military Policy, Politics, Statism, Yucca Mountain on March 17, 2010
What a great Reno Hayek Symposium Dinner last evening. I want to thank Susie Evans and Manny Martinez of Charter for the excellent discussion of net neutrality and its potential impact on our First Amendment freedoms and the free-market functioning of our economy. Broadband pipes are not free they require invested capital on which a return is expected. Demands for priority use of those pipes must be compensated. In essence, the “net neutrality” free loaders, with no investment at stake, are demanding priority use of those pipes without adequate compensation. Note that the pipe owners are not monopolies they are subject to free market competition; cable, phone, satellite all compete in a non-common carrier environment.
George Gilder points out in his recent WSJ article, Cap and Trade for the Internet, since 2001 the U.S. has led the world in internet deregulation with some $4 Trillion of investment increasing residential bandwidth 54 fold. But new attempts to promote regulation including net neutrality will turn this on its head. Economics-abundance or scarcity-in a free competitive market is regulation enough. Of course that’s not the tack the Obama statist are taking. FCC Chairman Julius Genachowski is moving to expand government control of the web. The WSJ editorial, Broadband Trojan Horse, discusses Obama’s “national broadband plan” including reclassification of the web as a “telecom service” subjecting it to “common carrier” status regulation and “open access” regulation. This solution in search of a problem is emblematic of Obama’s Soviet style control freaks. If implemented, it will destroy private investment. Thanks again to Susie Evans and Manny Martinez.
Ryan Costella and Dana Andrus gave a brief presentation on Empowerment Nevada a grass roots community action program they are initiating that basically promotes community problem solving without government involvement. Ryan hopes to enlist concerned citizens to re-ignite the spirit that founded this country and this state. He sees this as a springboard to other communities, other states and eventually the nation. “We want people who raise their hands to help, not hold their hand out.” His argument is that both left and right can agree on one thing: grass roots problem solving works. We wish Ryan luck in his efforts.
John Dunn gave us an update on Nevadans 4 Carbon Free Energy’s recent publicity campaign. The two Reno public meetings and attendant press reports have been well received. Politically the concept of a Yucca Energy Park including storage, reprocessing, power generation and research, seems to be a non-starter. The group has concluded that grassroots support is the key. This may, in fact, include a ballot initiative to let the voters decide. One thing for sure, jobs and money for Nevada and safe storage nationally are real necessities. I’ll keep updating as the occasion arises. Meantime check out: NV4CFE.org.
Finally, Jerry O’Driscoll briefed us on the recent Cato Summit in which he participated as a panelist. There were two presentations that particularly impressed him: Afghanistan-we need to win enough of the inter tribal wars to get the Taliban in charge so we can negotiate an exit. Climategate-the wounded scientific community caught in their phony research and conclusions appears to be as rough as Chicago politicians. My current issue of the Weekly Standard summarizes the reason on the cover!
Tom Motherway