Friday, March 31, 2006

Military Terms
Paul K. Van Riper

Who was it that said the corruption was in the fine print?--maybe me! I read this Paper by Lt. Gen. Van Riper, and began to percieve the real evil of Pentagon Staff bureaucracy. That Evil consists of multiplex confusion. I decided to present some of my own personal definitions to Those interested, simply to simplify or confuse.

Observations of this Author:
1) Center of Gravity--This refers specifically to what element in the Enemy culture or economy must be defeated, in order to engender Peace. Von Clauswitz lacked visualization of the true nature of warfare, where warfare is actually a transitional phase. We seek to disturb one plateau of Peace, in order to effect another plateau of Peace which is to Our own more favorable advantage. The center of gravity is that forestalling element in Enemy society which prevents the more favorable Peace.
2) Decisive Points--Are exactly those elements of Enemy society and economy which will have to be eliminated.
3) Objectives--Are exactly the identification of Decisive Points, along with the Means of destruction of those Decisive Points. The Means possess real relevance in the Discussion because of overuse or underuse of military hardware--the worry of insufficient Fire, or of the use of too much Gun. One would not use a nuclear weapon to take out a machine gun post, or should One try to take out a fortified position with a BB gun.
4) Planning--Needs to cease at the point of Conflict, with the Commander allowed free rein to utilize all Weaponry alloted in the manner presenting the best advantage of Fire in his perception. It need be his decision alongside his responsibility.
5) Commander or Command Intent--should be renamed Battle Situation. Such a Statement should be an assessment of opposing Enemy forces, identification of the Objective, assessment of the basic Ways to accomplish the Objective, and the basic Time elements of when to cease military operations--whether the Objective has been attained or not. Both Considerations must be outlined to limit battle Casualties, and granting the Commander ability and right to exploit realized Gains in excess of the initial Objective.

Identification of an End-State in warfare is an exercise in futility, unless One is a skilled Prophet. The result of Combat operations is a Product of Command exercise and choice on both Sides, fraught with unestimated percentage variables. Searching for some specific Scenario will inevitably leave Command and Staff unsatisfied. Warfare is like unto a Business enterprise--it will make a Profit or fail; no one can foretell the level of Profit, or the total Cost of failure. lgl

Thursday, March 30, 2006

Tornado Watch, but not Q4

This Author is staring out his window, which he is not supposed to do, as he is in a Tornado Watch. It was not the last Quarter of last year, which ground down to a 1.7% Growth rate in the Economy. Many Economists are going on Record saying that We have recovered the Q3 pace of last year, but One must remember that the first Quarter of this Year enjoyed a drop in Energy pricing, which has since been lost. I additionally believe revision of Q1 estimates will drop a percentage point of the perdicted 4% Growth rate.

The Spot markets are pushing Sweet Crude close to $67 per barrel. What is the longterm consequences of this Price runup? Economists have been proclaiming that there is little sign of Energy Costs impeding the Economy. Q4 of last Year, though, may be the Indicator Quarter of the Energy Cost impact. I personally believe increased Energy Costs are impacting the Economy harder than the increased Fed base rates.

The real question is: How does Energy Costs affect the Economy? This basically is answered by Business management decisions. Common Economist rote details Operational Costs increases result in immediate constriction of Capital investment. This may not be the Case, where there is a Tax structure in place which penalizes for Investment reduction--saved Funds resulting in heavy taxation. The Investment Schedules thereby may be the last to be amended. The Personal touch may be the impulse, with perdicted Cash shortages in the distant future driving current Stock Options, Stock Grants, Pay raises, and distribution of Profits to Stockholders. This means a personal distribution of Funds before Operational Costs absorb accumulated Funds. Everyone awaits the cutback in Consumer Spending, the cutback of Government Spending, and eventual rise in Taxation by grabbing the Cash now. lgl

Wednesday, March 29, 2006

The Bush Effect

Kash has a good view of Our future fiscal psychosis. This stands as a part of the Bush Effect. The Government, led by George W. Bush and the current Congress, plans a program of escalating annual deficits. They not only plan on Spending big, but on taxing small. The Later can be explained in Tax planning devoted to taxing Consumption, and not Income. Why the love of taxing Consumption? All must pay for Consumption when any form of tax is imposed, to greater or lesser degree, and the lesser degree pays the largest volume of tax revenues. Higher Incomes will inevitably find a reduction in Tax, while the Poor will be required to pay their full measure. Bush denies the notion that the Wealthy should pay their full measure as well.

The American Ambassador to Iraq, at the probable instigation of Cheney, created the unpardonable gaff of internal manipulation of Iraqi politics. Democracy is sacrosant, if and only if the American President approves. George W. does not understand how beloved he is to the Iraqi people, al Satr will probably be the next Prime Minister in Iraq.

Putin says the U.S. Government is undercutting Russia's efforts to join the WTO, but will not stipulate what exactly is the stance of the U.S. Government. The Oval Office Oil Combine probably went back to insisting Russia not undercut current Oil pricing with extension of longterm low-cost Supply contracts to foreign Energy Consumers. This is a practice long used by Russia to gain Trade advantages, but the Oil Combine does not like the drop in Profits from the World Oil price reductions generated by these longterm Contracts. This Author has long perceived that the World Trade Organization might have to change its name to the WTSO--or World Trade Strangulation Organization.

The Bush effect has been noted by many Authors, whether talking about Tax Cuts in the face of rising fiscal instability, diplomatic efforts to please political supporters--remember Venezula, inciting to violence by making bellicose statements about foreign nations, or acting as a very partisan lobbyist for the Oil industry. We luckily have only some three years left of this insanity of the White House run by and for the Profit motive. lgl

Tuesday, March 28, 2006

Medical Equipment

This Author found himself projecting several evil Scenarios while reading this short article. Many conditions seem to threaten adequate disposal of medical equipment. There is a shortage of overall Guidelines available to determine whether medical equipment should be junked, recycled, resold, traded in, or donated. Leeway is granted for malfesiance, carelessness, and/or destruction of usable equipment. It appears obvious to this Author that only about 25% of current exchanged medical equipment is being properly vented.

An Industry Board should be formed to oversee all such medical equipment transfers, and not necessarily Governmentally regulated. All Donated medical equipment should be routed through a central Testing agency (possibly Private funded), who would certify the equipments' functionality alongside determination as to the proper donation recepient (possess the Support services necessary). This Agency could also provide uninstaller capacities at uniform charge to defray Testing Costs and determinations, along with donation installing. Medical equipment companies who utilize Trade-ins should be forced to surrender said Trade-ins for inspection before recycling or junking, and medical facilities should be forestalled from cannibalizing medical equipment for Spare Parts prior to this transfer; medical equipment companies charged for the Testing, and medical facilities charged for the uninstall. This central Testing Agency should be charged with supervision of all Waste and Recycling procedures used in disposal of medical equipment.

Most would criticize the Program as another huge bureaucracy being created, but a chartered Public Corporation could serve nicely as such an overseeing Agent, and one which could be mostly Privately funded, with only Public Start-Up capitalization. A Savings of only 25% of the estimated $8 bn worth of discarded and mishandled medical equipment per year would make the Program worthwhile. Donations to foreign medical facilities would be adequately handled, with Service and Replacement capacity available. The Costs of Recycling and Waste disposal could actually be reduced, as standardized Procedures are adopted. It is worth consideration. lgl

Monday, March 27, 2006


This Author Today received his first Overdraft notice since he was a kid. It would only be fitting, if he had indeed overdrafted his account; but he did not. He received a Check from one Bank, and delivered it to another Bank three blocks away, thinking to leave the money in his Checking account until he could deal with his hometown bankers--another part of the chain Bank where he had deposited the Check from the first Bank. There was no doubt that it was his money at the first Bank, the second Bank, or his hometown Bank.

A Bank Teller at the Bank where the deposit was made, with a graciousness of Soul, put a 9-Day hold on the funds deposited. This Author returned to his hometown Bank, distributed his funds into his Investment portfolio with hometown Bank's own financial paper; and receives an Overdraft notice in his mail. This Author is decidedly not happy with the transactions, and Everyone will know of this unhappiness if he receives any returned Checks. The Anger: Before Homeland Security, Holds on Funds lasted no longer than the approved cancellation of the Check by the issuing Bank. Where did the 9-Day hold come from?

Other aggravations come from a noted 15 Cent average increase in the price of Gas across the Country, and that the Fed is again going to raise the base Interest rate--quite contrary to common reason. It has not been a good Day. lgl

Sunday, March 26, 2006

Cost Cutting

A number of Posts are discussing the record Current Accounts Deficit, with Mark Thoma presenting a good expression:
why the trade gap appears stickier

The Answer as to why the Trade deficits remain stable with increasing percentage, though, lies not in foreign nations pegging their Currencies to the Dollar: these nations pegged to the Dollar because it was stable; instability would produce their transfer to a more stable Currency than the Dollar. The rationale for the absorption of U.S. Debt comes in investment opprotunity for nations which want to continue Trade with the United States because of the the generation of economic activity within their own nation, and reduction of their own Welfare Costs.

Unenlightened Americans might determine the best course adoptable is to provide impediments to foreign assumption of American debt--bad idea! It does not solve the basic problems of American Unemployment--read the NYTimes article on Laid-Off Workers in today's edition. A Policy change is necessary, not Fixes. So what do We base this Policy change on?

Examine the American Business format. Offshoring and Outsourcing does not just get rid of high Labor Costs, it gets rid of extensive Service taxes--Unemployment, Social Security, etc. This elimination provides its own Profits extension, over and above lower Labor Costs. American Business is able to offer Products at lower Cost to Consumers, taking their Profits from the Taxes saved by Outsourcing and Offshoring. American Products Overseas do not share in the benefit of such activity, and Exports do not increase as rapidly as Imports.

The Solution is to charge American Business the Cost of the surrendered Taxation coming from Outsourcing and Offshoring. Suppression of American Labor Costs is still maintained, while the economic profits of Tax evasion is prevented. Policy Change: Business should be charged the Cost of Welfare payments as would an functioning American company using domestic Labor. This imposed as a special Import Sales Tax. lgl

Saturday, March 25, 2006

Carlos Slim was named by Forbes as the third-richest man in the World. Lopez Abrador is the favored Candidate to win the Mexican presidency. One of Lopez Abrador's pet big projects is a bullet train to the U.S. Border from Mexico City. A couple of Comments from this Author:

1) Any bullet train from Mexico City should have Terminal ends in L.A. and Houston.
2) A bullet train alone is insufficient; what is needed is a four-track rapid Freight system.

Quotes from the article:

Slim complained that U.S.-backed free market policies had failed to create strong economic growth in Latin America, although many countries have slain the dragon of high inflation that plagued the region for years.
"Stability is not enough. Opening up to trade is not enough. Privatization is not enough,'' he said, calling for a mix of private and public investment to kick start economies.

Readers of this Blog know that I do not favor extensive Trade, thinking it has become a waste of Fuel, Capital equipment, and human resources better spent elsewhere. It is still a fact that the United States should have better Relations with Our southern Neighbors. It is recognized that Venezula is difficult to deal with, but Brazil and Chile need be cultivated. We do not need to foster Trade, simply suppress unfair Trade practice. We should also help with the Capitalization of national projects, when they are also in American interest. lgl

Friday, March 24, 2006

Home Sales

New Home Sales had back-to-back heavy drops. Preowned Home Sales showed a big increase, but this can be seen as basic Tax avoidance; grabbing a Mortgage before May 15. This Author has been expecting a decline in the Construction industry for the last Three years, and I may finally be seeing it. One Economics blogger has recently suggested We keep track of Predictions, so We can laugh at the ludicrous---luckily for myself, it is not up and working yet!

Kash at Angry Bear has a nice Post on Durable Goods. I do not take a dim a view on the growth of Capital Goods, they being no greater than in 1998 without Transportation and defense spending, because I remember 1998 was not a relatively recessive Period. The piece still gives a wonderful entry into the worries associated with these numbers.

A further rise in the basic Fed rate will be counterproductive, not retarding Inflation with raging Oil price increases, and constricting Business operating budgets. New Orleans cannot seem to get the Levies finished, though there has been more than enough Money spent; it is too bad Money is not getting to other rebuilding efforts. I have heard that Mount St. Helen's does not want to stay dormant. Winter did not want to come, and now it doesn't seem to want to leave, developing a lot of Cleanup Costs in the MidWest. None of this sounds very bad, but Tornado and Hurricane seasons are about to arrive. GM has a problem deciding what to get rid of, and for what Price; the final Decisions will impact all of America, especially the Consumers if Engineering staff is denuded--We need an alternative to the SUV. This Author fears for the economy, even if there is not flatout disasters. lgl

Thursday, March 23, 2006

White Collar Crime
The 2005 National Public Survey on
White Collar Crime

Healthcare fraud costs the government and taxpayers an estimated $51 and $170 billion

It is estimated that for the year 2004, illegal credit card purchases totaled $788 million in the U.S. alone, which represents 4.7 cents of every $100 of total purchases. Also, recent studies project that as many as 7-10 million Americans have been victimized by identity theft; it is estimated that $48 billion in losses have been incurred through this type of crime alone

Only 30.1% of reporting households specified that a report was directed to at least one entity with the ability to investigate and/or prosecute the perpetrator under criminal sanctions.

Several statements need be made: The increased reportage of Incidents derive from increased Public knowledge of existence and access to law enforcement agencies (Contact information). Elderly and mature adults fail to report because of the bureaucracy of law enforcement reportage (extensive Time sequence). Health industry fraud is rife throughout the Country in all aspects of the profession--trying asking what a Clinic visit will cost at the time of attendance. Major purchase pricing is universally misleading--never mentioning licensing fees, Taxation, Warranty Costs, or Business-assigned commissions. States and Communities even go to great lengths to suppress information as to the actual Sales Tax rate.

This Author has even been subject to identity theft--purported to have spent $9000 in Credit Card purchases in Paris, when having never left the States. There is an element of Consumer aggravation which raises inconsiderate Charging to the level of White Collar crime when it does not constitute such, but fact states the Cost of White Collar crime is vastly underestimated. I estimate about 40 Cents out of every $100 of total GDP has been generated by some form of illicit White Collar crime, and if legal but hidden Charges are included: this raises to almost $12-14 of every $100 of GDP. It is a Problem which has to be resolved. lgl

Wednesday, March 22, 2006

A Good Paper
What Explains the Widening Wage Gap?
Outsourcing vs. Technology
Claudia Canals
February 2006
the wage gap between
skilled and unskilled workers has increased by 46.55% between 1980 and 1999.

The Math in the Paper seems relatively good to a basic nonmathmetician such as myself, though there are a couple of swift changes in it which may lack for some credance. It is not a question of error, only of emphasis. It still remains a highly creditable effort.

My real concern lies in the choice of Year used, though the Author could not refine the data base as well as could be appreciated--simply for the lack of the data. Conclusion of Period at the height of the Tech Boom is the problem; this Author estimating Skilled Labor to be 8.5% overemployed during this Period. This overemployment led to false presentation of overall Skilled Labor Payscale increases, corrected by Layoffs and Downsizing after the last Recession. This factor will have already foreshorted the Wage Gap between Unskilled and Skilled Labor to some degree, and was not introduced into the equation mix. It was nevertheless a excellent attempt to quantify the total biased technological impact on Wage scales. lgl

The Lion Sleeps Tonight

I bet my Readers think I will comment on the NYTimes article about the lack of Royalties paid to the Composer, but I will skip it with the aside such always occurs without a Title search.

My real orientation is to say that Bernacke was all wet in suggesting a drop in the Dollar will not truely impact Americans and the American economy. We do not possess the inplace Production capacity in the Near term to replace foreign supply of Consumer Products--it will require a minimum of three years, and probably six years, to return to the domestic supply of the 1960s. A drop in the Dollar will present a heavy load upon Consumers. Transition Costs will suppress American Wages. American Exports will not increase significantly, due to inplace competition of foreign Production facilities. Measures need to be taken to support the Dollar, not let it slide to hell. It is interesting that there is no advocate for Consumers among Economists, because the Business advocacy is all wrong!

I will finish with the Sqwack Box Case. The Day Traders plus their Contacts in the major firms are only the tip of the iceberg. The Insider Trader regulations are becoming increasingly difficult to enforce, and never touch the major Violators. Everyone crows about Martha Stewart and ignores the salient point; she was only the sacrificial goat! One concentrates on the Celebrities and the Small Fry, and overlook the real fraud of the major Players. This Author has never been a Fan of Insider Trader laws. Stockholders are more wary without their existence, and prosecutions under the normal criminal laws concerning Fraud produce greater reach to the extreme Violators, heavier Punishment, and attention to the areas of greatest loss. lgl

Tuesday, March 21, 2006

Halloween Idea

This Author was reviewing a NYTimes article today on the sale of Terrorism Insurance in Iraq, which I imagine is one of the few industries in Iraq that is advancing. I, of course, reverted to my Quixotic nature and tried translation to American society. Long and deep Thought, almost a New York nanosecond (I use this term too much, and leave Most wondering what is meant), brought me the perfect type of Insurance to sell to the American Public.

What is the worst fear of Americans? It might be the threat of Terrorism, but no, the fear of Taxation could be the greater. It might be fear of the disruption of the Family unit, but with the current divorce rate, even the children of failed marriages have doubts to that paramountcy. Could it be the fear of ill health, possible but doubtful; Americans believe they have the best Medical system in the World, and rational statisticians would claim about Sixth Best. I had the suspicision that I was close with the Later potential fear.

I finally arrived at my brainstorm. Where is the real fear for Americans? The Answer is so obvious: They are afraid they will be stiffed by Medicare or Medical Insurers! Here We have the genuine fear of every decent American--that the Insurers will not actually pay for their Medical bills. The fear is generated by a Republican Congress and President, who keep grumbling about Welfare payments and exorbitant Costs; totally oblivious to the fact they are the most Spendthrift Congress in history. It is reinforced by Private Medical Insurers who challenge anywhere they can, and always delay Payments.

Quick sketching (in honesty, in my head) brought me the conception that the fear is very real, and highly impactual. I estimate I could sell said Insurance with premiums about 61% of individual medical insurance to family insurance policy holders. The selling point for the Insurance would be We would legally represent all of Our Insured; no need to tell them We could save about 70% of Our own Payouts from such representation. There is always the stone in the Shoe, having to employ lawyers; We would have to watch this carefully, as their hourly Charges could bankrupt Us. lgl

Monday, March 20, 2006

Fourth Year of the War

CBS News provide Estimates of War Cost in Afghanistan and Iraq as between $235-250 billion, this Expenditure simply final Federal Government admission of what has already been spent. George W. Bush cherry-picks one out of 8,000(??--possibly read that somewhere) villages and Cities, and claims Progress; CBS reports that military commanders assert only a 75% decline in violent Incidents in the city picked. We also notice that We have again resorted to sustained Airstrikes in Iraq once more, in at least one area. Again, We find Charges advanced of U.S. Troops attacking Civilians. I believe the First, but not the Last report from the field in the previous sentence. Bush states 'We must stay the Course', but what Course?

This Author once wrote an entire Book, which People happily never read, outlining how Interventions should be conducted. I once thought I had clearly warned against long incurions, that none should last over 90 Days; else Enemies of the United States from around the World would organize and fund guerilla operations against Us. I mentioned before the Iraqi invasion, that We needed to cherry-pick a native Iraqi government to immediately take over the reins of Power until Elections could be held. I warned against American sentiments to engage in the ridiculous Concept of Nation building. I warned private elements of the Federal Government and Defense Dept. that One had to pay off and potentially still employ the relatively innocent in the Saddam Army and Police; otherwise, they would constitute the core of an Opposition movement against the Occupation (I am real old-fashioned and still call things by their real name). Every element of Iraqi society states the real wrong in Iraq is not the foreign Terrorist elements, but American presence; I holding some suspicision that the majority of the Iraqi Government dreams of settling in California.

We have been in Iraq over three years, costing Ourselves some 2310 American Dead, and the Iraqis some 30,000 lives. American Casualties will cost the Federal Government a probable $10 billion per year for the next 40 years, because of Rehabilitation Costs. The cost in Iraqi Casualties would likely break Medicare--funded here by Americans, while Iraq will never be able to fund Rehabilitative Costs. Iraq can barely afford to put back together what American Airstrikes and artillery have blown apart, don't forget the Terrorist bombings and Slayings. There will never be an economic justification for the wars in Iraq and Afghanistan (Anyone remember Pakistan). There is real need for Change, do We have to await the departure of George W. Bush from the Oval Office? lgl

Sunday, March 19, 2006

Corporate Activity

This Author opens the NYTimes, and finds Congress prepared to grant leniency to Corporate contributions to the Pension Fund. I turn to the AP, and find that Corporations are not paying their assessed Federal fines to the tune of $45 bn. Every article on all the Business News services are ready to pity the poor Corporations, who have such liabilities despite Years of the highest Profits in history. Is there something wrong with this Picture?

Why is it that Corporations can commit to billions of Dollars of liability under Buyout arrangements, and can pay their own Corporate Executives higher than ever before in history, but cannot meet made or quarranteed commitments to their own Labor force and the Consumers. One must remember that Stockholders also miss out on the largesse a portion of the time, considered part of the lumpen proleteriat. No News service mentions that the bills by Congress excuse all past default of Pensions to Labor unless specified, and mildly grant a freebee to Corporate Pension contributions for twenty years. The free one hides in the amount of Pension contributions (real) which will be some thirty percent less than the negotiated quarrantees to Labor, in terms of total amounts of future defaults. The Corporations at least have a friend in Congress, even if no one else does.

This Author still awaits an economic assessment of the total estimated amount of unpaid Stockholder dividends go to political contributions to Congressional and Presidential campaigns in percentage amounts. Your great-grandchildren, if they become economics historians, could possibly have an answer in their later years. lgl

Saturday, March 18, 2006

Human Trafficking

The Bush administration claims a campaign against Human Trafficking, see:

The United States Government estimates that as many as 800,000 people are trafficked across international borders annually, with up to 17,500 victims trafficked into our country each year.

From fiscal year 2001 through fiscal year 2005, the Civil Rights Division and United States Attorneys’ Offices filed 91 trafficking cases, a 405% increase over the number of trafficking cases filed from fiscal years 1996 through 2000. In these cases, Department attorneys charged 248 trafficking defendants, a 210% increase over the previous five fiscal years. In addition, prosecutors with the Civil Rights Division and United States Attorneys’ Offices convicted 140 defendants of trafficking-related crimes, a 109% increase over the previous five years.

Several statements should be made about the Above Administration claims: Many of the Prosecutions were actually inherited by the Justice Dept. from the Clinton administration--Our Justice system works slow, most involve only foreign-born Racketeers, native-born Racketeers involved were generally non-White and working in prostitution or cottage industry sweat shops, human trafficking in Prostitution remains highly consistent over Time, and Corporate sponsorship of human trafficking has been functionally ignored by the Bush administration. These elements all slant the campaign which the President has claimed.

Investigations are not being repeated under the Bush administration, in the degree and rank they were initiated under the Clinton administration. The Bush administration loves low Wages, and does not consider Wages less than One-Quarter of Union Scale to be anything out of the ordinary. Investigations never rise in the Bush administration above the foot Soldiers (Slave drivers), the Organizers, if White, are never sought, or is the illegal financial gains ever regained. Employers of illegal emigrant labor are never fined or incarcerated, unless they are non-White or poor. Non-White Organizers of human trafficking rarely suffer as savagely from prosecution, if well-represented or if affiliated with politically-powerful mainstream business concerns.

Some Hollywood personalities have been connected with Sweat Shops in foreign Countries. Extremely rare is an linking made with Corporate use of Sweat Shops--whether in foreign nations, or existent in this Country. How much of the human trafficking in the United States can be attributed to be Business-generated? Over One-Half!

A new Law need be passed into Federal Law, declaring human trafficking to exist in fact wherever occupational pay is paid to Anyone less than 60% of the average Standard Rate for that Occupation in the Country. Prosecutions for human trafficking would be simplified, the Standard of Living for American Labor would rise, and Consumer Prices would not face much expanded Inflationary pressure as those Prices are based upon highest Labor rates paid; only Business Profits would suffer measurably, and in an instance where they should suffer. lgl

Friday, March 17, 2006

Political Timing

One of the aspects I love about the current Neocon Republican political timing results from their shortsightedness. Too late they realized they could not pass a Budget bound to exceed the existing Debt Ceiling limit within the Budgetary Year under review. They would violate previous existing law, therefore, the quick scamper to raise the Debt Ceiling prior to passage of the new Budget. Was the Debt Ceiling limit raised to a level able to accomodate Bush Spending patterns throughout the rest of his Presidency? The Answer is No!

Much has been said about the Debt Ceiling--Everyone in America now owes $30,000 apiece--We have that second mortgage We always wanted, but the Federal Government has already spent the Money; time to work on the third mortgage. The Bush administration has already raised the Debt ceiling by $3 trillion, and is obviously not done yet. The House has already passed another $78 bn for the Iraq War which would never cost $100 bn.; another sidepiece, violence in Iraq now is far worse now per month and Year, than it ever was under the Baathist regime of Saddam--except for the Iran-Iraq War, with Iran currently desiring to talk with the U.S. about Iraq (the hyperbole can demoralize). The Israelis are currently out in force, and will shortly be asking for more American aid.

My Question must be: Can the Federal Government file for Bankruptcy under Chapter 11? I don't think the American People can afford the rest of the Bush administration. You may think you have heard the worst of the bad News, but you should check with the IRS about what Republican Tax law is doing to collected Tax revenues. What is wrong about Tax revenues shrinking with expansion of the Economy? I believe I may have used up most of my bile and invective, but do not be surpised to hear hissing and howls from this Corner. lgl

Thursday, March 16, 2006

Housing and Inflation

These are the two big New items for Today. They are functionally covered by Everyone. Here, though, We are in a quandary! The first is a hidden loss, and the second is a false Reading. Explaining the context stands as problem in itself.

Housing is in decline across the Board. The Febuary decline is based not only on total activity, but in the area of Housing permits. Household decisions to build Housing reflect longterm planning, and consider all factors which can impact their decision. The decision to obtain a building permit contains a minimum of two months planning, even among the Wealthy who utilize little mortgage acquirement worry. Housing permit decisions of last month were probably made before Christmas of last Year. We are now witnessing the impact of higher Interest rates from last Year's Fed positioning, alongside last Year's other Construction Costs. What does this mean for the Economy? We can expect a continuation of the current trend through June or July, especially if the Fed continues to raise Interest rates--something on the order of the same percentage decline per month.

Inflation, on the other hand, relies on Core readings. Energy is expected to drop through the Summer, if and without a Gasoline refining shortage. Energy pricing is expected to regain its advance with the approach of Winter. Energy pricing will therefore hide Inflation advances throughout the Summer, then blare with the coming of Winter. Food pricing will generally follow the same pattern as Energy. These big Two, Fuel and Food, are large in Everyone's budget, and universal in impact throughout the Consumer universe. As they roll, so does even the Core Inflation rate. There is nothing particularly pleasing about the current Inflation numbers! lgl

Wednesday, March 15, 2006

Two Noticied News Items

This Author was struck by two articles today--one in the NYTimes and the other a Reuter story. The Times article cited Utilities collecting Federal and State taxes from Customers, then never turning the tax revenue over to the tax authorities. The Reuter article cited Bernacke's defense of Deriatives. Utilities use claimed losses from other elements of business operations to eliminate the need to pay the collected taxes to tax authorities. Bernacke claims Deriatives are a factor of Risk Management, and help Companies guard against risk for Stockholders.

The striking point about Utilities's claim of tax exemption consists of the fact business losses cited come from outside the tax jurisdiction of the initiating Tax Authority. It is simple enough to tell Utilities they can only use business losses incurred inside the tax jurisdication of the Tax Authority, to forestall the payment of tax revenues collected within the tax jurisdiction. Many would classify such regulation to be a Trade Barrier, except possibly for the Taxpayer and Consumer. I side with the Later, thinking Private Sector enterprise has no right to call a Charge taxation, when it is not.

The Bernacke claim of the risk management of Deriatives is a bit of Kentucky windage in and of itself, without mentioning they need not have connection with the Enterprize over which they are issued. They are highly reminiscent of the old 'Bucket Shops' of the Robber Barron era, which had no actual connection to Stock Markets. These were basically nothing more than Betting shops (think stylized Casinos), and Deriatives are basically nothing more than online Bucket Shops. One wonders if We need this type of knowledge concerning Risk Management. lgl

Tuesday, March 14, 2006

The Broadband Spectrum

Recommendation 1: Congress should eliminate local franchising regulations,
which serve as a barrier to new entry.
Recommendation 2: Congress and the Federal Communications Commission
should make more spectrum available to private parties and allow them to use it
or trade the right to use it, so that spectrum will go to its highest-valued uses.

The bottom line is that investment in broadband should be as easy as possible.
Regulations that primarily protect incumbents or serve as barriers to entry should be

An excellent idea from some high-minded, noted Economists. The trouble lay in the fact it will not impact the Telecommunications industry much, if at all. Management policy at these Companies dictate they enter only non-contested areas--mostly new Construction areas. This is all new-Line service, and the most expensive. Guess What? Telecommunication Costs reflect the high Cost for new Construction, and the competition is for who can get to the highest Price for service the quickest.

What Congress needs to do is the great unspoken fear of the Telecommunications industry. This is the statement in law that Telecommunications cannot provide only partial service. It would make it mandatory for Service Providers to provide all services--Telephone, TV, and Internet. The unitary Construction Cost would lower Service fees, and it would generate actual competition for business--not based upon highest Cost ratios. What is needed is real Change of the landscape for the industry. lgl

Market Ripples

It is a strange Day, and the Author is acting even stranger. He has come close to being named as a Gay-Basher, but finds the American Family Association call for a boycott of Ford because of advertising in Gay publications to be anti-Competitive as well as anti-social. Business advertizes where there is Consumer Demand to be generated; it is Federal injunction time.

The price of Oil does not come close to reflecting economic conditions with only one applicable rationale, namely, that Speculators do not want a Oil Price reduction. There has already been about a $.20/barrel gain, when there should have been at least a $5/barrel reduction in Price, after the downsizing of Global Oil use estimates. The trouble being that the Oil Bubble has lasted too long, and too many Speculators are comfortable in acting within the Oil Market structure, and used to quick Price runups for fast Profits.

Europeans are beginning to show their true antagonisms, with forestalling measures to prevent inter-nation takeovers of native industries. The European Union works well, as long as their own domestic economies are protected. The United States should adopt some European traditions, before American Stickers must read: Made in America by Foreign Companies. lgl

Monday, March 13, 2006

Lack of Lawyers?

The Packers and Stockyards Act was passed in 1921 in response to concerns that, among other things, the marketing of livestock presented special problems that could not be adequately addressed by existing antitrust laws. The provisions of the act were based, in part, on prior antitrust statutes including the Sherman Act and the Federal Trade Commission Act. The Packers and Stockyards Act prohibits packers from engaging in or using any unfair, unjustly discriminatory, or deceptive practice or device, or making or giving any undue or unreasonable preference or advantage to another party. The act also makes unlawful packer anticompetitive practices that are antitrust-type actions, including a packer’s activities that manipulate or control prices or restrain trade.

The Meat markets have altered drastically over the past forty years, with massive Vertical and Horizontal intergration of Meat production. This seems unimportant if such Practices have made the Meat markets more effective. The Response to this Assessment states that the Meat markets are actually more inefficient. Capital Debt load--to finance the Corporate structure--must be considered a factor of 3-5 times the Traditional Debt load; Finance charges to be paid by the Consumer. Meat provision has focused on Prime Cut supply, with Meat markets raising the lower Cuts in train with the Prime Cut pricing; both to increase Debt load payment, and to increase Profits. Economists may not consider this a major worry, but this Author's estimates convey the idea it increased Beef Prices by over 30% above normal Production Costs, and Fish and Poultry Prices over 20%.

The Report claims the fault lay with

GIPSA’s basic investigative processes and practices were not designed for addressing the complex anticompetitive practices it had begun to encounter in recent years

and that Lawyers must be brought into the initial Investigations, to provide legal interpretation. This Author believes the Investigations could use more Accountants and fewer Lawyers. There is an obscenity somewhere in this mix, where Government Investigations must prove their allegations without the slightest imperfection, while Offenders need only claim violation of some obscure regulation--no contention of Innocense really required. It is Our Courts which might be obsolete.

A most telling quote from the Report tells it all:

Unfortunately, as the report makes clear, GIPSA’s senior management review panel became a log jam to the progress of investigations. Investigations were thwarted by management delays in providing policy and investigative guidance and by inaction on on-going investigations when they required management concurrence or direction. Further, GIPSA and OGC apparently have not effectively implemented a team approach to the investigation of complex competition related investigations. Overall, it appears that as GIPSA officials responded to the prior OIG and GAO reports, they did so in a manner that prevented, rather than facilitated the desired actions and results.

Could We need replacement of senior management? lgl

Sunday, March 12, 2006

Pull Out of the WTO?

The WTO Talks reflect a growing loss of Trade advantage for the United States. A NYTimes article today outlines the gross inadequacy of the Poverty line developed in 1963. No one mentions that passage of the WTO Accords, as Our Trading partners would dictate them, would raise the number of Americans below the Poverty line from the present underrepresented 12.5% to over 20%. The cited Newspaper also carried an article on the false fears of a falling Dollar, conveniently focused on the Stock Market share of multinationals, an element of the Rich getting Richer; not hazarding any speculation on the plight of American Poor, who might not have hedged Stocks to save them from drop below the Poverty line--Consensus estimate stating it artifically cuts at least 5% of the American Poor (actually Poor but considered self-sustaining). The Poverty line seems destined to rise, but insufficiently so, until the Rich get as much as they want. Ask Bill Gates or Warren Buffet how much is enough!

The Author has never been subject to the spell of Trade. Study of Trade Advantage in History has shown Individuals capable of attaining Wealth from Trade, but little sustained growth for Economies. The Wealth of Trading Powers always falls before the rigor and vitality of internal domestic economies, as Technology teaches the superiority of 'Building at Home' Advantages--lower Transportation Costs, culturally-orientated Production, and higher and more numerous domestic Paychecks. Trade Barriers might not be anthema, simply due Protection from dangerous, artifically-engineered Trade Advantage.

American Politicians adopted a strategy of Government Spending as long as the Debt can be funded. American purchases of Imports assures Foreigners will always be willing to buy Debt, simply to rid themselves of Dollar stocks at seeming Profit. The falling Dollar can be excused as necessary erosion by all Sides, as long as the illusion of temporary, immediate Profit can be maintained. But what does it do to all the rest of Us? lgl

Saturday, March 11, 2006

Free Traders and Capitalists

Daniel Drezner blogged a contempt for the Argentinian President Kirchner, who banned Beef Exports from the Country because of the escalating Price for Beef. The NYTimes carries an article listing the debate going on in China--of Socialism v. Private Aggregation of Wealth. These two elements have a correlation, though Many may not see it.

Let Us consider the Kirchner Ruling: Argentinian Beef Growers believe this will ruin the industry, because of loss of Capital. This is Traditional Economic theory, but does it work out in practice? Domestic Beef will drop in Price, but will Save an approximate 12% of Beef Cost in Transportation of Export Beef--remembering they will retain internal Transport Costs for the Domestic Sales. A number of Studies indicate internal domestic Pricing for Product will always reflect International Price for Product--in the absence of Trade barriers. This means domestic Consumers pay higher internal prices, if the International Price is higher. Argentinian range and agriculture has reduced total quantity of Beef production since Internationalization of Beef markets--to specialize on quality Product at higher Prime Cut pricing--exactly like the American Beef industry. The Beef Export ban can actually be expected to raise Beef production in Argentina--as Beef Growers lower Prime Cut standards and search to make up for the loss of Profits from the Ban. Argentinians will eat more Beef, the International Beef Pricing will reduce in Pricing as domestic Beef producers raise quantity supplied under higher Domestic Demand, and more Labor is employed by the Beef industry across the Board--both domestic and Internationally. A Countercyclical Economic theory!

The argument in China is identical to the one held in China prior to the Communist Revolution. Then and Now there were filthy-Rich Private Capitalists who exploited Chinese Labor and Consumers. The whole Debate, including the Argentinian one Above, revolves around a specific Point of Discussion: Does the majority of Society have to be exploited by a special Interest group, simply to aggregate sufficient Capital to advance the Economy? The Opinions vary from rabid Revolutionist to Ultra-Conservative--Paris barricades to "If the Poor have no bread, let them eat Cake." The Former Revolutionists never mention the Cost of dislocation caused by Revolution, the Later never mention how the Poor could afford to eat Cake when they cannot afford Bread. We might have found the justification for socially-directed Economic regulation. lgl

Friday, March 10, 2006

Jobs Picture

We read 243,000 Jobs added to the American Payroll, but hours dropped to 33.7 from 33.8; extra-special normal for the Organization month of Febuary. The Wage increase of 0.3% increase for the month, and 3.5% Year over Year reflect only partial Cost of Living increases. Nothing unhinged, and consisting of factors which were going to show anyhow. Whirlwind in an ant hill.

No direction can be discerned from the above information, but some type of forecast should be advanced; if only to express the foolishness of this Author. Here goes: The Workweek has to edge up to better 35.0 hours per Week, or this Year will see a Recession. Energy prices will not drop sufficently to prevent such a Stall, and Everyone believes there will be another eruption with the Hurricane Season and Winter. Wages should grow as rapidly as last Year to match Price rises, though only in the absence of a Recession; Fed Interest rates will not affect this basic equation, although they could incite the Recession. Construction is bound to drain its energy this Year, not even another Katrina could maintain the current Replacement rate for Housing and Plant. Manufacturing must pick up this Year, else the Recession is certain; this Year must be the Year of Trade deficit declines. The exact Date of the Recession start, if it comes, will probably be in August--peak Driving season with low stockpiles of Winter fuels.

This Author does not desire to sound like a Doomsayer, but all of the above elements will have to be regulated adequately to stay out of Recession. Free Markets sound good; the trouble with sounding good, though, comes in failure of efficiency to match verbal fanfare. The Federal Government is out of position as well, being unable to spend Us out of any generated Recession. Only the Summer will determine what direction the Economy will take, and concentrate on the areas of Capital Equipment and Material Resource pricing; as go they, so will the Economy take off in the opposite direction. lgl

Thursday, March 09, 2006

January Trade Deficit

Economists again groan as We came in with a $68.5 bn Trade Deficit in January. It does not help We also find a record $17.8 bn Trade Deficit with China. Is this real bad? It is not too bad in the Shortrun, but a disaster in the Longterm. The Steady-State of American Exports, except for seasonal Market purchases (Products which are bought in batches, sometimes dictated by the time of the Year), suggests that the World is buying what it can use of American Products. Several serious consequences result from the outlined Scenario.

The first clarity to be stated about these Conditions is that the United States is not going to produce its way out of the Trade Deficit. The rest of the World buys what it needs from the United States already, and that need is decreasing in total volume, as the World economy equalizes in technology. The American economy is based on heavy Energy consumption, and must learn to cut back on Energy-use; dictated by rising Oil prices and rising World demand for Oil. The American economy must again learn to produce the basic Products itself for domestic consumption; it puts American labor back to Work, raises total American Wages paid while constricting differential Payscales, and will eventually lower total American Energy usage. The current commitment to Free Trade must be altered, to forestall granting Trade advantage to foreign Suppliers--who need not pay American taxes and charges.

Will the American economy be able to do this?

It has to do this, because the Trade Deficit will not disappear in the Mist! The sole Question will be how much dislocation must first occur in the American economy. Delay of alteration will bring sharp devaluation of the Dollar, without any appreciable advantage in increased Trade volume. American Labor will continue to suffer from lack of Work, until American industry and business starts the switch to domestic production. We are coming to a Crossroads, which will acquire an ever-sharpening Turn. lgl

Wednesday, March 08, 2006

Educational Funding

In fiscal year 2005, the Department of Education (Education) provided more than $42 billion in grants to state and local education agencies, school districts, colleges and universities, and other organizations to conduct various program and research activities. While Congress directs the allocation of most of these funds, a small portion of this money—$4.7 billion in 2005—is awarded by the Secretary either through program competitions or through consideration of unsolicited proposals.

This Author, in the spirit of honesty, must admit he did not read the Report; he solely being interested in Grave-robbery, but felt it identified the magnitude of the Funding. The Report, though, will indicate what is wrong with current Funding procedures--not just in the specific area researched--but in the overall system. The Funding system, exactly like FEMA and disasters, provides poor quality and quantity for the amounts expended. It should be rationally designed, rather than calling for transparency!

Research Facilities need be identified so Students, Academians, and the Public knows where to turn for which type of Research or information. There should be a uniform Testing procedure for both Students and Researchers, if the Research and Education are to be Federally-funded. Amounts awarded should be specified by Catagory by Congress. Awards and Grants need be awarded under some system outline, where Applicants must attain certain levels of performance, and express an identifiable need for the Award or Grant (on both the Academic and Financial levels). There should finally be a rational Funding methodology, not just Pork Barrel enterprise by Congressmen and Senators. More cosmopolitan Commentors might suggest I expect too much, but remember the Iraq War could not cost even $100 bn. lgl

Tuesday, March 07, 2006

Up and Down

Productivity was down in the last Quarter--not a substantial loss--but still a loss; this Author wonders why it did not come earlier as Labor inputs increased. Wages rose somewhere over 3%, Year over Year. Also not a heavy concern, as Wages are a Production Cost exactly like materials, and Inflation bothers only as a distortionate function (causing segments into higher Costs models without allowed reactive Price increases in their Products). The most distorted aspect to current Inflation being Energy Prices, Gas and Diesel both increasing over Thirty cents a gallon, Year over Year. Where does this place Us?

Every element of the Economy has felt constriction, because of rising Costs, without equative rise in Prices. Wages are starting to realign to match Consumer Price increases, but still has a long way to go as they have been advancing slowly since the last Recession. Business feels impeded in raising Consumer Prices, in the face of deeply advancing Energy and Health Care Costs. A third aspect must also be advanced: the fear of Corporate management of reduced Profit ratios, with the vast increase in Stock ownership by Labor (through 401k programs) and Consumers (through Mutual and Hedge Funds).

Economists would not mention the next Comment, but this Author is considered an Outlaw anyway: Corporate and Business Profits have to scale back! American society and Economy has tried too hard to secure a parasitic Profit from Business enterprise, by and through the issuance of financial paper--Stocks, Bonds, Stock Options and Stock Grants. All of the Later are trying to ride the horse through the last two furloungs, and be in the Winner's Circle. The trouble is they are nothing but Dead Weight, and insist on the same Return as the Jockey and horse. Oh, to reach that Unreachable Star! lgl

Monday, March 06, 2006

Factory Orders

Big overall decline, but not as bad as it looks. November numbers for aircraft really skewed the numbers in the first place. The worst of the News was in the decline of Machinery orders. The references being made to Year 2000 confuse, rather than help economic analysis--We are not where We were then. There We faced a young age in the Durable Products arena, with People capable of slow Turnover; now, We are more in line for scheduled replacements. The OECD senses about the same thing as I.

The real cause for worry is in the area of Defense spending. Marginal cutdowns in Defense spending reflect in almost a 2% decline in Orders. Even Republicans are beginning to realize We will have to cut fundamental Defense spending, and probably before the end of this Bush's administration--the Federal bill is adding up too quickly, especially as Proscription D plans come online. Other areas of Federal Spending Cuts will affect just as badly--Infrastructure construction and Pork Barrel. Loss of Corporate support is the only element forestalling a Federal Downsizing of Expenditures, and the Numbers are beginning to embarrass even Bush.

Is there much need for worry?

The Economy is sound, but Federal Spending is not! Reduction in Federal Spending will curtail the volume of economic performance, but not the provision of Goods to the Private Sector; there, it will actually minimize inflationary pressure and lower the Cost of Resources. Most Economists would disagree with myself, but I would even expect a rise in the Labor Roll; business would add Employees to capture Product volume Sales. The lack of Machinery orders, though, means Outsourcing is still advancing while Business is still not seeking to expand their Consumer Product lines. The Dice are still rolling! lgl

Sunday, March 05, 2006

The Fright Game

This Author sees an appalling trend which has been bad for years, but is becoming worse, and even invading Journalistic reportage. This is the Fright Game. All Writers look for a Hook upon which they can base a Report or Book. It is the traditional path of successful authorship, and universally known by Novelists. The trouble comes from the fact it is invading the Sciences and Science reporting.

The first victim of the Trend comes in failure to place the reported facts in context. No one explains anymore just how important such Events are in the greater environment. I read an article this morning on low-grade radiation release from nuclear plants. The Article was balanced according to Today's standards, but language association could have led one to consider this Problem huge in context. Actual consideration of the facts would estimate the environmental risk would equal far less than 1% of the biohazard pollution released over the Time period of leakage, even in the State in question. Only the last Paragraph admitted the total Discharge was slated to be released as effluent to Rivers anyway.

There is no doubt this Planet is becoming overpopulated, and indeed, a percentage of such overpopulation consists of Writers, or would-be Authors; by the way, this Author has already heard the one about People in Glass Houses. Still, We should ask Ourselves to adhere to a higher Standard. lgl

Saturday, March 04, 2006

The Intrigue of India

Much Do About Nothing can best describe the Bush trip to India. Do We need the Indians as allies? Yes We do, in this time when Muslims listen to iminical mullayhs who would destroy any Unbeliever society. We need both India and Pakistan, but not just to capture ben Laden. The trouble comes from the fact neither are doing that what is really necessary for the West.

Many, if not the Majority, in India do not make more than a Dollar per Day, with Pakistan following with a Population not much better off; do not forget Banglodesh, which is worse off than both of the Others. These Populations will never be a market for American Goods--whether Capital or Consumer--with Income levels such as are now recorded. This make the entire subContinent nothing more than a Labor pool for Outsourcing.

American Investment in India now supposedly totals some $60 bn, the approximate par with last year's American investment in China for one year alone. They are about equal in Population, give or take some hundred millions, and China has significant additional Material Resources; but nothing really exceptionally superior. Why are the Investment levels so diverged?

The answer is simple: Universal Education. American Investment can find Labor existent in China with the basic skills necessary for laboring in the modern Labor force. The Indian subContinent lacks Universal Education, and most of the Population cannot function in the modern Labor economy. These Citizens will never be Consumers of American Products until they can be laborers in modern economic enterprise.

Does Bush go to the Indian subContinent to discuss native Government transference to a policy of Universal Education of interest to Everyone? No he does not, and would not even consider doing so if asked; he being of the Corporate structure, and recognizing the limitations of their Production levels, would not foster Native, foreign Competition for Resources in this section of the World. This conforms to modern Corporate policy, but this policy suffers from several issues: a signifcant segment of World society must suffer a substandard of living, modern Labor suffers from lack of Labor opprotunity as so much of the human race cannot afford their Products, while modern and obsolete Labor elements must both suffer from an overpriced Product supply. Don't you just love the comment: American Business is Business? lgl

Friday, March 03, 2006

What If?

Several Trends surge in the American economy, and this Author begins to wonder if they will congell in a marked Downturn. The Inflation rate is up, and up badly, despite the protestations of both Government and Fed. The Price of Oil is above $64/barrel for Sweet Crude, and most of the World Oil Supply reserves consist of harder to refine Oil. Rumors coming from the National Weather Service indicate Hurricane season may be as bad as last year, another Katrina may be waiting in the wings; We don't need even an Andrew. The Raw Materials Market averaged more than a 30% rise over the last few years, and shows no indication of reduction. Labor and Consumer Incomes only wish for a Inflation-indexed rise of any kind. Our Trading partners are about to introduce trade sanctions against Us by Treaties, which We should not have signed in the first place. American Policy commitments have forced Us into Expenditures Overseas costing American Taxpayers more than many national budgets in the World. The American economy appears none too healthy at this time.

It becomes instantly obvious this Author is breaking the Economics Code, coming up with any Doomsday warnings. The fact remains many Problems will have to be resolved in the near future, if Americans are to maintain their standard of living; solutions coming from some source other than the Stallgate of D.C., the SUVgate of Detroit, or the StockOptionsgate of Wall Street. The Bush Administration has already proven that the days of Watergate have already returned, via Cellphones. It is a question of Leadership at many varied levels, and it is slow in coming; it might be dragging negotiations of Leadership Pay packages. lgl

Thursday, March 02, 2006

Truth in Advertising

It may only be this Author's perception which is misleading, but the entire of American economy seems to suffer from lack of Truth in claims, when a Republican administration is in charge of the Government. It seemingly seeps from every aspect of American society, the product of Republicans being in charge.

CAFTA, the Central American Trade Agreement, finds few Signatories in compliance with it at the point of its inaugeration; of course, American small business and Labor have suffered from a flood of cheap Products from Central America, from the moment of its signing. Yahoo announces it is going to outsource most of its programming, a realist knows Yahoo does not want to claim responsible for maintaining the veriacity of claims issued by such Programming in the interest of American business. Remember the Republican anger at the Administration official who had the courage to suggest Iraq and Afghanistan might cost more than $100 billion. Republican proclaimed desire for smaller Government has been followed by the two worst Pork Barrel administrations in American political history, both in terms of financial amounts and percentage size of Pork Barrel to Government Services.

Oil Company Executives shrilled they would bring better, less corrupt Government to Washington, if only they would allowed leadership. Have you glanced at your Gas bill lately? Even worse, have you reviewed your total Tax bill lately--Federal, State, and Local? The most horrible aspects has not even been contemplated: Has the Government been paying for itself? Americans may feel wistful for the Days of Welfare Transfer payments, by the time George W. Bush is finally out of Office. lgl

Wednesday, March 01, 2006

One-The-Ground Sales

This Author is starting to feel uneasy about the recent economic numbers. We have been taking the volitile Products of the Inflation rates out for so long, Economists and Businessmen are beginning to think they don't count. What does count is these numbers are beginning to impact the Economy. I suspect that actual Quantity Sales have been decreasing in amount in recent months, while the Inflation keeps the numbers stable or advancing.

Housing is a by nature a longterm investment. This means Housing Sales are among the least-affected by short-term Price variations; face it, people need Housing to live in. Slowdown in this area only means reductions in Upgrades and less attractiveness as Speculative investment. Gas Sales have declined because of the high Pricing, and this Author expects the general range of Consumer Products are following the lead of Gas. Energy, Communications, and other Basic Services are all experiencing generic Price increasing. Some estimate the Inflation rate including all Price increases stands at 8.4%. The basic basket of Goods of most Inflation Indicators may be very flawed, tracking what 'used to be' technological Trend-setters, which have now dropped into stability; their stability meaning little in the modern economic matrix.

Inflation may be impacting hard, and likely is pushing Household Incomes badly. We do not want a context of High Prices with low Sales. Employment increases look good under such circumstances only due to Retailers' hope that Sales will improve with more 'on-the-floor' staffing. This misconception does not last long, and is too often replaced with 'slash and burn' downsizing of staff as substitute. It is time to contemplate hard volume Sale numbers, and ignore Core Inflation. lgl