We reached $74/barrel for Oil Today, and some rumors suggest We could reach $80/barrel, though this Author imagines (or it is only hope) that pressures will be relieved at a price of $76/barrel in this Round. Indications remain that Refining capacity has reached its bottom, and will start to increase. The Wholesale Price index was up by 0.1%, and Bank of America stated increases in Corporate borrowing. Profit Margins are being pressed, and the CPI index will rise by an Author-estimated 2.1 times the WPI index percentage increase by the clothing market season of August--at the very least. Pressure for additional Wage increases will increase by 11% on the Author's own in-house Scorecard (that means he doesn't explain it, so he won't get laughed at). Those who would desire a sensible explanation, this Author will simply state he expects Average Wages to expand by 2% by Christmas, but still run behind the Inflation rate. This can be somewhat underwritten by the slight drop in the Leading Economic Indicators, which shows Management dragging their heels because of the rising Operating Costs.
The lush Profits of the Banking industry in the face of a slowing Mortgage market remains a deep worry, as Banking service charges eat into Consumer Demand, and higher borrowing by Business for Operating Expenses dictate higher-priced Consumer Prices with lessened Consumer Demand through dragging Wages and higher Costs. The Trucking industry is starting the practice of "Cost plus Fuel premiums" Contracts which is a good idea to limit Transport by Air, but not as Wise in heavy-Weight hauling; the Split causing Profit-taking on the Cost side, and ahead-of-Cost premiums for the Fuel. The Split, therefore, could cause an artificial raise in Transport Costs of up to 4% of total Costs. One must understand the Concept of Breakpoint when studying the Economy: Booms and Busts are determined by long-range Trends, but Shift points between the Two often hinge upon the marginal rates of many elements, even to the place of determining if there will be a Shift from One to the Other. lgl
Thursday, April 20, 2006
Wednesday, April 19, 2006
Public Health Care
http://www.cdc.gov/od/oc/media/pressrel/r060418.htm
New Study Finds Lifetime Costs of Injuries in Billions; Costs Associated with a Year Top $406 billion
Press Release
The lifetime cost of injuries occurring in a single year in the United States totals an estimated $406 billion in medical expenses and productivity losses (including lost wages, fringe benefits, and ability to perform normal household responsibilities)- according to new findings released today by the Centers for Disease Control and Prevention (CDC).
What does the Above Statement tell Us if it is correct? The first conponent remains the Multiplier: One can take $406 times the number 64, which is the number of Years with the identical Costs before Medical Expenses will blend out effects of such Injuries; basically, through the attrition of Death or other deadly medical ailment supercedence. The second conponent insists that the serialized Total must also be graced with an increase of Medical Expense Inflation; under current Trend, somewhere between 8-14% per year. This Outlook may seem horrid, but it is probably the least expensive of modern Medical treatments.
The Question need be asked: Can Medicine afford Private Enterprise?
The Profit Motive affects every aspect of Medical Health treatments; suspected by this Author to cost 27% of overall Medical treatment and 42% of Cost of Drug availability, due to repetitive imposition through successive levels of Profits generation (I do not claim any real quantative evaluation of scientific scope). Still, the Author believes these would likely be the minimum level Costs of the Profit Motive in Health Care provision. It stands as an exceedingly large Cost which Medicine must currently endure, alongside the huge Cost of inflated Health Care Wages paid for Specialists; consider the Savings if Health Care Specialists were paid on the order level of Engineers, Chemists, or Car Mechanics. The Profit Motive seems great in the etheral reaches, but on-the-ground practicalities might insist such a huge industry with extreme usage by Customers need a tightly-controlled Cost environment; even if it doesn't attract the Best and the Brightest! lgl
New Study Finds Lifetime Costs of Injuries in Billions; Costs Associated with a Year Top $406 billion
Press Release
The lifetime cost of injuries occurring in a single year in the United States totals an estimated $406 billion in medical expenses and productivity losses (including lost wages, fringe benefits, and ability to perform normal household responsibilities)- according to new findings released today by the Centers for Disease Control and Prevention (CDC).
What does the Above Statement tell Us if it is correct? The first conponent remains the Multiplier: One can take $406 times the number 64, which is the number of Years with the identical Costs before Medical Expenses will blend out effects of such Injuries; basically, through the attrition of Death or other deadly medical ailment supercedence. The second conponent insists that the serialized Total must also be graced with an increase of Medical Expense Inflation; under current Trend, somewhere between 8-14% per year. This Outlook may seem horrid, but it is probably the least expensive of modern Medical treatments.
The Question need be asked: Can Medicine afford Private Enterprise?
The Profit Motive affects every aspect of Medical Health treatments; suspected by this Author to cost 27% of overall Medical treatment and 42% of Cost of Drug availability, due to repetitive imposition through successive levels of Profits generation (I do not claim any real quantative evaluation of scientific scope). Still, the Author believes these would likely be the minimum level Costs of the Profit Motive in Health Care provision. It stands as an exceedingly large Cost which Medicine must currently endure, alongside the huge Cost of inflated Health Care Wages paid for Specialists; consider the Savings if Health Care Specialists were paid on the order level of Engineers, Chemists, or Car Mechanics. The Profit Motive seems great in the etheral reaches, but on-the-ground practicalities might insist such a huge industry with extreme usage by Customers need a tightly-controlled Cost environment; even if it doesn't attract the Best and the Brightest! lgl
Tuesday, April 18, 2006
The Fed and Inflation
The price of Oil hit $72/barrel in London, and over $71/barrel in New York; by the way, you can't legitimately eliminate Price increases from Core Inflation, if such increases has been consistent for over a Year in duration. Construction Contracts were down severely, which will cut down on American Energy consumption; but with corresponding greater loss of purchasing power for Households. Wells-Fargo, one of my own bankers, reported a $2 billion Quarter though the Mortgage sector performed less than expected. This first means Banking Charges are becoming excessive, second, Businesses have to be borrowing more for Operating Capital, and third, $5.021 billion in Operating Expenses for a Bank is ridiculous. Food prices are also jumping, especially Eggs and Fish--both heavy Energy consumers. How many overactive Products can the Fed cut from Core Inflation, before We see a rise in it?
The only stable Price schedule are those for Retail Finished Goods, and even These are online for a 5% Inflation rate if the trend continues. There is not the slightest indication that rising Interest rates have any impact at all upon this inflationary trend. What is the worst push for this Inflation other than Oil? Government Spending--flat and simple! lgl
The only stable Price schedule are those for Retail Finished Goods, and even These are online for a 5% Inflation rate if the trend continues. There is not the slightest indication that rising Interest rates have any impact at all upon this inflationary trend. What is the worst push for this Inflation other than Oil? Government Spending--flat and simple! lgl
Monday, April 17, 2006
What caught this Author's eye immediately this morning was the data on the New York Fed Factory Index. Then later I read Testa at Midwest Economy
http://midwest.chicagofedblogs.org/archives/2006/04/manufacturing_a.html
April 17, 2006
Testa wrote that while the Midwest manufacturing was doing better, it was still the worst hit of all areas due to the concentration of industry. The New York area, though, is not less concentrated than the Midwest, and Energy Costs are to some degree more expensive--especially the manufacturing sources of Energy. The large drop in the New York Factory Index was attributed to lack of Orders and Reorders. Did I forget to mention that Oil hit the $70/barrel Pricetag again?
One almost-friendly Economist once told me he liked my Predictions, as they always seemed to signal an upturn in the Economy; but I think I will try it once more. This Prediction states that the high Energy Costs are starting to hit with a vengence, and hitting Manufacturing the worst, as it does in the initial phase. The Tourist Trade is likely to grind to a halt, with the bad numbers first alarming towards the middle of June. Watch the Construction numbers which will start pouring bad Stats by the end of May, if new Contracts do not rise substantially. This Author will be searching frantically for May numbers on Intermediate Hauling, which say much more on the state of the Economy than simple Inventory stockpiles. There may be no pickup in tonnage hauled, and if this is the Case, it is DEFCON Three. lgl
http://midwest.chicagofedblogs.org/archives/2006/04/manufacturing_a.html
April 17, 2006
Testa wrote that while the Midwest manufacturing was doing better, it was still the worst hit of all areas due to the concentration of industry. The New York area, though, is not less concentrated than the Midwest, and Energy Costs are to some degree more expensive--especially the manufacturing sources of Energy. The large drop in the New York Factory Index was attributed to lack of Orders and Reorders. Did I forget to mention that Oil hit the $70/barrel Pricetag again?
One almost-friendly Economist once told me he liked my Predictions, as they always seemed to signal an upturn in the Economy; but I think I will try it once more. This Prediction states that the high Energy Costs are starting to hit with a vengence, and hitting Manufacturing the worst, as it does in the initial phase. The Tourist Trade is likely to grind to a halt, with the bad numbers first alarming towards the middle of June. Watch the Construction numbers which will start pouring bad Stats by the end of May, if new Contracts do not rise substantially. This Author will be searching frantically for May numbers on Intermediate Hauling, which say much more on the state of the Economy than simple Inventory stockpiles. There may be no pickup in tonnage hauled, and if this is the Case, it is DEFCON Three. lgl
Sunday, April 16, 2006
Immigration Impact
Cost of Illegal Immigration May Be Less Than Meets the Eye
By EDUARDO PORTER
Published: April 16, 2006
http://www.nytimes.com/2006/04/16/business/yourmoney/16view.html
This is a good Review of some Studies on the impact of Immigration on Income levels in this Country. This Author will say that the assumption that Immigration propelled Industry to invest more Capital is somewhat improbable; Borjas and Katz might overestimate the potential of Labor cadres to promote Investment. The greatest impetus to Investment is the availability of financial assets. Investment Capital generates its own Investment opprotunity, because the Controllers of financial Capital will not let the funds sit idle.
I do not believe Immigration has much impact on Income--even among the Lowest in Income. There is little incentive to obtain low-paying Jobs among American Workers. Jobs will simply not be taken, if they will not provide a sustainable lifestyle. American business simply refuses to provide a Living Wage. The current Drive to enhance Profits has generated the loss if Income at the lower levels, not Immigrants willing to work for such Wages. A Study should be conducted on the spread of Business Profits since 1960, noting its percentage increases, and where these funds have been derived. lgl
By EDUARDO PORTER
Published: April 16, 2006
http://www.nytimes.com/2006/04/16/business/yourmoney/16view.html
This is a good Review of some Studies on the impact of Immigration on Income levels in this Country. This Author will say that the assumption that Immigration propelled Industry to invest more Capital is somewhat improbable; Borjas and Katz might overestimate the potential of Labor cadres to promote Investment. The greatest impetus to Investment is the availability of financial assets. Investment Capital generates its own Investment opprotunity, because the Controllers of financial Capital will not let the funds sit idle.
I do not believe Immigration has much impact on Income--even among the Lowest in Income. There is little incentive to obtain low-paying Jobs among American Workers. Jobs will simply not be taken, if they will not provide a sustainable lifestyle. American business simply refuses to provide a Living Wage. The current Drive to enhance Profits has generated the loss if Income at the lower levels, not Immigrants willing to work for such Wages. A Study should be conducted on the spread of Business Profits since 1960, noting its percentage increases, and where these funds have been derived. lgl
Saturday, April 15, 2006
The Perjury of Thought
The title of this Post may seem strange to Some, but it highlights a Trend currently evident across a broad spectrum of economic and political discussion: the use of argument which are inherently flawed for the purpose of Convention, and to avoid the implications of genuine analysis. Bush still talks of turning the Corner in Iraq, when he has daily evidence of increased Violence, Death tolls, and American Casualties; knowing real discussion would outline the Policy failures of Iraq investiture. Health Insurance companies are still hawking Proscription D along with the Politicians, both doing so only for the premium money; All understanding there must be reform else there will be nonpayment to Insured, destitution of the Social Security Funds, or higher Deficits and Taxes. The current Trend of the WTO is to discriminate against the U.S., then outvote Us; while Economic and Political leadership still extol Free Trade which is practiced by no member of the WTO. The list of such Perjuries are endless, often defending Positions proven valueless decades ago.
The price of Gasoline is passing $3/gallon slowly, but will probably be accomplished everywhere by the May Graduations; it all generated by the Speculators, who do not broadcast that overall Oil consumption is down Worldwide, or signify current levels of Oil production will meet Demand throughout the Year. They also do not mention that the Iranian President could not cut Iran's Oil production without denuding his own agenda of funds.
Iraq and Afghanistan get upscale Reportage by Governmental official, Politician, and Journalist; this Author suggests his Readers view the movie 'Black Hawk Down', for conditions are nearly identical in many areas of Iraq, and American troops are back to fighting a War with the Taliban in some sections of Afghanistan. American Casualties are on the increase in both areas, while Violence is escalating in both Nations plus Pakistan. This Author is tiring of the official lines. lgl
The price of Gasoline is passing $3/gallon slowly, but will probably be accomplished everywhere by the May Graduations; it all generated by the Speculators, who do not broadcast that overall Oil consumption is down Worldwide, or signify current levels of Oil production will meet Demand throughout the Year. They also do not mention that the Iranian President could not cut Iran's Oil production without denuding his own agenda of funds.
Iraq and Afghanistan get upscale Reportage by Governmental official, Politician, and Journalist; this Author suggests his Readers view the movie 'Black Hawk Down', for conditions are nearly identical in many areas of Iraq, and American troops are back to fighting a War with the Taliban in some sections of Afghanistan. American Casualties are on the increase in both areas, while Violence is escalating in both Nations plus Pakistan. This Author is tiring of the official lines. lgl
Friday, April 14, 2006
Rumsfeld and the Bush Era
The Secretary of Defense has been getting Calls to resign from retired Generals, some Seven so far and likely increasing. They cite micromanagement of affairs in Iraq, sloppy Intelligence in the initial push into Iraq, and are critical of his treatment of internal Management policy. Leave it to Generals not to mention the real reasons out of National Security fears.
The United States Military has been experiencing a marked Personnel drain because of the strain of repeated Tours to Iraq and Afghanistan subjected on Troops; the most noteworthy being the resignation of Junior Officers, qualified NCOs, and a denuding of National Guard forces overall. Rumsfeld (actually George W. Bush's refusal) decision to even discuss reinstitution of the Draft forestalled any attempt to adequately provide a good distribution of Effort from Americans. Patriotism does not really last past the Third Tour. It is not actually a need to reinstate the Draft, simply a methodology to promote a massive increase in Enlistments through genuine inducements. Bush Republicans, though, did not want to reinstate something like the G.I. bill because of the Cost. They opted instead for the current policy of understaffing of military forces, with huge investment in Weaponry for the huge Corporate Profits generated. Even here, they starved Troops deployed of essential equipment, which did not generate the great Corporate Profits deriving from R&D.
There will be further problems for the Bush administration if the clamor for Rumsfeld's resignation increases. Any attempt to retain Rumsfeld will lead to the discussion of Issues outlined by myself over the long term. Replacement of Rumsfeld will create greater problems for the Bush administration, as Rumsfeld hides a great number of Sins at Defense. There has been vast payments for Services never provided, overpayment and double payment for many Services, and Cost overruns on Weapons development far beyond which the Enron Accountants would allow even in the old days. Any Republican taking over Defense would face an efficient Review in Three years by an new Administration. Anyone else would outline the debacle to maintain his or her reputation. In any and all Cases, the entire mess will come to light at least within Four years, as We have a Lame-Duck administration where Dick Cheney could never get elected to the Presidency. lgl
The United States Military has been experiencing a marked Personnel drain because of the strain of repeated Tours to Iraq and Afghanistan subjected on Troops; the most noteworthy being the resignation of Junior Officers, qualified NCOs, and a denuding of National Guard forces overall. Rumsfeld (actually George W. Bush's refusal) decision to even discuss reinstitution of the Draft forestalled any attempt to adequately provide a good distribution of Effort from Americans. Patriotism does not really last past the Third Tour. It is not actually a need to reinstate the Draft, simply a methodology to promote a massive increase in Enlistments through genuine inducements. Bush Republicans, though, did not want to reinstate something like the G.I. bill because of the Cost. They opted instead for the current policy of understaffing of military forces, with huge investment in Weaponry for the huge Corporate Profits generated. Even here, they starved Troops deployed of essential equipment, which did not generate the great Corporate Profits deriving from R&D.
There will be further problems for the Bush administration if the clamor for Rumsfeld's resignation increases. Any attempt to retain Rumsfeld will lead to the discussion of Issues outlined by myself over the long term. Replacement of Rumsfeld will create greater problems for the Bush administration, as Rumsfeld hides a great number of Sins at Defense. There has been vast payments for Services never provided, overpayment and double payment for many Services, and Cost overruns on Weapons development far beyond which the Enron Accountants would allow even in the old days. Any Republican taking over Defense would face an efficient Review in Three years by an new Administration. Anyone else would outline the debacle to maintain his or her reputation. In any and all Cases, the entire mess will come to light at least within Four years, as We have a Lame-Duck administration where Dick Cheney could never get elected to the Presidency. lgl
Thursday, April 13, 2006
Labor Participation and Taxes
http://www.brookings.edu/es/commentary/journals/bpea_macro/200603bpea_aaronson.pdf
The Recent Decline in Labor Force Participation
and its Implications for Potential Labor Supply
Stephanie Aaronson, Bruce Fallick, Andrew Figura,
Jonathan Pingle, and William Wascher
Division of Research and Statistics
Board of Governors of the Federal Reserve System
March 2006
==============================
http://assets.aarp.org/rgcenter/econ/taxsurvey.pdf
Opinions on Taxes
Among U.S. Adults
Report written by
Jean Kalata, Research Analyst
National Member Research
Survey conducted by
International Communications Research
==============================
Americans still think Everyone should pay their fair share of Taxes, even the higher Income Households; though Those from the later Households know a lot more Individuals who cheat on their Taxes. Could it be poorer Incomes know fewer Individuals who have the ability to cheat, or is it that higher Income individuals possess more options to chose from with which to cheat? The Survey, anyway, was rather structurally limited in real determination because of loose Questions asking for Opinions rather than fact.
The second Report flows naturally from the Survey, as the perceived unfairness of the Tax Code remains one of the factors for lack of Labor participation. This Author thinks the major real reason comes from low initial Wages coupled with no potential for advancement. Small Startup salaries for Deadend Jobs does not incite enthusiastic performance. The delay in getting Youth into the Labor force (cited by the Report) in conjunction with bureaucratic snares canceling welfare and Disability programs when Labor attempts to reenter the Labor Force present extreme obstacles to Labor participation. All Factors interacting together destroy Incentive for Labor particaption. Why work when the combination of welfare programs and suppressed Wages plus Taxes leaves the Worker in the same economic strata?
The Scenario will become worse as the Baby Boomers age into the Elderly, especially if the rates of Immigration fall as this Author expects within the decade. The fall in Immigration will be due to greater safety and security along with greater individual economic opprotunity in Immigrants' native lands, where family size is also beginning to decline. The only real Solution will be for American business to again start to raise real Wages. lgl
The Recent Decline in Labor Force Participation
and its Implications for Potential Labor Supply
Stephanie Aaronson, Bruce Fallick, Andrew Figura,
Jonathan Pingle, and William Wascher
Division of Research and Statistics
Board of Governors of the Federal Reserve System
March 2006
==============================
http://assets.aarp.org/rgcenter/econ/taxsurvey.pdf
Opinions on Taxes
Among U.S. Adults
Report written by
Jean Kalata, Research Analyst
National Member Research
Survey conducted by
International Communications Research
==============================
Americans still think Everyone should pay their fair share of Taxes, even the higher Income Households; though Those from the later Households know a lot more Individuals who cheat on their Taxes. Could it be poorer Incomes know fewer Individuals who have the ability to cheat, or is it that higher Income individuals possess more options to chose from with which to cheat? The Survey, anyway, was rather structurally limited in real determination because of loose Questions asking for Opinions rather than fact.
The second Report flows naturally from the Survey, as the perceived unfairness of the Tax Code remains one of the factors for lack of Labor participation. This Author thinks the major real reason comes from low initial Wages coupled with no potential for advancement. Small Startup salaries for Deadend Jobs does not incite enthusiastic performance. The delay in getting Youth into the Labor force (cited by the Report) in conjunction with bureaucratic snares canceling welfare and Disability programs when Labor attempts to reenter the Labor Force present extreme obstacles to Labor participation. All Factors interacting together destroy Incentive for Labor particaption. Why work when the combination of welfare programs and suppressed Wages plus Taxes leaves the Worker in the same economic strata?
The Scenario will become worse as the Baby Boomers age into the Elderly, especially if the rates of Immigration fall as this Author expects within the decade. The fall in Immigration will be due to greater safety and security along with greater individual economic opprotunity in Immigrants' native lands, where family size is also beginning to decline. The only real Solution will be for American business to again start to raise real Wages. lgl
Wednesday, April 12, 2006
Metals Aglow
http://www.nytimes.com/reuters/business/business-markets-metals.html
Fierce Surge by Metals Sets New Price Records
By REUTERS
Published: April 12, 2006
All the major Metals are up, and all because of Investment Fund buying. Why the Investment Fund Buying at this time? The Corporate Earnings reports are due out soon, and no one expects a glowing picture. Most Fund managers also expect the Fed may continue to raise Interest rates, which always precipitate a Stock value decline over the long haul. Almost all the Fund managers estimate Oil prices have functionally maxed in the Short-term, and marginal Day-Trading style Profits taking is out on the Oil markets. The Fund managers are invading the Commodities and Resource markets, hoping for quick Profits.
We may be seeing the result of the Bush Tax Cuts! These Tax Cuts may not actually promote economic performance--there has not been marked expansion of Employment, no hard Capital investment except in Residential Housing, or the typical growth rates of recoveries from previous Recessions. The real growth in the Economy has been in the area of Government Spending, and increased funds released for People to build their Dream homes. We have witnessed Speculation funds grow geometrically, while Investment decisions have grown wilder and more reckless. Investment Fund managers have turned into Plungers in the market, putting real money behind Day Trading.
What has brought the Change? It is the desire for excess immediate Profits before George W. Bush leaves Office, and more rational thought will begin to limit the excesses of the Tax Cuts. The philosophy of 'Grab the Cash and Run' has spun out of control, and is the fault of the Tax Cuts in the first place. They have stacked up the Cash in the accounts of Investors, and threat of Tax reinstatements spur them in the direction of Quick-Turnover Profits taking. The behavior artifically inflates Consumer prices, while the quick accumulation of Funds does increasing damage to the Markets. Bush's Tax Cuts have probably retarded an already slow Recovery. lgl
Fierce Surge by Metals Sets New Price Records
By REUTERS
Published: April 12, 2006
All the major Metals are up, and all because of Investment Fund buying. Why the Investment Fund Buying at this time? The Corporate Earnings reports are due out soon, and no one expects a glowing picture. Most Fund managers also expect the Fed may continue to raise Interest rates, which always precipitate a Stock value decline over the long haul. Almost all the Fund managers estimate Oil prices have functionally maxed in the Short-term, and marginal Day-Trading style Profits taking is out on the Oil markets. The Fund managers are invading the Commodities and Resource markets, hoping for quick Profits.
We may be seeing the result of the Bush Tax Cuts! These Tax Cuts may not actually promote economic performance--there has not been marked expansion of Employment, no hard Capital investment except in Residential Housing, or the typical growth rates of recoveries from previous Recessions. The real growth in the Economy has been in the area of Government Spending, and increased funds released for People to build their Dream homes. We have witnessed Speculation funds grow geometrically, while Investment decisions have grown wilder and more reckless. Investment Fund managers have turned into Plungers in the market, putting real money behind Day Trading.
What has brought the Change? It is the desire for excess immediate Profits before George W. Bush leaves Office, and more rational thought will begin to limit the excesses of the Tax Cuts. The philosophy of 'Grab the Cash and Run' has spun out of control, and is the fault of the Tax Cuts in the first place. They have stacked up the Cash in the accounts of Investors, and threat of Tax reinstatements spur them in the direction of Quick-Turnover Profits taking. The behavior artifically inflates Consumer prices, while the quick accumulation of Funds does increasing damage to the Markets. Bush's Tax Cuts have probably retarded an already slow Recovery. lgl
Tuesday, April 11, 2006
Trade 2006
The WTO estimates World Trade should be up about 7% over last year, when it was up a revised 6% from the preceding year. China Minister claims that the China-U.S. Trade imbalance of $102 billion last year was because of U.S. restriction on High-Tech Sales to China, and that foreign-owned companies made up 59+% of the Imports to the U.S. Oil settled to $68.10/barrel on the Spot markets.
World Trade depends upon the American Consumer, it is sad to say. The Question which must be asked: Can the American Consumer endure a worse year than 2005? This Author believes that the Answer is No! Continued Imports by American Retailers will continue the stagnation in Pay for eighty percent of American labor, while rising Energy Costs alongside a rising Commodities markets will accelerate the American Consumer's financial incapacity.
2005 was probably the Watershed Year of World Trade. There may a lot of Years which come close to duplicating the Trade Values of 2005, but it is unlikely actual Trade volume will ever equal 2005 in tonnage hauled. One must realize We have started to lose more Drivers every year than are obtaining Drivers' licenses. This means less Fuel purchases each Year into the future. Federal and State regulations are pushing for higher MPGs, and Ethanol will continue to cut Oil Imports, though not drastically. Reduced Trade, itself, will reduce Energy consumption. Higher Materials Cost overall will incite greater Domestic production to avoid the potential high Cost of Theft and Transport security. Spreading World ecological standards will make foreign production higher in Production Cost, while expanded foreign production will begin to entail much higher Energy Transportation Costs to Production areas. We will never see the Trade volume of 2005 again, and probably will not even witness the Dollar value of 2005 Trade in a couple of years. lgl
World Trade depends upon the American Consumer, it is sad to say. The Question which must be asked: Can the American Consumer endure a worse year than 2005? This Author believes that the Answer is No! Continued Imports by American Retailers will continue the stagnation in Pay for eighty percent of American labor, while rising Energy Costs alongside a rising Commodities markets will accelerate the American Consumer's financial incapacity.
2005 was probably the Watershed Year of World Trade. There may a lot of Years which come close to duplicating the Trade Values of 2005, but it is unlikely actual Trade volume will ever equal 2005 in tonnage hauled. One must realize We have started to lose more Drivers every year than are obtaining Drivers' licenses. This means less Fuel purchases each Year into the future. Federal and State regulations are pushing for higher MPGs, and Ethanol will continue to cut Oil Imports, though not drastically. Reduced Trade, itself, will reduce Energy consumption. Higher Materials Cost overall will incite greater Domestic production to avoid the potential high Cost of Theft and Transport security. Spreading World ecological standards will make foreign production higher in Production Cost, while expanded foreign production will begin to entail much higher Energy Transportation Costs to Production areas. We will never see the Trade volume of 2005 again, and probably will not even witness the Dollar value of 2005 Trade in a couple of years. lgl
Monday, April 10, 2006
Retirement
http://longtermcare.genworth.com/comweb/pdfs/long_term_care/Cost_Of_Care_Survey.pdf
GENWORTH FINANCIAL
2006 COST OF CARE SURVEY
MARC H 2 0 0 6
Nursing Homes, Assisted Living Facilities
and Home Care Providers
This year we contacted more than 9,000 nursing homes, assisted living facilities and home care providers, with some significant conclusions. While rising costs on facilities have slowed,
escalating home care costs outpaced the rate of inflation. The different types of home health aids surveyed in our study show costs increasing to an average of $25.32 an hour—a 13% increase over 2005 costs
The Cost of a Nursing Home Private room was almost $71k, while a semi-Private Double Occupancy room averaged $65.5k nationally. This translates to about $195/Day and $167.5/Day. The Assisted Living one bedroom cost averaged over $32k per year, or somewhere around $88 per day. It is expensive.
Examination of the Rates for Health Care Services to the Elderly provides some cause to ponder. First, can these Health Care facilities handle the Numbers of Americans to need these services in a short time? Not the way these Services are currently provided. It might be best if Americans accepted now the need to reorganize the health care system. It is time!
A good option is to tell the current Political leadership that they cannot use the Social Security Trust Fund to fund general Government Spending and Tax Cuts. The Second thing to do is accept Social Security has to maintain its own facilities for the Elderly. The SS Trust Fund should be spent building and staffing these health facilities; Retail investments are generally on longterm Profitable deal, and in this instance, showing an intrinsically great Return on the funds invested. In-house appropriation of Funds allow for salaried Medical staff and elimination of interior Profit-setting in Costs; both extremely beneficial in holding down overall Costs, while neither option curtails health care quality. lgl
GENWORTH FINANCIAL
2006 COST OF CARE SURVEY
MARC H 2 0 0 6
Nursing Homes, Assisted Living Facilities
and Home Care Providers
This year we contacted more than 9,000 nursing homes, assisted living facilities and home care providers, with some significant conclusions. While rising costs on facilities have slowed,
escalating home care costs outpaced the rate of inflation. The different types of home health aids surveyed in our study show costs increasing to an average of $25.32 an hour—a 13% increase over 2005 costs
The Cost of a Nursing Home Private room was almost $71k, while a semi-Private Double Occupancy room averaged $65.5k nationally. This translates to about $195/Day and $167.5/Day. The Assisted Living one bedroom cost averaged over $32k per year, or somewhere around $88 per day. It is expensive.
Examination of the Rates for Health Care Services to the Elderly provides some cause to ponder. First, can these Health Care facilities handle the Numbers of Americans to need these services in a short time? Not the way these Services are currently provided. It might be best if Americans accepted now the need to reorganize the health care system. It is time!
A good option is to tell the current Political leadership that they cannot use the Social Security Trust Fund to fund general Government Spending and Tax Cuts. The Second thing to do is accept Social Security has to maintain its own facilities for the Elderly. The SS Trust Fund should be spent building and staffing these health facilities; Retail investments are generally on longterm Profitable deal, and in this instance, showing an intrinsically great Return on the funds invested. In-house appropriation of Funds allow for salaried Medical staff and elimination of interior Profit-setting in Costs; both extremely beneficial in holding down overall Costs, while neither option curtails health care quality. lgl
Sunday, April 09, 2006
Compensation
LOUIS UCHITELLE had a good article in the NYTimes (Seizing Intangibles for the G.D.P. ), which highlighted the hidden losses in Labor compensation because of Accounting method in the GDP. The Paper had two other articles on Compensation in today's Issue, (How the Pay Figures Were Calculated and Pay for Oil Chiefs Spiked Like Prices by J. ALEX TARQUINIO) which dealt with compensation of Executives. All defined one element of the Pay Crisis in the U.S.
People may ask why I say a Pay Crisis?
No one, except this Author, accounts Consumer Credit growth as a Pay negative. The growth of this Debt, coming from the longterm aggregation of Consumption Goods, which should have come from current Account Operations balances, signifies an effective Pay Cut. It is a major conponent in the modern Household accounts, and reflects the inability of the standard Paycheck to keep pace with needed Consumption purchases. All Economic models fail of understanding without subtracting Consumer Credit growth from the Totals of Labor Income, before estimation of the rate of increase or decrease in Pay. This Author has not done the Numbers (he is known as a mathematical Simpleton), but I estimate that the quoted estimate of Labor Pay share of 60% of GDP may have dropped 4-6 additional percentage points when Consumer Debt growth is intergrated. lgl
People may ask why I say a Pay Crisis?
No one, except this Author, accounts Consumer Credit growth as a Pay negative. The growth of this Debt, coming from the longterm aggregation of Consumption Goods, which should have come from current Account Operations balances, signifies an effective Pay Cut. It is a major conponent in the modern Household accounts, and reflects the inability of the standard Paycheck to keep pace with needed Consumption purchases. All Economic models fail of understanding without subtracting Consumer Credit growth from the Totals of Labor Income, before estimation of the rate of increase or decrease in Pay. This Author has not done the Numbers (he is known as a mathematical Simpleton), but I estimate that the quoted estimate of Labor Pay share of 60% of GDP may have dropped 4-6 additional percentage points when Consumer Debt growth is intergrated. lgl
Saturday, April 08, 2006
Defense Nightmare
Reuters has a number of Reports on Weapons Budget Overruns online today. Two are scheduled for Cancellation in June, unless the Sec. of Defense can prove there are no acceptable alternatives. The Global Hawk has several alternatives and really little effective use. The Weather satellite system has the sole aim of perdicting weather for 7 Days rather than 3 Days; what is untold is the unreliability in Forecast results to this point--We are talking 50-50 Coin toss here. The multiple launch rocket system is in excess of 15% over Budget, and Congress had to be notified under the McCann law; actually, the Stalin's Organ version of WWII is still the cheapest, most reliable, most accurate, and still the deadliest ever designed.
Over half of all the 89 Weapons systems being worked on are over Budget. One, the C-17, which is a huge Cargo plane, has been planned since the 1970s, and funded since 1984; rumor states it still is not near completion. The F-35 is the Costliest contract which the Defense Dept. has, and is a partnership agreement with 7 other Nations. It is planned to replace the aged A-10s and several other aircraft including the Harrier. The trouble is it will effectively replace all of Our current airfleet in terms of Target acquistion and Shoot-down capability; yet We plan to share this technology with other Nations, some of whom are a seeve for transfer of aircraft technology. The functional entire World will have the F-35 Specs for a fraction of the Development Cost to the United States, and almost immediately.
We need a Defense Contract award system which is not based upon how much Lobbyist money is advanced to finance political campaigns. There is little expectation that any Contract currently in operation will be canceled, but We could at least hope for better Security procedures. lgl
Over half of all the 89 Weapons systems being worked on are over Budget. One, the C-17, which is a huge Cargo plane, has been planned since the 1970s, and funded since 1984; rumor states it still is not near completion. The F-35 is the Costliest contract which the Defense Dept. has, and is a partnership agreement with 7 other Nations. It is planned to replace the aged A-10s and several other aircraft including the Harrier. The trouble is it will effectively replace all of Our current airfleet in terms of Target acquistion and Shoot-down capability; yet We plan to share this technology with other Nations, some of whom are a seeve for transfer of aircraft technology. The functional entire World will have the F-35 Specs for a fraction of the Development Cost to the United States, and almost immediately.
We need a Defense Contract award system which is not based upon how much Lobbyist money is advanced to finance political campaigns. There is little expectation that any Contract currently in operation will be canceled, but We could at least hope for better Security procedures. lgl
Friday, April 07, 2006
Roads and Fuel Costs
http://www.nytimes.com/aponline/business/AP-Highway-Costs-Rising.html
Rising Costs Delaying Road Construction
Until 2004, highway material costs were steady, with a 12-year average increase of only 1.8 percent, according to the Bureau of Labor Statistics. Concrete is up 32.8 percent a unit, from $550 in 2003 to $749 last year. Prices for reinforced steel and asphalt have also jumped, according to the Florida Department of Transportation. Even a cubic yard of dirt or 'earthwork' cost $7.24 on average in 2005, up 65.3 percent from $4.96 in 2003.
There are probably such Economic models, but this Author has never seen any which detail how much fuel is consumed by vehicle per minute delay of movement. I do know that potholes and cracked road surface decrease vehicle milage by somewhat over a mile per gallon because of added drag on tire surface. Bumper to bumper traffic along one-third of a Work route can cut mpg by one-half over the distance of the route. This is no Joke!
I live in a small midwestern Nebraskan town currently, which is split in the center by a major railroad trunk line; approx. some 10-12 Trains pass both ways daily, and the Railroad is building Trains in the center of town due to loss of area for building switching routes to the East or West. They have been discussing construction of two additional Viaducts for car traffic to add to the one here for 50 years. There is the question of placement, though, and now Clearing Costs for the new Viaducts and rising Construction Costs are delaying construction. The Railroad is insisting in closing off other Street crossings, if the Railroad provides the Construction Costs.
This Town has several Plants drawing in Workers from rural areas, and a number of Schools which draw Students from both Sides of the Tracks. Train length and Switching close off Crossings some 1 to 2 hours every day, in segments of 5 to 15 minutes. A probable 2% of Fuel Costs come from idling at Street Crossings for Those who have to cross the Railroad Tracks several times per day. This Author, though nomially Retired, has to cross the Tracks 3-6 times a day, with the ability to use the one Viaduct only about once out of those trips.
The Situation would not be bad, if this type of Congestion was limited only to the citizens of my fair City. Congestion is not limited to my town; actually, it is the life endured by an estimated one-Quarter of all drivers in the Country. Someone with more initiative than myself should construct a national Economic model to bring real statistical figures to this type of Fuel loss. lgl
Rising Costs Delaying Road Construction
Until 2004, highway material costs were steady, with a 12-year average increase of only 1.8 percent, according to the Bureau of Labor Statistics. Concrete is up 32.8 percent a unit, from $550 in 2003 to $749 last year. Prices for reinforced steel and asphalt have also jumped, according to the Florida Department of Transportation. Even a cubic yard of dirt or 'earthwork' cost $7.24 on average in 2005, up 65.3 percent from $4.96 in 2003.
There are probably such Economic models, but this Author has never seen any which detail how much fuel is consumed by vehicle per minute delay of movement. I do know that potholes and cracked road surface decrease vehicle milage by somewhat over a mile per gallon because of added drag on tire surface. Bumper to bumper traffic along one-third of a Work route can cut mpg by one-half over the distance of the route. This is no Joke!
I live in a small midwestern Nebraskan town currently, which is split in the center by a major railroad trunk line; approx. some 10-12 Trains pass both ways daily, and the Railroad is building Trains in the center of town due to loss of area for building switching routes to the East or West. They have been discussing construction of two additional Viaducts for car traffic to add to the one here for 50 years. There is the question of placement, though, and now Clearing Costs for the new Viaducts and rising Construction Costs are delaying construction. The Railroad is insisting in closing off other Street crossings, if the Railroad provides the Construction Costs.
This Town has several Plants drawing in Workers from rural areas, and a number of Schools which draw Students from both Sides of the Tracks. Train length and Switching close off Crossings some 1 to 2 hours every day, in segments of 5 to 15 minutes. A probable 2% of Fuel Costs come from idling at Street Crossings for Those who have to cross the Railroad Tracks several times per day. This Author, though nomially Retired, has to cross the Tracks 3-6 times a day, with the ability to use the one Viaduct only about once out of those trips.
The Situation would not be bad, if this type of Congestion was limited only to the citizens of my fair City. Congestion is not limited to my town; actually, it is the life endured by an estimated one-Quarter of all drivers in the Country. Someone with more initiative than myself should construct a national Economic model to bring real statistical figures to this type of Fuel loss. lgl
Thursday, April 06, 2006
Utter Heresy
This Author will wait awhile to explain his violation of the Economist Code. I will first state that March Sales were not simply bad, they were dismal. Consideration of the normal largesse of purchases (Sales Ticket size) provides a statement that We have finally seen the impact of rising Gas Prices. All Store Chains witnessed about the same loss of Volume in Sales, even Walmart who continues to lower Product Prices to maintain Sales; but only with ever-shrinking margins. Nonessential Sales are disappearing from the Shopping Carts.
Sweet Crude Oil price continues to advance, and Why? The greatest reason comes from Americans remaining attached to their Driving milage, which is also slowly advancing even under sharp Gas Price increases. A second major reason lies in Investors abandoning the Stock Market, for a speculation in what they believe is a sure thing--Oil. This attitude is also propelled by decreasing Unemployment numbers, and fears that the Fed will continue to raise Interest rates to forestall Inflation. The Total leads to one conclusion which is accurate: The P/E ratios are ridiculous under the current volume of Sales, the latest Runup in Stock prices destroyed the viable base for stable Returns.
The Economic Picture would look unbelievably better if the DOW stood at 8000. P/E ratios would be fantastic under such circumstances. Speculation funds would abandon Oil and Gold, and run back to the Stock Market. 2006 may see the Foreign Products Sales Bubble burst! What could this mean to the American economy? Not much actually. The Speculators in the Markets will lose their windfall gains made since the Tech Bubble burst. The Paper manupilators would go back to buying Chevy's and Fords instead of Mercedes. The Fed would drop its Interest rates, and Production Managers would go back to cutting Production Costs, instead of Staff, realizing that actual Production is cheaper here in the States; with an unbelievable strengthening of the Dollar. The final humor lies in the fact Retail Sales is not likely to drop over 3% from its current levels. lgl
Sweet Crude Oil price continues to advance, and Why? The greatest reason comes from Americans remaining attached to their Driving milage, which is also slowly advancing even under sharp Gas Price increases. A second major reason lies in Investors abandoning the Stock Market, for a speculation in what they believe is a sure thing--Oil. This attitude is also propelled by decreasing Unemployment numbers, and fears that the Fed will continue to raise Interest rates to forestall Inflation. The Total leads to one conclusion which is accurate: The P/E ratios are ridiculous under the current volume of Sales, the latest Runup in Stock prices destroyed the viable base for stable Returns.
The Economic Picture would look unbelievably better if the DOW stood at 8000. P/E ratios would be fantastic under such circumstances. Speculation funds would abandon Oil and Gold, and run back to the Stock Market. 2006 may see the Foreign Products Sales Bubble burst! What could this mean to the American economy? Not much actually. The Speculators in the Markets will lose their windfall gains made since the Tech Bubble burst. The Paper manupilators would go back to buying Chevy's and Fords instead of Mercedes. The Fed would drop its Interest rates, and Production Managers would go back to cutting Production Costs, instead of Staff, realizing that actual Production is cheaper here in the States; with an unbelievable strengthening of the Dollar. The final humor lies in the fact Retail Sales is not likely to drop over 3% from its current levels. lgl
Wednesday, April 05, 2006
Misguided Taxation
http://www.nytimes.com/2006/04/05/business/05tax.html?_r=1&oref=slogin
Big Gain for Rich Seen in Tax Cuts for Investments
By DAVID CAY JOHNSTON
Published: April 5, 2006
¶Americans with annual incomes of $1 million or more, about one-tenth of 1 percent all taxpayers, reaped 43 percent of all the savings on investment taxes in 2003. The savings for these taxpayers averaged about $41,400 each. By comparison, these same Americans received less than 10 percent of the savings from the other Bush tax cuts, which applied primarily to wages, though that share is expected to grow in coming years.
The Times, which also did its own analysis, asked the group to use the model to produce additional data on the effect of the investment tax cuts on various income groups. The analyses show that more than 70 percent of the tax savings on investment income went to the top 2 percent, about 2.6 million taxpayers.
The entire Scenario denies the fact that Equality demands Equal Opprotunity, and for the Later, there must be some eventual redistribuation of Income. This Author would perfer it to be conducted with sharp Inheritance taxation, so that economic activity be least effected. Any Income Tax, should at least possess some redistributive property, if it does exist; this Author advocates a Bank Deposit tax of 2% per year, and assessed at time of Deposit with Certificates of Demand again assessed every year thereafter at anniversery of deposit.
Retention of the Income Tax should bring alteration of Collection plus provision of some guarantee of redistribution of Income. I therefore propose Income should be split into twelve brackets, the first bracket assessed in January, and the next lowest assessed every month thereafter. Provision should state no Taxpayer in a higher Tax bracket can pay less than any Taxpayer in a lower Tax bracket. This will somewhat cancel lobbyied legal evasion of Taxes. Corporation shall pay more in Tax than the highest Tax-paying Personal Taxpayer, unless their Income was less than the highest earning Personal Taxpayers at which time they will pay the highest of any Personal Taxpayer in their Tax bracket. lgl
Big Gain for Rich Seen in Tax Cuts for Investments
By DAVID CAY JOHNSTON
Published: April 5, 2006
¶Americans with annual incomes of $1 million or more, about one-tenth of 1 percent all taxpayers, reaped 43 percent of all the savings on investment taxes in 2003. The savings for these taxpayers averaged about $41,400 each. By comparison, these same Americans received less than 10 percent of the savings from the other Bush tax cuts, which applied primarily to wages, though that share is expected to grow in coming years.
The Times, which also did its own analysis, asked the group to use the model to produce additional data on the effect of the investment tax cuts on various income groups. The analyses show that more than 70 percent of the tax savings on investment income went to the top 2 percent, about 2.6 million taxpayers.
The entire Scenario denies the fact that Equality demands Equal Opprotunity, and for the Later, there must be some eventual redistribuation of Income. This Author would perfer it to be conducted with sharp Inheritance taxation, so that economic activity be least effected. Any Income Tax, should at least possess some redistributive property, if it does exist; this Author advocates a Bank Deposit tax of 2% per year, and assessed at time of Deposit with Certificates of Demand again assessed every year thereafter at anniversery of deposit.
Retention of the Income Tax should bring alteration of Collection plus provision of some guarantee of redistribution of Income. I therefore propose Income should be split into twelve brackets, the first bracket assessed in January, and the next lowest assessed every month thereafter. Provision should state no Taxpayer in a higher Tax bracket can pay less than any Taxpayer in a lower Tax bracket. This will somewhat cancel lobbyied legal evasion of Taxes. Corporation shall pay more in Tax than the highest Tax-paying Personal Taxpayer, unless their Income was less than the highest earning Personal Taxpayers at which time they will pay the highest of any Personal Taxpayer in their Tax bracket. lgl
Tuesday, April 04, 2006
Price Controls
http://www.nytimes.com/2006/04/03/world/americas/03argentina.html?_r=2&oref=slogin&oref=slogin
For Argentina's Sizzling Economy, a Cap on Steak Prices
By LARRY ROHTER
Published: April 3, 2006
This Author was searching for something to write on today, and decided to scalp somewhat from other Bloggers. Jeffrey Tucker at Misesblog.org wrote a good Piece, saying Larry Rohter should have mentioned the vast growth in M2 in Argentina as reported by the Argentina Central Bank over the last Years since the devaluation of the Peso. Such growth will propel Inflation. Another Blogger wrote of hyperInflation in Zimbodwee(sorry for the lack of Cite, as I lost the Address--expressing the rational order of myself). John Whitehead also commented favorably on the Krishner attempt to forestall Inflation.
I dimly remember the activities of Arnold Fertig in the Phillipines in WWII, he being one of the American Commanders of the Phillipino resistence to the Japanese. He stated in his autobiography (???) that he set a Price Control on one Product (either Rice or Corn) which was a major staple of the People, and this enforced Price Control limited the excesses of Inflation and the Black Market. Different circumstance and different economy, but Price Controls need not be automatically bad, unless they become confusing and bureaucratic.
Inflation generated from the amounts of M2 increases shown by Argentina will never be curbed by Price Controls. The only Inflation curb under these conditions (9% growth of the Economy, and over 100% growth in M2) can only be be Taxation; also anathema to ever-growing numbers of Economists. I even favor low Tax rates, but Ones which are strictly enforced without loopholes. It does not alter the fact that Argentina could benefit by a 7% real Tax increase overall. lgl
For Argentina's Sizzling Economy, a Cap on Steak Prices
By LARRY ROHTER
Published: April 3, 2006
This Author was searching for something to write on today, and decided to scalp somewhat from other Bloggers. Jeffrey Tucker at Misesblog.org wrote a good Piece, saying Larry Rohter should have mentioned the vast growth in M2 in Argentina as reported by the Argentina Central Bank over the last Years since the devaluation of the Peso. Such growth will propel Inflation. Another Blogger wrote of hyperInflation in Zimbodwee(sorry for the lack of Cite, as I lost the Address--expressing the rational order of myself). John Whitehead also commented favorably on the Krishner attempt to forestall Inflation.
I dimly remember the activities of Arnold Fertig in the Phillipines in WWII, he being one of the American Commanders of the Phillipino resistence to the Japanese. He stated in his autobiography (???) that he set a Price Control on one Product (either Rice or Corn) which was a major staple of the People, and this enforced Price Control limited the excesses of Inflation and the Black Market. Different circumstance and different economy, but Price Controls need not be automatically bad, unless they become confusing and bureaucratic.
Inflation generated from the amounts of M2 increases shown by Argentina will never be curbed by Price Controls. The only Inflation curb under these conditions (9% growth of the Economy, and over 100% growth in M2) can only be be Taxation; also anathema to ever-growing numbers of Economists. I even favor low Tax rates, but Ones which are strictly enforced without loopholes. It does not alter the fact that Argentina could benefit by a 7% real Tax increase overall. lgl
Monday, April 03, 2006
ISM index
The Double Nickel in the ISM was bad enough, indicating our current boom has all the elements of a recession, except for the numbers--yet. The price of Sweet Crude stands at $67.45/barrel, and Prices at the Pump are still going up. Chavez in Venezuela is taking Steps towards Nationalization of the Oil industry there. Nigerian rebels are still shutting off substantial output from there. Pending Home Sales here is 5% below last Year's numbers. We might stay with a ISM index reading of 55 or less for the rest of the Year.
What will this do for the Economy?
Understand that an Reading above 50 means expansion of the economy. But how good is the expansion? This Author estimates that every Point above 50 means about another 40k New Jobs created per month. A Reading of 55 gives Us about an increase of about 200k New Jobs per Quarter--suffering from the element of Job destruction as well, due to Job completions in Contract work, seasonal changes, Layoffs, Downsizing, Phase-Outs, etc.
Another element intrudes in the Above matrix--the Cost of Energy. Energy is required through every segment of Production, Distribution, Advertizing, and Retailing. The Energy Bill is huge, with multiplex payout through every Production segment. The exact price of Energy impact is debatable, with Product resilency evident only in its Price elasticity. Business Management and Labor Costs are resistent to reduction, and are even an impetus for Price increases as Energy Price increases impact their own personal Living Costs. Management will shut down Operations which are unprofitable, and Labor will accept loss of Job before loss of Wages. Energy Costs are currently high enough at present to cut 40k Jobs per month. An Index reading of 55 could mean slow strangulation. lgl
What will this do for the Economy?
Understand that an Reading above 50 means expansion of the economy. But how good is the expansion? This Author estimates that every Point above 50 means about another 40k New Jobs created per month. A Reading of 55 gives Us about an increase of about 200k New Jobs per Quarter--suffering from the element of Job destruction as well, due to Job completions in Contract work, seasonal changes, Layoffs, Downsizing, Phase-Outs, etc.
Another element intrudes in the Above matrix--the Cost of Energy. Energy is required through every segment of Production, Distribution, Advertizing, and Retailing. The Energy Bill is huge, with multiplex payout through every Production segment. The exact price of Energy impact is debatable, with Product resilency evident only in its Price elasticity. Business Management and Labor Costs are resistent to reduction, and are even an impetus for Price increases as Energy Price increases impact their own personal Living Costs. Management will shut down Operations which are unprofitable, and Labor will accept loss of Job before loss of Wages. Energy Costs are currently high enough at present to cut 40k Jobs per month. An Index reading of 55 could mean slow strangulation. lgl
Sunday, April 02, 2006
The Ecology Spirit
Chavez forces Oil companies into a described 'modest' Contract, and the World is agog with fluxfuel in Brazil, whle a NYTimes articles describes how foreign investment provides domestic Labor losses. It is all part of the modern World, or is it?
Venezula presents a Scenario where a strong domestic leadership forces the Corporate structure to abide by a 'just' distribution of Profits between Leasse and Leassor. Unions in the International World reel under the Corporate threat to offshore their Jobs, and then Companies do it anyway. Most Economists see this and claim 'survival of the fittest' brings proper allocation of economic funding and distribution of Resources. The only Problem generated is that while Labor Wages center around some common median around the World, Labor standard of living may be falling as more-advanced Wages stagnate while low Wage Earners do also seem to stagnate.
The NYTimes quoted a statistican estimate that Corporate Profits rose from 7% to over 11% of GDP. This Author thinks the increase has been 12% to approxmately 20% of GDP since 2000. Corporate Executive and Economist use the old shell game of splitting Profits up into artificial Earnings divisions, where Everyone is supposed to treat such Structures as separate entities. These Entities absorb about 60% of the Profits generated and reinvest called Recapitalization. The Profits sent to the Canopy Corporation are much less than received, and both Canopy and Subdivision claim much lower Profits because of Operating Costs.
The Trouble arises when most of the Investment gets directed to lower Wage areas, where compatiable Technological skills can be found--mostly foreign with a lower Standard of Living. The trouble is extended when Corporations claim they cannot meet their Health Insurance and Pension benefits already guaranteed to Labor, after Stock Options have been exercised, after Stock Dividends have been granted, and after double-dip Investment schedules have been paid for. Corporations think Corporate management needs a Pay raise for such astute Planning. One Management team of about 600 received about three-quarters of a billion dollars, because they could somehow list losses of over $600 billion (I lost the Cite which was a good article). I will leave to the Reader to guess which Corporation this was (hint: It has been widely in the News as a failing Entity, and bitterly needs Pension relief) A second hint may be in order (It has invested approx. $340 billion in the same Period considered.) A third Hint? (their actual Pension bill runs no more than $10 billion, and their yearly Health Insurance bill runs about $3 billion per year.) lgl
Venezula presents a Scenario where a strong domestic leadership forces the Corporate structure to abide by a 'just' distribution of Profits between Leasse and Leassor. Unions in the International World reel under the Corporate threat to offshore their Jobs, and then Companies do it anyway. Most Economists see this and claim 'survival of the fittest' brings proper allocation of economic funding and distribution of Resources. The only Problem generated is that while Labor Wages center around some common median around the World, Labor standard of living may be falling as more-advanced Wages stagnate while low Wage Earners do also seem to stagnate.
The NYTimes quoted a statistican estimate that Corporate Profits rose from 7% to over 11% of GDP. This Author thinks the increase has been 12% to approxmately 20% of GDP since 2000. Corporate Executive and Economist use the old shell game of splitting Profits up into artificial Earnings divisions, where Everyone is supposed to treat such Structures as separate entities. These Entities absorb about 60% of the Profits generated and reinvest called Recapitalization. The Profits sent to the Canopy Corporation are much less than received, and both Canopy and Subdivision claim much lower Profits because of Operating Costs.
The Trouble arises when most of the Investment gets directed to lower Wage areas, where compatiable Technological skills can be found--mostly foreign with a lower Standard of Living. The trouble is extended when Corporations claim they cannot meet their Health Insurance and Pension benefits already guaranteed to Labor, after Stock Options have been exercised, after Stock Dividends have been granted, and after double-dip Investment schedules have been paid for. Corporations think Corporate management needs a Pay raise for such astute Planning. One Management team of about 600 received about three-quarters of a billion dollars, because they could somehow list losses of over $600 billion (I lost the Cite which was a good article). I will leave to the Reader to guess which Corporation this was (hint: It has been widely in the News as a failing Entity, and bitterly needs Pension relief) A second hint may be in order (It has invested approx. $340 billion in the same Period considered.) A third Hint? (their actual Pension bill runs no more than $10 billion, and their yearly Health Insurance bill runs about $3 billion per year.) lgl
Saturday, April 01, 2006
Immigration
http://pewhispanic.org/files/reports/63.pdf
No Consensus on Immigration Problem or Proposed Fixes
AMERICA’S IMMIGRATION QUANDARY
FOR IMMEDIATE RELEASE: THURDAY, MARCH 30, 2006, 2:00 PM
This Author must first say he is among the 22% of American citizens who view both legal and illegal immigration to be an immediate problem and hazard needing to be fixed. Only about 4% of those surveyed, though, found Immigration--legal or illegal--to be a priority Problem. Congress and President seemed destined to fail at any Immigration fix brought into law before the next Election. I believe this is the real Problem.
Overall, the public divides about evenly
among three main approaches for dealing with people
who are in this country illegally: 32% think it should
be possible for them to stay permanently; 32%
believe some should be allowed to stay under a
temporary worker program under the condition that
they leave eventually; and 27% think that all illegal
immigrants should be required to go home.
None of the three approaches settles any primary issue. The first leaves illegal immigrants capable of legally drawing upon tax-funded Social Services, while the Second approach functionally demands the provision of these Social Services--in order to forestall Social conditions unacceptable to American culture. The last approach threatens the American economy with a lack of alternative Labor supply.
I oppose almost all Tracking devices, but may have to concede to Work Cards. My assessment of Work Cards, though, would insist on universality; this meaning that all Labor would have to be registered--a seeming vast bureaucracy, but it can be simplified. The chartering act should declare Employers could not declare Labor Costs for purposes of Taxation without a Work Card assignation in terms of hours worked--both inside and outside this Country. Economists could use the exact assignment in many Economic models surveying the flow of Trade, the flow of Immigration, the transfers of Funds, etc. Law Enforcement could identify Immigration flows, and track questionable immigrants. Failure to comply with the Law will lead to high-level Fines, this Author suggests $200 per Hour worked with the Employer held responsible in last resort assessment. Work Cards, themselves, would be issued by the U.S. Treasury, and designed for forestall any but technologically-intense counterfeiting procedures; they specifically using exact identification of Employee information.
Work Visas, and the means of their Issuance, would thereby become irrevelant. Work Cards would only be issued to certified Employers--only when the exact personal information is advanced along with Photo, and issued like current Drivers's licenses. Employer recruitment Costs would increase, but this Cost would bring longer-Term employment based upon qualified Skill levels of Labor. A better design, in the Author's estimation, than the current suggestions which are destined only to bring congestion and bureaucratic confusion. lgl
No Consensus on Immigration Problem or Proposed Fixes
AMERICA’S IMMIGRATION QUANDARY
FOR IMMEDIATE RELEASE: THURDAY, MARCH 30, 2006, 2:00 PM
This Author must first say he is among the 22% of American citizens who view both legal and illegal immigration to be an immediate problem and hazard needing to be fixed. Only about 4% of those surveyed, though, found Immigration--legal or illegal--to be a priority Problem. Congress and President seemed destined to fail at any Immigration fix brought into law before the next Election. I believe this is the real Problem.
Overall, the public divides about evenly
among three main approaches for dealing with people
who are in this country illegally: 32% think it should
be possible for them to stay permanently; 32%
believe some should be allowed to stay under a
temporary worker program under the condition that
they leave eventually; and 27% think that all illegal
immigrants should be required to go home.
None of the three approaches settles any primary issue. The first leaves illegal immigrants capable of legally drawing upon tax-funded Social Services, while the Second approach functionally demands the provision of these Social Services--in order to forestall Social conditions unacceptable to American culture. The last approach threatens the American economy with a lack of alternative Labor supply.
I oppose almost all Tracking devices, but may have to concede to Work Cards. My assessment of Work Cards, though, would insist on universality; this meaning that all Labor would have to be registered--a seeming vast bureaucracy, but it can be simplified. The chartering act should declare Employers could not declare Labor Costs for purposes of Taxation without a Work Card assignation in terms of hours worked--both inside and outside this Country. Economists could use the exact assignment in many Economic models surveying the flow of Trade, the flow of Immigration, the transfers of Funds, etc. Law Enforcement could identify Immigration flows, and track questionable immigrants. Failure to comply with the Law will lead to high-level Fines, this Author suggests $200 per Hour worked with the Employer held responsible in last resort assessment. Work Cards, themselves, would be issued by the U.S. Treasury, and designed for forestall any but technologically-intense counterfeiting procedures; they specifically using exact identification of Employee information.
Work Visas, and the means of their Issuance, would thereby become irrevelant. Work Cards would only be issued to certified Employers--only when the exact personal information is advanced along with Photo, and issued like current Drivers's licenses. Employer recruitment Costs would increase, but this Cost would bring longer-Term employment based upon qualified Skill levels of Labor. A better design, in the Author's estimation, than the current suggestions which are destined only to bring congestion and bureaucratic confusion. lgl
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