Lawrance G. Lux

The End

2011-04-30T10:59:00.000-07:00

I write this for those few who have maintained consistent watch of this site over the years. I was diagnosed with lung cancer this past week, and will likely not contribute more to this site. I am in Hospice right now, as the combination of low blood flow through the heart and the active nature of cancer rule out any pleasant scenarios for Chemo or Radiation treatments. I wish All well, and that the nature of this blog will be maintained elsewhere by others. lgl

Money mystifies Me

2011-04-04T15:47:00.000-07:00

I will tell my Readers to consider this Post, and even study the graphs. I confess that I have a real problem with Stimulus overall. Stimulus, by its very nature, must be significantly effective as to swing the entire economy; when One hopes to draw the economy out of a Recession. Discussion of Stimulus in the context of the 1930s economies implies far less inertial weight to swinging the economy, as does shaking an economy many times that size. Stimulus could well be a economic policy which has reached its limits. Like Karl Smith, I really doubt a Zero Interest rate when Corporations are not spending, and Banks are not lending. I hate to pick on a particular, but the rise in Stocks could honestly express the real Inflation rate, and nothing else. I once long ago argued with a group of friends on the value of outsourcing any Government program established to promote Employment. Outsourcing leads to lobbyist demands to continue funding after the need for extra employment has passed, and the Government could layoff Workers at a proscribed rate; economically justifying the reduction. There is the added problem of Outsourcing costing more than in-house cheap Labor rates, with a Profit for the outsourcing management. I am terribly afraid that this Dog does not Bark, and even does not Hunt. The Fed cannot spread Cash into the economy without having real effect on the Pricing. The hesitation in Market Prices immediately after Fed movement on Cash release consisted of Everyone adopting a ‘Wait and See’ attitude about Price movement, before releasing any valuable Commodity in possession; this means that there was not that much for Sale, while Buyers awaited knowledge of how rising potential Commodity Pricing could affect their Sales structure. Remember this comes from a man who drove a Ford for ten years with a poor Heater in cold Weather; never have bought any Ford stock; I might have missed a real opportunity since the last Recession. I will now delve into Rachael Carson’s ‘Silent Spring’ with the ritual of getting a Banker to admit anything on the Record. We conceive that the Fed adopted the same casual attitude of debt acceptance that the Banks who were borrowing previously had to abandon. This poses a Question for myself: Under what Conditions could a central banking system fold up? I ask ths because Everyone said the big Investment banks were too big to fail. What happens when a few central banks have to admit that they have no real assets, only default Paper? I never claimed to be a Banker, but what are the Options from there? lgl

All that Nit-Picking

2011-04-03T11:04:00.000-07:00

I am not one capable of agreeing with the Austrians, Some consider that I do not even understand their Thought processes. I here bring you a Post which I think is important coming from an Austrian, the major purpose of which is to present a Counterpoint to my own Thought, which is truly at odds with all other economic thought. My idea states that Recalculation cannot possibly take place without a fall-off in the Aggregate Demand. Austrian or Keynesian, they all have got it wrong. Recalculation requires that policymakers, whether Private or Public, clearly identify the failures within the current system. What must be fixed cannot be found accurately without the drain of Cash down the Losses hole. Reestablishing the AD simply places a Band-Aid over the Skin Cancer, as We await the deadly fiber to sink to Crisis levels and crippling state. Give me an AD curve which is 20 points below normal, and everyone agrees that Changes have to be made. I find this Post which soothes my achy, breaky Heart. I have long surrendered any goal to become the next great American author, and even to develop a committed online Readership. It is why I am starting to enjoy blogging more than ever. They tell me that what is put on the Internet never really disappeared, simply loses View rate. Now I can play Nostrodomus without Anyone laughing at me, and I might be found to be accurate in a couple of Centuries. What are the Odds? Probably less than I having achieved real Notice on the Internet today, but what the hell, why not go for It? I will finish with this Post today. Everyone wants less taxation, but does Anyone actually deserve it? I am talking about lower Incomes as well as higher Incomes. Would it not be wise to demand a set Tax rate, and collect from All? Here are some of my reasons: the Union and Labor movement would be much more powerful under a set tax rate, and overall Wages would be much higher; the bonus system currently in force would include all Contributors to the Profitability, not just Those at the top of Management; Stockholders would demand a fair share of the final take, and not be left with undistributed Dividends, which are held until upper Management can find methods to absorb most of those Profits; and tax revenues could be stabilized at high levels, and Politicians could be forced to spend within necessary limits. Your Guess is as good as Mine! lgl

The Harsh Word from On-High!

2011-03-31T12:57:00.000-07:00

This is exactly that type of Post I can understand, but disagree with heartily. I have long since decided that the American economy can be truly saved only by revision of the Tax Code with lowered rates of Taxation, but ones that have no discounting allowed. My position on the Issue states that We cannot afford Keynesian deficit spending, even if the economy needed such which it does not. We must adopt mass, swarm labor tactics for government expenditure for any stimulation, and We must insist that such activity must be paid by Taxation. This still does not answer the claims of the Post, and I will follow with my Thoughts. Henry Ford’s standardization of Parts and assembly-line production must solve our deficit problem. This means the designation of only a One-Size payment as a Social Security benefit and Relief payment for the Poor. A simple Statement that no FICA taxation to this Point has fulfilled full payment for all Social Security payments with the addition of Medicare should silence all Claims of having paid more into the system. A Medicare and Medicaid system will be established where Insured will be allowed only a half million dollar total allowance for any 5-year period, combined with legislated Medical Provider responsibility for additional medical assistance to the Patient if they received any of the original half million; this means they are responsible for any added Costs of Treatment within the Period. A new Proscription rider will be included to the Social Security and Medicare/Medicaid system, where the previous author of Proscriptions using up a set allowance must be accountable for half of the remaining medication not covered. The Proscription allowance will be determined by Committee to provide the Drug industry with a 12% Profit ratio for their Drugs. Now We must turn to the Pensions and Retirement benefits. The Civil Service will receive no retirement benefit in excess of that provided by the Social Security benefit, so that they can double or triple the size of final benefit. Some may question the triple comment, and I will answer it. Military pensions and medical benefits will not be granted to Military Retirees until they are at least 62 years of age. Here is the Kicker: Military Retirees will lose their Pension benefits unless they continue to work for the federal government until they are 62, at the same rate of Pay as they received at time of Retirement; this helped by federal mandate that qualified ex-military Retirees will replace any Civil Service employees under a forced Retirement program; their pensions only becoming active after they reach Age 62. Retirement Investment funds are encouraged everywhere throughout the economy and society, with some of the advantages currently contained being somewhat restrained; the most notable being Tax delay can only extend for 10 years after registration, not upon actually Cashing Out. We advocate everyone plan for their Retirement, and follow clear Guidelines that Congress will outline for the greater Tax advantage. Still, in no way will it be the current Give-Away program of younger labor supporting Retiree lifestyles. lgl

The Chicanery of Corporate Taxes

2011-03-30T12:59:00.000-07:00

I started this search by reading this Post last. There will be two other Opinions which I will cite concerning their evaluation of the material, which focus on other aspects of the situation I would outline. I work the content of the original Post through my mind, and come up with several decisions. The first one is that if actual Productivity basically matches the drop in Employment, then We are actually still in a Recession. I scribble up some Paper, curse a little, input a little Kentucky Windage, and determine that the actual Inflation since 2007 has been more on the order of 6% per year, if one discounts the falling values of Housing. Quantitative Easing saved no Jobs, and directly suppressed actual Productivity by artificially decreasing actual Demand for Product through higher Pricing of final Product. All Stimulus efforts advanced so far only aided final stage Production, which paid less for inputs, but received advanced Retail Pricing. This spurred the level of Business Profits, but only at the level of international Players who could import intermediate Production Goods; such items which could not be supplied by domestic Producers because of higher Costs of Production, and rising material Costs. Tyler Cowen brings his own View to the Mandel Post. He asserts that the Mandel data compares favorably with one current economic model hypothesis, while contradicting its opposition posit. I am not sufficiently fluent in either hypothesis to argue this Point. I do know of no economic evaluation which measures Productivity rate gains in terms of actual or real output increases or decreases. One factor Tyler does not touch upon remains the fact that a great share of the international competitiveness for input supply comes from Corporations desiring to transition to foreign production in order to escape necessary response to United States Business and Corporate Tax law. He does stress that there is definitely a structural unemployment problem in this Country further injured by a declining Productivity output. I could mention that the Fed Quantitative Easing did finance the Corporate efforts to shift Production overseas. Arnold Kling joins in with this effort, which underlines that this is not Trade neutral. It is also not Employment neutral. The real Cost of intermediate inputs are being under-valued. The amounts of such inputs are also under-estimated; but here is the kicker, the matrix changes massively when it is canopy production for a parent Corporation. The later has a real advantage in under-pricing the value of these inputs to achieve Tax advantage, when they can shift final Sales Profits overseas to the intermediate inputs production. They get taxed less on less reported Income. At the same time, they can claim a higher Profit ratio, but with lower amounts taxed. Corporations, if they are big enough, love this system. lgl

The High Moral Ground

2011-03-29T13:31:00.000-07:00

I began reading this Piece, and started to feel disquiet, then I reached the part where Megan should have more forcibly retracted her own statements because of the follow-up information. The bright Knight is slightly tarnished armor in me decided I needed to ride my trusty stead, almost as Good as Don Quixote’s, at the gallop. I considered that I would need something new and original for evaluation, something to stick the lance point in the Corporate rear, even if my slight weight could do no real penetration. I hoped that the radio would play the Song ‘The Night Chicago Died’ so I could imagine that though the Darkness surrounded me, Right and Truth could still succeed. I was hit by a Bolt of Lightning, or at least a bit of joint pain, and came up with the Winning Ticket; otherwise known as the Alternative Corporate Minimum Tax for Domestic Sales. It is quite simple in context, some might say like its author. There are only a few short elements in the hopeful law, which I will stipulate: 1) Every Corporation and Business must pay the Alternative Corporate Minimum Tax for Domestic Sales 2) The ACMT will apply in each and every case where the Business or Corporation does not pay an equal or greater amount of Tax in the United States on the Profits of their Sales in the domestic United States. 3) The ACMT will not consider any Tax paid elsewhere of any form–including State and Local Taxation, Excise Taxes, and Taxes paid to any foreign entity. 4) Foreign Corporations and Business enterprise will be as subject to the ACMT as domestic entities. 5) The ACMT will be equal to the lowest listed Income Tax rate for Individual Taxpayers, and the final Tax applied will be the highest of the two applications–the normal Tax Accounting, or the ACMT. 6) The Profits from Domestic Sales will be considered to be 10% for Domestic Sales, unless the Business or Corporation can prove a reduced Profit from actual finance payments made outside the canopy of the total Business or Corporation.. I wish my Business friends well, as I ride off to joust with lesser Knights; I could get bruised up you know. The one Thought I would leave with all of you must be that We cannot create Debt through Spending which We know We will never be responsible for, or pay. Forcing our descendants enter Receivership is both Wrong and morally bankrupt. lgl

Some Common Sense in a World of Nonsense

2011-03-28T12:32:00.000-07:00

This article presents me with the pressure to bring a response to the fore. I will state first that federal economic policy makers do not understand Inflation as well as they should. Their first failure comes in the ignorance of the impact of Inflation by sector. Where is all the Inflation coming from? The Answer is Food and Fuel. Both generate the highest Inflationary pressure and rate of Inflation. Food and Fuel make up the largest component in the Household budget beyond capital acquisitions like Homes and Vehicles. Capital acquisitions come with some form of mortgage, whose rate has been set in prior period, and relatively immune to Inflation. Households do not see Inflation there–they see it in continuous Daily or Weekly purchases. What are the most continuous of steady purchases?–Food and Fuel. These Costs are Inflation to Consumers, and where real Household notice is paid. Consumers are contracting their purchases by the Inflation they can see, and they see the heaviest Inflation out there. One only need to blow that C-Note on a SUV refill to notice the Inflation. The second flaw in Fed policy lies in the Interest rates–economists always talking about less than 0% as a good thing. Households have watched their Bank Deposits tank, with absolutely no Income coming from them; a sincere burst of confidence foregone, as Households thought they had a slight hedge against Inflation–now gone by Fed decree. I once had a Father who made about $30k per year off his bank deposits; thank God he is not alive today to witness the miserable $600-800 which he would probably draw from like amounts. My Father was never a big Spender, but such Interest rates would have put him in catatonic freeze in buying anything; especially with a magnificent Inflation rate which the Fed refuses to observe. I can positively explain that Consumer Confidence is being adversely affected by the Inflation. Quantitative Easing has been a long-standing Joke, whose sole Goal fulfillment has been Jobs saved, according to the economists who designed the policy. There were better Hiring rates late in the Great Depression, as the Warehouses slowly emptied. The Fed utilizes the collapsed Housing market to exclaim there is no Inflation, while concurrently, banks demand full capital asset coverage before extension of any new mortgages; this means Housing prices will descend still for quite a while due to lack of Buyers. Everyone in the Markets screams Household should invest in Stocks, Bonds, and Securities of various types, but all require constant supervision, else those investments will be even more ineffective than the 0% bank interest rates. Grandpa always told me to never draw Cards in another man’s game; you should know Gramps was a professional Gambler at one time in his career. I fear for federal economic policy makers who turn Households loose to ‘Sink or Swim’ on their own, with even less recourse to Social Services. lgl

Real Missteps in the System

2011-03-27T10:07:00.001-07:00

I disagree with Mike Shedlock on this one. What seems like a good idea remains fraught with peril. A major rationale for spreading Taxes out over a wide base establishes that tax-paying cannot be gamed. Evasion of one type of taxation leads to deeper tax impact from other types of taxation. Case in Point: Without Property Taxes, many successful people would place their accumulated wealth in fancier, and more numerous, residences. Soon, you would find people living in Housing much too expensive for their Income, with a collapsed Resale market because of the Price they would be committed to demand by Mortgage and retention of wealth. People would be led to retain excessively large Housing at points where they could do with far less Space, and therefore the tendency would lead to superabundant construction with young people paying too much for their Housing. Property taxes do have an impact on the market, but much of that impact is beneficial. The Business escape from Taxation remains another aspect, considering that they make a huge draft upon Community Services–both their own, and their Employees; suggesting the Community taxpayers foot the full bill is not only unfair, but also impossible. The major reason for Tax Spread lies in the reduction of tax impact upon one segment of the Population. We do not need the Poor who contribute 60% or more of their Income in Life Support to be forced to pay 40% or more tax on those purchases; by the way, without Property Taxes and Income Taxes on the Poor, Government Services could not be provided; I won't even begin to discuss FICA taxes or their removal. The high Income Earners simply do not purchase or Spend to the degree necessary to tax those purchases at sufficient level. I once estimated that if all the Exemptions for the Poor granted exemption from high Sales or VAT taxes, then the remaining high Incomes would have to pay a Sales or VAT tax of around 320% to fund the current necessary tax revenues for Government services. It does not help that under similar circumstance for the Poor in Exemptions from taxation, that elimination of Income Taxes would raise Sales and VAT taxes to somewhere in the high 800s’ of percentage. Simple removal of Capital Gains taxation would put Us in the 200% range of Sales and VAT taxation. We spread out the Taxation so that everyone complains about taxation, but no one is actually incited to tax rebellion, though there is admittedly great amounts of tax evasion. Economists disagree with me, but Corporate tax evasion through purchased legislation has cost this Country about $12 trillion of national debt since 1963. The advantages granted to Corporations in like period meant only about one trillion dollars in GDP increase per year, over what was achieved in the Period. The actual Gain to GDP growth subtracting the lost tax revenues was probably less than $300 billion per year, or translated, loss of about 200,000 lifetime Jobs over the Period; check the Employment growth over the Period to see whether it would have made major difference. It can be clearly seen that loss of Tax venues can affect the entire economy in ways which no one wants, and quick assessments in the area of Tax placements are usually not Right. lgl

The Correct Direction

2011-03-26T12:37:00.000-07:00

I fear that Greg Mankiw does not know the condition of the human soul. His Presidential Address to the nation will never be delivered. No Generation will ever accept the debt servitude of a previous Generation. The United States will default on its accumulated debt, the Question being only When. Politicians may call it by various Names in order to hide admittance of the real intent, and there may be a number of methods to achieve that end; but the end-result will be the same. Will it destroy human civilization?–No! Will it collapse the World economy?–Possibly! But there will be Recovery. People may shift around for a few years until a new economy is formed, still, there will be a new one develop. Will there be intense hardship for People?–of course! The worst possibility though, will be that the United States will wind up a Third World nation.

I agree with Paul Krugman in his list of Republican economic theories which are illusionary. I do not believe in his liquidity trap, a fancy name for stating that it is simply Cash which has to be thrown at the Problem. I, as a matter of fact, think that there is an over-surplus of Cash in the economy, and that the Fed is doing exactly the Wrong thing. My Solution for the weak economic performance defies all current economic theories, and advocate a vastly increased amount of Tax Collections garnered. I have long called for a major overhaul of the Tax Code, and I estimate that the actual Profitability of Business enterprise must be reduced by around 8% through Taxation; this means that if the Business makes a 12% Profit, We take 8% as Tax.

I first must say that such tax pressure is not unrealistic, as Business have been making at least this level of Profitability to be paying out the Bonuses and Salaries to Management–totally over-priced when they cannot seem to pay high Dividends to Stockholders. The second major importance to be made is that the higher collected Taxes will force Management to achieve greater efficiency in business practice, and initiate tri-level development plans to maintain continuous Profitability; the later meaning they have to search for opportunity in Short-Term, Intermediate Term, and Long-Term investment to keep from being replaced. That means they will have to work harder and be more innovative. It also means that major Profits cannot be invested in Treasuries for protection against adversity, as higher taxation of enterprise Profits will demand a higher rate of Return than currently being generated by Government non-taxables. The increased Tax revenues will nullify much of Greg’s Presidential Address, and the actual Reality states that Taxes are not a nullification of innovation, but actually a Spur; everyone needing to produce higher Volumes at lower Cost to Consumers to get both Sales from which Profits are taken, and cheaper Production and Distribution Costs. lgl

Your Basic Award System

2011-03-24T12:29:00.000-07:00

I have decided to go totally off the Reservation today, and delve where no man was meant to go; this into the area of Bonuses, Pensions, Stock awards, and medical coverage. There stands so much hassle about Bonus systems and health care coverage that the system seems to be broken, which it relatively comes with the Reality as well as the Image. Business has always maintained the ideal that they should possess sole Right to determine how they award their Employees. Labor has continuously contended that Management was totally unfair in their Award system, granting Management personnel far greater advantage over the rest of its employees. I study the system, and find that both are accurate: Those who determine their own Pay, pay themselves much better than those who have no Voice in the decision process. Business is presently in a major Conflict with Labor to suspend Collective Bargaining between Business and Labor, completely eliminating the Labor Voice from the decision process. What is to be done when one agrees with both Sides?

I decide it is time to revamp the whole Award system. The first Step is to determine the base Wage Scale levels, and how these base Wages will be increased on future Growth and under the impact of Inflation. The Second Step consists on insistence that medical coverage extend as least as long as the base Wages are paid. The third Step is to outlaw any Bonus or Award system in which all Labor components do not shard equally of the benefit as apportioned by their participation within the Production process. The difficulty of determining the later Step leads naturally for the fourth Step, which would be to disallow any benefit or Award which is disassociated from the base Wage Scale.

My original Concept stands as there shall be no Bonus or Award granted except for an extension of the base Salary for an Award period past Severance of Employment, the period length determined by Management; though the filing of such Award determines by law that it must be paid. Everyone knows Business management’s lack of desire to pay Wages past the usefulness of the Wages, meaning that such Awards will be carefully crafted and of short duration. The Award can be of any Size ranging from Base Starting Salary to final Employee Salary upon Retirement. Remember that these Salaries must be paid under the same Schedule as currently-employed Labor, and are legally binding for the total summation of Time periods awarded. Medical coverage must continue for the same length of period, if it is granted to currently Employed. We suddenly find Management hampered in their easy growth to great Wealth, Labor finds much of their complaints satisfied without that much Collective Bargaining, and Business still has complete management over the level of contracted liability they will owe to Labor. We might get back to awarding past effort without massive search for personal Wealth, people might concentrate on their Jobs because they possess long-term interest in the success of their enterprise, and Business even will probably show a better bottom line. lgl

Another form of land usage and Water Treatment

2011-03-23T16:48:00.000-07:00

I was amazed by the video in this Post, and feel that Everyone should view it. We currently have declining cattle herds, with the Meat-Producers leading the list of shrinking resources. Without further research into the material, which I may later make, I would call for a program of the federal government purchase of 2 million head of beef cattle per year on the open Market, and transfer of these animals to poor grass areas during the Rain or Wet season for the land. Here is the elements of the program of which I would approve:

1) Transfer would be made only of young healthy Stock before investiture in the feedlot Cost spectrum, so as not to affect the Cost of butcher Meats or Feed Grains.
2) I would have All tagged and branded with federal signature, stipulating that none of these animals could be sold to Feedlot, Packing Plant, or Animal Rearing Units except by the Government.
3) All care in Transfer to the allotted acreage, and final collection of the animals for Sale to Feedlots would be done by federally-employed or contracted Employees.
4) There is indication that Herding during the process hastens the Recovery, so that the Local Employment can be sustained for long-term Periods.
5) Back of the Envelope figuring leads me to the imagination that several years of such sequestration of animals will raise the level of Beef herds by 25%, while most of the Cost of the program would be recovered by the resale of the animals after 2 years.

I now have several qualifications that my farm background leads me to announce. The usage of cattle could be most effective, the use of Hogs, Sheep, and Goats would be highly counterproductive to the process. The will be a huge Cost in vehicle transfer of Herds from Dry to Wet areas when the Rain stops, but the cooling effect of the recovered areas will present less need of transference over Time. Most economists will not understand the ramifications of such activity, lacking a background in animal husbandry. One myth I would like to discard immediately will be the Claim that increased numbers of large animals will lead to increased levels of Methane Gras; this is Wrong, as the chemical decay of the areas release the same Methane as does Gestation. The second myth to be dismissed is the contention that Livestock pollutes Clean Water. Reality states that animal waste delivers the microorganisms and chemicals in natural state capable of killing both bacteria and Viruses, and the additional chemicals share many of the properties of proper fluoridation, if one allows the water to flow a couple miles from the position of animal waste deposit. It only sounds gross! lgl

Another Crackpot Idea

2011-03-22T12:36:00.000-07:00

People often wonder at How my mind works, and I like to add confusion with cross-signaling wherever possible; here is a Case in Point. I was reviewing John Whitehead’s numbers, and considering the degree of accuracy in his projections. The improbabilities of Averages and concrete data remains pretty well-known (something about Variance in the division process after the gross numbers begin to grow), until I had the Insight that it was all a Tempest in a Teapot, and utilizing the worst extreme of Variance was always the best effort in Economics. It is like unto playing Horseshoes–scream about the One-Pointers, and forget about the Ringers; you will invariably win more Games. This philosophical point determined, I had another great Thought.

Our esteemed Government agency currently sells flight destinations routes to Airlines, limiting in number the total volume of Traffic seen in the Air. I contemplated Whitehead’s style of analysis, and asked myself Why there could not be greater rationality obtained by sale of all Routes, not only for Passenger traffic, but also for Freight; then moving on to place Trucking, Railroads, and Airlines in competition. The Effort would require the analysis of the likely expected economic value of each type of personnel and freight transfer, the variable Cost per Unit of each type of Transfer for such specific element, and the Cost of material transfer from one mode of Transportation to another. One can clearly witness that there would have to be a vast number of Special Permits to cut material transfer Costs, muddled payment accounting, and added inconvenience potential for Those committed to a transfer (here We are talking about added Cost). This enforced competition, though, would reduce Capitalization Costs, maximize Production unit usage for Equipment, and potentially increase economic value for said Transfers, and at greater Comfort.

You will find innumerable Anger issues rising to the fore, coming from lengthy Bus transference between Railheads, or Railhead and Airport. The flow of Traffic will slow, but it will raise Hotel and Motel occupancy rates; increased Local revenues, greater lost Wages from Travelers, and higher Costs to Business of sending personnel around the Globe. The Counterpoint may consist of lessened congestion at Airports, removal of the gigantic freezes at specific Airports due to bad Weather, and a Routing system which puts emphasis on what must be moved as quickly as possible, and what can take a more leisurely route. All of this done at cheaper Cost, and much less Consumption of Transportation fuel. The Concept is so nefarious that no one can ascertain whether such evolution would be an economic gain, or would be an economic loss. Still, it has such potential that Computer models should be built and tested. lgl

The Heaving Chests of the Violated

2011-03-21T13:38:00.000-07:00

I would like to apologize to all eminent personnel, before I enter into this rave. I am not a Saltwater economist, or even a Freshwater economist; maybe I can be classified as a River Rat situated alongside a slow-moving brook. Some things I do know, one of which is that fiscal expansion must affect Resource and Commodity pricing adversely–this means maintaining a higher Price than would be otherwise natural; the Trick here being this will occur whether there is over-employment or under-employment of economic assets. Ricardo has little to do with that, except for allowance of foreign Suppliers to attain some level of economic Profits. Paul Krugman remains correct in his disbelief in the ‘intertemporal maximization’ which go on in these models; a sound rationale for this being that scaled Averages are a poor constraint for any graphical model. I disagree with Paul in his estimate that Public Spending will not crowd out Private Investment, but surely never for a reason suggested by the Freshwater economists. My Take on Public Spending is it presents an avenue of safe Investment for excess hoards of Cash at good rate of Return, which would never be invested at all if that rate of Investment rested upon Consumer Demand or the Supply of Product. I suggest that there would be less Private Investment at lower rates of Return, if Government through Treasuries didn't allow Investment of Profits at relatively high rate of Return. Remember that manipulation of Treasury Paper and its rate of Return is a political process controlled by Fed and Congress, and as consequence, Private Investment can insist on a higher rate of Return than that of the normal Risk based on market forces; Private Investment here cut off if the higher Profits are not realized, all because the safe harbor of Treasuries. This naturally curtails significant Private Investment because the added Risk Value cannot be paid by much of the proposed economic effort.

The first thing to be said is that the previous paragraph should have been much shorter. The second element must be a proper definition of discipline. The later must be flexible so that it bends under impacts, but does not break. I will interject this link here to indicate that I personally possess little discipline or logical pattern in my own efforts. I say this because the material in the Post with its own links should perhaps be read before my own advocacy of radical ideas. I start by suggesting all Concepts in any academic discipline should be reviewed almost continuously for relevance within the current Reality we face. Now I will turn to my main proposition.

I will start with the fact that We have a Social Security Trust Fund which is huge, but will run out after a period of years. The Trust Fund needs better assets than Treasuries with a Bernanke dictated rate of Return. Major Corporate Buyouts are all the rage amongst the Investment community, and huge commitments of Cash have not only been quoted, but raised. It is no secret that the Investment banks have run into the ground once, and show every indication that they will do so again. My idea is that the Fed has to save these banks anyway, and Congress has the power to dictate that these Banks under duress must be purchased with federal Treasuries held by the Social Security Trust Fund. The later gets a much higher rate of Return for their Investment, the Fed has to supervise these banks anyway, and Congress can also forbid Quantitative Easing so that the viability of these institutions must endure the stresses of the natural markets. As an intuitive aside, the proposed legislation should forbid any Publicly-held Property from granting any Salaries, Benefits, Bonuses, or Gains which would pay Employees better than the President of the United States–just a Thought! lgl

Heresy in the Modern Age

2011-03-19T18:14:00.000-07:00

I was simply reading this article online, when I decided I would have to become a Heretic. Like most such offenses from the True Faith, this I start this with light heart and expectation that everyone will understand my position; though in truth, it will probably be greeted with vast disdain and terrorist contempt. Reaction will indeed probably consist of less than assassination, though character assassination holds high Incidence value. I might as well get started in the vilification of current economic policies at this Point, as no one steps forward to save me from myself.

My main Contention starts from an estimate that, in Reality, there is too much Cash in the system. The real reason that Stimulus and Intervention fails to produce the desired effects follows from modern business and finance methods to forestall absorption of Losses. Businesses today cut Production and Staff, not Profits. Translated differently, Business refuses to integrate the economic difficulties from which Consumers suffer. There are always too many Players too well funded to allow Recovery efforts to survive. This leaves Consumers, already losing Money and Jobs, to exert the economic energy necessary for successful recovery, facing the great mountain of Investment funds of a Business class who refuse to report any losses. They are willing to pressure Regulators and Legislators to ensure they come up with no Losses and are capable of over-Pricing any and all Production resources.

All Monetary, fiscal, and Tax policy adopted so far within the last Crisis has gone to guarantee that Business Interests would not have to eat any financial losses. I return the Reader to the Concept that there are too many Players with too much Money, and this practice will have to be stopped before serious Recovery can be effected. The best Means which should be adopted need be harsh Taxation, which will bring in tax revenues and curtail Business expansions, except in certified Profit areas. The Bush Tax Cuts in this Scenario can be likened to slow Arsenic poisoning. The best way to introduce massive harsh Taxation immediately would be nullification of all Tax remissions for the next Tax Year, except for a flat family deduction adjudged by the number of financial Dependents. Does this assessment make me the darling of both Liberals and Conservatives? lgl

Economic Stimulus and Stress

2011-03-18T12:03:00.000-07:00

I was reading this when I decided I must advance a hypothesis I had been considering for a long time. The reason I was reluctant to advance my notion was basically due to the fact it would challenge almost all economic thought since John Maynard Keynes. Here is the basic hypothesis:

Economic stimulus has immediate advantage, but long-term hazard. Inputs of stimulus create economic elements which are foreign to market forces, and destabilize the economy in later economic performance. The major way this occurs is by altering the exact position of Stress, and the magnitudes of the Stress imposed. The Result creates economic elements not naturally joined to economy, reacting to different variables of Stress, but which can impede natural economic recovery forces by insistence that such economic elements be fully-funded and functional.

The whole is similar to building a House of Cards. We do not now possess a natural economy. The later is much smaller than what We have, but must fully fuel the mess currently considered the economy. We have a vastly expanded Government, containing among other things, a vast assortment of regulatory agencies and labor. The later must be paid on a par with their natural economy counterparts; think here all economic sectors cannot only be accounted by the labor force engaged in the industry, but also the regulatory agents to supervise the industry; again think of the Labor Wage Costs for the industry to include both labor force and regulatory agent salaries. Other elements of Government include National Parks, Reserves, Monuments, and Cemeteries–all of which Wage Costs must be paid. Unemployment Insurances Costs must not only contain unemployment benefits–but salaries for the management of the system at all levels. Government will not order specific payment of specific bills in health care, it accepting both Private and Public employment for no other reason than challenging the bill payments after Review; all costing both in Insurance premiums and health care Costs. I will not continue into the massive Hiring by Government for projects and programs almost without Number; all of which must be financed by the natural economy.

Every advent of economic stimulus not only adds to the mess, but it further makes the entire situation Top-Heavy. Intervention always creates Stresses unexpected within the entire economy–both natural and artificial–on a structure more subject to collapse. We are now at the Stage where We are manipulating the Money Supply itself because no one can conceive of major actual economic expansion intervention and stimulus. The Money Supply, though, is the seeming only connection between the natural and artificial economies through Wages, Rents, and Profits. Now We are introducing Stress factors into the Money Supply, with no economic agents being sure of the actual payments they receive; which may or may not be worth the Sale of economic assets within the market. Has Anyone asked what happens if the Money Supply actually collapses through Stress? I imagine that We have a second Great Depression if the Inflation rates reaches the mid-Teens, and it is not a prospect I can readily enjoy. lgl

The Gag Amendment

2011-03-11T11:49:00.000-08:00

I am so sick of listening to People talking about the horrors of Unions everywhere on the Internet and Public Broadcasts. I have considered the entire situation for months, without any resolution of what could possibly be done to represent both Sides of the argument. I found that I could come up with little, but then I contemplated working from the other direction, this being what I have come up with; a real Wake-up Call I hope for a Right-Wing formation who believe they can do no Wrong. It is a constitutional amendment specifically ordered to counter unfair representation of Views. Here are the main Points:

Constitutional Amendment:
1) No Individual can criticize, attack, or otherwise condemn the Income of any other American or Legal Resident, if their own Income by Income Tax or Capital Gains Tax filings are higher than the Income or Income Class criticized. The Penalty for such Criticism will be one year's Income for one Individual of the Criticized Income Class as defined by the previous year's Tax Returns; Payable to the IRS with specific purpose of paying down the national debt. The only Exception to this Violation is in discussions made during Collective Bargaining negoitations. Such Negoitations cannot be broadcast Live on either Public Stations or Internet Connection by any means.

2) Public Broadcasts criticizing any Labor organization, Union, or Society of any type cannot be made without granting the offended Party equal Airtime without format or editorial commentary from the Public Broadcaster; all Costs of the broadcast to be borne by the Broadcaster itself, with no attempt to bill the Labor organization. The Response must be run an equal amount of times as the original Criticism during the same operational hours as the Criticism broadcast--still at Broadcaster expense.

3) Any Business, or Business organization, which pays for any Advertising casting Labor in injurious light--especially criticism of labor organization or Collective Bargaining--must pay an equal amount as the Advertising cost to the Unions specificed, it to be placed within their labor recruitment budget.

There is a definite bias today in the reportage given to labor conditions, never mentioning the position of Labor, or granting the Gains which the Labor Movement have achieved during the history of the United States. Those who consider this Amendment radical should be happy I did not include a provision in the Amendment requiring every Commentator on Wage levels to specifically state his or her own Income at each Airing based for their previous year's Tax Statements. I know that economists will hate this entire Post, but Labor is being injured by a slander campaign which is well-financed and organized by Individuals who have much better position in the World than your average Laborer. lgl

My Two Cents

2011-03-09T08:30:00.000-08:00

I started by reading this Post from Arnold Kling. I followed it with reading both of Tyler Cowen’s Posts, here and here. I finished with previewing Matt Yglesias’ Post. I will first admit that I am totally scalping my material today, something which occasionally irritates Tyler. Second, I agree wholeheartedly with Matt that the Right uses shaded eyeglasses when considering the promise offered by the Right-acclaimed entities like Singapore, Chile, and Hong Kong. All Cases proclaimed utilize great government authority–whether cited by Left or Right–and that great government force is hidden only by style. I will finish this paragraph with Statement that the strength of government authority is governed more by population density and the need for conformance, than it has ever been driven by ideology.

I will initially contend with Tyler’s assessment of the Left being too significantly worried about the corruptive power of Money in Politics. Here is a place where One cannot be too worried! A bad Apple applies damage beyond his own circle of influence, and a group of bad Apples can ruin an entire harvest. I once constructed a model–you all recognize my skill level with models–which has since been lost to history, yet it suggested that as little as 5% of the corrupt Participants in an legislative process could skew over One-Third of the passed legislation in ways that are injurious to the Polity as a Whole. Tyler also suggests that left-leaning economists refuse to consider the federal budget as a series of integrated Accounts. I imagine this to be an overstatement, considering the Right’s refusal to touch Tax Cuts, Defense Spending, Government Contracts, or special Tax Exemptions long past their Worth. The Right is as reluctant to actually reorder Government Spending as the Left, and to blame one Side is to hide the real problem.

I review the material and think Arnold Kling may be the most lost. There is only one structural imperfection at play: Tax revenues do not meet or match Government Expenditures. One can claim that Tax revenues are too small, or one can claim that Government Expenditures are too high. The single greatest Problem in Government must be the refusal to deny the profligate Spending of previous administrations; I once called it the Win-Win situation, where both Sides achieved exactly what they wanted all the Time. This Crap needs to change before We can reach any viable fiscal policy. lgl

Where to Start

2011-03-08T11:12:00.000-08:00

I read sorrowfully through this missive from the CBO. The main thrust of the argument was the nonsensical nature of the budget Gains made over the Period. Slow growth in Expenditure Savings were listed as caused by reduced welfare for the Wealthy, reduced welfare for the Unemployed, and a short-term suppression of normal growth in Medicare and Medicaid Spending. The worst aspect of the poor Gains was the increase in the Interest from the increased debt levels of the federal government. Only as an aside did it mention that Social Security Spending increased by 4%; it specifically not identifying whether this increase included, or excluded, the reduction of the payroll contributions for FICA. He did mention in passing that Defense Spending increased by 3% for the Period, though this was the one area where the Rules were not altered, so that it was a real runaway excess which no one wants to discuss.

I feel We have a real blind-spot of major proportions here. Economists should help in the on-going race for the Presidency starting about now. How this is to be done is by citing continuously the actual deficit areas of the Budget, and analyzing exactly where and what programs are costing the excess Spending. We as a Nation will not be able to stabilize the federal budget, and bring restraint, until We can talk about the real areas which should not exist. One of my great decisions on policy states that without Need through Specific Threat for any specific Weapons system, there should be absolutely no deficit spending to accomplish success; it is all a question of reducing Time Schedules and provision of Partial Payments. Attempts should be made to Sunset obsolete programs and policies throughout the federal government, and sell the vast quantities of materials purchased–then stored without use.

One cannot even begin to start a program of reduction of Government Spending without hard Numbers as to where the Money is flowing. This must be eliminated by a policy of Last Hands accountable, must Answer for the loss of funds. They will find where the Money went, or they will be fired or imprisoned. Every program director should be forced to advance a Paper Proposal to Congress outlining their own belief of what must be done, if funding was reduced by 20%. All such directors should be asked to forward a list of program recipients who make more than $100,000 in federal funds from the program. There should be Congressional Hearings questioning subordinate federal employees of the programs, questioning the validity of director reports and their views on budget reduction. This is the way to begin to control federal Spending, and it must be started soon, else We will drown in debt. lgl

New Thoughts

2011-03-07T09:19:00.000-08:00

I first read the Post from Tyler Cowen, then went back to the article by Paul Krugman. Both decided upon collective solutions to the Process they describe, but I find a lack of efficiency in this Outcome. I agree with the Krugman concept of ‘hallowing out’ of the middle-Income range, as does Tyler Cowen. Paul suggests reintroduction of the power of Unions will bring Relief, which Tyler and I doubt. Tyler advances a Concept of legal defense of intellectual property, which I have read Today could be considered a Socialism of Ideas; granting the right to channel Thought and charge for it. None of the above ideas appear to be any great help in preservation of Income for the vast majority of Us.

I ponder on the entire Issue, and come up with several ideas for which I am assured I will be vilified for even contemplating; a perfect position from which to start in this assessment. My first idea is the Guaranteed Work law passed by Nation or even State. It simply states that all Items for Sale in the given jurisdiction must be assembled or packaged, one or the other, within the jurisdiction it is sold. Business will automatically claim vast Production Costs deriving from such a law; my retort being that outside of labor Costs, there would be very little additional Costs, due to the lower, more concentrated capacity of bulk Shipping with less tonnage requirement. The ‘hallow’ immediately fills as Business searches for qualified Assembly and Packaging technicians within the jurisdiction of Sale. The Wages demanded would be the Wages necessary for a Living Wage within the area, and Income justification would appear without overt Government attempts to narrow the Income Gap.

The second idea stands in the area of education. It consists of a actual Scaling Down of the current high standards of educations, for a sounder base of certified Skills. It would require High School Students to test out as qualified Apprentice technicians in at least two fields; I would suggest Carpentry, Mechanics, Truck Driving, Lab technicians, Plumbing, Secretary, Cashier, Cook, Baker, maybe even Candle-Stick Maker. I give only a minor range of potential Apprenticeships which can be devised, but requiring passing of at least two qualifications places the Student in far better position in the labor markets, even if they go on to a college education. Such a mandatory requirement has long been necessary.

The focus of my concentration is toward actions which will basically decentralize the current economy, and break the extreme power of current Business leadership to order our lives; often in ways which are hazardous to our Standard of Living. I know that such ideas will be in for vast criticism, but I believe there will be little actual economic grounds to proclaim higher Production or Distribution Costs. Only Time will tell. lgl

Economics for Small Fry

2011-03-06T10:29:00.000-08:00

Like always, I will recommend this excellent Post, which has many very vital links to the Issue involved; then begin to talk about something else. What if Government debt in not just an irresponsible Spending pattern, but a substitute for a Futures Market on Inflation. Purchases of Treasuries or other Debt instruments simply constitute a hedge against expected future liabilities associated with a decayed Currency. Why do I ask this Question?–Because the purchase of Debt has long since passed the viability of a balanced Portfolio, even for central banks. Do people really expect the need of fancy Paper to trade in for other reams of Paper issued by the Treasury? It is not really a matter of Investment under these guidelines, but maintenance of a viable Route of Trade. You Kids need to understand that current fiscal policies are getting real shaky, almost as bad as the previous Credit Default Swaps–just played by central banks instead of Investment banks.

Here is where the ground is shaky, but should be really firm. I will get grandiose in Error, and accept the fact that Union members may draw some 30% more in total benefits than does the average Worker. I can then also admit that Union members make around 7% in total Pay Package in their Employment, as is the average benefits and Pay Package of Management. Here is where it gets tricky: Union membership had absolutely nothing to do with the Trillions lost in the Great Recession by Investors; it seems that Banker and Corporate Executive had the closest connection, and made the basic decisions. Union membership has absolutely nothing to do with the Unemployment rate, except for being immune to its impact; now under the force of Change by action of State Chief Executives–whose Pay Packages resemble Management–not Union members. It is also interesting that Management did most of the Downsizing of the Great Recession which caused the Unemployment; for which, by the way, Management generally gave themselves a Pay Raise. I like you may be a little irritated at the ballooning of Employment in Education and Health–with its attendant Cost–over the last three decades. I just don’t feel it is time to ‘Tar and Feather’ Unions and run them out of Town, simply because they want a place at the Table where all the great decisions are made.

Some of Us try to analyze what We are going to need to get Employment back on track. I will make a dire forecast, but one which will likely prove True. This states that We need 4 back-to-back months of Job Creation in excess of 500,000 per month, following with a Job Creation of 300,000 per month in succeeding months; else most Unemployed today should figure on permanent retirement. There is no way these Numbers can possibly be reached with the current political and business leadership. My Vote is to pay for the Debt with Taxation, and continue the Welfare venues as We will need them. I know such a Plan is unpopular with leadership; of course, they are making good Money, while Few others are. lgl

Left Field Analysis

2011-03-05T11:41:00.001-08:00

I am going to go way out in Left Field on this one, and read this Account before you start. My basic hypothesis that the basic causation for the low Wage Gains for Labor comes from the suppressed Interest rate policy of the Fed. It is really way out there, is it not? I am trying to organize my Thoughts on this Issue, but it is so obtuse as to be difficult to explain. The underlying assumption behind my thinking is that Operating Business Costs are so low that industry does not need trained labor, consistently high Production levels, or prevention of labor troubles. It also is Why Business is so currently opposed to extension of Health Care, Pensions, and Collective Bargaining in toto. Securing the Profits of Business may be one of the more deadly aspects in economic impact, and the most difficult to secure against; Business personnel being totally devoted to the highest Profits obtainable.

Now I have to design my Concept, a effort of definition hard to express because of no previous discussion. I start with a little bit of history. Without playing a endless cycle of past events which will prove nothing discrete, I will simply state that the position of Labor seems improved when Government Tax law or Regulations threaten the bottom-line of Business. Wages were suppressed before the unionization of the 1930s, bettered under the Government regulation of the 1940s, improved under the returning Veterans of WWII and Korea in the 1950s, started to slip in positional power after the Kennedy Tax Cuts, worsened after the derision of Government in the 1970s which left Business unregulated though highly taxed, the Wildcatting without Regulation of the 1980s destroying much of the power of Unions, the joblessness of the late 1980s and early 90s stagnated Wages and shredded funded Pension plans, the Clinton Tax increases bringing relief to Labor in the form of higher Wages and sustained benefits, and the destruction of Labor’s bargaining position has been consistent since the Bush Tax Cuts and refusal of Business Regulation. The most troubling aspect of development has been the abandonment of Politicians of the general welfare to search for the easy funding of business-financed Special Interests.

The previous accounting defines my suspicion, though it lacks for any positive evidence there is a correlation between the sweetening of Business Profits and the increasing plight of Labor in this Country. Most will claim there is no necessary connectivity between Privileges granted to Business by Tax law and Regulation, and the loss of Labor power to insist on just reward and protection. It is exactly this correlation which must be determined if such exists, and then remedial measures devised to protect the most important component in the economy from the predatory behavior of a well-financed class, one which gains immense Profits from suppression of the majority of Participants. One has to prove the Case, before We can get either legislation, Regulation, Tax Law, or economists to response to it. lgl

Search for No-Pay Help

2011-03-04T12:39:00.000-08:00

I would commend this Post to my Reader from Mike Shedlock, who combines much data about Population Growth, Job Growth, and Unemployment rates. His main Contention stands as the lowered Unemployment rate comes from Labor dropping from the Labor Force, rather than an increase in Hiring; 127,000 only leaves us flat on the Employment rate scale. This leads to another Point, which will be the focus of my Post, which questions how effectively economic Stimulus actually generates Production. Here lies the actual dismal science, and I will try to explain How.

I need highly energetic econ Graduate Students who are attempting to make a Name for themselves by writing that brilliant dissertation which Everyone applauds. This is because economic Stimulus has been insufficiently studied and evaluated according to some understandable scale. I will try to explain myself:

1) There is no accurate definition of economic Stimulus; economists known to extend the name to almost every excessive Expenditure make by any Government throughout Time. We need a universally accepted boundary defined as economic Stimulus, simply to be able to quantify the Expenditure. I would rule out any Expenditure which would have been Spent anyway due to political considerations, any Tax Cut or Exemption which would have been implemented due to political considerations, and any grant–like the Fed’s No Interest policy–which is simply response to political pressure from Banking and Wall Street. I want to get to this Gem of great worth which no one defines.
2) The second need consists of a list of economic stimulus grants from 1932 to the Present; a pendant effort, upon which one will find much controversy as economists will debate whether it was natural growth of Government Spending, or actual economic Stimulus.
3) The third part of the debacle must to establish the Employment statistics so that they can be integrated into an economic model expressing the true effectiveness of economic stimulus; complicated by the inclusion of a line of total Government Spending throughout the same Period from 1932 to the Present.

Now I know there has been a lot of good economic evaluation of most of these things in the Past, but I do not know of any combination put together to evaluate the true benefit of economic Stimulus over the Periods where it was implemented through its Expenditure. The later will have to represented as Step graphs of magnitude and length of Expenditure placed over the economic model.

Everyone knows I could not endure the labor, or have the specific Skills, to do such Work on my own. It would lend some young Student immense prestige, though, if he could present a creditable model along these lines, backed by the necessary data. lgl

Tax Law Simplified

2011-03-03T12:43:00.000-08:00

This is a very good Post to read, though one has to scale down through considerable Link garbage. The Author makes the overall Point that any effective Tax Change will alter the tax status by which small business relates to the C Corporations. Five of the Views described by the Author insist that small business will be forced into higher tax impact, while C Corporations will get lower tax rates. There is always the aside of double taxation which should not be stated, because it is actually taxation on two separate entities: the C Corporation and then its Stockholders. Both entities make a substantial Income, derived quite differently, and therefore subject to Taxation. The Solution to all these Problems can be accomplished simply, and I’ll try to explain How.

I will state initially that all Parties need to be subject to low steady rates of not just Tax, but of Tax Impact. It is also true that all C Corporations insist on all the Rights of an individual citizen in all legal disputes. My Solution is simply to eliminate all Corporate taxation and all Capital Gains taxation. Are Business personnel cheering at this Point? They should not be, because I must insist that all Income derived must be subject to the same rates required of individual Taxpayers. Here is where I begin to smile: All would get the Personal Exemption, get all the Investment advantages of 401k and other type Exemptions, and even get a Mortgage credit on one structure–limited in total amount of course. There would be absolute freedom from any discriminatory taxation based upon artificial device.

The next sensible function would be to eliminate the wide-open nature of current Exemptions, Tax Credits, and Reductions granted to any one Individual–whether human or C Corporation, S and Partnerships included. Congress should be prohibited from passing any Tax law which benefits any specific group, without outlining specifically what Value, or total amount, that this exemption could excuse from the Tax base of the Individual; I would be generous and suggest a one million dollar maximum to any tax reduction. I believe that resort and commitment to these two principles will do much to avert our deficit spending, and rescue our small business personnel from the ungodliness of Tax evasion. lgl

The State of Grace

2011-03-02T13:38:00.000-08:00

The arguments of Mark Zandi and Ben Bernanke sound terribly well-thought and admirable, but I pre-force must approach the Problem of Government debt differently. Conservatives proclaim 1963 the Great Watershed, where Taxes on Business was finally reduced. All utter benedictions of How it expanded the American economy to such great degree. Question: Did it? We know that Government Spending through The Great Society and Vietnam kept the economy humming through the early 1970s. There We come to a real parting of the Waters; first Energy Shocks, then expansion of Government Spending, until We reach that technological Great–the PC. But before We can realize it’s wave of benefit–We hit Stagflation, followed by the S&L Bailout, and further Recessions. We come to the Clinton Miracle–Conservative spitting, and retorting it must be renamed the Tech Miracle; contrariwise, occasioned as it was by a rise in Business taxation, exactly as Reagan did in the 1980s–getting Us out of a Recession once more. The We come to the Tech Bubble–a place where far too much Cash had been brought to the Tech Miracle–another Recession. George W. Bush stated What was needed was Tax Cuts, bringing delayed economic Growth, and then the Housing Bubble. We are now telling Ourselves that Stimulus will succeed, if only We allow the Bankers to go back to the misfortunes which brought on the last Recession.

Here, I will try to encode my critique. One has to count the number of Recessions since the Great Watershed. One then has to count the number of years where the Government tried Stimulus deficit spending to counter the effects of Recession. The above is not as easy as One thinks, because We have been deficit spending fairly consistently since Pearl Harbor in 1941. It takes a bit of History past this Point, as one has to estimate the length of Recovery necessary for Recessions before the Great Watershed, and one has to estimate the length of time for Recovery since the Great Watershed. The Question has three Parts: Was Recovery times faster before the Watershed, than after the Watershed; especially if We discount the disaster of the Great Depression from skewing the mix?; Why did the economy improve after the Reagan Tax Hike, and the Clinton Tax Hike, if Stimulus is absolutely mandatory for Recovery?; and Why have there been no line changes to forestall business practices which have brought Us several Recessions–like closing loopholes in financing laws and regulations?

I will now turn to my main point. Everyone I talk to about the business of Stimulus presents me with a real Problem. The basic idea is that Stimulus must be in place for an estimated Two years, but that the expected replacement of the deficit caused by that Stimulus cannot be repaid in under about 12-15 years without doing damage to the growth of the economy. I would think it Heaven on Earth if We could keep the economy from going into Recession for longer than a decade. Every economist knows that Recessions are caused by natural fortunes, and occur periodically, all with preventive measures functionally nil. What they are espousing is the continual growth of Debt until the financial industry collapses. I think it is time for an alternate economic policy, and I am afraid it must occur on Our Watch. lgl

Recessionary Leadership

2011-03-01T12:27:00.000-08:00

Menzie Chinn gives Us a good Post on the proposed ‘Crowding Out’ of Investment; if you don’t believe, check out the Math in the link. I am not in complete agreement with Menzie Chinn about the apparent lack of crowding out of investment, but I would never attempt to argue with him using the Math. I will, of course, change the Rules of the Game. I obviously will start by statement I question not Government debt, Government Spending, Taxes, or Interest rates as propellent of the Crowding Out effect. Where would I start? At the real source of Change over the past three decades, which consist of the Pay Packages of Management. Management leadership considers the Pay Packages to be the most important element of the matrix, so much so that they are willing to refuse Tax Impact by funds transference overseas, deny Dividends to Stockholders, get a federal Judge to imply that they could hide Pay Packages from Stockholders, and borrow additional debt against the Business or Corporation in order to fulfill those Pay Packages. Those Pay Packages were the real alteration of the business model over the past 30 years, and it is time that economists examine the impact of those Pay Packages on the economy; with close attention to the crowding out effects on Investment.

The worst impact of Pay Packages on Investment may come in the direct area of Nonresidential Construction–the latest seen here. There has grown a tendency in Corporate and Business circles of refusal of Investment potential where the Returns will arrive only after long development, constraining the Income flow in the Short-Run, though enhancing it in the Long-Run. Investments of too lengthy a development ratio get dismissed, often though the real technological advantage lies with the long-term development. This skews the Labor markets, the Investment curves, and the Corporate balance sheets. The Long-Term trend here introduces a degradation of Production function, and Investment recession in the Short-Run. The famed capability of CEOs may actually be a Poison Pill for which Stockholders, Labor, and Consumers will all pay in their own time, and in their own way.

I have often thought that Gentle Ben lived in a fairytale of his own making. Such Posts as this confirm my suspicions. I question not only his ideological policy, but also his defense of his own actions. So far, I have yet to hear Fed official, Bank officer, Treasury official, or Government leadership utter a ‘mea culpa’, even though the U.S. Government has swallowed about a Trillion dollars of bullshit. An economy which is struggling to get into the Teens of Trillions of GDP, let alone out of them to the upside, cannot require a Trillion dollars of Stimulus just to stay even. This means that about 8% of the total economy must be Stimulus, just to stop Contraction. What makes it even worse is the fact Business and Corporation have functionally been told that they do not have to pay Taxes, when We are drowning in Government debt at every level. Business and Economics may not like me, but there has to be a rational Thought somewhere. lgl

The State of Everyone's little empire

2011-02-28T13:25:00.000-08:00

I read something like this, and begin to fear for the entire field of economics. I possess the growing suspicion that the entire economic modeling process has like the Income Tax, become so riddled with Exceptions, that a valid Reading can hardly be found. We are supposed to be powering out of the last Recession, but Why is Production still below par, and Unemployment at such height? I can answer the later Question myself, but where is the failure to achieve Production levels consistent with the modeling? It reminds of the CPI, I wondering what is the Inflation rate on the thrown-out, volatile elements like Fuel and Food, and How much does the Two constitute in the total performance of the economy. Remember, any worth must show the progression over a decade at least, so no false fiddling with that stats.

Paul Krugman does not agree with me, but hell, I don’t even agree with God most of the time. He would choose to ignore all the indications of Inflation–in imitation of the Fed. Still, he would probably be the last to advance real stats on how much Household Income has be absorbed by the inflation of those volatile elements which Households so often have to purchase. I would like to know if this absorption is interrupting Intermediate and Long-Term Goods purchases–which Everyone knows that they are–but not by How Much? I am not trying to be mean to Paul Krugman or any other economists; it simply stands that We must get uncorrupted information to base sound economic decisions, and the models don’t lie unless the modelers have something to hide. We need a profundity of accuracy in this business, and We are giving an excess of garbage.

Here is an Outline of what I am beginning to fear, and it remains a valid deterrent to economic expansion. Conservatives have captured State Legislatures and Congress, and all insist on Tax Cuts, continued Government Spending on profitable projects for Business and Corporation, and limiting both Welfare and Government employment. It is incredibly foolish for Anyone to expect that the economy will improve under conditions where the Wealthy get the Welfare, and the Poor gain in both Population and Need. A Day of Reckoning will come, and it will basically consist of Interest rate going up again, and our Collective Debt generated by Tax Cuts without reason will finally destroy our economic position. My Conservative fellow Citizens do not understand that their positions will collapse long before the U.S. Government, but both can and will collapse. lgl

Actual Impact of Unions

2011-02-27T07:52:00.000-08:00

I read this and think about how much further We must go to gain Understanding. It is simply another caricature examination of the position of Labor by Management. Neither even wants to understand the position of the Other. Labor desires to believe Management wants to suppress their interests under a proclamation of necessary support of Stockholder rights; while simply desirous of vast Wages, Benefits, and Profits for themselves. Management holds to the illusion that they are granting privileges to Labor, like negotiating with them, all the way to the idea that Wages were a Gift; under some illusion that they could get Labor for some type of Slave Wages. The article outlines that it is a question of different Mind-sets, but it might not go far enough to explain the rationale.

I once drew a sketch outlining various Costs of Labor under Slave Conditions, Starvation Wages, Management Desires and Union Desires. It was particularly loose, and Most would consider it untruthful, but I only utilized it for reference to Labor Costs. I adopted the estimated Costs of Slavery: thinking of the Cost of Warehousing and Heat of the Slaves, the Cost of feeding the Slaves, and such ascetic Costs of Slave Catchers to catch escaped Slaves; finishing with the inevitable Cost of purchase of Slaves in the first place. I found that paying Starvation Wages was actually cheaper than Slavery if one did not have to maintain the health of Workers; there being a truly heightened rise in pandemic conditions from poor Housing and poor Food quality. I ran through a uniform Wage rate on the order of what Management would likely desire to pay, all without Labor ability to improve its position. Then I ran in that which Union and Labor would desire to be paid.

The humor I found in my personal model, since destroyed, consisted of there being only a 39% Wage difference between Starvation Wages and Union Demands, and the difference would only make up about a 2% difference in the Profitability of most Businesses. Talk about your marginal utilities of which Tyler Cowen is so fond! It all seems like a tremendous lot of trouble for little Gain for Anyone. My model was created in the early 1970s, and could possibly differ greatly from the Present, though I doubt by very much. Subsequent work at the time estimated it would cost Stockholders a possible Penny per Share in dividends in the difference, and Management a possible 12% of their Pay Packages. The Range may have altered greatly under the current matrix of Business, but I doubt it. One wonders how such sharp animosities could develop over the Issue in the Present Day. lgl

How Things are, and How they should be

2011-02-26T13:32:00.000-08:00

I possess a real problem with the stated causation here. Paul Krugman does more than hint that it remains the political clout of smaller, less population states which allows for greater stimulus to them, accounting for the more solid employment rates. There exists great difficulty in subscription to this Concept. Senators may be able to influence given amounts of Stimulus, but only at the behest of the Special Interests, never the relative size of their Electorate. I would enter a Statement that there is higher Profits in constructing Highways in rural areas than in congested Zones, greater Profits in constructing new Roadways rather than resurfacing older pavement, and the greater Profits come from elimination of extensive bridging in those Roadways. Rural paving also achieves much higher daily surfacing rates. The final comment must state that rural roadway construction requires far less Personnel, and much greater per unit use of Equipment. I would not blame or praise the smaller Populations of States for any such Awards.

One can join either side on whether Commodity price increase come from excess Stimulus, or from Supply Shortages. I personally think that Supply Shortages are present, but not for the reasons Most state. I think Government and Tax Cuts have made it too easy for Business and Mining to show high Profits. Most of the Commodity industry has found that they can maintain their Profit ratios with lower Production, and vastly reduced Labor and Equipment overuse. I believe (sincerely, for those Doubters out there) that Governments and Tax Writers have developed the wrong Business model, which far too many businesses have adopted. We have far too much Rent-Seeking in the Tax Cut and Stimulus industry today; all having nothing to do with Employment rates.

I finish today with this Post, which actually says little, unless One follows trend lines. The American economy continues to require greater education for Labor. This occurs when the extended education provides little direct Training for most personnel obtaining Work. I am going to sound Liberal here, but this means that Business and Industry are demanding their Labor force spend Four or More years outside the labor force, with a Cost to Labor of about $50k per year for the designated Individual who must foot this bill. This constitutes a Trap which costs the economy much Productive labor due to relative discrimination, and a vast pool of Debt for the financial world to draw Interest upon. I do not like the Trend, and could almost accept a Tax upon Employers to minimize their Demand for education, especially when coupled to the fact that vast amounts of Training Costs occasion due to Employment Upgrades from Staff. I will sound like a Socialist, but think that Workers have a Right to contention for Jobs matching their Skill level without discriminatory bias. lgl

Potential Start of Sanity

2011-02-25T13:14:00.000-08:00

I have just read this short Post from Catherine Rampell. I agree with her on this issue, and felt I should discuss procedural policies by which modifications could be made. I have always felt in economic policy decisions that simplest is best, and minimum is always far better than maximum. Here is my short List of things I would do to set the House in order:

1) I would pass a federal law insisting that States and Local Governments create Minimum Wage Jobs of at least 16 hours per Week for All Unemployed who would apply, with the federal government mandated to pay for all such Labor conducted up to 16 hours per Week. The amount would at least pay for the normal Cost of Groceries for a family of 5 with tight Buying care exercised. This would have nothing to do with Unemployment Benefits, other than bringing to an end any extension of those benefits. A high number of Unemployed live in a Household which have other Income Earners who supply a great share of the Maintenance.

2) I would limit the largesse of Tax Breaks overall, setting federal Income Tax law prohibiting more than $100,000 per individual, $160,000 per joint filing, or $1 million per business or Corporation to be granted as Tax Break. It would mean that there is a Top End to how much Anyone can game the Tax Code to save Money.

3) I would advocate the initiation of a national health care system. The current system where People put off going for medical treatment until massive intervention must be conducted is an idiocy. The practice of Doctors, Clinics, and Hospitals being able to manipulate their fees to eliminate Patients who they do not desire to serve must be stopped. We must enact federal law which tells Insurers in a Public/Private system that they can only sell health insurance which pays 100% of the liability which Medicare sets, and on which they themselves pay. Supplemental Co-Pay Insurance can only be sold if it does pay 100% of the remaining Cost of all Procedures paid in order to sell such policies. The overuse of medical care can be limited by charging a $35 Door payment for every visit to a Doctor, Clinic, or Hospital. It also means that no Doctor, Clinic, or Hospital Testing Procedure can be scheduled more often than once a month.

4) People will automatically ask How I would expect to pay for the above programs considering the ballooning deficit. I will say I favor Health Insurance premiums replacing all Personal Exemptions and Dependent Exemptions in federal Income Tax without choice on the part of the Taxpayers, though they can sign up for those Premiums going to their own designated health Insurance policy; though they must pay for all Co-Pay Supplemental Insurance themselves. Those who are unemployed or unable to create such Exemptions will be paid from Gain from these Exemption removals. The Minimum Wages paid under the law will be paid by a Surtax on Income paid by Business prior to consideration of Deductions or Reductions of any type, and segregated by position of the Businesses in which the Minimum Wages were paid by State.

5) Advanced Public Employees in the Top Pay Grades must prove that they possess the Living Expenses necessary to get paid; at a rate only 125% of the total provable Living Expenses. This also includes all Specialty Consultants employed by the Executive, Legislative, or Judicial branches of Government. It is a law I strongly suggest that State and Local Governments also employ. lgl

Shirer's designation of Nazi lack of empathy

2011-02-24T12:21:00.000-08:00

Ask me if this is a prelude to things which We do not want. I wish first to state that it indeed is a Report on Durable Goods for January, a month associated with poor economic performance because of Weather and Accounting Infringements. Here are the details which worry me! Aircraft Orders are generally placed after the First of the Year. New non-Transport Orders are generally placed within the Winter months to get placement in the Production queue for the high Production months; they being down 3.6% without the Transport. I would really like to know the magnitude of long-term Contracted Production, whether these Contracts currently are reduced in size. Worse than the Libya Crisis could be stagnation of the Markets, which will cause excess Speculator Cash to flow into Oil; funds bounding into the Market faster than real barrels of Oil. We are looking to a downgrade of value in the Stock Markets from my last Check, and the World economy does not need a Speculator-driven bubble in the Oil markets.

Megan makes more of this than is warranted, but it stands as fact that Greece has never ventured far from the City-State political format for which they are so famous. One has to understand the tribalism of the Greeks, something akin more to the Afghani than western nation-states. I can picture the disintegration of the Greek national government faster and more forcefully than that of the Libyan government. Watch, and if the several Greek cities start sending their own Trade representatives to various Ports of Call, then one can assume an unnatural form of existence will fail. Many Greeks will be outraged by this evaluation, but their anger will be far greater for my Statement, than for an eventual truthful outcome to my Words.

I will finish my tirade with this Post today. It seems that the Old Conservatives are somewhere to the Left of our current Liberals. Eisenhower sponsored Social Security, ranted against the military-industrial complex, and supported an extremely Progressive Income Tax. Ronald Reagan passed a massive increase of Tax impacts. Nixon wanted a extended health care system to the Left of Hillary Clinton. It is interesting that Those who in their millions witnessed the horrors of War, and it’s effect upon Civilian populations left desolate, found all these programs necessary; with the better-off bearing the brunt of the funding. Today, We have people who never witnessed the horrors of War trying to tell Us what people do not need. It may be destroying our Society, as Everyone leaves the care of people to Others, as they pursue Profits they will never realize. lgl

Watching Rome Burn???

2011-02-22T12:11:00.000-08:00

The Reader may not believe my Take on this article, but here it is. Capital flows have become an extreme problem within the last 30 years; one element of the problem consisting of rapid reversals and removals which impact every economy. The genus of the Problem derives from excess Profits building in established Production, and the tendency of business leadership to closely watch financial markets, switching to those venues which show the greatest expectation of Returns. It is a Problem which has come to Us within a matter of decades, and one has to ask Why.

The extreme Profits deriving from established Production comes from technological improvement, static suppression of Wage rates, and avoidance of payment of Communication and Transport Costs through outsourcing those Costs to local and national communities. Corporations have utilized the economic blackmail of Production transference to get both lower Wages and lower Property taxation. The real construction behind the excess Returns from Production comes in the concerted effort by Business to limit or suppress the taxation on those Profits. There has been such a transfer of taxation that where Business taxation paid practically half of the tax revenues of the federal government in 1963, they now pay about 20%; down even from 2000. This means a huge cache of extra Cash swinging around in the financial world, more Cash than either established economies or emerging economies can absorb effectively.

Business leadership has sold the idea that lower Taxes promotes economic expansion. This is true in only limited context, and when there is too much Investment Cash, it holds the potential for disaster. Inflation not based upon resource shortages remains the Threat which is the real danger behind Inflation. Here is the Inflation that really bites. A Case in Point is the current Spot Price of Sweet Crude Oil, where Speculators are driving the price of the Oil upwards, even though there is a surplus of the Product. The natural correction for excess Investment Cash is higher taxation, a condition which is anathema to Business and Tea Party society. The ideation had better change in the near future, else We will attain a bankruptcy for governments of all types, alongside a degrading Production capacity due to excessive Resource Pricing. It is time for real Economists to step up to the Plate! lgl

Common Goodwill

2011-02-21T10:21:00.000-08:00

I liked this Post from Bruce Bartlett probably a bit more than it deserves, though it is very good, simply because it churned many ideas inside my head. The first Concept I determine is that We must separate Social Security from Medicare and Medicaid. A slight increase in FICA taxation would cover Social Security benefits, especially if the benefits were set at uniform amount. The second Thought came as a blazing Star: Medicare and Medicaid could be far better financed by replacement with a National Health Insurance program underwritten by elimination of the Personal Exemption and Dependent Exemptions now on the books.

Bruce decides to move on so I follow, and find that tax revenues will consume only 14.4% of GDP this year. Bruce goes into a slight contempt, richly deserved, for the ineffective Bush Tax Cuts. Many will disclaim about the Tax Cuts for the Wealthy in the sharp reduction of tax revenues. I will assert that the reduction in tax revenues coming from Business and Industry did as much, if not greater, damage to the revenue system. Bruce Bartlett would say that Obama must renounce his pledge not to increase taxes on Those making less than $250,000+. I suggest that Obama must raise Business Tax revenues by 34% overall to actually balance the Budget. One has to understand that through the Period of 1870–1963, Business taxes paid for much of the federal government; a Time where the United States advanced to be the leading industrial power in the World, though it was also a Time without major Entitlements. I am not suggesting that We should force the Business world to pay for Our Spendthrift Souls; yet, We could increase Business taxation to a point that Business leadership only made a few dozen times the Salary and Benefits of the Average American Laborer.

Bruce’s discussion on the possibility of a greater increase in GDP to aid in deficit relief ignores the long history of short intervals between Recessions with proclaimed needed Stimulus, and requires the Dreams of Mankind not yet witnessed on this Earth. It is obvious a new tax system must be created to actually reduce the deficit and debt, and I have previously discussed many potential amendments to the Tax Code in attempts to correct the relevant flaws. 60% of American Households are losing Life-Sustaining Income at a relatively rapid rate; We are not becoming a Third World country, but Second World maybe. My favorite Tax change for the Day is a 8% Tariff whereby foreign competition will have to suffer the same distress as domestic Producers in payment of Social Welfare Costs. We do not really need to be competitive in foreign markets, We could simply be Cooperative in domestic affairs and politics. lgl

Trade, Unions, and Inflation

2011-02-20T12:49:00.000-08:00

One must first read the Post, and then assume (correctly) that both are to some degree wrong. The major loss to Trade resides in the Welfare Costs (Taxes) which each Trading partner must pay, simply to alternate political entities. The secret success of Trade consists of the ability of the Trading partner to minimize those Welfare Costs to his advantage. Domestic production always has to pay those Taxes, while foreign production can avoid those Welfare Costs, at least at the domestic level of Trade unless there is a viable Tariff. The true Winner of Trade is the Partner who pays the lowest Welfare Costs; the true Loser is the Partner who pays the highest Welfare Costs, the domestic Taxpayer, and eventually–the Consumer. One may ask about the later inclusion, but the Consumer inevitably must buy the shoddiest Product in a decaying infrastructure over the long-term.

I found this Post which is far too critical of Collective Bargaining. There must be a place for both Unions and Employers, outlawing one will not resolve any issue. I would enjoy new legislation which handled the observed Problems far better than current observation. I would enjoy a law which made Unions completely free to Join, forbidden to collectively bargain over Wages, but able to force all Employers to collectively bargain over the Unions Dues they are forced to pay per hour of Union member employment. Unions themselves would be committed to decide what level of Health Care they would provide to Union members and their families, and what level of Pension they must grant to all members past a certain Age. Employers could set their own Wage levels, Employees could decide if they wanted to Work under such level Wages, and Unions could declare Employers deficient in Unions Dues payment if labor Contracts were not reached and fulfilled under this law (Blackball those companies). Employers could still hire Scab labor, but Unions would have the right to Picket the Production facilities and Headquarters, employing Union members not gainfully employed elsewhere.

I will finish today with this Post, where James Hamilton suggests that The Days of Wine and Roses may be over; as Inflation seems to be picking up again. One can and should ask if the Fed can maintain their suppression of Interest rates under such Conditions. The Answer is No! No one but myself may have asked what happens to the federal debt if Interest rates return to say a potential of 6% per annum? I do not like the way the economy is going, but have lived through so many Booms and Busts that I can’t even tell what is a Recession anymore. lgl

Product Tax

2011-02-19T10:40:00.000-08:00

I tire so easily these days, especially after hearing Commentary about Core Inflation not rising as quickly as the CPI, when the later throws out all those Products and eventually Services which are actually increasing. An individual asked me What there was to do with Government organs who would not admit that American Consumers were being taxed by adverse Pricing policy in the interest of the Multinationals. I told the individual that one had to hit such leadership where it hurt, and the best avenue was Tax policy. It is here where political leadership is most vulnerable as the Tax Code is a ridiculous Joke. He returned with a query of How Tax law could handle both static Wages and rising Prices. I told him that We would need to force the Price increases across the board, so that all Wage levels would bring universal demand for enhanced Wages at the same time. He wanted to know how such could be done, but I had not ready Answer.

I thought that We had to get a little Crazy here, but in a specific way which would accomplish the task. I brought out the old venerable Product Tax. It is highly similar to the old Salt Taxes, except it has a uniform rate through the economy unlike the later. I would suggest a real punch to the assessment, with understanding that We have real need to raise revenues. I determined that 20% of total Sales will provide both revenues and shake loose Wages as well as Prices. States and Local entities could be aided by directing 2% of raised revenue to the States, and 6% of the revenue to the Local governments; under the strict proviso that the federal government was off the hook for Medicaid and Welfare. Producers will all scream about no consideration for their heavy Costs, so that with the periodic filing of Expenses, they would receive 92% of those Costs; the 8% ensuring that Business itself was taxed in manner where they could not pass the tax onto the Consumer.

The Product Tax differs from ordinary Income tax in several important ways. There remains little chance to hide Income by fictional Costs or magical debt which is never paid. The static nature of Wages is almost impossible to maintain under such circumstances as presented by the Product Tax; One can hide neither the Income or the Income loss from taxation. It strengthens the hand of Labor for Wage Increases, with vengeful Quitting if Workers do not get proper response to their own crisis from their Employers. Business can still hide their total sources of Income under such taxation, but Tax law can insist that Business must register all Cash Register tapes; a simple routine of filing each Slip daily by Internet access; the law should also include an exorbitant Fine for non-compliance, such as 50 times the sum found non-Reported. The Whole should shift the Game Rules to where Labor can achieve a greater share of the Profits of that productivity they have been showing over the decades. lgl

Estimates on the Situation

2011-02-17T10:32:00.000-08:00

Do We need to worry about people being liars in economic surveys? Could it be that both Politicians and Economists fear the views of ordinary people, simply because they themselves need some work in the arena of truthfulness? I most detest the concept of mandatory spending. I think it is the greatest lie of them all, and utilized every time someone suggest a real decision be made. A basic Cap has to placed on the growth of individual benefits granted to Anyone under his total program access. Such a Cap could be used to limit Social Security benefits, Medicare and Medicaid payments, even full utilization of Tax Cuts. I would love a Cap on Defense development spending, where Cost Overruns could not exceed $10 million per Company per year. I could change that stated Word to Billion, but when talking about this range of Income stream, Why? There are means to traverse lying to honest truth, if one has only the Incentive.

Tyler Cowen claims a stagnation of Health Care in this Country. What is the Problem? A cynical man might suggest that they spend way too much time finding ways to increase the total amounts of their bills. A more sensible man might hazard that the human body machine has basically reached it normal Life span, and that increased inputs on Maintenance and Lubrication can only have limited benefit. Someone like myself might come up with increased funding in advertisement for Christian Science. I question on a national level the propriety of spending One-Quarter of an individual’s lifetime Income on keeping him alive for the last decade of his life. This is the Stoney road on which We had set off on–possibly to damnation.

Readers will find it unlikely that I can link this Piece with the above Content, but it might be a Solution to the above Problems of Budget Deficit and Health Care stagnation. We tax Drug Sales at 50% rate, so that Drugs are still lucrative, but paying towards the deficit. The price for Drugs will of course increase in Consumer Retail, and with more Violence throughout the Transport chain. Reduction in Health Care Costs can easily be gained by an enforced 1-Hour Response delay on all Ambulance and Paramedic Treatment; something which will reduce Health Care Costs along the entire Health Care chain as well. It also works well for Stroke and Heart Attack victims as well. There are simple Solutions to Complex problems; you only have to adopt a simple attitude. lgl

Differences

2011-02-16T10:02:00.000-08:00

I found a Post whose information I have considerable doubt on the accuracy of all expressed views, but which is excellent as a teaching element. John Maynard Keynes was an economist of his Times. He basically started his leadership role in Economics writing on the economies of the First World War. He watched the development of the Versailles Treaty, and felt compelled to note that it would never work. He observed Winston Churchill commit his second political Suicide by clinging to the Gold Standard. He endured the Great Depression alongside his fellow Englishmen, and understood that the laboring classes were dropping into the Hunger and Privation under which they had lived prior to the Corn Laws. He proposed his famous Stimulus theory trying to avoid horrors which he understood too well; never contemplating these measures to be more than a temporary expedient. He had the misfortune to continue his career through Breton Woods. He is crucified or deified by modern day economists, depending on which of his Works they want to examine; often both at the same time, using Words written in different decades. Keynes’ only fault was that he was a functioning economist attempting to find Solutions to arisen problems; he was never dedicated to creating a magnificent economic theory for all Mankind for all Time.

Here is another article on which I do not agree with much. Economists make too much of the value of Productivity Gains. I do not know whether any specific Reader has seen such a graph, but We are talking about those graphs whose traveling line is composed of interlocking U’s, graph line denoted by the lowest point of each U. This means that Productivity Gains increase with both increased and reduced Production (actual New Hires, or new Fires), with the bottom of each U means the lowest Productivity rate witnessed. Production levels depend on Consumer Demand, and labor employment can affect rise or fall from the lowest point of the U. The retirement of the Baby Boomers leads to a smaller labor force, but a maintained Consumption population. An increase or decrease in the later population governs Consumer Demand, which governs Production; Productivity Gains means little outside a math model.

Now here is a Post on which I can agree. I do have doubts that my reasoning coincides with Stan though. I believe there is a time of confrontation, where any level of Government will be forced to shut down, if Taxes are not raised. This means there is a Point where there will be no further subscription of Government debt. Government leadership will have to decide to actually print more money (this easier done with Computer keystrokes), or shut down programs. Then it becomes a decision of which Government employees to tell to stay home. Could they possibly decide to raise Taxes?–Oh Yes, but only after the whole nation suffers. lgl

A Request

2011-02-15T12:29:00.000-08:00

I listen to my friends complain about current taxation, then I come home and read this! European central banks cannot ease monetary policy, because of the VATs which put pressure on Prices. Trade reduces as a production factor, when and if foreign nations also adopt fiscal restraint. The Fed believes in monetary easing, but Commodity prices are starting to skyrocket. The financial system has not been fixed, and is not back to providing the necessary capital to functioning business; here We are not talking about incentive for new production, just maintenance of current Production rates. Republicans want fiscal restraint, though Britain already expresses some difficulties with the entire Concept, both in Welfare terms as well as economic performance. Everyone parades Tax Cuts before me in the blogger world; no one actually presenting any Studies definitely outlining any great assistance from these Cuts. None of it contains exactly what I want.

I remember back in the old days, some even after the Start of the Tax Cut parade with John Kennedy. I witnessed the Times when the Unemployment rate was relatively high, even after the great Tax Cuts. I agree with economists that there has been a vast increase in the Labor Pool since the initial Tax Cuts, and that the expansion of the economy has been massive. My trouble sits in the fact that the economic expansion has not been relatively consistent, at least not to the Point where the Tax Cuts can find any statistical validity in raising the Employment rates–either alone, or joined at the Hip with Technology and Infrastructure development. I ponder on this, and desire specific economic models to answer some of the Questions I possess.

I would like some keen Economics Dept. to develop a Model combining the rising pattern of GDP since 1945 with the growth of Tax Receipts throughout the entire Period. It would delight myself if another line was added for the growth of State Tax Receipts throughout the Period, and even throw in the growth of Local Government Tax Receipts during the Period. I would also enjoy a second economic model detailing the separate impact lines of using the current GDP with different tax structures of 1945, 1950, 1956, 1962, 1965, 1972, 1980, 1988, 1992, 2000, 2005, and 2010 in term lines of total Tax Receipts which would have been gained from each Tax structure. These models would be great to overlay the growth of Government Expenditures–Local, State, and Federal–over the same Period. We could finish with an Overlay of the statistical growth in the Labor Rolls within the Period. The information would please me to tremendous degree, and could even help in making economic policy decisions. lgl

The Solution--Simple!

2011-02-14T10:41:00.000-08:00

I consider all arguments to be a ‘Tempest in a Teapot’. It is not the proportional nature of the decline, or the lack of such proportion, the reality is a reduction in all Employment throughout the sectors. The Concept that education and retraining exist as Solutions for the Unemployment must be discarded. Economists all look to inflationary Wage rates which suppress Employment. I would rather turn to suppressed Interest rates which holds down Consumer Demand (Most would disagree, simply because they always insist on the inclusion of Big-Ticket items). This I believe is foolish. The suppressed Interest rates support Product pricing throughout all Product lines, and only make a marginal difference in purchase of Big-Ticket Product; here, Purchases stand essentially based upon long-created necessity. Interest rate suppression affects all Product lines, though, and bring Resistence to lowering Product pricing specifically in those sectors of immediate need–namely, Food, Clothing, and Short-Term Household needs. The later sectors are where We get the consistent Consumer Demand volume, and greatest reaction to market demand. Suppressed Interest rates destroy the flexibility of those markets.

The previous contemplated Studies which had little relevance because of erroneous formulation of the Problem; this Post examines a statistical study where there cannot be real benefit to economic policy formation. Two years is too long an interval to expect genuine policy effect; there being far too many forthcoming distortions, while examination over time cannot adjudge the effectiveness of the policy. This means the medium strength correlation is so slight that minimal economic shocks could alter the outcome to a negative correlation. So much of Economics continues to be the correct Outline of the Problems, then essential decision of What is being decided.

I will finish with this Post, which poses the right Questions, but no Solutions to those Questions. The budget deficit will never be resolved without an increase in Taxes. Entitlements will never be paid adequately until the benefits are uniform and limited in total amount per individual. Defense will never become a sound element in a sound budget, until and unless Generals give up their expensive Toys which never work effectively without decades of R&D, and Corporate leadership cannot buy political influence. We need to Downsize the federal government, and state governments, and local governments; ??–even regulatory agencies. We need to do this without getting the benefits eliminated, just the deadweight of excess payments, excess labor positions, and excessively priced supply contracts for Government programs. lgl

History Lesson

2011-02-13T08:40:00.000-08:00

I would in no way think to justify Mao Zedong, a creature of vast evil tendency. I will refer you to this Post, and state all Works cited within it minimize the specter of poor harvests within the matrix. The most humane administration at the times described would have been highly pressured to prevent any Famine from taking place. The China of the Time had low agricultural capacities, degraded Transportation, and few or little Export options. Chinese bureaucracy long held a tradition of refusing Shipments of potential necessary Goods from local Province, and farm families had a consistent tradition of hoarding Supples to later charge as highly for their Product as possible. This was combined with a long history of military and bandit confiscations of almost any needed Good without payment. One has to understand the nature of the Chinese at the Time; Mao possibly was the only individual, or usage of his methods, constituting the sole method to unify the nation. Mao may be Meat for post-condemnation, but every Problem in the China at the Time was not at his inception.

There are much better ways to criticize past leadership, and this might be one of those examples. It sets out to highlight the specific areas where banking leadership deliberately abandoned long-established practice to engineer high Profits for themselves. They did not deny funds to their older Client criteria, they simply opened the Client list to Everyone; no matter the lack of financial solvency involved. They actively decided to destabilize the banking system; after starting their financial careers at exactly the point where Congress was in the midst of the S&L Bailout of the 1980s. They realized when they ascended to Power that they had a vast opportunity to achieve great personal Wealth for themselves, knowing they would get active Salvation when the banking system cracked from Congress and President. Mao Zedong was simply trying to unify a nation, and see it through an economic disintegration. Our own brand of Polecats not only achieved their Mission of huge Wealth, but got the American people forced into paying the residual bill for their malfeasance.

The Reader can ask How I could possibly compare the Two: Our bankers versus Mao. The later killed Millions, but he did build a nation; admittedly according to the wrong Rules, with its eventual failure. Our bankers only stole Billions of Dollars, swiping out family fortunes, and creating conditions where those fortunes cannot be rebuilt easily; all at the expense to American Taxpayers. Mao is dead now, and cannot come again. Our bankers are alive and well, fully stocked, capable of a repetition of the Theft of yore. Who do you think is in better position: The Chinese people, or Ourselves? lgl

Bingo!!!

2011-02-11T12:24:00.000-08:00

The Republicans are trying to right a sinking Ship without throwing any cargo overboard. They want everything untouched which pleases them, and will junk anything from which they do not directly benefit as a Class or personally. Catherine Rampell hints at the idea these Republicans may lack for foresight. Almost every household utilizes Medicare, dito for Student loans, Home mortgage deductions, Unemployment Insurance upon need, and any Veterans’ benefit which apply. They are allowed Investment Tax Credits, and chose to place their pre-School children in organizations drawing assistance to defray the Cost of this baby-sitting. There is no comfort for Anyone who would champion Cuts in these programs.

I think the Problem should be approached differently. I once heard of a thing called ‘Spanish Casino’ or ‘Spanish Bingo’. I am not saying any Casino ever used this system in the World, or ever will; I am simply saying I have heard of such a system. The Rule of the Casino is that no Player can cash out more than a set amount of Chips per evening, except for the additional replacement of purchased Chips which were Signed for. The Players could play as long as they wanted facing the House Odds, but could only gain the stipulated amount per night. There was always sufficient Casino surveillance to ensure that Players were not cashing out each other’s Chips. Such a system could be adapted to suit both Republican and Democrat needs.

We need a law which states that no Citizen or Resident can draw more than a set stipulated amount in Government benefits per year. This would call for a universal Check-Writing Agency which Local, State, and Federal payments are made to the Agency, which issues all Checks to the individual Citizen or Resident. A stipulated maximum amount shall be established for every Citizen or Resident that can be drawn per year; anywhere from $35k–$85,000. It is a rigged Game where any amount left unused stays with the House. It helps with the Tax load somehow. It also helps if balancing the budget on every level is mandatory as well by federal law or Constitutional Amendment. This is the beautiful time where Congress and Legislature gets to decide what Tax remissions are for the good of the Republic, and which are not! It is a positive system which will work if only utilized. lgl

Principles of Pure (Uncorrupted) Keynesian Policy

2011-02-10T12:11:00.000-08:00

I decided to arouse the ire of economists and business leadership today, basically because the economic student needs an alternate explanation of What is going Right, and What is going Wrong with the current economy, and some suggestions as to Why these effects are in force. I made this weighty decision, then decided of course to go off Topic. I leave to my Readers to wonder Why this be the Case, and its importance to the issues at hand. Here resides my Concept of genuine Keynesian policy, and Why almost All policymakers would disagree with me:

1) Pure Keynesian policy will never allow disruption of Consumer Demand. This seems simple in statement, but vastly complicated in actuality. Keynesian policy is in direct contradiction to Monetary policy on this Issue, thinking that screwing with the Interest rates suppresses the natural purchase pattern of the older generations, while artificially inflating the Pricing of alternate forms of Investment other than traditional Savings in Banks. The Elderly curtail their purchases by as much as 40%; Investment instrument markets are skewed, with elevated Profits and Losses occurring simultaneously with not real increase in hard capital investment; and Banks find themselves short of Cash and fearful of extending Credit in the normal outlets traditional to Banking.

2) Pure Keynesian policy should know better than to protect or promote business Profits at any juncture. Loss of business Profits remains the real driving force behind business management improvement and technological innovation. Protecting and supporting business Profits only means that continued poor management and production practice will still be with Us. It is also a Truism that Business will not invest to greater degree within their own sector, if current Consumer Demand for their Product is being met with sufficient Product. This leads Business leadership to turn to already inflated Investment instrument markets to produce Profits, and inciting an paper investment bubble; this bubble will burst to huge losses if hard capital investment does not match the funds coming into the paper markets.

3) Government fiscal policy is extremely important to pure Keynesianism. It is here that Keynesian policy splits off from business leadership. The later would desire increased heavily capitalized Government projects employing their specialized expertise and Profits ratios; able to pay for their highly-skilled labor. Pure Keynesian policy knows that What is needed consists of mass labor employment at Minimum Wages levels of a vast segment of the labor force. This means there will be continuous search for better Jobs, high increase in Consumer Demand per Dollar spent on Stimulus Hiring, and an upgrade in actual Job Skills for Those employed by teaching organizational and Production management skills. There are any numbers of potential mass labor endeavors to chose: I like military reserve training, but One could chose brush clearing in Fire areas, planting of Trees, Clean-up efforts ranging from suburban and urban clearing of garbage and trash to refurbishment to homes for the Elderly.

I could possibly pick out other elements which prove current policy is deficient in actual economic stimulus, but I have named the essential Three. They will need to be worked upon before We witness improvement in our economic fortunes. lgl

Read It and Weep

2011-02-08T09:46:00.000-08:00

I went yesterday into How Tax remissions eliminations do not directly impact economic growth rates, suggesting that Tax rates need not be raised; that only wildfire tax exemptions and reductions need to be eliminated. Mark Thoma today outlines How the economic recovery can be hampered by the Cost-Cutting efforts at the State and Local levels of Government. Conservatives seem to have conquered State and Local levels of Government, and have chosen an economic policy favoring Tax Cuts over retained Spending on these levels. I do not believe this is the proper economic policy to follow, and suggest that serious economic evaluation should be brought to bear on this area.

I advanced an hypothesis yesterday which stated that Consumer Demand showed no Sign of reduction when overall taxation was less than 25% of total Sales transactions. This is commentary on all taxation on the Products, and is an area which should be studied. This is setup for a necessary secondary analysis, questioning whether State and Local taxation have been reducing as a percentage of taxation on final Sales transactions. It is inconceivable that States and Local governments could maintain a stable Budget performance in past decades, but now finds itself in such dire straits. Only two conditions could explain the Situation: State and Local governments had splurged into a huge increase in Spending; or two, these governments have been surrendering their necessary taxation rates to maintain integrity.

The Conservative movement has been producing reduction of Tax receipts at every level of government, and everyone have been watching the deficits pile up. Conservatives utilize what is basically corrupted Keynesian policy to justify this reduction of Tax receipts by claims that it stimulated economic growth. I asserted yesterday that there may be some gain from actual reduction of Tax rates, but this is still to be proven when total Taxation of final Sales transactions remain below 25%. I also proposed that Tax remissions and reductions did nothing for economic stimulus; here, We must examine whether is produces more economic growth than the Cost of the stimulus, considering the financial cost, the pressures on the Price schedules of resources consumed, etc. I contend that such Tax activity does not advance economic growth, and eats up necessary and beneficial Tax revenues required for actual economic stimulus. lgl

The Tax Accountants suggest Lynching

2011-02-07T10:42:00.000-08:00

I like an honest man who will admit that he cooked the books. Economics creates the land where fairy tales may come true; such as Tax rates basically alter the purchase patterns of Consumers, especially in the existence of serial Inflation. Consumers buy their Products because they need or desire those Products, and there will never be a direct correlation between Tax rate and purchase decision. I bet my Readers are now contemplating I am about to start a tirade to insist that Tax rates are more sporadic in design and force. I am not, though there is a good argument to be made on that point.

I am going to generate a sleight of hand, and attempt to cook the books for my own thought pattern. Tax rates are relatively non-reactive in the Markets, if they are set at reasonable low levels; here I am talking somewhere below 25% of the price of total value Transactions. I say this to outrage Economists, before heading totally off-tangent in a new direction. The subject I will talk about is the total lack of impact of Tax remission eliminations. End-Consumers must pay for the full value of the Tax, whether there are reductions of that Tax for the Producers in gift deductions; they not affecting the Product price at all at the primary point of Sale. There are very good arguments for suggesting there is much provisional restrictions on 2nd Generation of Production provision, though even these are somewhat hollow as most Business wants to stay in business, and alternate production is always capitalized if there is unfulfilled Consumer Demand.

Here is where my argument gets highly contemplative–this means a great lack of Proof, and some degree of Doubt. I suggest that Tax remissions, increasing or decreasing, do not affect Price scheduling in the slightest. Product Prices are determined by the Tax rates, and Business does not pass on any Savings from Tax remissions back to the Consumers. I am so clear in this belief that I would claim no alteration in Price schedules after elimination of Tax remissions due the actuality of competition–both domestic and International. There I have proved the two main elements to as great a degree as I ever devote–no unfilled Consumer Demand, and no alteration of Prices higher or lower–after elimination of Tax benefits to Producers. I await the screams of my fellow Bloggers. lgl

Government ability to destoy your efforts!

2011-02-05T11:40:00.000-08:00

I basically agree with most of this, but have some serious reservations concerning the material. Here is where We enter the debate over farm subsidies. One should first know that I myself came from a farm family, and live in an agricultural community. I will go even farther, and state that much of the industry of my city relies on ethanol production from a local Plant. I will go further out on a limb, and suggest that guarantees of Income for farm families and agribusiness is in the nature of life support for all of Us. This all said, I do not believe that farm subsidies should be based upon production crops, but on the after-Cost Incomes of the Participants. Price supports for specific Grains, or Price supports for their conversion usage, simply forestalls the market adaptability as expressed by Price changes. We should keep the poor farm families from getting Poorer, but We should never allow for the Rich to get Richer by Government support systems; especially when it distorts the market system for the Products.

Here is another Case where Congress works through Government activity to help the Rich to become Richer. One group of people want to charge royalties on use of loopholes in the Tax Code they find. The other group wants to fully utilize the loopholes found without payment of an excess charge for using that loophole. All such Tax strategy Patents should be denied because of the ease of Discovery of the loopholes, but almost Everyone wants the Patent system maintained, at least for the Patents which they currently hold. This could all be resolved by altering the Patent laws to signify the magnitude of the royalties for which any User can be legally bound by the issuance of the Patent specific. Congress, though, will never accept that Individuals and Business cannot forestall economic innovation through the simple process of demanding Windfall Profits on an idea in the first place.

A final look at Government interference with the natural flow of Business comes here. The interesting fact one should witness here relies on the fact that it is not the Business responsible for the Unemployed who are charged with the Tax increases, but the ones still trying to maintain a labor force. The bill for the extended Unemployment should be thrown back upon the initial Employers, not the current Employers who have their own problems with maintaining their Employees. Some would call this ex-Post facto taxation, yet their action of yesteryears caused the welfare liability today. Is it so much a taxation, as it is a replenish able Fine? The transgression does not reside with the current Employers, so Why should they pay for the misdeeds of Others? lgl

Reality which must be given birth

2011-02-04T13:23:00.000-08:00

I bring my avid Readers to this Post, which is testimony before Congressional Committee; the graphs constituted to provide substantive defense from denial of the information. It indicates that We as a nation are going bankrupt; my current estimate (remember the unreliable mine) suggests that We would need an additional 16-18 million Employed working full-time in order to cover the deficit under the current Tax rates. The Unemployment rate stays persistently at 9%, the terrible triple three, where it has remained too long. It is also not lack of liquidity or finance, as most small bankers have complained the major difficulty in extending Credit comes in Consumers’ lack of participation, and businessmen asserting that they have sufficient capital to meet current Product commitments. The most bullish of economic estimates will go on Record only with the Tax Cuts providing at most a 2% Unemployment relief through the Intermediate Term. Tax Cuts have did nothing for the economy, and soured the temper of all Americans. It is time to tell the lobbyists to ‘Kiss our Grits’ and raise an equitable amount of tax revenue.

There are Those out there so in the Dark that they don’t know I mean raising Taxes. I would far rather do this by eliminating the Tax Dodges from the system, than go into raising Tax rates. The trouble comes in that these Tax exemptions are so shelved that it hurts the lower-range of Taxpayers far more than the Wealthy. This means that the major benefit from such a Tax Dodge goes to the Wealthy, but the Poor Taxpayers complain about losing piddling amounts maybe up to a 1k of Tax burden. The Wealthy think they have blocked any action, but there are reparative methods to the Problem.

The method that I prefer is legislative action to make all Tax allowance, Exemptions, Deductions, and Tax Credits progressive in nature. Remember that I want elimination of all these discriminatory allotments, but when this proved impossible; you make do with a cheap fix. I immediately call for a Tax law revision which insists that all such remissions of taxation must be Progressive. I will extend a list of my placement:

0—$50,000----------100% deduction
$50k–$100k----------80% reduction of tax
$100k–$500k---------50% reduction of tax
$500k—Infinity-------0% reduction of taxation.

My Momma always said I would one day be assassinated, but she didn’t wait around to see if her prediction turned out True–got tired of waiting, I guess. lgl

Truth in Discussion

2011-02-02T13:14:00.000-08:00

This is a good example of the majority of economic thinking, without the humanist chatter which is most often added to express some caring nature. I read the Post, and ask How the Answers could be so critical without provision of additional information. I need a Spreadsheet containing the specific Production Costs and their alteration over time. Here are some of the Questions I would like answered:

1) Has the Cost of Labor been rising in relation to total Production Costs in the industries discussed? Or has it been decreasing in percentage terms?
2) Were the Pension funds involved fully funded, and if not, why was there not adequate funds sat aside?
3) Has the Pay Packages to Management absorbed any reduction of Labor Costs which might have occurred over the extended Period of Time, and if so, how much was absorbed?
4) Has the debt of such industries increased over the Period, and if so, was that debt raised to fulfill Labor Costs or Pension benefits derived from that Labor?
5) Is there indication that Management has been paying themselves excessive Pay Packages, possibly coming from refusal to fully fund Pension funds?

There are many more Questions which could be asked about each industry or organization cited in the Post, but the only element consistent in the past history is a steady reduction of Tax revenues coming from such enterprise; though Peter sought to mention the inability of Labor to pay for the Government services deemed necessary in the Government agencies discussed. This bothers me somewhat, as I wonder Why Labor Costs must always seem to pay for themselves, while Tax Cuts are never required to pay for themselves in increased Production, or does Management fees see need to be justified; this in a context where they are the fastest increasing Production Cost across almost every industry. lgl

The real impact of Tax Cuts

2011-02-01T11:34:00.000-08:00

I read this Post from Tyler Cowen, which leads me back to this Post from Paul Krugman. Cowen suggests that immigration has little to do with median Income stagnation. Krugman would have Us believe that Inflation has nothing to do with Commodity Pricing. Krugman takes the Phelps position, and contests that Wages are the ultimate core price mechanism without resort to Commodity pricing. Myself, I can only see two things which could create the divergence between the rapid response of Inflation to Commodity pricing in the 1970s, and the expressed lack of inflationary response of Today. The first possibility is the widespread development of Consumer Credit and its consistent use, and the second possibility stands as the alteration of the Tax system in force.

The development of Consumer Credit seems more a response to the need for Consumer Credit, than it does a propellent of such need. I would at least like to believe that people would not propel themselves into debt except that they could not maintain their lifestyle and commitments without assumption of such debt. The only way they would need this accessary source of Income was if something had curtailed the natural flow of Wages coming their way. This is to say that the wild swings in Commodity pricing propelled their thrust into Consumer debt, the underlying cause being a stagnation of Wages.

This leaves Us with the Tax system currently in place. We are in the land of Tax Cuts everywhere, though no one ever presents solid Proof that it actually provides economic growth. They never seem to be reversed under any circumstances, even to Cities, States, and the federal government potentially falling into debt Receivership. Why there is such commitment to Tax Cuts is another Story which may be brought up later. I am trying to discern what impact that Tax Cuts could possibly have on Wage stagnation. Tax Cuts grant business leadership a greater retained amount of business Profits after Wages have already been paid. This is a distinct advantage to business leadership, since it greatly enhances their own economic position and status. Here is the element in Question: Does business perceive any heightened advantage to suppression of Wage increases? I submit that they do desire an increase in after-Cost Profits, now that they can personally keep a great share of the after-Tax Profits. It takes little visualization to view business leadership as the enemies of both expanded labor force and Wage increases which would seem natural given the volume of Production. This is what I believe holds the real impact on Wage stagnation and suppressed Hiring. lgl

The Called Strikeout Rule

2011-01-31T13:04:00.000-08:00

Everyone shakes their Heads at the federal budget, All acting like there is relatively nothing to be done about it. This is not the Case, and what is needed in a rise in Tax revenues not based on some magic economic growth which never appears. I am not sure about the Numbers on all this, but the current Round of Tax breaks to Business since the last Downturn would require a economic growth rate in the high 7s percentile for approx. some Six years to make up the lost Revenues. Everyone spouts that We need all the Tax Cut stimulus to reduce the Unemployment Rate, but even the CBO states it all will have only marginal effect on the employment; meaning less than 1%. People, I guess you can call Politicians people, all swear to the Skies that no one could get any increase in Taxes. I will remind my Readers that Politicians are paid to carry their Views of the World.

Readers have asked me How We could bypass the entrenched lobby of the No New Taxes Conservatives. I recall an old Concept whose time might have come; it is called the Called Strikeout Rule. It is a Way to get around all those bunkered special Tax exemptions and Credits. It is a simple law which can be easily understood by the majority of people, who can thereby insist their legislators adopt the Rule into law. It simply states no one in a higher Tax bracket can pay less as Tax, as had the highest amount paid by any Taxpayer within the next lowest Tax bracket.

The Called Strikeout Rule says not only that special Exemptions to Taxes can be ignored by the IRS, but also; it specifically outlines that it matters not How excellent the Tax preparation designed for tax evasion, it must conform in payment to the worst Tax preparation of the next lowest Tax bracket. Now I know that most Taxpayers will not understand the demonic aspect of such a simple law, though the Wealthy will understand hardly without Words. Loose adherence to such a Rule will raise Tax revenues by about 11%, while strict obedience and compliance is estimated by myself to potentially double the current Tax collections. Pressuring for such a law should be the profound duty of any Taxpayer tired of watching the Rich get richer while the Taxpayers are still paying the same old taxes. lgl

My View of Tax Justice

2011-01-29T11:13:00.000-08:00

Greg Mankiw presents a very good video on Taxes, which is fair and balanced; rendering a good expression of current sentiments on Taxes. He labeled his Post ‘Tax Justice’, and therefore it behooves me to render my own version of such a Concept. I would like to assert foremost that Tax simplification is the biggest item on my agenda. This first calls for all Income to be labeled as Income, with no differentiation or freedom granted by such from tax assignment. The ‘Flat Tax’ of Steve Forbes leaves me somewhat cold, as this leaves the Wealthy free of a normal assessment of Taxation based upon ability to earn more than their Neighbors. The common Progressive Income Tax also leaves me cold, due to the steady erosion of impact due to Tax concessions remanded into law. This entire system of Tax remissions leads me to condemn the entire tax system as prejudiced and discriminatory.

I believe that there should be a ‘Flat Tax’ assessed on all Income without remissions. I believe that the Tax level should be universally 12% of Income. I will further state that all individual Tax contributions must first be directed to the Social Security General Fund until the maximum payment level is met, or until the Tax requirement is paid. Past this Point in fiscal minimum, some 3% of total Revenues shall be paid to the States in substitution for a Sales Tax, and 2% of said revenue shall be directed to Local Government in lieu of Property taxation. There is a reason Why I set the base rate so low at 12%. The next paragraph will bear on this discussion.

An additional Tax increase of 1% of total Income will be added for every $10,000 over $30,000. This means that any Income over $30,000 will pay 13% of all Income, over $40,000 some 14%, and through the $10ks until a rate of 35% will serve as a maximum where Income of any source equals $350,000 per year. There is to be absolutely no Tax remissions of any type–even including Personal Exemptions. Inheritance Taxation will be at 35% starting at an initial excused $3 million dollars per heir. There will be no Investment Credits or Tax reductions of any kind, and little need for detailed Income Tax returns. The States and Local Government will still be free to impose any Property taxes they need, as well and licensing fees etc., but no further Sales taxes. Business, Corporation, Partnership, Sole Proprietorship, and Charities will face the same Tax rates and lack of Tax remissions. Churches will only be taxed on Collections that they advance to higher regional networks greater than a parish or congregation level. It is my View of Tax Justice. lgl

Anti-Business Tirade and Boxing Day!

2011-01-27T12:40:00.000-08:00

I herein state for Full Disclosure and Clarity that I only watched a sufficient minute amount of the State of the Union Address to claim to my Democratic friends that I had listened to him; and little enough to please my Republican friends who desired I not listen to propaganda–by their definition. Then I read this blog Post. The Part which interested me the most was this Statement: "put in place over the last two years about the most anti-investment, anti-business, anti-Jobs regimen that we have probably seen in the last couple of decades." Now, I have some difficulty with this Statement. I do know that the Bush administration did implement the beginning of ‘Save the Country for Corporate America’, but Obama has not strayed far from that path. It amazes me that Corporate America could not cease the registry of Profits throughout the worst ‘Recession since the Great Depression.’ It did require the Fed to purchase a Trillion Dollars of Debt, and all sort of guarantees of Protection for the financial world. We did occasion a multitude of Home Foreclosures–for which Mortgage-issuers were protected from harm by Fed caress, and vast losses from individual Stock and Bond Holders, who were promised by Corporate leadership that, "there would be only minor Dividend payments, and Stockholders would gain when Stock Price went up, and Corporate leadership could sell their Stock Option and Stock Grants at prime price.’

Small Business is indeed suffering great distress from the Recession, finding it hard to sell within empty subdivision housing. Luckily, such great franchise Retails as Walmart, Target, etc. ad infinitum, get sufficient Tax Breaks as to ‘Last the Course’. Service Providers find there is a depressing lack of Sales, though they can be upbeat by the number of experienced Job Applicants who apply regularly; though many have limited experience in Service provision. All in All, I think Most of Us are awaiting the absorption by Small Business of the huge Corporate Layoffs created by the ‘Recession to end all Recessions’. It could be long wait, and Corporate America is getting tired of paying Unemployment Benefits from a fund which they functionally ceased Contributions into when they laid off their personnel.

I decided to provide a true anti-investment, anti-business, anti-Jobs regimen:

1) Congress pass a Minimum Property Tax which must be paid to all and every State by every business in the Country; every State allowed to increase but not lower the Minimum rate.
2) All Business entities must pay at least 30% of their nominal taxation rate, even if they can find a multitude of Tax remissions from that rate.
3) Financial institutions are forbidden to seek or accept any Tax remissions of any type; the Thinking here states that if We have to guarantee their Profitability, they can pay their Taxes.
4) Congress passes a law which states that any Small Business denied Credit by a financial institution must be reviewed by the Federal Reserve in the area, and if the Fed determines that the Credit should have been advanced, then the financial institution will pay the Fed 1% of the value of the Credit as Fine for negligent practice.
5) Congress pass a law bringing ‘Boxing Day’ south from Canada, and every Individual making over $1 million per year must wear a Jester’s suit on December 26th of each year, else be fined one-quarter of all Tax remissions granted to them for the year. lgl

Through the Lookling Glass, Darkly

2011-01-25T13:33:00.000-08:00

A dastardly unkind Sprite asked several vitriolic Questions about my poetic elegance of yesterday’s Post. I will give several Examples of errant Wrong:

1) How can Keynesian policy avoid excessive Government Spending when the real levels of natural Consumer Spending cannot be found? Here he asking How such can be determined, when Hundreds of good economists find depressing poor Results at measurements over the general field. I told the Dolt that One does not need to discover the natural level of Consumer Spending; simply utilize the principles of Minima and Maxima. The Grasshopper would not learn, and asked How such could be utilized. I replied that all Government Spending should be centered around payment of Minimum Wage for Government projects, employing as much unemployed labor as possible. The poor unlearned Soul thought for a moment, then asked How any Projects could be completed using Minimum Wage labor, when modern practices required specialized labor to operate mechanized construction and production. The Claim was that no one would work Minimum Wage labor when highly technological advances had been made. I responded as best I could, saying that the Army Engineers (note I did not say Corps of Engineers) could operate the complicated machinery, as they were already being paid by the Government, and did not have much else to do anyway! My Critic sought to expand upon his diatribe, but I cut him off; some threats of Hell and Damnation!

2) A second imprecise Reader of my lofty words essayed as How One could determine a failure in the economic signal system which they questioned that the Austrians even advocated as infallible. I easily broke such Protest, saying that any higher proportion going to Base Resources and Mining than normal for a certain level of Production fulfilled by Consumer Demand was distortion in the signaling system of the economy. Austrians estimate that there is an automatic leveler in the Interest rates charged, and this does do it, but only after there is much Unemployment across the entire reach of the economy. Someone asked Why there would be such a lag in the signaling system. I replied that Interest rates are not actually set by markets. They are determined by corporate schedules designed to attain the greatest Return for their institution–in this case Lenders. I grew expansive at this point, and stated that certain economic studies produced sometime, somewhere (my imagination or in the 1970s) that found that Corporate Pricing was 8% stickier than were Wages through the Periods studied.

Further Questions were asked, but they became so complex that I would wait until later to find a relevant Answer defending my position; myself confident in my eternal rectitude. I sent them all packing, and swung open my medicine cabinet door. lgl

(only Some of Us consider that this happend in reality)

You can get Angry now!

2011-01-24T12:15:00.000-08:00

One should not pretend to understand all of this, but One should integrate that the Austrians are right about Interest rates, and their ability to act as a Governor placed upon Consumer Prices. Keynes basically argued for replacement Government Spending to replace loss of Consumer Spending in deep recessions; it took the Monetarists to actually propound that you could get the same effect by monkeying with the Interest rates. I think Keynes and the Austrians were right, but only within limits. Keynes assumed one could increase Government Spending greater than the replaced Consumer Spending, which could not be done without long-term ingrained Inflation. The Austrians assume in error that Consumer Spending cannot fall below a level which will generate a sound economic signal system, which it can. Thus, we have three Views of the economy, all of which are in some ways wrong.

I promised myself I would not enter into Surge pressures on the economy, which will alter Consumer Spending totally outside the restraint practices of the Austrians. They assume every natural effect has a natural economic response, which is assuredly not the Case. Monetarists actually see nothing but the Surge effects of action upon the economy, ignoring the natural flow which cannot be sustainable suppressed over a long-term Period. Keynes recognized the Surge reductions in the economy, but would not admit that Government Spending could not exceed natural Consumer Spending without equal distress to the economy; all within a context where Consumer Spending was considered natural at the height of the last Boom, a completely farfetched illusion.

No Government action is better than misjudged Government policy, so the Austrians are correct on this Score. This is not to say that no Government policy is economically sound for it is not! My economic view differs from all three cited. Central to my View is the idea that one of the real reasons for the lasting impact of Recessions lies in the unequal impact they have on the fortunes of the economic participants. Government policy should be taken to ensure that all Participants share in the retardation aspects, as well as in the Booms aspects. This means higher Taxation for the Profits which do exist, and not necessarily by higher Tax rates. My Thought of the Day is that for every 2% increase in the Unemployment rate, that a Surtax of 10% should be placed against all viable Deductions, Exemptions, Credits, and other Tax remissions which are not Personal in origin–the later like Personal Exemption, Dependent Exemption, Household College credits, etc. This would be applicable to both Individuals and Businesses. This not only has the benefit of paying for Government Spending and reducing the Deficit, but also insists that all economic participants work harder to maintain their own personal standards of living. lgl

Off-the-Wall Solution

2011-01-22T09:40:00.000-08:00

I would call this Numbers Mashing, though it has clean lines and details. I would suggest that the projected Growth of last year was the Inflation which the Fed stated did not exist. It is the Answer to rising Wages in the face of maintained Unemployment. I read in another article which I did not source link that Consumers made a further Dip into Savings of around 1.4% in the last year. There will not be a 4% increase in personal consumption expenditures if the diet of Savings consumption is used. Housing was down 5% last year, which I have always believed would stabilize around 2005 Price levels. Monetary policy may support the economic recovery, though I imagine it only supports adverse Past debt loads for lending institutions. I personally expect an economic growth rate of less than 3% for the coming year, with slightly worse for the following year; I fell that the American economy has reached its Peak, what with the start of Retirement for the Baby Boomers. I know that the Unemployment rate will only decrease with their Retirement. The Fed cannot have it both ways in the final analysis, and economic slack will not hold down Inflation; economic growth as stated must generate the Inflation. I think it will be a real bitch by mid-Summer.

I may have a radical Solution for the President to help the Job Market; by the way, I am scalping all these links from Mark Thoma. My Solution will seem like a really incredible Solution, until it is examined in minutia. I would call this the Forced Retirement Act. This would take the decision to Retire away from individual Labor, and place it in the hands of current Employers. Anyone over the Age of 55 could be forcibly Retired if their Employer wished to replace them with younger Labor. Social Security benefits would be calculated as if they were of Age 65, but on current Worked Quarters. I can just see the economists jumping Up and Down out of outrage.

The Pressures on the Social Security Fund would be immediately accelerated admittedly. There would be constant and raucous complaint coming from the forced Retirees. There would have to be allowance for forced Retirees to attempt employment elsewhere in the economy; and consistently, allowance for Anyone over Age 55 to retire voluntarily. The Upside would be that the already Worked Quarters would be at cheaper rate than Now or in the Future; with allowance made for current unemployment due to the Recession so that Retirees are not penalized. Vast numbers of Job positions would be opened up, and at downsized Wage levels. More People would eventually be paying into the Social Security Fund against a lower liability. Retirees would start on Retirement practices far earlier–leading to an increase in Consumption Spending without dependence on further erosion of Housing Prices; new Start-Ups of retirement homes could restart the Construction industry. It is a Win-Win in long-term fiscal budgeting, and a source We should consider. lgl

Mode of Attack

2011-01-21T12:33:00.000-08:00

I fear that Arnold may have missed the real Cost of Corporate Power which is not the longevity or duration of their impact, but the fact that our Congress, Legislatures, Governors, and Presidents are for Sale. It also does not matter exactly What Corporations are buying at any given point in Time; it is simply that it is the creation of a political system where the Will of the People is defeated in the money-making interest of Corporations and Business. I watch the Scene playing out, and have only one Solution: make all political contributions subject to the highest rate of Income tax applicable–no matter Where or How it was generated. I am quite sure the average Taxpayer would accept a $.40 tax on his allowable Tax Form allocation of a $1, if the Corporations were charged $40,000 for their $100k funding of a PAC. This could indeed level the Playing Field, and perhaps give a little aid to the Budget Deficit.

I commend this Post in the spirit of the above message coming from Donald Marron. He is somewhat altruistic, though We can pardon him as such for a excellently written Post. It all comes down to the Money, Honey, and exactly Who gets it! The Health Care industry will not abide a reduction in their Share of the Pie, and will literally spend Millions in political contributions to assure that it does not lose an iota of their Gains. On the other Side, WE have a President and a shrinking group of Democrats (the political Cash is corruptive) who actually worry about deficits. The People want more health care benefits, but less Taxation. How will it be resolved? What can the President do about it?

My policy recommendation would be for Obama to directly ask the Congressional Budget Office to establish a Model outlining the real rate of Taxation for Taxpayers if health care Costs are considered a form of lifetime taxation. A number of models (at least Four) need be compiled: the Fate of Taxpayers under the old system prior to the Obama health care reform; the Fate of the American Taxpayer after passage of the Obama health care reform; The Fate of American Taxpayers if the current Republican legislation is passed; and the lifetime Tax of Americans if a universal health care system was introduced. I would advise Obama to start utilizing the Results of these four Models to counteract the Republican sentiment in Congress. lgl

Where were you the day. . . .

2011-01-20T09:15:00.000-08:00

One can read this Post, and decide to discount the material. It stands as True that Norway has lower Population concentration, more highly-skilled labor cadres, no real Immigrant problem, and a philosophy of communal welfare; coming originally from the direct threats imposed by a dire climate inimical to human life. It still also stands as True that the Norwegian economy possesses far greater stability than the American economy, and such stability extends throughout the economy, not just the business structure. It is also instructive that the last real advance of the American economy came following a large Tax Increase; Boom and Bust cycles occurring with greater rapidity after periodic reductions from this Tax Increase. It can almost be claimed that Tax Cuts simply allow for the creation of Bubbles.

You can combine the previous Post with this One, and ask just where is there any expected Stimulus. Violation of strict PAYGO leads to increasing deficits, increased Debt Service Costs, higher Resource Costs to Producers with Government competition; all while the greatest segment of Income in American society is taxed less and less. Congress will not cut their Spending habits, apply heavier Taxes, or cut Welfare benefits. It works relentlessly to bankrupt the federal system, while still making a Profit for their own Class of Wealthy in the interim. A less gentle Soul than myself might even call for Treason trials, especially as the United States could easily pay for their Expenditures.

I must first say I applaud this lady, and wish herself and her program a good and fair Hearing at Davos. Then I ask myself if this kind of upbeat, illustrative American rationalism is what the United States is sending to Davos. We have massive problems which will not be resolved with Good Will efforts which do not meet the Needs surfacing throughout the World. Governments are the biggest Spenders in the World today, and rarely utilize small Business to fulfill their desires. We send Spokespeople who cant about improvements in a marginal sector of Production, while We need an Overhaul of basic budgetary systems. There are a lot of people trying to join Nero on the balcony (I know that he was not even in Rome when it burned!). lgl

Patents and Tax Farming

2011-01-19T12:33:00.000-08:00

There remain simply too many Patents out there for anyone to keep track of, so now IBM requests a Patent for a program to keep track of the Patents. I have stated previously, and will reiterate, that there is a very simple Solution to the whole Problem. Patents are a Public award, and should never have been implemented as an Award system without definition of the magnitude of the awards; based upon a per-usage rate, combined with the cost of development of the technology. The Government that initiates the award has inherent right to determine How Much is to be gained from the award on a Piece-rate basis.

There implications of the system of Patents go way beyond a simple guarantee of Profits. Some will think this argument to be spacious, but it is very real when it comes to adding up the Money. Patents are a form of Tax Farming; an old Roman system where Senators bid on tax collection among specific provinces of the empire. The highest bidder in the Senate was awarded the right of tax collections for a province, then could impose any Tax rates he desired to raise the amount of funds to pay the Senate contract. Needless to say, Tax Farming made many Senators rich, and impoverished many provinces. Then the high bidders had the Roman Legions to impose their Tax rates and Collections; today, many utilize the power of the federal Courts to enforce Patents. Often the rates stipulated are equally as usurious.

I could easily attest that the American bill for Drugs and Medical Equipment would easily be cut by 35%, if judicious use of listed per-dosage or usage rates were imposed when the Patent was issued. Remember this is not to say that medical research would remain adequately funded; it only says rates issued to allow Americans to pay for their Drug Costs would lead to reliance on equally as efficient older Drugs or medical practices not continuously under Patent. I could easily also lay claim that Technical Software and Hardware would again be adjudged for its life expectancy, not by specifically-designed Software to cut older equipment from the Communications network. These are Changes which would remove Patents from the arena of Tax Farming, and would generate a new business mode for economic growth. lgl

Idyllic Dream as Nightmare

2011-01-17T10:23:00.000-08:00

I read this Post, and think about What type of explanation for Government I would use to explain to small children. This did lead me far afield, which I will outline in a minute. My definition for the children comes first: Government is the argumentative manner adults decide who gets to work at what essentially without fighting, choosing one set of people to be in charge for a specific period of time, then picking another set again for the next Period. This cuts down on the amount of time which people can argue and fight. Adults will probably choose the same people to lead for a second period, if they worked out well; the adults choose another group if they did not!

I study on the two definitions, and things pop to mind. The first thing I consider is the fact that Government should spring from the base upward; there should be no pressure from the Top exerted on the Bottom. The second thing which springs to mind consists of the fact that there should be no increase in Power granted to leadership as it does rise in position. The third thing enters in that the elected people should not have greater power to get out their message than their Opponents or lower Ranks. I am starting to get the concept of a Revolution in the Making, and it is one which will be opposed by the leadership.

I think I will start with Taxation. It will be changed to supply what is needed, not for general programs. I will start with Police, Fire, and City Services. A law will state that every block must employ 1 trained Police Officer, 1 trained Fireman, and 1 trained City Maintenance Worker. These Employed will be expected to work anywhere in the City or governing jurisdiction, but each block must come up with the funding. I would suggest that every business block must come up with 3 of each category. It will clearly be evident that these Services will soon privatize, as Business will notice the advantage of getting into the business of trained labor supply; it also getting cheaper under business competition. It will work likewise going upward through the levels of jurisdiction–Education, Welfare services, litigation, and Defense handled in the same manner. Each Household committed to a set payment of taxation, which Business competing to gain the greater share of the funding. Households and Business organizations having an additive level of specific taxes they must pay, and which they are quite capable of complaining about. There can even be an Infrastructure Tax of set limit, which must be spent in the expansion of social access. It is a much simpler system than the current types of taxation, and far easier to contest. Variations of the set limits of Taxation can even be altered to suit the level of capital investment in Block or Business. lgl

Different View

2011-01-16T11:47:00.000-08:00

I like this Post for what it does say, but not the reasoning behind it. This always comes out when working with economic models, which is the principle of diminishing effect at the extremes. Paul Krugman states that there is a position at which falling Wages would produce full employment. I contest this view. Current Production factors–We are talking structural unemployment here–will preclude any labor expansion to full employment without real alteration of modes of Production; by this I do not mean labor intensive practices of old. I will try to explain what I mean in as positive a manner as I can elaborate.

We are currently in a mid-technological range of Production; this means there will not be overwhelming investment in new Production facilities until the old facilities are Aged, or a new Cost-Saving technology has been introduced. Management has already learned How to maximize Productivity under this existing technology with minimal labor assets, minimal Operating Costs, and maximum Profitability factors. Business will hire according to the new labor model, not the developing labor model originally utilized to develop the technology. Mass labor is not going to come back to the Production cycle until new technology development is under way; which without new major advance in technology, will only come with the Ageing of old equipment.

We have here a factor which must be understood: no amount of monetary or fiscal policy will alter the plans of Business Management to significant degree to depress the unemployment rate. There is only one other factor which can alter the paradigm, which is to alter the return ratio of Profits to current business formation. This can be done by higher Taxes, placed on the Profits themselves, or on the composite materials and Resources used in current production. I advocate the double approach, and would call for a complete Overhaul of the US Tax Code–basically eliminating all special tax exemptions and deductions; the principle here is that the Tax rates should conform to the natural economic environment, which means ‘Pay as You Go’ Government Spending. This is the quickest venue to impel Business management to seek additional Profits-Making endeavors with heavy employment of labor. lgl

How I get myself into Trouble!

2011-01-14T12:22:00.000-08:00

People have often asked me How I could get into so much trouble, as I do not communicate with that many people. I have a perfect example here! I was talking with two old friends about old Cars. Then I get to thinking about Forklifts, which I used to drive in my younger days. I asked my friends if they know of Anyone in the country who had any collection of old Forklifts that I might examine. Others heard the commentary, and asked Why I wanted to see some old Forklifts. I explained that Forklifts went back to the old Steam Engine days as an industrial equipment, and some designs over the years were quite interesting. People looked doubtful, and I explained the concept of an industrial museum; also stating that as We were situated in a centralized area of the Country, and were a relatively industrialized City, it would be an excellent location for such an industrial museum.

Other people inquired for an expansion of that Concept. I explained that it would be a good Investment for the City, probably bringing in good Receipts from a door charge; this if We could establish a good building and equipment assortment which would require at least 4 hours to preview. I also mentioned that it was a good year to hunt for equipment donations which could be accounted as charitable contributions, while the new Full Costing allowance granted to new equipment made purchase of new equipment cheaper for the companies who gave such equipment. Someone asked How Much I was talking about in Dollar terms, and I stated it could be minimally be done for about $5-7 million, but should be funded at around $15 million.

I heard several snorts of Contempt, so I decided to dig my Grave deeper. I suggested that setting up as functioning equipment displays would serve as a good Educational tool for High School Students, with Syllabus given to Shop Teachers; the later expected to actually teach the lectures. I went further and stated that Companies could also preuse such a museum to teach extended Safety courses capable of getting lowered liability insurance premiums for Companies in the area. I mentioned that We had great labor cadres to fill Instructor positions for such Courses, as there were many experienced Retirees from the local Plants. I finished with a Statement that connection with the local Community College may allow Us to issue a 2-year Degree in Production Engineering. Then I heard the Death Knell of the Issue: the suggestion that I was the obvious choice to head up the museum development. I replied that I am only an idea man, and that one needed an efficient Manager and Cost Accountant to head the Project. lgl

Why do I think I am Right, when everyone thinks I am Wrong?

2011-01-13T12:59:00.000-08:00

I read this fine Post from Arnold Kling, and it starts me thinking. Arnold stipulates much of what I feel at fault with the American modeling process. He, of course, remains a very nice person, while I am not quite the same. His belief in the additional leisure remains correct, but I take a rather dimmer view of the process than him. The current Tax Code allows automatically for increased levels of Wages, even as the level of productivity sinks. I could call for a Tax stipulation that only 90% of paid Wages, Salaries, and Benefits could be deducted if the average yearly Productivity did not match the previous year’s Productivity per Worker. This penalizes Labor and Management for a loss of Productivity.

Labor may ask why I, a strong proponent of labor, should take such contentious position. Here is my basic ideation: The loss of Productivity of employed labor means an easing of Management control over both Production and Costs. It is a basic Means to retain skilled Labor during Periods of low Sales and slack Production. This would seem a great benefit to Business, but is it? Management adopts the easy Road of inefficient Business model, with little exertion to increase Sales or alternate Product. A Recession does not mean Opportunity to take the wife on that long Vacation–basically at Consumers’ Expense.

The need to maintain Productivity levels sharpens Labor Skills, forces Management to examine alternate Production strategies and new Product lines, and rehires unemployed labor in desire to maintain peak Production levels after current Labor tires of the increased pace. The Workweek actually shortens, Labor Rolls actually grow, and Wages per Worker actually go down. Labor obviously will find this unattractive, though the economy will show greater promise. I have always been of the inclination to believe that the economy is better-served by added stress being placed on Management to preform, rather than giving them benefits to maintain their current Work schedules under recessionary pressures. I worry about those current Managers who come in at Ten, and leave at 2:30. I don’t think this was the way the current industrial structure was built. lgl

The Art of Deduction

2011-01-12T06:19:00.000-08:00

I like this article for what it tells Us, not what it doesn’t. It is evidence that there was communal economic activity around 4100 B.C. This stands way beyond subsistence farming. It is advanced technological alteration of basic agricultural product to enhance the shelf-life of the Crops. The size of the production facility almost insists on some form of market structure, as the volume of Product to be handled would exceed the needs of even a small group of families, let alone individual families. The discovery of a leather sandal within close proximity to the facility indicate the high probability of caravan travel, as only Travelers would invest in expensive, durable footwear in the absence of extreme Cold conditions. The indication of market structure suggests a common medium of exchange–or Money. The later would indicate some form of advance Government structure. The importance, here, being the suggested progression from tribal life to village entity, along with labor specialization.

I will now turn my Readers to this Post. One will ask what modern Baseball players have to do with ancient winemakers? It is all a matter of establishment of a Consumption market. The Post concentrates on the impact of high Pay for the best Players on the payment structure of the medium-range Players. I focus on a different aspect: What impact does the high Pay have on the attending Public? It is obvious that Team managements have been raising Ticket prices and Marketing efforts to profit from the increased Payrolls of Players, even more so among those Teams advancing medium-range player Pay at equitable scale to the higher-priced Players. The median Income of Attendants of Ball games has obviously had to rise during such Period of payment of high Pay to advanced Players.

Could a Wine-making facility of the size found been able to continue to pay for the Expense of its construction based upon the purchase habits of only wealthy individuals? The Answer to this is No! There had to be a major Population center, successive Caravans through the area, or widespread Sales of cheap Wine throughout the area. This indeed brings another aspect to Mind; the need for massive amounts of Product to make Wine, the area had to be heavily planted to vineyards. Labor in these vineyards had to be supported by grain production, so there had to exist a massive amount of land development with high rural population in the area. The Economics of History may be the most interesting aspect of the field. lgl

Cattle Feed, Anyone?

2011-01-10T13:00:00.000-08:00

I decided to post twice today, because of this article by Andrew Revkin. It lists the likely progress of food supply through the growth of Population across Time. I will tell my Readers that there is no disaster scenario looming, where there is suddenly multitudes starving for their daily supply of energy. My main point I would like to emphasize being that the manner in which Food is delivered to everyone will make a great difference. There is sufficient arable land to maintain a Population of over Twenty billion if Eating Habits are altered.

I like to shock people with the Statement that the Food problem should be turned over to Purina and other animal food companies. They feed multi-millions of domestic animals, all very nutritionally, and do so without inconvenient Food Poisoning. These companies would study the Problem of feeding humans, and come up with a basic list of necessities–or prerequisite work which would have to be done. Let me try to imitate such a List.

People would have to be weaned from eating Meat more than once a day. This is most easily done by getting Parents to prepare the Child specific foods from Birth. The entire personal desire for specific foods could be altered in one child growth cycle. The second need is to transfer food desire to processed food, coming pre-packaged, and needing only to be heated with the possible addition of some common supplement–Milk, Ketchup, etc. People say that processed food cannot possibly taste Good; I think We ought to castigate manufacturers everywhere for the induced hatred of Soy-burgers; singular groups of a vegetable never taste Good. Mixtures of vegetables with garnishing is the way to go; people handle Salads this way, why not a casserole-style processed food? Vitamins and Minerals can be introduced easily into such Mixtures, without the disadvantages of bad Taste. We need to get into Ocean Ranching, supplying much vital protein from fish meal and flesh. Again, proper Garnishing and Heating will bring out Good Taste. Eating two Packets per day of processed food with one natural meal per day would allow both cultural flavor and necessary food, while actually cutting Food Costs with higher yield in number of people fed per acre. lgl

Economic Policy Fiction

2011-01-10T07:41:00.000-08:00

Does Anyone wonder where Economics goes wrong and Why it does? Read this Post! I ask first if it is natural to have a nominal Interest rate of 0%? Second, I would ask if it were natural for Banks, who are dependent or should be on their reserves, to attempt a greater degradation of the reserves by pushing Inflation? What I am trying to get at here stands that there are several things which are not truly economic policy, simply criminal stupidity. They are not even political maneuvers, as no one gains sufficiently to make the attempts profitable. Banks make higher Profits, but with need to reinvest and no viable way to hold reserves in investment, they simply lend to a business leadership which is already deluged with oversupply of Investment Cash, as their Sales performance cannot even generate need for greater production capacity. There is no additional Consumer dollars out there, they already dedicated to current expenditures or a consistent Savings pattern. Remember the old adage about beating a dead horse?

I could take the argument to the Demand/Supply curves to prove excess Capital will actually decrease Demand over time, as Consumers fear the Consumption patterns of their Peers, which is decidedly below their own. I could attempt proof that the Profitable employment of resources declines into negative territory at the incremental level with nominal Interest rates at 0%. I am not good with graphs, though, and this is one area I would not like to screw up. It all means that this artificial generation of Production through false Capital provision of no Interest actually causes a real loss of Profitability and Returns.

The same can be said for excess Tax Cuts, which do no one except the wealthy Taxpayer any Good. It allows such individuals in Management decisions to adopt quasi-monopoly Price and Production placement, set to maximize their Return without further benefit to the economy. Real Prices should have dropped somewhere around 2.1% because of the Downturn, even though the Sales performance has been higher, simply because Consumption Demand should have been much higher; it will not be without the real Prices reductions. There is a very real economic trend visible where there is an attempt to force higher Prices and Profitability from limited Sales, reducing Wage levels and Standards of Living. My response simply states this is not the way to do it, and Consumers and Households will show far greater resiliency to artificial pressures than is imagined. Current economic policy is in for a rude Awakening! lgl

I hope my Readers can understand this!

2011-01-09T08:10:00.000-08:00

The last word in the battle over Trade may be here. Ian Fletcher has vocalized most of my misgivings about Free Trade, though I will state my main complaint about Free Trade consists of the tendency of Wages to flow downwards to the lowest common denominator, with the corresponding loss of Standard of Living. Labor Gains, hard earned in one economy, are destroyed by simple purchase from other countries where such Gains were never realized. Labor in both nations are left without the Income which they should be earning. I should examine Fletcher’s rationales and explain.

No Trade is sustainable in the long-run. It is only dependent on the length of Time it takes for that lack to appear. Trade Advantage only lasts as long as the current level of Technology, and Technology itself has only the Shelf-Life of Capital, which at most is about 30 years. New Capital will always flow to the areas of greatest potential Profitability, which is almost never in the areas of direct competition with older Technology still in use. This tendency is also required to make the Stopler-Samuelson theorem work to full advantage. There is never developed Job replacement under conditions of Free Trade, and negative externalities are never computed as subtraction from the gains of Free Trade; something which has never be proven effectively as yet. The positive externalities are even trickier; Industries are robbed for Capital which flows to the new higher-Profit industries, creating higher Wages in the high-Profits new industries while Wages are suppressed in the older industries, all within the Context of All competing with the influx of new low-Wage labor from foreign sources through Imports; this relatively the only long-term capacity to pay for the purchase of Exports.

Fletcher possibly explains the problems with Ricardo’s Comparative Advantage far better than I could. The thing to remember consists that the problem with Ricardo’s theorem all revolve around the mobility of resources; none of which move perfectly, and of those which temporarily do move perfectly, they preform to create a vacuum within the shifting economy with bulge in the recipient economy. Both economies suffer from adverse alterations in Wages and Profits. My final Statement would be that Perfect Competition can never exist–even in the Short-Run. As long as there is transition from older Technology to newer Technology with competition between the Two, there can never be full production; Ricardo’s Comparative Advantage can never work fully because of the Costs of Transition, and the life of Capital insists that the Costs of Transition never cease. Advocates of Free Trade would insist that Comparative Advantage exceeds those Costs of Transition, but I would contend they do not when found operating across the entire cycle of Capital life. lgl

Tis not nice to fool Mother Nature!

2011-01-08T09:05:00.000-08:00

I read this Piece from Tyler Cowen, and affix on the problem I have long seen in American society. It is basically a problem of changing the Rules of the Game for all of the Incomes below the top 20%. I call it the destruction of alternate means of Saving. It is the Federal Reserve who is the apparent enemy in this fiasco, though the real culprits are the Top Earners in the Country, who apply constant pressure to Fed policy. Bankers go along with the practice heartily, because they make far more Money in Shadow Banking than they do in ordinary Banking.

Here is a Statement of the Problem: Fed monetary policy is consistently utilized to ensure all actual Bank Deposits will lose Money, because the Interest rates paid by Banks will always remain below the Inflation rate. The traditional manner of Saving used by lower Incomes has been destroyed by this mechanism, leaving such Incomes to lose Money by Saving, or investment in instrumental means which they do not readily understand; and which, by the way, are under the total control of the Top Earners in the American economy. The interesting thing here is that these Top Earners possess both the power to determine what these forms of investment will charge the Investor, and their own Pay for handling these investment organizations. The federal government insists that Banking abandon its traditional role of being the investment vehicle of the Poor, forcing lower Incomes to channel their Savings through the financial flow of the Top Earners to the benefit of the Top Earners, while Investment return is pushed as marginally low as possible for all Investors.

There is a Solution to this chicanery: Passage of a federal law or mandate which insists that all Savings deposits at Banks must receive at least 4% Interest on all deposits made; or 2% higher than the Inflation rate determined by the CPI, whichever is higher. The law should also stipulate that Demand Deposit get at least 2% Interest on deposits, or an Interest rate equal to the Inflation rate, whichever is higher. The federal government should not be in the business of pressuring low Incomes to invest in Instruments which they do not understand, or should they be establishing economy policy which benefits only one segment of the economy; especially when this Income class already has too much deferment paid to their antics. lgl

A Different Voice

2011-01-07T12:40:00.000-08:00

I will ask my Readers to study this Post carefully, then follow on with reading this article. I will warn you now that both are likely to bore you to death. You may get the impression that Japan is doing a better job than the rest of the World with their Working Age Population–which they are–and most of the rest of the World is destroying not only the economic viability of their Working Age Populations, but also destroying their job skills along the way. You will tell me that handles the first Post, but not the article; but I will then relentlessly insist that it also covers the second Piece. Shadow Banking–as used traditionally and gainfully today–searches hard to employ elements of the Working Age Population which would not be able to attain Work without imaginary finance. It simply is a Statement that a base level of Money systemically passed through a procedure will increase real Capital assets. It does not accomplish the real task of production profitability, which in the long-run remains mandatory to create the hard Capital assets ultimately needed to forestall the traditional economic Bust.

Statistical models may help to explain the dire situation. Production sectors reach capacity employment based upon the technological style of their production; technology universally utilized to reduce employment needs. Full capacity employment in a Production sector is considered reached when that sector could double functional output with no more than 10 hours of Overtime per Week for the Employed. Study of the Production sectors currently operating announce that almost all Production sectors are operating at capacity employment, with hardly more than one million laborers to be employed in the United States in real capital production. Shadow Banking simply creates a imaginary fund capable of financing Production commitments which are not really necessary for the current state of the economy; this simply to provide more Jobs supplying a Consumption Income of sufficient size to increase all Production sectors and their capacity employment. It is here where the entire Scenario falls on its face.

Consumption Income, even with vast expansion of Consumer Credit venues, does not expand as rapidly as Shadow Banking funds. Shadow Banking Production also acts in competition with hard asset production for the slowly expanding Consumer Income. All Production sectors–hard asset and Shadow Banking–suffer from an insufficiency of Consumption dollars received, Profits attained, and mortgage funding paid back to both Shadow and Real Banking. There is Wage Suppression by Businesses afflicted by lack of sufficient Sales, and slower growth of Consumption Income. Most economists will tell you that Shadow Banking is necessary, and that Quantitative Easing is a Must. The fact is that the first was the propellent of the last Downturn, and that the later will maintain the Downturn; simply by the protection of Shadow Banking. lgl

Changing old Management habits

2011-01-06T12:14:00.000-08:00

I do not like this line of Thought about Unemployed labor because it places the entire onus for that unemployment on the Unemployed, when the issue has been brought on by the entire economy reaction. The reality states that all of current economic forces have joined to make low-skill labor unprofitable. I need to explain this Statement, and will try to outline it in the following elements.

The United States has consistently shied away from universal health care from the beginning. This reality, combined with the very real demand of Workers to be covered by employer-supplied health care, has trained Management to only hire high-Skill employees with high potential production. Federal regulations regarding provision of Pension contributions and freedom from discriminatory practices toward labor with attendant Safety issues have worsened the situation. Low-Skill labor face major Hiring obstacles, especially with Business switch to Temporary Labor to save on all the above Costs. We possess a highly volatile, sensitive labor market today, quick to layoff, and reluctant to Hire; with low-Skill labor unable to compete in the face of Business demand for high-Skilled productivity to pay for the Costs of Hiring.

The real First Step is universal health care. Employee health insurance may be the quickest way to accomplish this End, though Many will state it is impossible. The foremost best way to achieve this position is to separate the Employer and Employee. This means a Tax law which bills every Employer equally for a bare-bones minimum health insurance, with a maximum $15k per year payout per Individual covered–including family members of the employee. Further law would stipulate that Employers must offer a Group health insurance opportunity to every employee for catastrophic health care, for which premiums will be withdrawn from employee paychecks–though the employees do not have to opt for this Insurance. Additional law will create a national Pension Fund, to which every Employer must contribute 12% of all Wages and Salaries paid per year–including bonuses. Employees, to be eligible for the Pension rights under the program, must contribute at least 6% of their Wages through Paycheck withdrawal for at least 20 Quarters. The situation of low-skilled labor suddenly feels less dire, and the practicality of Hiring such labor cadres much more appealing; now, if We could only get Firing based on simple desire! lgl

Dirty Politics--and how to Win!

2011-01-05T12:37:00.000-08:00

We get the image of a revetment abnormal, with the Government walls crumbling solely because We are feeding the Dragons napalm again. The article does not state it, but overwhelmingly excess Government Spending remains mainly cyclical, but the tax revenues lost are almost always structural in nature; never able to cover the bill, if the economy doubled in size and output. I am not saying that Government Spending should not be organized uniformly and regulated as a quantitative Whole with universal benefit; simply stating that proper Taxation is the only real curative for Deficits, and will have to be introduced sometime.

I like this Post, though I possess a far greater knowledge it seems of the social order of both New York and Texas. I know that only 3% of New York’s labor force is unregistered, while almost 14% of Texas’ labor force goes unregistered and unreported. I know that careful review of the Standard of Living of both States would account the SoL in New York to be almost 12% higher when the total population average is utilized, not simply the easy-to-access information. Medical Services and Food Quality are both higher in New York than in Texas, and Texan Housing in significantly lower in quality when total Housing is examined. Goods service and provision is also much lower in Texas, especially away from the major metropolitan areas. The disparity between Rich and Poor in both States is about equal in magnitude, but the Living Standard in Texas in much lower for the Poor. Government service to its citizens in probably about 18% lower in Texas than in New York, irrelevant as to the prices paid for that Government; all due not just to racial attitudes, but the isolation of geographic distance. I do not have any great resentment to Texas, and actually feel that New York provision for the Poor should be closer to the Texas Standard than to its own. This, though, equally does not constitute an abandonment of the plight of the Poor, or efforts to improve their position.

I do not agree with Peter Wehner on this one, though I cannot agree with Senator Dimwit—ah, DeMint. I do not think that refusal to raise the debt ceiling will adversely affect the federal government, if Obama knows how to play Hardball. Instead of closing down federal offices to anger American citizens, Obama must order all Defense Spending–except for provision of current military deployments–to immediately cease in the arena of Weapons development, military supply contracts to domestic bases, and a 30% reduction of permanent domestic military positions. All Civilian contractors will be notified of cancellation of Contracts, and Military units will be ordered to handle all military services (Mess, Laundry, etc.) which will be undertaken by military counterparts. I am quite sure that Congress will suffer greater duress from such Cancellations than will the President or the American people as a Whole. This is How you deal with Conservative intransigence. lgl

Talk about being an Ass

2011-01-04T12:34:00.000-08:00

My Readers, and some Psychologists, have asked How my mind works; my stock answer is that it doesn’t. I decided I would give an Example of How my mind works. I will ask the Readers to preview these Posts: one, two, three, four, and five. I then had thought to the near universal desire among Conservatives to default on the US Treasuries granted to the General Social Security Fund, so Congress could pretend to not tax people while Spending all the money collected by FICA taxes over the years. I then thought about How poor people could forestall these Conservatives from achieving their objective of destroying the basic retirement policy of about 80% of the Population.

My first idea was and remains relevant, getting the AARP to file before the US Supreme Court for a declaration that such US Treasuries held primea focus, sort of like ‘most favored nation’ policy where these held Treasuries held first place on replacement funding, and other debts of the federal government could not be paid before they were funded under any default conditions of the federal government. I felt that such a Ruling would go far at this juncture is restraining deeply Conservative animosity to the Social Security program.

My feeling, though, was that such a Ruling might not be sufficient restraint. Here is where I thought economic modeling could really be a Savior. This would require a further US Supreme Court Ruling based on previous Tax law. It gets a little complicated, but here goes: Denial of Social Security benefits reverted FICA taxes paid in the Past to additional Taxation on Taxpayers in those Period; but where Tax law stipulated all levels of deductions and rates of Taxation. Business contributions can be discounted because of their forced payment of higher Wages at the time, if they had not paid such contributions; functionally, these contributions must be considered added unwarranted Taxation paid by Labor. The Ruling would be a simple declaration that Congress must repay all unwarranted taxation by nullification of Social Security benefits to all FICA taxpayers for all years of contributions made; all under the proviso that no confiscations of individual property can be made without due process of law. Congress may want to avoid paying the bill, but We do not have to let them get away with it. lgl

The Fallacy

2011-01-03T10:07:00.000-08:00

Arnold Kling might be Right on this, but I possess other Thoughts. I like the idea of Emergency Health Insurance, where medical insurance must pay all Expenses over $4000. I also like the concept of internships for even college graduates, if there is a covering Employment law stating that Business must provide Board and Room as in Ages past, or some equivalent of such provision. I feel we must give some thought to the Poor and Uneducated, suggesting that under Business evasion of the two above considerations due to alternate provision, that it must adopt Poor people to fulfill the later provision. Arnold would chagrined by such an assault on the Business model, but the later model has shown absolutely no success in provision of its labor force adequately.

My greatest Concern can be found here. Conservatives in control of State Governments laud platitudes while concentrating on Tax Cuts, those famous overused rants against Public Spending. The trouble comes when anyone seriously discusses Cuts in Spending, these self-same conservatives outraged that anyone could actually expect them to Vote for Spending Cuts which would be totally unpopular with the Electorate. So they pass legislation cutting Pennies from the budgets when We need to cut Dollars. No one wants to cut the Social Spending which all agree os necessary to save their political careers and the American way of life–not even I. Here is the Rub: we will eventually need to come up with those Dollars–not just Pennies; and the only source of those Dollars are higher Taxes. We also need to stop giving higher Incomes the best break every time We pass a Tax Cut or introduce a Social program.

Readers will ask how I bring the two above paragraphs together. Here is How! We cannot expect Private Business or Charity to take over for Government welfare, then We will have to establish certain minimum standards granting the Poor–Working or Not–some venue to claim Aid from somewhere; a situation where everyone can have a Voice in society. Conservatives do not understand that We cannot suppress the Poor without altering American society in ways which will embarrass Us all. lgl

Knowledge may not be Power, but it is Profitable

2011-01-02T09:14:00.000-08:00

Arnold Kling sadly misses the Point expressed by Peter Wilby. This is the fact that Charity is not sufficient in scope, and not consistent to deal with the real problems. Aid necessary over a long or continuous Period is almost never served by Charity; only when the situation returns to crisis proportions will there be steady return of funds. It is like the Boss who tells his Employees that he will pay everything he owes to them when he gets a chance, rather than a consistent, regular schedule of payments; I just know that such a Boss would have a multitude of Employees. The second consideration barely touched by Wilby is the huge Cost of Charity collections; a signature vastly in excess of any Civil Service, as the Collectors generally pay themselves according to their own desires. Causes are rarely great things on which to base consistent performance, just as long-term employment of Temps will not make for steady business and Sales.

I herein would like to state that I did not take Microeconomics until after I had taken advanced Price Theory; a fact which hindered me in both Price Theory and in my finally taking the Intro course of Economics. Nick Rowe explains why I had my difficulty. I would contend with his supposition that the problem would be solved with forcing everyone to take the Intro course. I personally would blackball anyone uninterested in the Intro course; it taking Someone who has achieved a B+ in the course to really state they are competent in the field. I would advise changing the name of the course to Economic Shortages, both to generate greater Interest in the course, and letting Students understand that it is material with which they will eventually have to contend.

I will let my Readers finish the day with this Post. I personally estimate that "Plunge" behavior actually creates and expands most Booms. Not until such behavior develops will a real Boom take place, and such behavior creates a Balloon when run over time. This means that very Boom will eventually will run into a Balloon, which will eventually deflate. Who are the Plungers, then, as they are the Creators of a Boom as well as the eventual Balloon? They are Business and Professional personnel who have made a success of their own endeavors, and need a source of Investment. They are generally individuals with imprecise knowledge about Investment, and depend on Others to guide their investment decisions. They also possess a strong desire to gain as great a Return on their own investments, as they previously have had in their own personal business of professional endeavor. The Crux of my statement consists of the fact that they are both old and new Investors, but without real knowledge of either Investment, or the real limitations of simple monetary involvement in generation of long-term Profits. lgl

And I promised I would be Nice!

2011-01-01T11:43:00.000-08:00

I know not what to write on the foretelling of the new Year–Giddi-up Go on the Happy Best Wishes and all that. It is so complex that I almost feel I must separate into Good News and Bad News. The trouble comes that the Good News almost sounds like the reverse, and vice versa. Still, we might as well try this because nothing works anyway in our modern World.

Goods News:
1) The economy will not erode seriously in the next 12 months, but will basically stay the same. Like I said, the Same is not exactly a brilliant performance.
2) The US Dollar will solidify and increase in value. American Consumers will find that their Dollars will buy more. The downside to this is they will have a lot fewer Dollars to spend, and that the US Trade Deficit will become a major Topic once more.
3) The Medicare and Medicaid budgets will become an absolute disaster in this Year, so that Congress will have to adopt real medical reform, adopt higher real Taxes, or get hung from lamp posts; any one of those alternatives of real benefit, but with real antagonism being raised.
4) The power of the big Banks will finally be broken, because of their refusal to deliver the necessary Cash street-side, but it will kill any Stimulus designed by the brilliance of the new Congress.
5) Oil will again drop in Price, but only because fundamental economic functions will be constrained.

Now for the Bad News:
1) We are going to drop another 1.25 million from the Employment Rolls, though Consumers will get more conservative in Purchases with a reduction in Consumer debt.
2) Congress will find that the only way to raise sufficient funds for government operation is by higher Taxes on Business and higher Personal Incomes; the downside being that US Treasuries will take the slide once thought to be destined for the recovered Dollar.
3) Government action must be undertaken to create a new series of Minimum Wage jobs of major numbers in order to increase Employment Rolls and maintain a minimum level of Consumption; the upside may be that I may get my Military Reserve increase of 1 million more Reservists.
4) In the interest of getting a sound tax revenue base, Hedge Funds will be defined as Corporations by Congress, over the objections of many Wealthy individuals and mutual funds; the downside being that the Stock Market will show far less promise in the coming year.
5) A new medical law will pass stipulating that now medical businesses or medical suppliers may not increase their Price list, if they showed Gross Profits in excess of 10%. The new law will also stipulate that Doctors, Hospitals, and Clinics which made more than 10% of their initial Capitalization in the previous Year cannot raise their Fee and Price schedules in the following year. The law will be expanded to stipulate that CPAs, and lawyers, cannot bill any given Client more than $250,000 per year in labor billing; this does in no way limits the number of Clients or Income they may earn.

Like aforementioned, the whole does not make for pleasant reading. The way of the future is very rocky, and the Present will not go Gentle into the Good Night. lgl

Who'se your buddy?

2010-12-31T11:03:00.000-08:00

One has to really ask who your friends are, when you start reading Pieces like this one. Once this data works through your mind, ask how many Couples have been reduced to One Income from Two Incomes over the past two years. Remember that the Couple must make somewhere are $30k in order to save at all, and need to make around $80k to get the same benefit as the upper end of Incomes. What is amusing is American Taxpayers imagine that Congress is serving their Interests in this type of Tax Cuts. It reminds of corrupt Union officials, who had to be paid off with a bigger Slice of the Wages of union members than the members got, simply in order to the members to gain any advantage.

I will recommend this long Post to my Readers who wish to find the materials to adjudge the Standards of Living expressed through different societies during the ages of Mankind. There are several methodologies explained in development of models of comparison, though I personally dislike most of the models. I prefer a poundage of Consumption materials consumed per month per Individual, thinking such Consumption could not vary relatively over Time by more than a factor of 3 under any maintenance of social structure. We are talking about Averages here, and it is easy to estimate the population size, then estimate the Transport facilities with their load capacity into the area. The model may seem simplistic, but one can get very real and verifiable statistics from the model.

Some bright Individual might at this time inquire why I would introduce two such disparate Posts in one venue. My model works very well in the current world, and has some applications here. We need only to define what Consumption poundage a American Poor Person consumed per month in a number of different periods of time; most consistent for my labor being 1993, 2000, 2004, 2008, and 2010. It would also be necessary to estimate the Consumption poundage per month of the wealthiest tier of Consumers for the same periods. Now, We can estimate how the Tax alterations of the past periods affected the poundage Consumption for both Rich and Poor. I don’t really do models–too mathematically imprecise–but I think this works to the real advantage of legislators of all stripes. Dare I say more without being arrested for subversion? lgl

The Big Risks

2010-12-30T09:58:00.000-08:00

Mike Shedlock has probably come up with the most accurate forecast for the coming Employment Year. The one factor I do not see seems to me to be the most important factor of all. If Gasoline crosses $4 per gallon, then there will be a 70,000 Jobs per month loss. If diesel crosses the $4 per gallon limit, there will be a loss of 33,000 Jobs per month–my estimates. No one worries much until 5 gallons of Fuel costs a $20 bill. A long, hard Winter will also cost 9000 Jobs per month through April. I do not expect that Business sold enough in the Christmas Season to retain their full staff. Real Estate is going to lose more personnel under low Home sales, and Cars will likely fall off to the disquiet of significant labor. It does not look good!

Now We have to ask about the chances of fuels reaching the danger levels. Read this article! Are We going to make a new high in Oil Production? Can the current pricing of fuels be maintained in stability without a new high in Oil Production? The price of fuels would approach $6 per gallon if the price of Oil in contracts goes higher than $145 per barrel--my Guess. Rather than talk about the much higher-priced Oil, how about talking about $145/barrel Oil. We now have to talk about redirection of Consumer Demand to Fuels; every billion dollars of redirected Consumption will cost about 2000 additional Jobs per month. We find the future to be slightly rocky!

I will let my Readers ponder this thing. One now has to relate the discussion of stimulus to the whole business above. My estimates state that a $.55 per gallon rise above the current market price for fuel will cancel the entirety of the new stimulus. Here is gets much trickier: it is my estimates that a 3% rise in total State tax collections will also negate the stimulus efforts so far. A drag on Bank commercial and home loans extension consistent with the current restriction for over 8 more months will cancel the Bush Tax extensions. A combination of all factors at once will be equivalent to a 5-6% rise in overall Tax collections within this Country. To Be, or not to Be–I think We have been had! lgl

A level Playing Field

2010-12-28T13:56:00.000-08:00

I like Tyler Cowen so much because I often find something I can contend. Wealthy people cannot find artistic merit in paying for their entertainment. Many of his Commentators find the entrance of Unions into the mix of payments to be a vast usury, with Wealthy people being defrauded. I am going to fly off the scale here, and should be roundly denounced, but I am going to do it anyway! Almost All who attend these performances regularly live in residences which cost more than $3 million (divided by 365–What?) Some 70% of them possess some Sailing vessel which range in Cost from $40k to $7 million; said vessel housed in docking for anywhere from $400–$9000 per month. They take 3 Trips per year somewhere in the World–estimated Cost of said singular trip somewhere between $30k–$400,000. Their average Christmas List costs between $30-50k. Forty Percent of these specialized Consumers possess specialized Vacation housing estimated to average about $500k–$4 million; Some with up to a round dozen of Residences.

I do not know the Price of New York Concert Tickets–probably anywhere from $400–$2000 per Ticket. They undoubtedly could not live in their primary housing for even one day for those amounts. It is unlikely they could dock their favorite vessel for more than 3 months for the number of times per year they attend these Concerts. The Pricing of the Stagehands is inline with the normal Charges for labor among the Boat-builders. They get as much Service at these Concerts as they normally receive on their yearly Trips, which is better than they receive at their Vacation homes; remember they pay more is Cost and Taxation for these secondary homes when Ticket Costs are multiplied by 365. I can guarantee that they get more Service from Concert Hall staff in their Trips to the Concert Hall than they generally receive from Anyone on their Christmas List.

Wall Street Wizards are granted the Right by so many Conservatives to demand usurious rates for their labor participation within the economy, but when the role is reversed, great outcries result when poor labor thinks to apply their monopoly positions to be paid as well as the aforementioned Wizards. I would suggest that All reexamine their concept of a level Playing Field, especially within the arena of potential Taxation. The Wealthy are lucky that I am not a Plumber! It is a sad Story when an economist could use what are relatively minute amounts of labor salary when set against the total labor force employment, just to attack Labor Unions. lgl

Lets Talk Turkey for Once

2010-12-27T09:22:00.000-08:00

What is wrong with this Argument? Especially read the comment from Ironman after the Post. There is a relationship between median household Income and tax rates. What can that tell Us? Median household Income remains a relatively stable element throughout most business cycles, there being a real drag to Income change, depletion or Gain over the wide range of households. Personal Income and Corporate Income make vast Gains within economic booms, and are highly resistant to added taxation. On the other hand, Personal Income and Corporate Profits only reduce in magnitude during the deepest of the business downturn, and consistently remain the first to recover their advantage. I contest Mark Perry’s supposition that federal revenues are likely to grow at their current rate, when Business, Corporation, and Personal Income are at the outer shell of their taxable Income, and a whole list of tax remissions to protect the Wealthy from taxation will begin to drain their contributions to tax revenues.

Spending Restraint and Pro-Growth policies will not balance the budget. Spending Restraint will only reduce the fair value median Income households obtain from Government Spending, actually granting the higher Incomes that value in tax cuts. Pro-Growth policies provide advantage to the higher Incomes, as the median Income households substantially maintain their contributions. Pro-Business economists like to cite Welfare programs as Wasteful, but I have never witnessed higher Incomes rejecting Social Security, Medicare, or Unemployment Insurance where they have been eligible for such a program. They are often first in line, already with registered legal representation. I will devote the following paragraph to effective Spending Restraint.

Pick a Limit–any acceptable Limit–above which higher Incomes must pay for their own subsidies; I would suggest around $100k per year. Hereafter, no one draws Unemployment Insurance unless his Income falls below the Limit. All Incomes above the Limit must Sign a mortgage contract with the Social Security Administration, stipulating they will receive no monthly benefit if their Costs to the program have exceeded their contributions from Work years. I called it a mortgage because All above the yearly Limit must pay a yearly percentage of their Income–I will bring up the 8% of gross Income before Taxation for all medical expenses incurred by payment by Medicare of their medical expenses; said mortgage coming due upon their deaths, and the full amount will come due from their Estate. All Personal Incomes, Business Incomes, and Corporate Incomes must make a yearly payment of $250k to the Unemployment Insurance Fund, if their Income Tax Return grants them more than $1 million of tax reductions below the stipulated rate for their Income level. Am I a Stone in their Shoe, or What? lgl

The real World according to the Carper.

2010-12-26T08:02:00.000-08:00

Students among my Readers should read this article twice. Shiller must get high marks for description of effect, if not the highest marks for explanation of theory. The ‘balanced-bidget multiplier theorem’ basically states that maintenance of people in their consistent Income strata provides the multiplier effect, as a drop from that Income strata would lead to a serious diminishment from current Consumption patterns. It is basically a Prevention of the deterioration effect which comes from loss of Income. We are talking about ‘Time lags’ here, and creation of artificial increased Time lags before the reversion to lower Income Expenditures. Everyone gains from a delay of eventual reduction of Wages, Expenditures, and Expenses. Business Profits can pay down existing debt, Consumers can pay downing existing debt, Consumers can purchase necessary Consumption products before reduced Income levels, and Businesses can alter their Production models in a more effective manner. It is a Statement that Short-Term inputs of Income can alleviate tie immediate impact of Income shortfalls, and lead to more successful long-range economic productivity.

You can find this basic mistreatment of Trade issues at great length anytime you wish to goggle the results. There is actually no indication that Trade reduced tensions between Nations; actually, there is much to note that unfair Trade practice did more to incite antagonism at the individual level in society against other peoples they traded with, all based upon Trade advantage fully exploited without Government restrictions; those later elements often helping to reduce such local tensions. There remains much indication that Trade on unrestricted levels adversely affects much of the local populations, propelling them to achieve an educational level they cannot afford, or delaying their initial entrance into the labor market; which they cannot equally afford. Trade activists often lay claim to Peace through Trade, citing Periods of stable Governments, while denying the Trade pressures behind most warfare which can be easily found.

I commend this Post to my Readers. Til the Season to study economic reports very seriously. The last economic reports of the Year are always as totally upbeat as any economist can make them, as they want as little depression entering the new Year as is possible. Any ordinary Problem is a major Problem if seriously cited at this time, and what is left unsaid is more than likely to be extremely sad in outlook. Old Year woes are rarely identified to enter New Year resolutions, though economists rarely express their true desires. lgl

Chances--Maybe 20%

2010-12-24T08:34:00.000-08:00

Someday, Someone will do this to me, and I hope that I fare as well as Paul Krugman. Individuals can only respond to their environment; they lack the capacity to change it drastically in the Short Run, and rarely much in the Long Run. Suffice it to say that to be 50% Right in future predictions stands as a high Success record. This is Why I have decided to pull a Krugman attempt, and give a hazy, lazy group of far-fetched nonsense as likely to be True in a decade. I hope it makes Everyone laugh.

1) A new consistent American Tax Code will be in place, after the huge financial disstabilization where not even the Federal Reserve could claim enough assets to purchase Treasuries.
2) Employment will be Up, due to new Regulations in place which actually Tax for the overuse of energy-intensive equipment in Agriculture, Transportation, and Manufacturing.
3) Much of the Interstate system will be closed to All but Freight and Mass Transient vehicles.
4) There will be a return to Urbanization as the effects of the above stresses take effect, with Land prices dropping in the hinterland. Much will return to Agricultural use with a Population density to meet Agriculture labor needs reminiscent of the 1945 Time span, before the return of Servicemen.
5) Housing will move to Apartment-dwelling, as the Costs of maintaining Private residences continue to rise, and Service Retail returns to urban settings to follow the Consumers.
6) Technology will continue to aid society: I look forward to individual electrical generators will translate Air resistence on vehicles back into Motive power to propel those vehicles.
7) I predict a return to domestic production as the Costs of Trade and Transportation continue to increase.
8) A consistent World-wide policy of reforestation will be introduced, while in America, widespread use of Tree-planting Summer camps will replace the increasing Costs of full-time, Privately-funded, Child Care supervision. It would probably be the most popular $10 billion dollar per year Public program for Congress that they would ever have passed.
9) A system of permanent Soup Kitchens would be set up, funded by Local Government, but aided by refusal to allow Waste expense to Retail Grocers, unless the total have been turned over to a registered local Soup Kitchen. There would be a base charge placed on All who would eat there of low amount to cover Wage and Capital Costs, but with Local Voucher offices giving Stamps to use instead of Cash in the Soup Kitchens. Preferment in Apartment subsidy to Welfare Recipients close to the Soup Kitchens would negate the need for the Food Stamp programs which is wasteful of both Food and Nutrition.
10) A Statement that the above trends will only be starting in a decade, and will probably take 30 years to reach fruitation.

I will first listen to Conservatives who will denounce the entire List as being un-American, and injurious to both Profits and averse impact of Taxation. I will next listen to Liberals, who will claim that the simplistic notions of Welfare will deny the Poor the possibility to expressing their individuality, and reduce necessary Government employment. I will follow with listening to the Property-holders bellow that I am adversely affecting Land values. I will finish by entertaining those rare Philosophers who proclaim that We should let All go to hell by their own chose of destruction. lgl

The Restless Heart

2010-12-23T12:31:00.000-08:00

Mark Perry sees the Consumer as back, but I wish for greater elements than Retail Spending Without Employment. The economy remains the crippled Cartoon when confronted by bygone Booms. Some 21,000 units were sold in Housing last November; I can remember when that many units were sold in my rural State in one month. I think back to a discussion I had over thirty years ago, where We were translating Average Income of Taxpayers into other elements. Now I would first like to say there is no way to in any way reach this conclusion in a rational manner, but I estimate that the average Taxpayer would have to own about 23,400 shares of Corporate stock and be a Day-Trader to equal the Income levels they possessed during the height of the last Boom. Two things: It is nice to know that some things never change, and I am still as poor at Math as I ever was; and the economy is about in that bad a shape.

I will turn Us away from the futuristically impossible with a far more down-to-earth evaluation by Arnold Kling; though it may be a biased in its own way. Understand that Conservatives and Liberals share a common thread: they hide their faults and Sins within a provisional ideology which can be modified to fit all circumstances. I wonder at Arnold’s praise of Cancer research, whose Price per Cure went from about $200k to about $600k since 2006. Isn’t there something in Economics about Scarcity, and proper division of Resources? I also doubt his predictions about Mini defaults, because a Credit Rating will have to reestablished for Government entities, whether they deserve one or not! Energy will also always come from a deliverable source, and Solar will not take over until electricity is genuine replacement for Oil or Coal.

I will really waste time and energy on this issue, when actual real Tax revenues from US corporate tax rates actually exceed Japanese collections. The United States may hold the Record for the most Tax remissions per Dollar of collected tax receipts. I hereby state my New Year’s Resolution, which is to congratulate Congress when it finally restructures the American Tax Code to a place where it makes some Sense. Knowing my relative animosity to Congress, I feel gratified that there is little chance I will have to praise Congress at any time. lgl

Degree of Significance

2010-12-22T11:19:00.000-08:00

I present this Post to express my great faith in economic models. There is sharp tendency to define models in terms of the desired Variables wished present. It is like the old Packaging axiom: if it fits, the box is Right, even if it is a little loose inside–just add Packing. Economists have a whale of a lot of Packing, and utilize an incredible amount in their daily activities. I must have encountered at least a thousand definitions for even the simplest Demand/Supply interface, all leading to different conclusions about a near universal economic model. Know that there is a Marginal Utility to all such models, which becomes increasingly minute as it drifts away from the absolute Center of the argument. This might be considered the essential flaw of economics.

Are liberal economists trying to pick a fight with each other, or are they trying to find some common thread to devise another form of attack on recession woes. I could present a very ideological, and depressingly conservative, definition of balance sheet recessions. There are Those Few Strange Bedfellows who would insist that balance sheet recessions are nothing but the native system Safety value to release excessive Wages, Profits, and Benefits being paid on distressingly light actual Production figures. Americans may have been living far above their Means, and not paying for it in any significant way; the economy must find a natural Means to stabilize itself. Most of my Readers will find that that not to be very ideological, but intense contemplation might worry a considerable number of you.

Paul Krugman is a man who believes in economic models, and does a really good job of defining them with relative accuracy. He sometimes does not fully explore the differences between economies, though, and this Post points out that fact. Iceland enjoyed greater occupational opportunity than have the Baltic nations, where a loss of Jobs means Unemployed, while Icelandic model only calls for alternate Employment which must be funded. I would consider all nations to have adopted the most advantageous policy for each nation. It is also somewhat silly to proclaim that economic policy constraints in less developed nations hold real significance for a more advanced and evolved economy. lgl

The Hideous Corvee

2010-12-20T11:13:00.000-08:00

The true nature of the Problem is defined here, but the Solutions are all wrong. It is not time to attack labor, even public labor, but to attach blame where it belongs: at the feet of Conservatives willing to suppress anything to suppress Taxes. They want all the advantages of a safe and secure life, without any reduction of their own Wage and Profit. They would most certainly insist that Others work for nothing or at Starvation Wages, in order for themselves to live at the peak of their potential Income. The real need is to shake up the extreme Comfort of the Wealthy.
I advise all Readers to await the end of this Post before exhibiting great rage, as this projected law I advocate has many Parts, some of which cancel or ameliorate prior issues. I will probably do best in simply outlining the thing to be passed into law:

1) No Public Employee will be paid for more than 25 hours per Week. The Government will insist that the following Working Hours must be devoted to Insurance and Pension.
2) Public Employees can accept payment for Government labor from private sources, but at no rates less than the listed Minimum Wage. The Employee can also list up to 4 payments per any of the 40 or more Hours which they are expected to labor.
3) Introduction of the a law of Corvee, which insists that anyone listed as a Wage Earner, Salary Earner, Capital Gains Earner above a certain level of Income, or Recipient of Professional fees must provide 10 Hours of Public Service per month.
4) All People subject to the Corvee can hire Others acceptable to the Government involved as substitute labor to the Government; the hired Personnel required to register Who has employed them, and at what Wage.
5) There will be a central labor Pool designed to combine potential Employer with potential Employee, and to see that labor is distributed evenly across Local, State, and Federal Jobs.

Study of the Situation will tell that enforcement of such a law would solve the Benefits problem for Public employees. The dedication of 15 hours per Week of Government labor to payment for such programs eliminates the Debt problems. Private Citizens can utilize the system to bring understanding of the need to pay Public Employees a Living Wage. There can be a registered program by which Private Citizens can group their labor into full Workweeks, if they desire to actually provide the Corvee instead of paying for Substitutes. Violation of the law will be a $10,000 Fine per Incidence plus the total number of hours of labor lost times the average hourly Wages or Salaries at the Violators alternate occupation. And you people thought you knew how to establish a Big Brother State! lgl

The Real End of the World

2010-12-18T09:09:00.000-08:00

Read this Post and the links within it. I contest the basic data, but not in a manner which people are used to; Stating that it is a common element of developed civilization. Rome became a huge City whose citizens spent the entire day at the Games, a factor which went on throughout the empire. Beijing used to have huge numbers sleeping in the streets back in the day it was called Peking. New Delhi had a half-million people living homeless last time I checked. You may ask what it is that I am trying to say, and I will try to explain.

There is a historical record existent that all industry starts very labor-intensive, then pares down to being highly technological, with only about 45% of the original Workforce necessary to maintain the successful production levels. The is at direct variance to familial rearing of replacement labor cadres. There has always been a traditional increase in the labor force coming from more children raised than required for simple replacement of population. We have a functional oversupply of labor by the third Generation to fill the original cadre, which has been significantly reduced by technological development.

It is only the start of the Problem, though, as I hope to make my Readers understand. The increase in Population raises Consumer Demand and brings the development of Service industries to provide for the extended Population. Service industries, though, are subject to technological advance with reduction of employed labor force exactly like earlier industries. Now enters the growing Problem where Consumption must be paid for, and there is a shrinking number of people capable of financing that Consumption within the increased Consumer Demand minus finance. Can the economists among you explain what that last term signifies? Dark Thoughts turn efforts away from productive labor into the realm of fraud. Bernie Madoff becomes easy to understand, while hard labor becomes undignified; all within the periphery of higher Price to Those who must purchase Product, simply to pay for the pilferage. Now We are at a position where Third Generation positioning will always produce a larger Population with less Occupation, and less capacity to pay for Consumption. It has broken every Civilization in history, and there is no Solution for the Problem. Don’t you wish that We lived in a vibrant economy? lgl

Here I go Again

2010-12-17T13:17:00.000-08:00

I recommend this Post to my Readers, and would ask you several Questions about the thing. What do you think about the potential Answers if exactly the same Questions were asked of a Poll today? How would American society have changed if the prevailing views had been adopted in follow years? Could answering the same questions by modern Polled tend to lead these people away from established Liberal and Conservative positions today? Would there be higher optimism in modern Americans if such type questions were asked of them in consistent Polling? Would persistent Polling among widespread Americans along with publication of those Results engender a greater adoption of liberal tendencies because of previous levels of success with liberal results, without undue hardship coming from most restrictions caused by the liberal adoptions? Would this style of continuous discussion among Americans actually help or hinder the political process in America? Could such a continuous stirring of American sentiment actually produce greater separation of Politician and Lobbyist?

I had thought of another idea when contemplating this article. The Republicans want a reduced Estate taxation, Democrats want a higher Estate taxation. I would promote a Compromise! Let the Republicans have their 35% after a certain level–which I believe will devolve to be about $5 million. Here is the Kicker: All Estates must first give back all Benefits received by the Deceased from the Government prior to death: this means however number of Personal yearly Deductions, all Unemployment Benefits, all Social Security and Medicare payments, and all delayed Tax Credits which were unpaid. No one ever said I could not piss off Wealthy people.

I am going to keep this Post short today, basically because it is Friday and I am already writing on Weekend time. Oh, in the above Option, I would allow them to deduct whatever FICA taxes they had paid in on themselves; though not in their role as Employer. Isn’t it wonderful to be Santa Claus, and gouge the Rich! lgl

How the Wealthy do hate me!

2010-12-16T09:03:00.000-08:00

There stands a fast-growing Crisis in America which this Post might outline, if providing no Solution. I possess a Solution, though Conservatives will scream it is another Case of Big Brotherism that will bring down the economy. This again requires federal law, and will be cursed to the lowest depths of Hell. The federal act would force federal, State, and Local Tax agencies to collect all initial Tax revenues–just like there were no tax remissions except for Personal Deductions and Child Dependent Deductions. It is not to discount all tax remissions by wide sweep; simply a plan to generate necessary tax revenues without as much bite to Taxpayers. The genus of the law states all Cash revenue must be collected, but tax remissions would be repaid in Municipal Bonds, State Bonds, or forms of Treasuries. All can potentially be converted to Cash through Market structure after receipt of tax remissions, while federal, State, and Local authorities could exhibit some control over the Interest rates paid on the bonds. It is simply telling One and All of said Taxpayers that they must take a Stake in the welfare of the State, in order to avoid the tax censure of the State. It might actually led to less outsize Tax filings filled with excess information to acquire too little.

I pity my Readers now that I refer them to this Post; just remember that sometimes these things need be used. I bring in this information to express that Tax Cuts past this Point have an actual Stimulus factor of around 5%; meaning that we accomplish about $1.05 of economic growth for every $1 spent in Tax Cuts. People will need a translation of what I am saying because I do, so I will give one to them and possibly myself. The Recovery will stop when the federal government stops Spending, whether than Spending is by outright Stimulus or Tax Cut. Understand that We will lose some portion of that $1.05 after the Spending stops; the most likely figure lost is about $.95 of every $1 currently spent. It has the horrid aspect of potentially extending to $1.20 of Recovery reduction per federal dollar currently spent at this time.

Now I have to find my way back to my original argument. Municipal Spending goes into local Wage payments and Infrastructure construction. These two elements get the most Cash to the Street–raising the Consumption and Consumer Demand higher than any other form of Stimulus. It also possesses the longest retention periods of any Stimulus. It also represents the greatest increase in economic growth potential. Issuance of Bonds instead of payment in Cash for tax remissions ensures the greatest activity in the financial markets to generate Investment funds as these bonds must be traded to raise any Cash. Local, State, and federal authorities have the greatest chance under this system to stabilize their Interest rate structure on their debt. Every economic incentive would back my proposition, with the greatest degree of financial stabilization. I will now listen to economists tear apart my argument. lgl

Point of Law

2010-12-15T12:19:00.000-08:00

Does Anyone want what Congress is planning to pass as Tax Cuts. Here is one analysis. I would advance a Rule of Closing, a technical term in Congress, the gist of which would state that the wishes of a previous Congress must be observed, unless a Two/Thirds majority Vote is taken by the current Congress to override the previous legislation. A previous Congress had stipulated that the Bush Tax Cuts should Sunset in 2011, and they should sunset without passage of the Rule of Closing overturning the Sunset. Those unfamiliar with the Rule of Closing should understand that it is a decision by the current Congress that the legislative power of a previous Congress should be ended on some specific Issue. Everyone in Washington has been silent about the Rule of Closing necessary, but I ask herein if any legislation without a Rule of Closing on this matter will be valid law.

People will think I am simply fighting to the bitter end–which I am. The truth, though, actually insists that they must have this Rule of Closing with its Two/Thirds majority. I am sure that even Democrats would like to shoot me at this point, as their lobbyists will be raising Hell. I am not one who cares, and herein inform the President that he might be acting unconstitutionally if he would sign such legislation into law. Obama might not of known of this Point of Law, but he should really consider that the legislation is bogus with or without his Signature, without that Rule of Closing. I would advise he throw the Issue to the Supreme Court, whose deliberations will be slow enough that the Bush Tax Cuts will Sunset on schedule.

The whole principle in question is not archaic, but a vital function of Congress which is being abused. The fact that a principle has not been used in a long time, or that it has been used inconsistently, does not validate its abuse. No American, and especially the greatest majority of American Taxpayers, want a continuation of bad Tax law which will do nothing to improve the economy. It is time We revised the entire Tax structure, not just continue bad practice. lgl

2010-12-14T09:39:00.000-08:00

Everyone has their own ideas about regulation. Here is a well-thought response to the issue. I would myself take a scythe to regulations, but do so in an intelligent method. I would pass into law an act detailing every agency and Dept. of the federal government must re-codify all their regulations and get Congress to pass on or strike out any element found wanting of intelligence, after which end a Manual will be published as regulatory law in force for ten years; the process to be repeated after such Period. It would probably take 3 years for such a Process to take place, and would be delayed ad infinitum unless pressed, so I would pass into law the nullification of all current regulation past January 1, 2015. The Manuals, and nothing but the Manuals, would govern agency and Dept. response to everything under their supervision.

Some otherwise intelligent people have asked me Why I so dislike graphs and diagrams, except those I fashion myself. I finally found a Post which can explain my hesitation. Graphing does excellent work, if one can interpret the information from the graph accurately. The trouble arises from the fact that interpretation often is dependent in the quality and style of Training one has received in such graphical study. Check out the diagrams presented in the Post, and try to develop a sense in what they say. Now, if you are extremely wealthy, go and buy the book and estimate what they would make of the Mess ( Cost Price–$160).

I will finish today with this Post for my older Reader. One can even program the relationship between Risk and Return. It is one of the prime reasons for so many Corporations ceasing their distribution of Dividends, knowing the safety of Pricing in their Stocks, with enough growth to silence any Return demand. Understand that the Fed is shoring up the Investment banks, who are shoring up Wall Street; a constant Savings or Deposit rate of 5% per year over 40 years would have done better than equal investment in the Stock Markets over the last 40 years for about 95% of Investors–considering the Ups and Downs. I know that about 70% of the Investors in the Stock Markets should not be in Markets at all. It is simply that they possess no alternative. lgl

Ways of Doing Business

2010-12-13T13:00:00.000-08:00

Some people insist on making things more difficult than they have to be. One can test the value of Tax Cuts in generation of Jobs simply by study of past performance. One simply has to designate the X-axis as the Tax Rate–going from 40% through Stages until 27% tax rate is reached; the viable range We could be talking, each tax rate time-dated to present a Time scale for evaluation. The Y-axis would be assigned the total amount of Labor with two graphs set up by time-dating; those who are employed, and the total number seeking employment at that specific time; One can place a Time line across the top as a Z-line. Thereafter, one has only to plot in the specific points at each period of time. I have always been of the suspicion that the graph of Tax Cuts actually resembled a Bell Curve, where over-reduction of tax rates actually reduced the tendency to acquire more labor assets (this meaning Business was using reduced Government taxation to pay for their Static Costs).

I agree with Felix Salmon that Obama’s cut of payroll taxes for Social Security will not affect the security of Social Security. The real Crocodile remains the refusal to separate Medicare and Social Security. A simple Presidential Decree stating that FICA taxes must be split into Social Security General Fund, and Medicare Special Fund would force Congress to confront the real Gorilla in the Mist. If Obama would wish to differentiate his Presidency from all Others, he would do this immediately. It would show Everyone where the real Shortfall lay, and the amounts of taxation necessary to maintain the program. Some will say this will incite Congress to cancel the Medicare program, but We are dealing with the fighting Senior Citizens here! They still do the majority of Voting, and mostly still have dominant control of political contributions. I would start the fight now, and mostly have the Dust settle prior to the next Election.

Scott Sumner tries hard to find some effective way to eliminate Government intervention from the economy, without revisiting all the tribulations of the Past. He might have come up with a Solution which will work. I am not deep enough into his analysis to tell the Stress points of the program, and whether it would actually work or find too great a resistence; an economic prospect common with all new movements in the economy. Here is my Kicker: Fiat Money is Fiat Money; the Issuer should be able to declare its worth. Scott would place an evaluation process on the fiat money, letting the Public set their own value. I would prefer a Treasury declaration that the Dollar was worth what it was in 1960, and that all Prices and Wages should reflect this value; the alternative being that Taxpayers will be subject to 1960 taxation rates. The Fed will be ordered to honor only the reduced Deposits rendered by the demanded Deflation rate. Mortgage-holders and other Debt can appeal to the Fed for revised estimate of their payments, which will be legally binding. All labor contracts will be declared Null and Void in legal proceedings, unless they have been proportionally reduced. This will probably seem really radical, but I suspicion that Labor will be far safer in this manner, than they would be under the Sumner plan. lgl

Medical Practice

2010-12-12T07:33:00.000-08:00

Read what Tyler Cowen has to say, then consider possible options for the direction of health care in this Country. Tyler assumes that Medical Care in this country will be categorized by Price. I can think of a more capable system, though everyone will think it very Orwellian. I take my idea from the British system of Trial where Solicitor and Pleader are separated. I would leave diagnosis to Doctors, and medical treatment given to medical economists with the ZIP code style thrown in for good measure. Surgeons would be separated into an entirely third class, and hired by medical examiners by their record of success. Doctors would be paid a Piece rate for placing the Patient ailment in a Postal-style treatment code, medical economists would take the Postal code and assign Drug treatments or medical procedures, while Surgeons and Technicians would be brought in for curative treatments. Doctors could be chosen on the basis of success in diagnostic analysis, medical economists would be chosen on the basis of success in distribution of medical cases through the system; and Surgeons and Technicians would be picked according to their success rates. All would get what was a functional flat rate for types of medical treatment, with a bonus for each success. Patients would flow through the medical system, with basically no one concerned about how much Wealth was assembled by the Patients. My position is that it would be functionally a better performing medical system with higher success rates and lower Costs.

My rationale for the above decision is the distribution of tasks. Medical students straight out of training would get the ‘grunt work’ of medicine when they are young themselves and healthy, and could better spend their time perfecting their surgical and technical craft. Older physicians would be placed in diagnosis where their physical efforts will be less, but their experience along with Time to maintain their understanding of current medical literature would make them the best diagnosticians. Everyone could more easily be adjudged for their success rates with greater overall supervision, and medical examiners could keep the medical costs as low as possible. A series of constant Questionnaire evaluations would allow for a high degree of colleague evaluation of Peers and Subordinates without any onus being placed by such activity.

Could such a medical system be introduced?–probably far easier than is currently imagined. Part of the success of the medical system would be the simple fact that Patient and Practitioner do not possess a personal relationship, with all Patients evaluated based solely on medical condition. There are several medical clinics which show extremely high levels of success utilizing a similar system, able to capture expertise and delineation of task. It could be a real Winner! lgl

New Day for Health Care

2010-12-10T12:51:00.000-08:00

I would start by asking Readers to preview this Post from the CBO. It includes important information which must be understood. Health Care Costs are rising, and the Republican advocacy of cutting Welfare benefits are unviable; the vast majority of health care patients cannot withstand health care Costs now, when those Costs make up 10% of the GDP, never will the Populace withstand a rise in those load-bearing Costs to 16% of GDP. Republicans may think they can surround hospitals with barbed-wire topped walls and Security guard dogs, but if they want any health care at all, it must be open to Everyone–too many Guns and Knives out there! Police agencies will not do well suppressing demand for health care, especially as those Officers and their families will need health care themselves.

We must approach the Problem from both Sides, by raising tax revenues, and by cutting health care Costs. My view of increasing tax revenues is return to a uniform tariff of 6% on all Imports; it not only raises immense revenues, it also cancels the added Cost of domestic production where domestic taxation for Services drain their Profitability under competition. My second plan is for Congress to pass a progressive list of taxation per units of $10,000 as an Alternate Minimum Tax; specifically, below $20,000–a tax rate of 0%, $30-50,000–a tax rate of 10%, $60-80,000–a tax rate of 12%, and above $80–100,000–a rate of 15%, and over $100,000–a tax rate of 20%. You must pay the regular taxation after all reductions, or the AMT–whichever is higher. I would like to eliminate the growth to full payment strategy currently on the Tax base, where the Taxpayer must pay the top rate wherever his Income falls throughout the total of his Income.

Reducing the health care Costs can be effective if We treat the health care problem as a unit Whole. There are some simple Rules which must be adopted:

1) Any Doctor who receives more than $60,000 in payments from Government subsidy for the treatment of Patients will be considered Government Employees and receive no further payment for their services; combined with the expectation that they will maintain a set Patient load of Government subsidized Patients throughout the Work Year, granted one month of Vacation with a substitute Doctor named; failure to maintain this Work load will cause Penalty of demanded return of Salary consistent with the percentage of failing to meet this Standard.
2) Clinics will be granted a sum of $250,000 before they are considered a Government facility in payment for treatment of Government-subsidized Patients, and given only Cost plus 10% past that Point to meet their Expenses; again meeting the Patient load acceptable to Medicine for the size of their facility.
3) Hospitals will be given an initial payment of $2 million before given the same treatment as clinics.
4) All Drugs and Medical Equipment will be paid for by Government subsidy at Production Cost plus 20%–the standard rate for medical royalty provision. Their Research Costs may be paid up to 25%, if a panel of medical economists find a marked improvement in Patient Care, but only after Proof than the regular payment schedule will not repay the cost of Research.

We have to change, and the sooner the better. Medical Insurance must be held in check, with Government medical economists setting the rate charged for standard procedures on which Insurers cannot contest the Charges–Get it from the Insured as premiums. A vast Change in Government procedure, but utterly necessary; We need all of the Above. lgl

2010-12-09T14:03:00.000-08:00

I am quite sure that Mike Shedlock opposes my position on economic policy, but he does write very interesting stuff at times. He looks at life from the position of reducing Taxation and Spending, while I desire an increase in Taxation, and specific Spending. It stands as humorous that We feel so identically the same on the contempt We have for the way things are. The Compromise Tax Deal gains no one anything, and the very bribe produced to mollify lower Income Taxpayers was not, and will not, be desired by the Public. The American Public wants a real discussion someplace about what to do with the Deficit, and they are not getting one; I would suggest this will eventually affect all members’ decisions to remain in their jobs!

Hennessey suggests that Democrats could have won on Taxes by basically giving the Republicans what they wanted in the first place. The problem here being that keeping things the same, even making it worse with expanded Tax Cuts, cannot be the Answer if it has not worked successfully for a great number of Quarters. The real sadness comes in the fact that Retail is not doing too badly, Some would even say that they are successful in Recovery efforts. The real kicker have been that the artificial Profits of the Boom years have disappeared, and are not likely to show up soon. The most polite method of explaining the situation is that Wall Street does not want Bernie Madoff back, just his way of doing business.

Here are the greatest opposition to real economic policy. Business still believes that the Government can be robbed of tax revenues, and that it will all work out well. It is actually not working out at all. The double down quality of raising the national debt will absolutely demand restructure within 3 years, and Business estimate that it will work out well for themselves. It will not! There will be Non-Escape Taxes levied when the Crisis finally is driven home, and now is the time to avert that Crisis. You tell them, and you tell them, but they still do not want to believe. lgl

Can your Light shine in such artificial illumination?

2010-12-08T15:42:00.000-08:00

Some economists are attempting to understand the sourcing rationale behind the payroll tax cut of 2%, thinking the whole concept is rather dubious–as do I. The difference between us, though, consists of my knowledge all good politicians run from blame, and both Sides wanted to avoid the serious impact of the Inflation rate which all of U.S. officialdom proclaimed was not there. Word to the Poor Critters: Grocery-shopping housewives have already noticed the Inflation, and are starting to burn with righteous anger, which can only grow when their husbands recognize that the 2% reduction in payroll taxes did not lessen the impact of the household bills.

The Budget Deal reinforced an economic policy of doing nothing, which a vast number of people cannot afford. We live in a La-La Land, where a Tax Cut means continuing the same rate as before, this purportedly some form of stimulus; funding for Tax Cuts comes not from Spending Cuts, but from reduced revenues to programs which are currently fully-funded though not through a revenue cut; all Tax Cuts placed where economic conditions will maximize the revenue loss (can you notice all Tax Cuts are going to Those who still have an Income of major size to tax); and Government officials who think they should get Raises because they thought of a federal freeze of Civil Service salaries. No one supports any measure of Tax reform, and WE are $283bn over Budget in the first One-Sixth of the fiscal year.

Everyone in the business community knows that continuation of the Bush Tax Cuts will not entice any further investment in Production, as long as Consumer Demand is absent–which it has been for two years. Business wants only to maintain their Profitability at reduced Production levels while waiting for the Consumer to come back; something which will not happen in the force necessary without aid from the Government; again something from which federal policy avoids because of the potential to force Tax hikes as all the fallacies are realized. The interesting thing is that Tax hikes are the real force necessary to force Business to produce more, and dump the excess at Sale Cost; Consumers regaining their participation rates by Business leaders desiring the same Profits range lost to Tax hikes. A World of Smoke and Mirrors, but one where We have lost ourselves. lgl

Debt Relationship to Inflation

2010-12-07T13:45:00.000-08:00

I simply present this stylized gobblygook to signify I do not understand it much at all. I worry about Inflation, not from expansion of the money base, but from the acquisition of debt. It is not the actual injection of Stimulus which need be worried about, but the failure to fund that Stimulus in the first place; and the said effect of Inflation from it. Acquiring debt has the effect of lowering the value of Wages in the linear economy, while increasing the value of Profits and Rents. The reason for the benefit of the later lies in the purchase of additional productive product–non-immediate Consumption usage. Physical Product gains value under Inflation; it being cheaper to have acquired productive resource at an earlier time.

The problem with Debt comes from artificial increase in the Price of Consumption in relationship to other competitive linear economies; those who are bidding for the same Product and Resource. Such competition causes both linear economies to pay more for that Product and Resource than simple operation in a singular economy, and debt creates dispersion across linear economies. This dispersion allows the lower Debt acquisition to advance greater bidding against the debt-ridden nation, and increases the overall bid ratio higher. This means that the Price goes up for All, but with the lesser-debt nation having greater bargaining power, and paying lower Price for the Product–even though the Sale price is identical. I know that it is a hard Concept to follow, but think of its as the less debt-ridden country ability to force the more debt-ridden country to pay at the top of their dispersal range, without themselves having to pay above the Mean.

See, I told you that I did not understand this stuff. Debt-ridden countries have Consumption to maintain lifestyle, which forces them to spend their Savings, while less debt-ridden nations can afford to maximize their lifestyle, without sacrificing their Investment potential. The higher bidding caused by the greater entrance into the markets leads not only to higher Pricing and Inflation, but the erosion of Wages in the debt-ridden nation. I await my colleagues’ contempt for my poor choice of ideation and theory. lgl

The Real Facts

2010-12-07T09:38:00.000-08:00

It can really start to get tricky after this purported deal. Obama really tried to get something substantive, but Republican pressure is great and they will soon possess the decisive Vote. Obama has repeatedly refused to take it to the people, making preemptive deals with the Opposition before Grass Roots Democrats had a chance to voice their Opinion. The Owner of a Fighter in Boxing should not declare the Opponent the likely Victor before the Match. It is not conducive to a helpful outcome. Obama and Capital Democrats do not understand the basic doctrine of Politics, which is a battle to the end. Democrats want to avoid the appearance of defeat, but they should really tell Republicans to bring it on! A battle royale insists that both Sides commit their full array of power, and the Opposition gets to witness their true agenda. I am quite sure that the Populace would be greatly interested in full revelation.

Paul Krugman stands quite Right on this one! The implications of a further reduction of federal tax revenues, with an increase in federal Spending, will be an absolute disaster for World financial markets. And this is exactly what the Deal will accomplish. The Lobbyists demand for further Tax Savings will break the Camel’s back. I predict that the bond markets will start to collapse somewhere early in the new year, as first indications of reduced tax revenues appear. The Beltway may be dense and half-blind, but they will notice when they land on the Street.

I will let my Readers view this Piece from the source. Ask how the new Deal will affect the events described in the Post, remembering Expenditures for the fiscal year have already exceeded tax revenues by $283 billion. Notice that Corporations received more refunds than made payments in this Period, and the Deal would ensure that such a condition will continue for the rest of the fiscal year. Obama and the White House were vitally concerned with hiding the impact of the Inflation which is not supposed to exist according to the Fed, but which does; this is the reason for the cut in Payroll taxes, there being no real advantage for Labor. The Democrats at the Capital level gave away the entire Store with nothing for the Hinterland. Get set for the worst Recession since the Great Depression. lgl

Getting Tough

2010-12-06T11:52:00.000-08:00

You may ask Why this Post is important to study; I remand you to the Chart. Let me put it another way; the right hand side should also have an axis, scaled not from zero precisely, but showing the percentage of each Income level paying each form of Tax. Everyone knows this would make the Chart a little dense on the Right side, but the Chart can be expanded as needed, due to the miracles of technology. Such documentation though, even in Chart form, might produce some misgivings amidst the sad Taxpayers at the high Income level. Remember, kids, this is the way you find out the bad News about the economy–devising the correct method to analyze economic data.

There is a lady who thinks there is some Common Ground over which Democrats and Republicans can agree about Taxes and Expenditures. Republicans care not either for marginal tax rates or average tax rates, they only want no additional tax revenues coming from themselves. Democrats want to gouge the Wealthy; knowing that the Poor are safe, one cannot get blood from a stone, and the Poor and Middle Class are on some stony ground. No one talks about What has actually to be done to balance the budget in all its aspects. I will give a Roadmap:

1) Social Security and Medicare have to be separated, with Medicare given its own wondrous Tax rate and base; first Step in the Trip to a national health care system. Both Democrats and Republicans know what a pain this will be to the Pocketbook.
2) the Civil Service–hopefully State and Local as well as federal–needs to be split in two, One-Half working Monday, Tuesday, Wed., and One-Half working Thurs., Friday, Sat. Everyone would work a 12-hour Shift three day a Week; Everyone would get only 2-Weeks of paid Vacation after working at least 50 Weeks, and Congress will determine a Unit Pension benefit to be paid monthly for all Civil Services classifications. No Civil Service personnel will be employed more than 20 Working Years per lifetime, and any further Service to the nation must be paid out of potential Private charity contributions.
3) Income will be split in $10,000 Units for Tax purposes, and there be passed by Congress an Alternate Minimum Income Tax in a progressive list which must be paid for each segment. The AMT yearly Fix will become a thing of the Past, but any form of Employment taxation will accrue to the fulfillment of the segmented AMT. By the way, Corporate Income, Capital Gains, Inheritance, and Royalties and Rents will all be considered ordinary Income and taxed at the same rate.
4) Congress cannot just Vote in support of a federal program or project; they must determine How much they are willing to pay for that project every year, and the project in question let out for Bidding. Any Bid is considered sacrosanct, and the Bidder will be compelled under law to supply the Contract under the terms of the Contract.
5) Congress must drop any such project from the current fiscal year, if no Bid has been advanced under the Contract passage.

Does it seem harsh? It is meant to be! lgl

Real View

2010-12-05T10:29:00.000-08:00

One should recognize the alternate projections which could be aroused by diversion of the Bush Tax Cuts elsewhere. Here is a pretty good stab at the wealthy end of the Bush Tax Cuts. There are a lot more uses for the tax revenues besides giving it to people who will not use it to promote the economy. It patently expresses that the low-End of the Income spectrum vitally needs the extra Cash to build their economic viability—something which makes up about 80% of the Population. There could have been additional data in the article with information on the fact that only about 18-20% of the Return, if given to the Wealthy, will actually be spent upon purchase of any economic Product–rather than financial instruments on which there is no economic return. This means that instead of an even split where almost all of the $500 would go to the purchase of economic Product; about $410 of that $500 will be transferred to commercial paper which does not generate even comparable economic activity.

This Post from James Hamilton immediately after the Leonhardt article on the economic site I utilize explains it all. None of the economic data indicates that there will be any increase in employment currently which would decrease the actual Unemployment rate–something far too great by any evaluation. The Leonhardt article explained How the current Bush Tax Cuts extended will never improve that employment, while indications exist that such current economic activity will decrease with the new year. The only buoyancy present at this time consisting of the Christmas Season. The Republican Congress may be voting to reinstate the Bush Tax Cuts while the economy is already in decline.

Here is a Post from Matt Yglesias that expresses the Opposing Side argument. The trouble is that it proposes equally flawed ideas. Still, Matt explains the argument is clear terms, with the positions of Liberals and Conservatives. The actual fact stands that We need higher Taxes, a freeze on social welfare spending, and establishment of Government-funded large-scale Work programs where no one can complain about reducing Spending once the projects are complete. The trouble remains the fact that it meets opposition from all Sides. lgl

New Taxes

2010-12-04T10:34:00.000-08:00

Here is an article which shows that the Playing Field has never been equal. The Poor cannot afford the favoritism which the Rich hire. Could I put up with the expiration of the Obama Tax Cuts?–Certainly! Do I want expiration of the Bush Tax Cuts?–even greater Certainty! It is not only the Just thing to do; it makes an incredible sense given the skewed Expenditures of the Government not covered by tax revenues. There still exists an almost Certainty, though, that the Bush Tax Cuts will be reinstated without revision, and the Obama Tax Cuts reinstated only with sharp revision, unless Democrats make huge concessions to a Republican budgetary plan which is only of real advantage to the Wealthy. This Certainty finds establishment in the fact that all of Congress belongs to the Wealthy Class benefitted by the current system.

There are a number of Nuisance Taxes which Democrats could force upon a reluctant Republican Congress, if they desired to do so; it all a Question of turning to the Voters for support. I would pass the Accounting Tax: where every Taxpayer must pay in addition to his determined taxation an amount equal to the total Costs paid to Accountants and Tax Preparers (including lawyers). It has an inherent sense; if you create a huge documentation which must be checked, then you should pay for the Cost of checking it. It is clear that We would all want some standard deduction on this Tax; I would suggest a deduction of $250 per Individual Taxpayer, and $2500 per individual Business. Everyone else must pay the full amount to assure the price of Accounting is paid for the Government.

There is always the Deduction Tax: which is simply a taxation each Taxpayer must pay on the total amounts saved by Tax deductions, Tax Credits, and Tax Exemptions. It is optional if the Voters want to include Tax deferments until later in life. I would suggest a straight taxation of 12% of all such tax remissions, and even give an Exemption on this Deduction Tax equaling the standard personal deduction, plus maybe some deduction from this Tax for each dependent; never including a member of the Workforce. There is always the Luxury Vehicle Tax, where Purchasers must pay $10 per $1000 above any Vehicle of Standard Options average Price for the year in question. This later Tax must enter an Insurance Fund to pay for the added Cost of Car Insurance from luxury vehicle claims. I would get really nasty with a Viewed Tax, where any Politician, Business person, Lawyer, or Advertising Agent must pay $1 per minute for every minute of Viewing Time he is viewed or heard on Radio or TV; this Tax also includes repeat Airings of Material, it all being considered Advertising of Person, if not Product. There are ways to get tax revenues out of these bas, hmmn, individuals. lgl

Tough Love

2010-12-03T12:53:00.000-08:00

I would first like to say that I don’t agree with this assessment at all. There is absolutely no drag upon Employment from the last Recession, nor will there be: it is all a question of development of Consumer Demand. It gets my goat that people imagine that the losses of a previous busted Boom will forestall a new regeneration. People have been losing Money in Business ventures to greater or lesser degree since the dawn of Mankind. Such losses produce Hunger and Risk-Taking by Those without Wealth, and the Wealthy hate the lack of Return to keep their pile growing. Economic Busts do not dampen Incentive, it enhances it! One has only to examine Germany and Japan after World War II; they starting from a bombed-out nothing to return to major economic powers in the World once more.

The second element I would stipulate consists of the statement that Tax incentives do not operate in the presence of reduced Consumption Demand. Business will not invest without solid Demand and Traffic. Consumers will not purchase if they possess capacity Products which are already paid for and working. There has to be an enlargement of the Consumer population, not a pursuit of a fed Consumer already reliably supplied with older Product. One needs Government Spending to expand that Consumption market, and it will not come from Tax incentives; especially when Government insists on deficits which serve no one, and drain private Capital markets. It is also a Truism that Exports will never replace a domestic market, no matter how rigorously sought.

I want the uniform Tariff of 6%; something which aids domestic production, while not costing the end-Consumers much more than they will pay anyway. I want the repeal of the Bush Tax Cuts as being ineffective–Past, Present, and Future. I want the Fed to stop destroying the Constant Consumer–who are millions of Elderly who cannot get a decent Return on their chosen investment instruments–Bank accounts. I want the Unemployment Benefits cut off after 60 days, forcing Labor to take what Jobs are available. I want the Government to supply those Jobs which the Private Sector will not–through massive restoration projects at every level. I would finish by passage of a federal law forbidding discrimination between Property holders to attract new Business to the area; local and State revenue coffers must themselves be replenished. Government must supply Jobs, but lower Income jobs acclimating American Consumers to a lower Income, but one where the purchasing pattern is maintained. We need to get the pretension out the economy, and the real hard work reintroduced. lgl

One Size fits None

2010-12-02T12:01:00.000-08:00

I find a very good idea once in a while, and generally it is gummed up to a point that it is unworkable. It stands as a sick and sad concept to give the overages to Charity, like everyone wishes to make investments with no rate of Return. The idea of giving a share percentage of the Profits of an enterprise is not new, something call silent partnerships. Building a business format finding and selecting these silent partnerships creates the new Concept. What I would do is create the business, find the participating business, and sell Percentage (1) shares over the Internet for an auctioned price with the participating business capable of acceptance or rejection of the bid. Here is a Means of participating in small business growth without the ridiculous resort to Stocks, Bonds, and Commissions; I would demand a singular Commission price from both participating business and purchaser of $100 per realized Sale. The business enterprise format could also offer Insurance on fulfillment of Return for the original investment; also through Sale at auction to major Insurers with premium set by the Insurer at auction. I would also set a $25 commission for this Insurance, as I would want an up-front one-time payment for the Insurance. It could become the new Craze of the Internet!

I was arguing for the exact opposite yesterday, but Catherine Rampell may have a point. I also have a point: Taxes should not be so complicated that one must hire a Tax Preparer; a place where Workers from the same industry can join cause in cursing the IRS for the same reasons. This states that Tax benefits should be uniform and consistent. The personal deduction should be one-size fits all–both personal and dependents. Joint filings from Marriage should get a singular one-size fits all–I would suggest $10k per filing. I would suggest a one-size fits All investment tax credit of $4000, dependent upon that great an investment, but no more Cash underwritten. I would suggest a Tax-delay Credit for investment vehicle of the inverse size of Tax bracket one is in; this meaning that you pay a tax on your tax-delay credit, but that you pay that much less tax after Retirement on the Money cashed in. I would suggest a Capital Gains Sales tax of 3%, and forget all about Inheritance, Gift, Charity contributions, etc.; though I would maintain a Capital Gains taxation of 21%.

I possess a real dislike here for granting escape from Inheritance and Gift taxation, but little is ever gained anyway. As long as the Capital Gains rate and the Capital Gains Sales tax rates are maintained, more money will be received in tax revenues than in the other; simply because the later can be so completely gamed by Those who have Money, and poorer individuals should be let out anyway from taxation. I will catch hell about voiding the Charity contributions deductions, with only the Statement that Government should be our greatest and most needy Charity case. I will listen now to the complaints (do you really think so?). lgl

Real Truth

2010-12-01T05:10:00.000-08:00

I can easily find How Wall Street and the Beltway think. The trouble remains that these ideas have brought Us grief repetitively over the years. I told All who would listen that the Bush Tax Cuts were bad, and have been doing so since they were first proposed during the 2000 Presidential campaign. Now, they want to do it one more time, with all the expectant results which never occur. There has to be a better way, but even if there was an easily definable one, the Lobbies would never allow passage.

The Democrats need a rallying Cry in the Tax debate. I would call for the elimination of the Flow-Through of the current Tax system. Everyone thinks that higher Tax brackets are taxed at the stated Tax rates, but they are only taxed at those rates after they have received the same Tax advantage as the lower Income brackets; this process creating a great hole in tax revenues. I would adopt a tax provision stating that each Taxpayer must pay the Tax rate stipulated for their Income bracket, throughout the total of their Income; not just on what had not previously been taxed at a lower rate. It is a Call on which Democrats can block new Republican tax legislation which would further denude tax revenues, and do so with widespread Public support when the Issue starts to be discussed.

My Pet Initiative is a uniform Tariff of 6% on all foreign Products. This would bring in a great deal of tax revenue, and alter the entire Debt posture of the Country; not just for Government debt, but also for Consumer Credit, all within the context of loosening up the extension of Business Credit. What is most apparent consists of the failure of the Government–federal, State, and Local–to control their Expenditures. This, more than Credit Default Swaps, has presented the stress in the financial markets; they unable to continually meet a rising demand for Credit which is never actually repaid except with further Debt. Everyone knows that this Debt is building faster than actual Production Profits, and the later has to be devoted to many other economic factors. There must be Change, and sooner than later. lgl