I read this article, and decide to take a radical stance on the entire issue of Poverty. I honestly believe that the disadvantages of the Poor come primarily from association with each other. Does this sound Rude and Cruel? I study on the issue of Poverty, and first decide it is too expensive to underwrite Poverty in the Cities where it occurs. Housing, Food, Clothing, and Medical Services are just too expensive within Cities to underwrite effectively. Everyone will imagine that I am in love with Small Town America past this point, and a ridiculous idealist who cannot understand the complexities of the issues involved. People should first understand that I am rather cynical and lack a genuine degree of empathy with Anyone, and Anger issues have never bothered me; I being rather Angry myself.
My solution to Poverty goes back to early America, and the creation of County Farms with a twist. I would purchase farmland of high quality to establish Garden farms. These would not be traditional modern Garden farms. I would establish several Rules, which will alter the nature of the farms. Here is my list:
1) There will be only traditional Garden vegetables and fruits grown on said farms.
2) All Produce sold by the farms must be processed on the farm; which means cleaned, Cooked or Canned.
3) Labor cannot purchase outside replacement vegetables and fruits on the Open market if such substances are produced on the farms.
4) All labor, except for Management supervisors, will be paid a standard Wage consistent with Minimum Wage of the States involved.
5) All such farms will be located in small communities, without respect for County or State boundaries.
Now the Reader will ask where the labor will come from? The Answer consists of current Welfare Recipients. Old Welfare Recipients will be required to relocate to such farms for a mandatory year before receiving further Welfare aid. New Recipients must start on the farms to enter the program. Free Health Care will be given to all residents of the farms. Every adult resident on the farms must work on the farm–whether in field work, the Processing Plant, or in Child Care and Cooking for the central kitchen provision of meals. Children will attend School through the entire year, but only in the morning, if they can maintain a B-Average; less than this Average will mean a 4-hour afternoon Study Hall must be attended. All management personnel on the farm will come from the transferred Welfare recipients whenever possible. All Sale of the Produce of the farms will go to defray the cost of the farms, with any Profits going to provide health care or expand the farm system. The goal will be to force every Welfare recipient to attend the farms for one calender year, and during such period to destroy the Housing from which they had come; the farms should provide a resettlement office to suggest relocation areas whenever possible. lgl
Monday, October 18, 2010
Sunday, October 17, 2010
Vile Language--sometimes the only Comment possible
I never know what to write about when I start Writing, but decided on this article. It describes Japan under deflation, but considering the state of the rest of the World economies, can be utilized as a substitute for the rest of the World. It is time to make some general observations; which while a poor instrument, can sometimes provide Insight. The first and foremost element I would like to express consists of the fact that almost all Inflation has come not from the domestic markets, but from that ever-desirable God–Exports. I remember a famous description of Revolution in the old movie–The Professionals–where Revolution was defined as a raving Beauty at first, and the disappointment of Men when they find Revolution is a used, and old Whore. Trade is much the same as Revolution, where Participants imagine far greater beauty and honor than they actually find.
Everyone desires Trade, because Business sees an expansion of Profits from selling to more than the domestic market. Where it is initially successful, Labor and Resource Costs increase; where it is unsuccessful, Labor Costs are suppressed but Resource Costs continue to increase. The key element in this discussion states that whether Trade is successful or unsuccessful, it still destabilizes the domestic Profitability of native industry. Domestic industry must keep pace with the Resource and Labor Costs of the Export Trade, and therefore domestic Prices must rise. People find themselves in pursuit of a better life that eludes them because of the increasing Costs; said expenditures not geared to the Production Costs of domestic production, but of Trade production. The simple Transportation Costs of Trade raises the Transport Costs of domestic production around 2-4% at a continually maintained scale.
Trade Production Costs always sinks to the bottom because of those self-same Transportation Costs; and so, every nation easily loses its Trade advantage as Resource capital flows outward in search of higher Return. Loss of Trade advantage quickly bring declines in Production quantities, demanding less Labor and Resource; all making Capital less Profitable, so that further capitalization is less desirable. Production soon finds its way back to domestic production levels, facing stiff competition from Trade, and paying the enhanced Costs of Inflation which occurred in pursuit of Trade production. All deflation scenarios is actually only a devolvement back to the price and Profitability structures of domestic production; it requiring less Labor and Resource with less Capitalization. The is the problem with Trade and resulting deflation; she is truly the old Whore of which We speak. lgl
Everyone desires Trade, because Business sees an expansion of Profits from selling to more than the domestic market. Where it is initially successful, Labor and Resource Costs increase; where it is unsuccessful, Labor Costs are suppressed but Resource Costs continue to increase. The key element in this discussion states that whether Trade is successful or unsuccessful, it still destabilizes the domestic Profitability of native industry. Domestic industry must keep pace with the Resource and Labor Costs of the Export Trade, and therefore domestic Prices must rise. People find themselves in pursuit of a better life that eludes them because of the increasing Costs; said expenditures not geared to the Production Costs of domestic production, but of Trade production. The simple Transportation Costs of Trade raises the Transport Costs of domestic production around 2-4% at a continually maintained scale.
Trade Production Costs always sinks to the bottom because of those self-same Transportation Costs; and so, every nation easily loses its Trade advantage as Resource capital flows outward in search of higher Return. Loss of Trade advantage quickly bring declines in Production quantities, demanding less Labor and Resource; all making Capital less Profitable, so that further capitalization is less desirable. Production soon finds its way back to domestic production levels, facing stiff competition from Trade, and paying the enhanced Costs of Inflation which occurred in pursuit of Trade production. All deflation scenarios is actually only a devolvement back to the price and Profitability structures of domestic production; it requiring less Labor and Resource with less Capitalization. The is the problem with Trade and resulting deflation; she is truly the old Whore of which We speak. lgl
Saturday, October 16, 2010
Rude Economic Modeling
I felt that my Readers ought to read this link today, even though I did not plan to Post; blogging being one of those Jobs where a Day Off is belittled. I would further advise pursuing her Recent Post links. I cannot say that I agree with all which she writes, but it is comforting to know that someone other than I considers Taxation to be a normal Operating Cost. It is relevant that it has been during the shrinking Tax Years (1997-2010) that Income Inequality has grown so proportionate–remember back when We talked about the Top 10%, rather than the Top 1%? It started immediately after Republicans starting the virtues of massive Tax Cuts. I remember back even so far as 1987 when Reagan himself thought there should be Tax increases–We were talking about the Top 20% back then.
I will follow with this link. The Risk premium seems only transferred to the Government, and necessary reorganization of the financial sector can be put off as too expensive for those Banks which are Too-Big-To-Fail. The whole thing holds a stench of protecting the funds of the One-Percent Icons, who already seem to possess too much influence within the halls of Congress. I could honestly back a 10% Surtax on a Individuals possessing more than $1 billion in assets, and all Corporations or Businesses holding more than $10 billion in assets. I seriously do not think it would curtail long-term economic growth, while probably raising the Trickle-Down Effect of economic productivity by 2000%. It might even quadruple the Dividend Yield of most Corporate venture stocks.
It is a Saturday, and I am feeling particularly lazy, so will finish only with the Observation that no human program–whether economic, social, or individual–will ever exist which does not possess limits. This means that initial benefits are generally Low, Intermediate benefits are generally High, but continuation beyond a certain point leads to a declining scale of benefit. Plot on a Bell Curve would tell Us We are currently below the X-axis on the issue of Tax Cuts. I am the only one to believe this, but almost all factors in the economy express this datum. lgl
I will follow with this link. The Risk premium seems only transferred to the Government, and necessary reorganization of the financial sector can be put off as too expensive for those Banks which are Too-Big-To-Fail. The whole thing holds a stench of protecting the funds of the One-Percent Icons, who already seem to possess too much influence within the halls of Congress. I could honestly back a 10% Surtax on a Individuals possessing more than $1 billion in assets, and all Corporations or Businesses holding more than $10 billion in assets. I seriously do not think it would curtail long-term economic growth, while probably raising the Trickle-Down Effect of economic productivity by 2000%. It might even quadruple the Dividend Yield of most Corporate venture stocks.
It is a Saturday, and I am feeling particularly lazy, so will finish only with the Observation that no human program–whether economic, social, or individual–will ever exist which does not possess limits. This means that initial benefits are generally Low, Intermediate benefits are generally High, but continuation beyond a certain point leads to a declining scale of benefit. Plot on a Bell Curve would tell Us We are currently below the X-axis on the issue of Tax Cuts. I am the only one to believe this, but almost all factors in the economy express this datum. lgl
Friday, October 15, 2010
View from the Backseat
I will start with providing this Link, and then turn to a slightly different analysis, even though I totally agree with Mike Shedlock on this Issue. I want to examine the situation from the point of view of the Consuming Household. They have primary Labor Income, and Secondary Income from whatever Investment and Retirement Portfolios they possess. Primary Labor Income is basically examined from the viewpoint of Pay per Hour or bi-weekly Salary. Secondary Income from Investments is graded by Percentage gain in total capital. The first suffers from total elimination at much greater rate than reduction of Pay. The later suffers almost totally from reduction of Return, though there is the hazard of total investment loss–rare, but always potentially existent. Now We must examine How each of these Incomes affect Consumption by the Household.
I will first answer Those who will point out I didn’t mention the hazard of reduced Hours of Work; this I don’t consider because this late in the Recovery (???), Partial Labor has already been primarily set. The elimination threat of Primary Labor Income may be Mild or Acute, but the possibility has little affect at this time, all due to the fact that Household Needs remain Constant, and are not permanently deniable. Primary Labor Income, therefore, has little impact on Consumption patterns at this late stage, unless there is complete elimination past this Point.
Now We must turn to Secondary Investment Income. Interest rates vitally affect the amount of this Income in that Depositors and/or Bond-holders receive a rate of Return which will pay for an expanded Consumption, or negate the possibility of an expanded Consumption. This is apparent especially in older households, where the adults are above the Age of 50. They are intent upon maximizing their Income before Retirement, or are already in Retirement; meaning that their Income for Discretionary Consumption comes principally from Investment returns. It is also true that Stocks which pay Dividends set that Return in relationship to the reigning Interest rates, as they do not wish to pay more than that which leads to investment in their venture Stock. Now, I don’t want to harp on a thing, but the amount of Discretionary Investment Income actually determines How Much older households are willing to spend on younger households, and Children and Grandchildren will get Shorted in both Gifts and Money; much of which is Clothing and Money for Necessities and Appliances; to say nothing about aid in Mortgage payments.
I have not studied the amounts or degree of Aid provided by older Households to younger Households, but know it is usually extensive and continuous; except when Someone like Ben Bernanke makes the mistake of thinking this natural flow of Income should be short-circuited. Mish has stated that replacement of Necessities is not naturally repetitive, and therefore not expansionary. Myself, I think the corruption of this Secondary flow of Income costs Business about 5 times what they retain in those fanciful Tax Cuts. In any case, low Interest rates are not going to spur anything! lgl
I will first answer Those who will point out I didn’t mention the hazard of reduced Hours of Work; this I don’t consider because this late in the Recovery (???), Partial Labor has already been primarily set. The elimination threat of Primary Labor Income may be Mild or Acute, but the possibility has little affect at this time, all due to the fact that Household Needs remain Constant, and are not permanently deniable. Primary Labor Income, therefore, has little impact on Consumption patterns at this late stage, unless there is complete elimination past this Point.
Now We must turn to Secondary Investment Income. Interest rates vitally affect the amount of this Income in that Depositors and/or Bond-holders receive a rate of Return which will pay for an expanded Consumption, or negate the possibility of an expanded Consumption. This is apparent especially in older households, where the adults are above the Age of 50. They are intent upon maximizing their Income before Retirement, or are already in Retirement; meaning that their Income for Discretionary Consumption comes principally from Investment returns. It is also true that Stocks which pay Dividends set that Return in relationship to the reigning Interest rates, as they do not wish to pay more than that which leads to investment in their venture Stock. Now, I don’t want to harp on a thing, but the amount of Discretionary Investment Income actually determines How Much older households are willing to spend on younger households, and Children and Grandchildren will get Shorted in both Gifts and Money; much of which is Clothing and Money for Necessities and Appliances; to say nothing about aid in Mortgage payments.
I have not studied the amounts or degree of Aid provided by older Households to younger Households, but know it is usually extensive and continuous; except when Someone like Ben Bernanke makes the mistake of thinking this natural flow of Income should be short-circuited. Mish has stated that replacement of Necessities is not naturally repetitive, and therefore not expansionary. Myself, I think the corruption of this Secondary flow of Income costs Business about 5 times what they retain in those fanciful Tax Cuts. In any case, low Interest rates are not going to spur anything! lgl
Thursday, October 14, 2010
My Sour Note for Today
Here is a Post which leads me to contest the rest of current economic thought in the Country. Every Easing of Finance in this Country has worsened the conditions under which this Country has to operate. We are leaving the Cash in the hands of Those who are not operating in the native economy. Whether Consumer or Business personnel are spending the Dollars from the Easing, they are spending those funds on foreign product. I must take the Readers on a far distant reach here, but it is the only resolution which makes sense: Current economic policy effectively only increased the Profits of Exports, even where there is no growth in Exports. This devolves into capital concentration within the Export sectors, with a discrimination against the capitalization of domestic industry. The upshot of this directional flow insists that Prices will increase in the domestic market, while Prices in the Export markets will be suppressed. Domestic Income will face increasing Price discrimination, while American Incomes will be drained.
People ask me what Solution I would advocate for a better Recovery. I suggest the truly hated venue–higher Taxes. The one aspect of Government Spending which makes it advantageous remains the fact that the funds must be spent within the domestic economy–which means Jobs. Higher Taxes suck a great amount out of Disposable Income, leaving Tied Income relatively alone; else there are many Politicians who face worse than Hanging in effigy. This decreases the Profitability of Imports with a favoritism shown to domestic production in the long-run with their wedge pricing for profitability against set production costs. Both Government and Private Sector begin to hire domestic labor as enhanced rates, while Imports reduce to resource necessities.
I am neither a liberal Democrat, or a capitalist Republican. I dislike Government Spending in almost every case, except for infrastructure construction and mass labor projects based upon minimum wages. Readers should be able to understand the first is for the advancement of Production, the later is to spur the economy under levels of unemployment. The first actually increases the Income levels in the areas impacted, while the later raise the Household Income of the labor involved; which is almost entirely spent on Consumer Goods. I do not believe, Now or Ever, that anything can be achieved by granting Rich people even more Tax Breaks. I do believe a change in philosophy must occur before We get a rising Standard of Living. lgl
People ask me what Solution I would advocate for a better Recovery. I suggest the truly hated venue–higher Taxes. The one aspect of Government Spending which makes it advantageous remains the fact that the funds must be spent within the domestic economy–which means Jobs. Higher Taxes suck a great amount out of Disposable Income, leaving Tied Income relatively alone; else there are many Politicians who face worse than Hanging in effigy. This decreases the Profitability of Imports with a favoritism shown to domestic production in the long-run with their wedge pricing for profitability against set production costs. Both Government and Private Sector begin to hire domestic labor as enhanced rates, while Imports reduce to resource necessities.
I am neither a liberal Democrat, or a capitalist Republican. I dislike Government Spending in almost every case, except for infrastructure construction and mass labor projects based upon minimum wages. Readers should be able to understand the first is for the advancement of Production, the later is to spur the economy under levels of unemployment. The first actually increases the Income levels in the areas impacted, while the later raise the Household Income of the labor involved; which is almost entirely spent on Consumer Goods. I do not believe, Now or Ever, that anything can be achieved by granting Rich people even more Tax Breaks. I do believe a change in philosophy must occur before We get a rising Standard of Living. lgl
Wednesday, October 13, 2010
What is the Purpose?
Where are We going here? It goes back to asking about Why recessions are such a problem. The only Answer which will hold up states that recessions are bad because people lose some share of their Standard of Living. Investors are an integral part of the population which suffers from recessions, but they are not the only segment of the population which suffers from the recession. They are not even the first to suffer, as Layoffs start long before poor Profits are reported. They are not the worst to suffer as well, with Labor losing a far greater share of their total Income. They do happen to be the most organized and vocal, with the greatest swing weight to influence Government officials.
Here is the Problem: Government, especially the Fed, categorically expound that there is little Inflation. What exactly is Inflation? Some who claim that it is only a change in Prices which is higher. I would advance another definition which will be picked apart drastically as soon as it is heard: Inflation is an alteration in the stasis between Income and Pricing, where Prices increase in percentage Cost in relation to Income. Inflation is often hidden under recessionary conditions, but it remains existent. People still suffer from the percentage Cost increase of Prices, even though nominal Prices have not altered. Now We enter into the realm of QE1 and QE2. Investors love Quantitive Easing because it lowers their Investment Costs, but What does it do for the rest of the Price Structure?
We can first fairly determine that it will not lower Consumer Prices in the Short-Run as would a Business demand to raise Cash through Sales, and increase those Prices in the Intermediate and Long-Run. This means that there is assured Inflation in the future, which the Fed states is needed. Is It? One has to ask if a Recession can be defined as Over when Average Income is still below the previous Average, and Prices have continued to increase. This is a good Question to answer, but there is an even more important Question to be asked: Have not QE1 and QE2 both been designed to worsen the loss of Average Income to the advantage of a specific Class–namely, the Investors? The Fed is part of the Problem, rather than a part of the Solution under these Conditions. These are definite indications that We are on the wrong Course, when We should be designing Mass Labor Public projects. lgl
Here is the Problem: Government, especially the Fed, categorically expound that there is little Inflation. What exactly is Inflation? Some who claim that it is only a change in Prices which is higher. I would advance another definition which will be picked apart drastically as soon as it is heard: Inflation is an alteration in the stasis between Income and Pricing, where Prices increase in percentage Cost in relation to Income. Inflation is often hidden under recessionary conditions, but it remains existent. People still suffer from the percentage Cost increase of Prices, even though nominal Prices have not altered. Now We enter into the realm of QE1 and QE2. Investors love Quantitive Easing because it lowers their Investment Costs, but What does it do for the rest of the Price Structure?
We can first fairly determine that it will not lower Consumer Prices in the Short-Run as would a Business demand to raise Cash through Sales, and increase those Prices in the Intermediate and Long-Run. This means that there is assured Inflation in the future, which the Fed states is needed. Is It? One has to ask if a Recession can be defined as Over when Average Income is still below the previous Average, and Prices have continued to increase. This is a good Question to answer, but there is an even more important Question to be asked: Have not QE1 and QE2 both been designed to worsen the loss of Average Income to the advantage of a specific Class–namely, the Investors? The Fed is part of the Problem, rather than a part of the Solution under these Conditions. These are definite indications that We are on the wrong Course, when We should be designing Mass Labor Public projects. lgl
Tuesday, October 12, 2010
How can You Win?
I wish sometimes that Greg Mankiw sounded as intelligent in the NYTimes as he does in this Post. It is at that point of discussion where We can have an intelligent discussion on Taxes. I have always wondered Why exactly that Economists insist that Taxes are an automatic distortion of the economic optimum. How can one define that Infrastructure Cost of Production without Taxation. There are Economists who consider Economics only from the position that the sole Goal must be maximization of individual wealth. The proper scope of economics should be the social growth of the entire economy. It must include Taxation as a Production Cost, else there would be no Production of magnitude. The deadweight Cost of Taxation must be amended by the enhancement benefit of Production increase by the infrastructure construction.
Tyler Cowen believes that marginal tax rates are morally wrong. It is true that its entire basis relies on the ‘Deep Pockets’ formula of lawyers, and enjoys all the respect that our dear lawyers possess. I suggest there is a way to remove the moral hazard of marginal tax rates for Tyler, but it is one he would not enjoy; eliminate the Work-up phase of Taxation; not granting lower Tax rates to the Wealthy on lower Income earned first. It would clearly delineate the difference in taxation between alternate Income levels, and positively assert the Social demand to Tax.
I will finish with this Post from Stan Collender. One can ask Why, and I will only state that all exemptions from taxation that one finds in the law have already garnered the support necessary to pass such legislation into law. This support rarely changes under any conditions, and Reformers face this opposition anytime they attempt a serious revision in tax law. It is admitted that current tax law is patently unfair through much of its operation, but the favored groups are organized, while Reform is not; particularly in the fact that it is idealistic, but not individually rewarding. Everyone is desirous of changing some aspect of tax law; still, the chances of making the situation worse are higher than the chances of making things better. lgl
Tyler Cowen believes that marginal tax rates are morally wrong. It is true that its entire basis relies on the ‘Deep Pockets’ formula of lawyers, and enjoys all the respect that our dear lawyers possess. I suggest there is a way to remove the moral hazard of marginal tax rates for Tyler, but it is one he would not enjoy; eliminate the Work-up phase of Taxation; not granting lower Tax rates to the Wealthy on lower Income earned first. It would clearly delineate the difference in taxation between alternate Income levels, and positively assert the Social demand to Tax.
I will finish with this Post from Stan Collender. One can ask Why, and I will only state that all exemptions from taxation that one finds in the law have already garnered the support necessary to pass such legislation into law. This support rarely changes under any conditions, and Reformers face this opposition anytime they attempt a serious revision in tax law. It is admitted that current tax law is patently unfair through much of its operation, but the favored groups are organized, while Reform is not; particularly in the fact that it is idealistic, but not individually rewarding. Everyone is desirous of changing some aspect of tax law; still, the chances of making the situation worse are higher than the chances of making things better. lgl
Monday, October 11, 2010
How can you talk Turkey when they only gobble?
How often do you listen to Carnival barkers? My entire study of economics leads me to suggest that only a relatively set Interest rate of around 4.25% for the Overnight rate is the only sustainable rate with a steady rate of growth for the economy; the Fed maybe having a Percentage point to play with for or against. Higher than this rate causes Business to find it impossible to get the Operating Credit to do business. Lower than this damages the ability of all Investors, not just Depositors, to get a sound rate of Return; necessary for themselves to be a full participant in the economy. Taylor wants a sliding scale when there needs to be relative constant placement of Rates, while Meyer wants to give Business money, though there is absolutely no indication that Business would ever pass it on to Others. Bernanke made a reputation on claiming the Fed of Depression years was too Static in Policy; I must accuse Ben of being too flighty in applying Policy. Time will probably show that We were all Wrong!
The Nobel Prize Commission chose again to highlight current research into the latest economic problem–Unemployment. It is not that I think the Three do not deserve it; they have performed a profound level of research; I will tell the Reader now that if they do not pursue the Tyler Cowen link, they will miss an excellent experience. I differ from the Three Prize Winners in that I do not want a kick-start to the housing markets, before there has been a massive reduction in Housing prices. The Mortgage Crisis was caused by falling Home prices, and I would not see them replaced where they would fall again under economic stress. I personally would reintroduce a Selective Service Draft solely for military training, and run up to two million kids through it; it would build up necessary Reserves, and offer Trainees some Concept of military service other than the common liberal contempt. Such Thinking would present actual Household Income to a vast number of currently unemployed Youth.
Business and Politics will never truly invest in Labor, though they spend huge amounts at every other idiot thing. Millions could be employed and learn vital labor skills cleaning up and beautifying our environment. But Business and Politician will not consider anything which does not make some Business sector widely-inflated Profits. We have lost the sense of Community which got Us through the Great Depression. The attitude of the Criminals of the 1930s have migrated to the Business mentality. Politicians should learn that they can Vote for something, even when their Contributors do not gain from it; all it takes is to be the Right Thing to do. We will not likely see such behavior in our lifetime, though We might see the downfall of our Way of Life. lgl
The Nobel Prize Commission chose again to highlight current research into the latest economic problem–Unemployment. It is not that I think the Three do not deserve it; they have performed a profound level of research; I will tell the Reader now that if they do not pursue the Tyler Cowen link, they will miss an excellent experience. I differ from the Three Prize Winners in that I do not want a kick-start to the housing markets, before there has been a massive reduction in Housing prices. The Mortgage Crisis was caused by falling Home prices, and I would not see them replaced where they would fall again under economic stress. I personally would reintroduce a Selective Service Draft solely for military training, and run up to two million kids through it; it would build up necessary Reserves, and offer Trainees some Concept of military service other than the common liberal contempt. Such Thinking would present actual Household Income to a vast number of currently unemployed Youth.
Business and Politics will never truly invest in Labor, though they spend huge amounts at every other idiot thing. Millions could be employed and learn vital labor skills cleaning up and beautifying our environment. But Business and Politician will not consider anything which does not make some Business sector widely-inflated Profits. We have lost the sense of Community which got Us through the Great Depression. The attitude of the Criminals of the 1930s have migrated to the Business mentality. Politicians should learn that they can Vote for something, even when their Contributors do not gain from it; all it takes is to be the Right Thing to do. We will not likely see such behavior in our lifetime, though We might see the downfall of our Way of Life. lgl
Sunday, October 10, 2010
Some of the Reason Why I am disliked!
I do not want to sound like Sour Grapes here, but Greg Mankiw breaks my heart over his oppression as a Taxpayer. He states that Taxes destroy his incentive to make more money. I say that if my desires were fulfilled, and the Tax Cuts of 2001-03 were completely withdrawn, then he would be working much harder. I will go on to ask him How Much he saves from these Tax Cuts before he hits the big $250k? While I feel terrible for his kids, how level is the Playing Field if they get through College without debt, when the rest of the Student Body had to borrow a quarter-million apiece to get the same degree? I should suggest that he also remonstrate with his kids not to purchase their housing based upon the level of mortgage they can get, or their inheritance will disappear without substantive gain. I will finish with the Comment that he may one day appreciate that increased Medicare taxation.
It seems that I must discuss Malpractice in the health care industry today. What amazes me about Malpractice arguments lies in their refusal to separate between Corrective Damages and Putative Damages. I first know for a fact that Insurance companies will not support malpractice reform if premium rates for malpractice are limited by the same legislation. I know that Corrective Damages will still incur, whether paid by malpractice Insurer or Government entity. I myself do not like the tort system, and would have every lawyer’s fees limited in magnitude for such Cases; I would suggest a maximum of $50k through completion of the litigation. I would insist that the Insurer pay all litigation Costs of the Plaintiff if found financially liable in the Case. I would follow with the provision that the lawyers are solely liable for the Plaintiff litigation Costs if they lose; this to forestall spurious claims. The entire medical Cost of any Injury will fall back upon Government programs if the Insurer can escape Claims, so the issue of Corrective Damages should be decided above and beyond Putative Damages. I think I can hear the malpractice Costs shrinking already.
I will finish with this attraction. I personally like the Japanese system of medicine, where Doctors own their own small hospitals, must hire their own staff, and receive Government support based upon their successful provision of health care. It is clear that there is too much Cash in American health care, that medical Patents are an expensive Joke, and medical Insurers make too much Money denying claims–which have to be paid by alternate (read Government) means. Medicare should not be an arena where Everyone can make a 20% Profit on their Prostitution. I would still like to witness Doctors switched to Government Employee status after filing over $80k/year in Wage claims from the Government–Local, State, and Federal lumped together to derive the amount. Modern hospitals are super-sweet hotel rooms with fine Service, where We need the potential for massive bed space. I would pay hospitals a flat rate for occupied beds paid by the Government, and a rate which will increase with the number of beds actually filled. Hospitals will scream if they get only say $500/day per Government-paid Patient, but I equally believe they will find a method to make a Profit at that provision. It will take a Bully to change the health care system, not a bunch of lobbyist-controlled less than Public Servants. lgl
It seems that I must discuss Malpractice in the health care industry today. What amazes me about Malpractice arguments lies in their refusal to separate between Corrective Damages and Putative Damages. I first know for a fact that Insurance companies will not support malpractice reform if premium rates for malpractice are limited by the same legislation. I know that Corrective Damages will still incur, whether paid by malpractice Insurer or Government entity. I myself do not like the tort system, and would have every lawyer’s fees limited in magnitude for such Cases; I would suggest a maximum of $50k through completion of the litigation. I would insist that the Insurer pay all litigation Costs of the Plaintiff if found financially liable in the Case. I would follow with the provision that the lawyers are solely liable for the Plaintiff litigation Costs if they lose; this to forestall spurious claims. The entire medical Cost of any Injury will fall back upon Government programs if the Insurer can escape Claims, so the issue of Corrective Damages should be decided above and beyond Putative Damages. I think I can hear the malpractice Costs shrinking already.
I will finish with this attraction. I personally like the Japanese system of medicine, where Doctors own their own small hospitals, must hire their own staff, and receive Government support based upon their successful provision of health care. It is clear that there is too much Cash in American health care, that medical Patents are an expensive Joke, and medical Insurers make too much Money denying claims–which have to be paid by alternate (read Government) means. Medicare should not be an arena where Everyone can make a 20% Profit on their Prostitution. I would still like to witness Doctors switched to Government Employee status after filing over $80k/year in Wage claims from the Government–Local, State, and Federal lumped together to derive the amount. Modern hospitals are super-sweet hotel rooms with fine Service, where We need the potential for massive bed space. I would pay hospitals a flat rate for occupied beds paid by the Government, and a rate which will increase with the number of beds actually filled. Hospitals will scream if they get only say $500/day per Government-paid Patient, but I equally believe they will find a method to make a Profit at that provision. It will take a Bully to change the health care system, not a bunch of lobbyist-controlled less than Public Servants. lgl
Saturday, October 09, 2010
Honesty and Deception
I do not think most of my Readers possess the economic technique sufficient to understand all of this Post–I don’t! The graphing of moral hazard leaves something to be desired, counting as it does a constant Public reaction under financial risk. This variable reaction can alter the shifts in MR and MC, as both MR1 and MC1 are actually a sonic wave pattern. Government policy can also be perceived as a wave pattern as well, with sudden shifts in temperament. Ex-ante constraints will always be suppressed by the financial industry itself, and not rigorously enforced by government regulators under constant pressure. Mark Thoma does possibly not realize it, but he has proposed the only solution to apply constraint to shadow banking. This cannot be Insurance, and cannot be in-line failures, and must not be firm failures. The only Answer left is immediate Takeover of all shadow banking firms upon loss of liquidity by Government regulators; assets never to be returned until all liabilities are paid, and Government Costs are subtracted. Mark will contest my implying that Insurance is impossible, but it remains so when the amounts at risk cannot be formulated at any level than that of the shadow bankers’ desire to draw percentage Profits from the deals.
I do not agree with Mish at all on this one, but it stands as more coherent than the entirety of the Right. Here is my stance: Higher Taxes will not further slow the economy, or will it impede further Gains in the Private sector; the high-paid, heavily-pensioned Government Workers should go, I stand with Mike on this, but massive employment of Workers at the Minimum Wage level will produce much needed Income for Households especially if it covered by health care insurance bought by the Government as bargain rates; Business needs no further re-balancing of Spreadsheets, myself firmly opposed to Business welfare, they need to bear normal Risk in order to earn those Profits they acclaim; and finally, there is real need to turn the health industry semi-Public through a Surtax on all Profits above 10% annually to pay for Welfare health Costs which are unfunded. The problems of Cost Over-runs on public projects should insist that Business absorb the same Cost as the Public; on Public projects, Business need a tax equal to the percentage Over-run incurred mandated and collected–this to assure that the Real Costs are integrated into the Bids.
I will not go further Today, imaging that most Readers will be like me, and bored to Death to all the Solutions out there to a limited number of Problems; none of which is likely to work. I would like to create a mandatory Political Court, where every official and elected person must endure periodically; the entire idea is that the individual must pay a $2500 Fine for every Lie or Misrepresentation he has made Publicly, after which he did not fulfill the implied Promise made to the Public. Americans can take a ‘No Comment’ or Bad News, but We tire of the bull—. No one thinks like myself, though, because of the huge increase of Unemployment which would probably occur. lgl
I do not agree with Mish at all on this one, but it stands as more coherent than the entirety of the Right. Here is my stance: Higher Taxes will not further slow the economy, or will it impede further Gains in the Private sector; the high-paid, heavily-pensioned Government Workers should go, I stand with Mike on this, but massive employment of Workers at the Minimum Wage level will produce much needed Income for Households especially if it covered by health care insurance bought by the Government as bargain rates; Business needs no further re-balancing of Spreadsheets, myself firmly opposed to Business welfare, they need to bear normal Risk in order to earn those Profits they acclaim; and finally, there is real need to turn the health industry semi-Public through a Surtax on all Profits above 10% annually to pay for Welfare health Costs which are unfunded. The problems of Cost Over-runs on public projects should insist that Business absorb the same Cost as the Public; on Public projects, Business need a tax equal to the percentage Over-run incurred mandated and collected–this to assure that the Real Costs are integrated into the Bids.
I will not go further Today, imaging that most Readers will be like me, and bored to Death to all the Solutions out there to a limited number of Problems; none of which is likely to work. I would like to create a mandatory Political Court, where every official and elected person must endure periodically; the entire idea is that the individual must pay a $2500 Fine for every Lie or Misrepresentation he has made Publicly, after which he did not fulfill the implied Promise made to the Public. Americans can take a ‘No Comment’ or Bad News, but We tire of the bull—. No one thinks like myself, though, because of the huge increase of Unemployment which would probably occur. lgl
Friday, October 08, 2010
It's not Bad, It's not Bad, awh Damn!
There is a ton of material on the BLS Job Report today, but this quick Post might express it better than windier Posts. Mark Thoma would desire more quantitative easing, but I cannot find any value in a policy so obviously failed. The Fed simply does not have the pull to turn the economy around by itself, and it has no help anywhere. Business is simply using the funds to create Profits for themselves. Banks are not lending, because there are safer investment elsewhere with better Profits for themselves. The increase in Part-Time employment only means that Business is gearing for a bad Christmas Season and coming year. Labor is being shorted, and Households are losing Income, yet everyone expects Consumer Demand to remain steady–I do not!
The data I would like to preview is the activity of the used Product markets. A rise in this area will mean bad News for the economy, especially if the new direction of Start-Ups begins to resemble Repair Shops. This would mean a downgrade of Consumer Preference to older, but reliable, Products. Purchase of older Vehicles because of Price premium may be beyond Us, as also in the Sale of Used Furniture and Appliances. The Reader may find this to be far-fetched, but Dealers are relying on a $3000 Mark-Up for newer Used Cars. Vehicle Warranties will not hold up under this resort, if Consumers need transportation and cannot afford the $3000. Economists will tell you what this will do to the New Car market, if long-term New Vehicle purchasers cannot afford the $8000 Mark-Up price.
Three years of current economic trend could lead to the American economy beginning to resemble the Mexican economy, with heavy usage of aged Product. It is my fear that the American Consumer is getting ready to Downshift, and the economy will only suffer from such an assault. I have been trying to source data for my estimate, but my Guess is that Computer equipment is as Aged as it have been since the early 1980s. There is indication that Main Street Consumers are not upgrading their Software, as long as it effectively works. Blockbusters–the highest-priced of the Trade stores–has filed for bankruptcy, and the greatest Sales of DVDs are found in the Used Disk Counters. I know positively that Amazon’s Resale program has ruined independent Authors, who get nothing from Used Books. I share not the optimism of Wall Street, and am cognizant of Wall Street’s partying most heavily right before the Crash. lgl
The data I would like to preview is the activity of the used Product markets. A rise in this area will mean bad News for the economy, especially if the new direction of Start-Ups begins to resemble Repair Shops. This would mean a downgrade of Consumer Preference to older, but reliable, Products. Purchase of older Vehicles because of Price premium may be beyond Us, as also in the Sale of Used Furniture and Appliances. The Reader may find this to be far-fetched, but Dealers are relying on a $3000 Mark-Up for newer Used Cars. Vehicle Warranties will not hold up under this resort, if Consumers need transportation and cannot afford the $3000. Economists will tell you what this will do to the New Car market, if long-term New Vehicle purchasers cannot afford the $8000 Mark-Up price.
Three years of current economic trend could lead to the American economy beginning to resemble the Mexican economy, with heavy usage of aged Product. It is my fear that the American Consumer is getting ready to Downshift, and the economy will only suffer from such an assault. I have been trying to source data for my estimate, but my Guess is that Computer equipment is as Aged as it have been since the early 1980s. There is indication that Main Street Consumers are not upgrading their Software, as long as it effectively works. Blockbusters–the highest-priced of the Trade stores–has filed for bankruptcy, and the greatest Sales of DVDs are found in the Used Disk Counters. I know positively that Amazon’s Resale program has ruined independent Authors, who get nothing from Used Books. I share not the optimism of Wall Street, and am cognizant of Wall Street’s partying most heavily right before the Crash. lgl
Thursday, October 07, 2010
Anyone want a Job?
I tend to discount Mike Shedlock’s approach sometimes because it sounds a little more dire than warranted, but this account is truly sad. (Roubini never had it so good!) I am trying to remember an old Report on budgetary channeling from the Dark Ages of the 1970s, as I spout the drivel which might have changed with the advent of Credit Cards with serious balances; this stating that Christmas Shoppers never begin to budget seriously for the Christmas Season until October. We might be getting Unemployment at exactly the wrong moment in history. The mortgage foreclosure rate and the decline of labor hours may join with the above information to suggest the largest buying segment of the Christmas Shoppers may be short a significant number of people. Mortgage holders traditionally are well-adjusted Tw0-Income families with young children, the Shopper who has the most to buy with the heaviest Mark-Ups. Card-Holders have been paying down their balances throughout the Recovery, but is it enough to produce effective Christmas budgets?
Catherine Rampell also notes the growth of Job Seekers, but from another venue. The interesting fact here may be that the Hire rate for Professionals and Business personnel is much slower and analytical than for Construction Workers. Construction foremen find Job Skill levels much easier to track, as they only need to know what previous Job sites the Workers have worked to understand the viable capability of the Worker. Professional and Business want to pick the exact composite which is right for their business model, and truly interview the Job Seeker. Both methods are effective for the sectors involved, but it does make a difference to our model. Construction labor with likely be receiving Income at the end of October, over labor undertook in the early part of October. Professional and Business Job Seekers will likely start getting their first Paycheck somewhere in late November. Economists will tell you this stands as too late to save the Christmas Season for these new Job Holders.
The information can be considered so dire to the point that I would include this link. My entrance on discussion of this Post must be the Cost of a Retraining program to eliminate or forestall the destructive criteria of Obsolete. What does this Retraining Cost do to the natural investment for Retirement? What does the use of Retirement funds for Retraining do for that Retirement fund? Is the fundamental Cost of Education cancelling the real value of Education, under a Business model and program sheering Labor at immediate sign of Profit weakness? Could this not be the real problem which Government policy should concentrate upon? lgl
Catherine Rampell also notes the growth of Job Seekers, but from another venue. The interesting fact here may be that the Hire rate for Professionals and Business personnel is much slower and analytical than for Construction Workers. Construction foremen find Job Skill levels much easier to track, as they only need to know what previous Job sites the Workers have worked to understand the viable capability of the Worker. Professional and Business want to pick the exact composite which is right for their business model, and truly interview the Job Seeker. Both methods are effective for the sectors involved, but it does make a difference to our model. Construction labor with likely be receiving Income at the end of October, over labor undertook in the early part of October. Professional and Business Job Seekers will likely start getting their first Paycheck somewhere in late November. Economists will tell you this stands as too late to save the Christmas Season for these new Job Holders.
The information can be considered so dire to the point that I would include this link. My entrance on discussion of this Post must be the Cost of a Retraining program to eliminate or forestall the destructive criteria of Obsolete. What does this Retraining Cost do to the natural investment for Retirement? What does the use of Retirement funds for Retraining do for that Retirement fund? Is the fundamental Cost of Education cancelling the real value of Education, under a Business model and program sheering Labor at immediate sign of Profit weakness? Could this not be the real problem which Government policy should concentrate upon? lgl
Wednesday, October 06, 2010
Can my Voice be heard in the Wilderness?
I agree and disagree with Joseph Stiglitz in this article by Phil Izzo. Central banks are certainly raising havoc with banking practice, Government expenditures, and Consumer Demand. Central banks are extending Cash to individual banks practically for nothing, destroying Interest rates for Depositors along with their Consumer Demand. Governments are borrowing Cash at extraordinary rates on every level because of low or nonexistent Taxes and huge expenditures. No one should even imagine that this Government debt will disappear before the Interest rates return to normal. Banks Depositors are following the banks themselves in investing only in Treasuries–the only place where there is any rate of Interest; Consumers going further and curtailing normal Spending because the 10-year Treasuries exact a great deal of Time before you get repayment or even market sale. Banks can derive a secure rate of Return by investment in Treasuries, or much higher Risk Return by investment overseas. None of this helps the American economy, where Unemployed Labor cuts its Consumer Expense drastically.
I agree with Stiglitz that there should be great Government expenditure on Labor programs, especially cheap level Employment which brings high Return in Consumer Demand. Paying Business to provide this Employment is stupid, though, and is much too expensive to be withstood. We do not need Business to borrow all Operating Capital funding from Banks at Prime rates, then give Business a 20% Return on their investment, simply to employ large numbers of people. Government can borrow at much cheaper rates, hire more people at cheaper rates than Business, pay managerial personnel much less, and additionally coordinate the national effort. Government programs have an added advantage over Business–greater ease of downsizing past the period of Recovery; Business demands continued program maintenance after their initial capitalization. It should not be the economic policy of the Government to maintain Businesses in the Black, when they should themselves downsize.
I have always advocated the elimination of the Bush Tax Cuts of 2001-03 at all levels; they should have never been instituted in the first place. Current economic thought suggests a policy of maintaining Business activity, even in those areas where Capitalization is bloated, and Profits are truly marginal. Their Solution is a ever-increasing award of Tax Cuts. I would take the exact opposite course. Everyone–Consumers, Business, Corporate, Capital Gains, and Inheritance should be taxed at rates which will pay for Government Expenditures at least in Boom periods; this means adjusting Tax rates to fully pay for Government Expenses at the time of the height of the last Boom. Government expenditures which are higher than they were at such a time will be repaid by a return to Boom conditions, or at least seriously retard our Debt acquisition. Such a policy would force Business to reinvent itself in order to maintain Profitability, spark a considerable amount of domestic investment to reduce taxation, and narrow the gap between High and Low Incomes in this Country. It is interesting that the effort would actually improve Business performance, as it forces the business remodeling which always occurs in a return to a economic boom. lgl
I agree with Stiglitz that there should be great Government expenditure on Labor programs, especially cheap level Employment which brings high Return in Consumer Demand. Paying Business to provide this Employment is stupid, though, and is much too expensive to be withstood. We do not need Business to borrow all Operating Capital funding from Banks at Prime rates, then give Business a 20% Return on their investment, simply to employ large numbers of people. Government can borrow at much cheaper rates, hire more people at cheaper rates than Business, pay managerial personnel much less, and additionally coordinate the national effort. Government programs have an added advantage over Business–greater ease of downsizing past the period of Recovery; Business demands continued program maintenance after their initial capitalization. It should not be the economic policy of the Government to maintain Businesses in the Black, when they should themselves downsize.
I have always advocated the elimination of the Bush Tax Cuts of 2001-03 at all levels; they should have never been instituted in the first place. Current economic thought suggests a policy of maintaining Business activity, even in those areas where Capitalization is bloated, and Profits are truly marginal. Their Solution is a ever-increasing award of Tax Cuts. I would take the exact opposite course. Everyone–Consumers, Business, Corporate, Capital Gains, and Inheritance should be taxed at rates which will pay for Government Expenditures at least in Boom periods; this means adjusting Tax rates to fully pay for Government Expenses at the time of the height of the last Boom. Government expenditures which are higher than they were at such a time will be repaid by a return to Boom conditions, or at least seriously retard our Debt acquisition. Such a policy would force Business to reinvent itself in order to maintain Profitability, spark a considerable amount of domestic investment to reduce taxation, and narrow the gap between High and Low Incomes in this Country. It is interesting that the effort would actually improve Business performance, as it forces the business remodeling which always occurs in a return to a economic boom. lgl
Tuesday, October 05, 2010
Balmy--but Happy!!!
I do not doubt that all of these Concerned Experts know what they are talking about. But it is actually not about the Money. The Cash can be found and impounded for the necessary Work, just as soon as the real Cracks in the system (pun intended) can be found and curatives identified. My Thought, though, holds an incredible assumption, which is this Century may be known as the Period of Road Removable, in the sense of the current Road system. I am not getting all Sc-Fi weird here, simply acknowledging that current systems are rapidly running out of viable Resource and Material. Do I believe that the current Transport systems will be replaced by a new, better system–Yes. Will it come close to being the current style of system–No!
I will state for the Record that I do not agree with this Evaluation. No expenditure of Public funds will rebalance the World economy. The Developing nations will never be able to take the lead from the Advanced nations no matter How Much economists would desire it; the Developing nations simply need too much Technology and Finance from the Advanced nations. What is needed is for the Advanced nations to find a new direction for growth, which is Why I implanted the previous paragraph. Nothing could be as beneficial to all nations as the development of an entirely new Transportation system; low on Energy Cost, heavy of Freightage, and with great durability.
It is time for mechanical Engineers to shine, like their Computer and Electrical brethren. I am currently thinking of closed-liquid canals with propellent of liquid flow–possibly with Pull straps upon Cargo. It would be nice if it could be a liquid Plastic made from waste Fuel by-products. I am thinking of uniform Cargo barges transported clear across the Country on a level canal sped by canal flow and grinder gears propelling the barge the full length of the barge to attain the canal flow. Automatic switching would divert Cargos to proper destination with drainage locks, and wheels on the barges to simple hook up tractors to pull to final placement. It would require immense amounts of electrical energy to drive the grinder gears, and there would need be great banks of such gears to develop the liquid flow ahead of the barges between cities, but once started; the flow would be much easier to maintain. Insane?–Possibly, but We need a massive new direction for the economy, and this would be a massive endeavor and accomplishment. lgl
I will state for the Record that I do not agree with this Evaluation. No expenditure of Public funds will rebalance the World economy. The Developing nations will never be able to take the lead from the Advanced nations no matter How Much economists would desire it; the Developing nations simply need too much Technology and Finance from the Advanced nations. What is needed is for the Advanced nations to find a new direction for growth, which is Why I implanted the previous paragraph. Nothing could be as beneficial to all nations as the development of an entirely new Transportation system; low on Energy Cost, heavy of Freightage, and with great durability.
It is time for mechanical Engineers to shine, like their Computer and Electrical brethren. I am currently thinking of closed-liquid canals with propellent of liquid flow–possibly with Pull straps upon Cargo. It would be nice if it could be a liquid Plastic made from waste Fuel by-products. I am thinking of uniform Cargo barges transported clear across the Country on a level canal sped by canal flow and grinder gears propelling the barge the full length of the barge to attain the canal flow. Automatic switching would divert Cargos to proper destination with drainage locks, and wheels on the barges to simple hook up tractors to pull to final placement. It would require immense amounts of electrical energy to drive the grinder gears, and there would need be great banks of such gears to develop the liquid flow ahead of the barges between cities, but once started; the flow would be much easier to maintain. Insane?–Possibly, but We need a massive new direction for the economy, and this would be a massive endeavor and accomplishment. lgl
Monday, October 04, 2010
Try Ridiculous if All Else Fails
I may not intrinsically agree with all of this article, but Arnold like always makes an excellent statement. I am an old Hand at this stuff, and believe all economic Downturns come from mis-structure of the Profit distribution. When participants in the economy do not receive their proper allocation of Wage and Profit, then they do not maintain their normal Expenditure patterns; this leading to further shortage of normal Profits distribution, all leading eventually to Production failures. That Statement is easy to spout, but not as easy to prove. This stands as the base insecurity in the economy: everyone knows there is something wrong with the economy, but no one can precisely point out the trouble with effectiveness.
I like this Piece, because it made me reconsider my precepts. Robert Higgs says that Consumer Demand has been growing nicely, and cannot be the source of the Downturn. He has a Point which is hard to contradict. He relies on belief that the Downturn comes from the threat to private investment, which has declined. I will grant him this Point. The Question to be answered is what caused the reduction of private Investment. I think the source of the reduction came from two activities, on which most economists will not agree.
The first is the rise of Property taxes and Utilities Costs. These forced small firms to raise their Retail prices some 18-20% higher than the rise in Production and Distribution Costs increases. They lacked the volume and Cost-shifting capacity of the large Retail outlets, and competition forced small firms out of the markets. The image of Sole Proprietorship became tarnished and unprofitable–Investment left the small, independent Concerns; the greatest source of Employment. The second disaster was the Bush Tax Cuts. They insisted that there must be a continual growth of Government debt in magnitudes never before seen; this due to the great growth of Government Spending. Private Investors found a source of low-Profit, but absolutely Safe, investment. Where Have all the Flowers Gone?–to bankroll the Government everywhere. lgl
I like this Piece, because it made me reconsider my precepts. Robert Higgs says that Consumer Demand has been growing nicely, and cannot be the source of the Downturn. He has a Point which is hard to contradict. He relies on belief that the Downturn comes from the threat to private investment, which has declined. I will grant him this Point. The Question to be answered is what caused the reduction of private Investment. I think the source of the reduction came from two activities, on which most economists will not agree.
The first is the rise of Property taxes and Utilities Costs. These forced small firms to raise their Retail prices some 18-20% higher than the rise in Production and Distribution Costs increases. They lacked the volume and Cost-shifting capacity of the large Retail outlets, and competition forced small firms out of the markets. The image of Sole Proprietorship became tarnished and unprofitable–Investment left the small, independent Concerns; the greatest source of Employment. The second disaster was the Bush Tax Cuts. They insisted that there must be a continual growth of Government debt in magnitudes never before seen; this due to the great growth of Government Spending. Private Investors found a source of low-Profit, but absolutely Safe, investment. Where Have all the Flowers Gone?–to bankroll the Government everywhere. lgl
Sunday, October 03, 2010
Am I the only One?
I really like this Piece from Paul Krugman, though I do not agree with his conclusions. It at least explains the Race of Death trying to connect Labor, Finance, Capital, and Production. The Keynesian approach fails to stipulate the relationship of Treasuries to M1 and M2 in that Treasuries are the creation of Money when they are eventually Cashed; even if only to be renewed. It is the old Story of the original Holders of the Funds getting back their starting funds, plus a considerable amount of Interest, while the Government still owes the same magnitude of debt plus Interest payments. Keynesians would not call this a massive growth in the Money Supply, yet it does make an incredible number of people feel considerably Richer than they are; all based on the printing of Paper. It would work from the Keynesian View, if the production managers believed the misconception. They, and Consumers, fail to appreciate the great growth of Wealth; they maintain their original stance, and well, people are still unemployed.
Ferguson’s listed Remarks are also some bother to myself as well. He asks who is going to buy the Treasuries, as any competent economist should understand immediately: exactly those People who find further Investment Capital to enhance Production to be currently unprofitable. This means the Government is only providing an alternate Investment center for massive amounts of funds no longer devoted to Production growth. I don’t know if it is valid economic policy for Government to provide an acceptable rate of Profit for obtained funds which, in many instances, came from economics Profits that corroded the original Boom.
A little Hint to the Readers here: Downturns are the natural Pressure value which presses economic profits from an economy. These economic profits always build up in a Boom, as Producers start charging above viable Price to increase their Profits. The Downturns result from normal Profits being suppressed under the economic profit pricing. Now many in Government suggest paying Business to build those economic profits through paying Interest on those Profits during Downturns is a genuine good economic policy. I would dissent, as it simply continues an imaginary pursuit of artificial Wealth. It prevents normal Profits from reasserting its control over the economy, and creates a false new Class of Wealth. lgl
Ferguson’s listed Remarks are also some bother to myself as well. He asks who is going to buy the Treasuries, as any competent economist should understand immediately: exactly those People who find further Investment Capital to enhance Production to be currently unprofitable. This means the Government is only providing an alternate Investment center for massive amounts of funds no longer devoted to Production growth. I don’t know if it is valid economic policy for Government to provide an acceptable rate of Profit for obtained funds which, in many instances, came from economics Profits that corroded the original Boom.
A little Hint to the Readers here: Downturns are the natural Pressure value which presses economic profits from an economy. These economic profits always build up in a Boom, as Producers start charging above viable Price to increase their Profits. The Downturns result from normal Profits being suppressed under the economic profit pricing. Now many in Government suggest paying Business to build those economic profits through paying Interest on those Profits during Downturns is a genuine good economic policy. I would dissent, as it simply continues an imaginary pursuit of artificial Wealth. It prevents normal Profits from reasserting its control over the economy, and creates a false new Class of Wealth. lgl
Saturday, October 02, 2010
The Dogs will be nipping at my heels!
There have been Requests for greater explanation of yesterday’s Post as to effects on Production, mainly issuing from malicious individuals who want to watch me fall on my face. There still remains that small segment of the reading Public who would want clarification, so I advance with full Warning that mysterious are the ways of Production, and I am the last person to ask about the Process. The heaviest inquiry seems to be for my definition of scope between the factors, an area where Anyone will fail; simply pick the advantageous Period of Time, and Error will resound! Here is my estimate of the Situation, and I will state categorically that it will be wrong some 30% of the Time.
I will start with the easiest–Supply contracts. The first statement on them is that they are always fulfilled; something to do with financial liability. They are of two types: those in which you guarantee a certain provision of Product, and those in which you are guaranteed a certain level of Product. Some are of set Price for the Product, others are tied to a sliding Scale based upon an agreed upon estimate of Inflation. When you are guaranteed a certain level of Delivery, reduction of Production schedules lead to intricate problems of building Inventory without maintenance of Production schedules. When you promised to deliver a certain level of Product, then the above mentioned financial liability comes into being. Production schedules are almost always maintained to eliminate the problems associated with Supply contracts; outside of the issue of declared bankruptcies. The current economy suffered from a shortage of Supply contracts before the last downturn, as everyone figured that Production Costs would reduce while Consumer Demand would remain High; seriously sapping a normal Recovery mechanism.
No one takes to the Time to supply me with a fund of accurate Answers to the following, so I am giving my best guess-estimates. Prices affecting Production schedules seem to center around these rates: a 1% rise in Material Costs equate to roughly a $.70 increase in the unit of Energy utilized and/or about a 4% rise in the Cost of Capital (holding True only in the Short-Run, and then only until Interest Costs reach 9% Prime rate). Land or Capital Costs came be contemplated to remain the Same throughout the intermediate period, and affect Production only in the long-term. Labor is the most difficult to judge, but I estimate that a 1% Material Cost increase, a $.70 Energy Cost, a 4% Finance Cost, and a $2.15 labor unit Cost (Hour) remain roughly the same in impact on total Production Costs. Remember that all these sub-Costs are in flux, and can counter each other’s impact. The final element must be stated that Consumer Demand is second in power only to Supply contracts, and can be impacted by all of the sub-Costs, but has relatively no impact upon the sub-Costs in the Short or Intermediate Runs. I will Now leave it to any and every decent economist to acclaim that I am full of it! lgl
I will start with the easiest–Supply contracts. The first statement on them is that they are always fulfilled; something to do with financial liability. They are of two types: those in which you guarantee a certain provision of Product, and those in which you are guaranteed a certain level of Product. Some are of set Price for the Product, others are tied to a sliding Scale based upon an agreed upon estimate of Inflation. When you are guaranteed a certain level of Delivery, reduction of Production schedules lead to intricate problems of building Inventory without maintenance of Production schedules. When you promised to deliver a certain level of Product, then the above mentioned financial liability comes into being. Production schedules are almost always maintained to eliminate the problems associated with Supply contracts; outside of the issue of declared bankruptcies. The current economy suffered from a shortage of Supply contracts before the last downturn, as everyone figured that Production Costs would reduce while Consumer Demand would remain High; seriously sapping a normal Recovery mechanism.
No one takes to the Time to supply me with a fund of accurate Answers to the following, so I am giving my best guess-estimates. Prices affecting Production schedules seem to center around these rates: a 1% rise in Material Costs equate to roughly a $.70 increase in the unit of Energy utilized and/or about a 4% rise in the Cost of Capital (holding True only in the Short-Run, and then only until Interest Costs reach 9% Prime rate). Land or Capital Costs came be contemplated to remain the Same throughout the intermediate period, and affect Production only in the long-term. Labor is the most difficult to judge, but I estimate that a 1% Material Cost increase, a $.70 Energy Cost, a 4% Finance Cost, and a $2.15 labor unit Cost (Hour) remain roughly the same in impact on total Production Costs. Remember that all these sub-Costs are in flux, and can counter each other’s impact. The final element must be stated that Consumer Demand is second in power only to Supply contracts, and can be impacted by all of the sub-Costs, but has relatively no impact upon the sub-Costs in the Short or Intermediate Runs. I will Now leave it to any and every decent economist to acclaim that I am full of it! lgl
Friday, October 01, 2010
The Wages of Sin--not! The Sin of Wages
I will allow my Readers to ponder this Post with its varied links. I will let them read all the materials, which I of course didn’t. I ask only that they consider a series of Questions:
1) Output is determined basically by managerial schedules. There are various factors which go in to establishment of Production schedules: Land, Labor, Material Costs, Taxes, Energy Costs, prior Supply contracts, and Consumer Demand. Most of this examination suggests that loss of Profits from one Cost sector can be counterbalanced by gain of Profits from lower Costs in another sector. Attempt to adjudge the value of each element within the creation of any Production schedule. What carries the most Weight? How will one sector affect the other surrounding sectors in the complex of schedule formation? What is the heavy Hitter in determination of Production schedule choice?
2) Remember We are looking at these things from the viewpoint of Production managers who must set Production schedules. How would a 25% Rise in Energy Cost per Unit affect the other sectors?—clearly need to know the number of Energy units utilized in the Production process. What impact would a 3% Rise in Material Costs do to the Production schedule?–again, We must know how much of the Production Cost can be attributed to Material Costs. What would a 3% reduction in Finance Costs do to the Production schedule?–here We must find the total Cost of Finance to the overall Production Cost. We come to Labor and its Impact upon the Production schedules. We would first have to determine the Labor Cost per Unit in the Production process.
3) Is it likely that Labor Cost per Production unit equals even 50% of the total Production Cost?–maybe in some Third World country where the Production floor is rolling Cigarettes by Hand. Rule of Thumb here: Figure that Material Cost is about 20% usually, Plant is functionally about 40% of Production Costs, Energy Cost range around 12-25%, and Labor Costs come in around 25%–though It can vary about 15% in the Production process.
4) Economists make a really big deal about the difference between nominal Wage levels and real Wages levels. What exactly could be the difference between the two levels?–Hint: think about 14-16% actual or real, though Business personnel like to dream of 50% or greater. How great a factor can 14-16% of 25-40% of the Production Cost impact the decision-making of the managers, when they are setting up Production Schedules?
The heavy Hitters in managerial decision-making on Production schedules are prior Supply contracts and Consumer Demand. Neither are affected by the Costs of the Production schedules, but both can increase the Costs of Distribution and Marketing the Product. Understand that Distribution and Retail establish their own Cost level which is priced into the Product Pricing; this to solidify the Profit margins for the Product. I wish that good economists would ignore the Wage issues which constrain Production–which they really don’t–and concentrate on Wage issues which markedly impact Consumer Demand. Economists and Business personnel want Inflation everywhere except in Wages. lgl
1) Output is determined basically by managerial schedules. There are various factors which go in to establishment of Production schedules: Land, Labor, Material Costs, Taxes, Energy Costs, prior Supply contracts, and Consumer Demand. Most of this examination suggests that loss of Profits from one Cost sector can be counterbalanced by gain of Profits from lower Costs in another sector. Attempt to adjudge the value of each element within the creation of any Production schedule. What carries the most Weight? How will one sector affect the other surrounding sectors in the complex of schedule formation? What is the heavy Hitter in determination of Production schedule choice?
2) Remember We are looking at these things from the viewpoint of Production managers who must set Production schedules. How would a 25% Rise in Energy Cost per Unit affect the other sectors?—clearly need to know the number of Energy units utilized in the Production process. What impact would a 3% Rise in Material Costs do to the Production schedule?–again, We must know how much of the Production Cost can be attributed to Material Costs. What would a 3% reduction in Finance Costs do to the Production schedule?–here We must find the total Cost of Finance to the overall Production Cost. We come to Labor and its Impact upon the Production schedules. We would first have to determine the Labor Cost per Unit in the Production process.
3) Is it likely that Labor Cost per Production unit equals even 50% of the total Production Cost?–maybe in some Third World country where the Production floor is rolling Cigarettes by Hand. Rule of Thumb here: Figure that Material Cost is about 20% usually, Plant is functionally about 40% of Production Costs, Energy Cost range around 12-25%, and Labor Costs come in around 25%–though It can vary about 15% in the Production process.
4) Economists make a really big deal about the difference between nominal Wage levels and real Wages levels. What exactly could be the difference between the two levels?–Hint: think about 14-16% actual or real, though Business personnel like to dream of 50% or greater. How great a factor can 14-16% of 25-40% of the Production Cost impact the decision-making of the managers, when they are setting up Production Schedules?
The heavy Hitters in managerial decision-making on Production schedules are prior Supply contracts and Consumer Demand. Neither are affected by the Costs of the Production schedules, but both can increase the Costs of Distribution and Marketing the Product. Understand that Distribution and Retail establish their own Cost level which is priced into the Product Pricing; this to solidify the Profit margins for the Product. I wish that good economists would ignore the Wage issues which constrain Production–which they really don’t–and concentrate on Wage issues which markedly impact Consumer Demand. Economists and Business personnel want Inflation everywhere except in Wages. lgl
Thursday, September 30, 2010
The Simplest Tax Plan
Watch this thing here, then ask what We should do. There have been multiple commentaries on my own specifics of potential Tax changes, and some have asked for the simplest Plan for Taxes which can be imagined. There are also stipulations most of the time for Tax plans which could possibly find passage. My irreverent Thought pattern suggests there is no possibility of Tax change unless the Wealth make Money from it. Still, we cannot let such an assessment inhibit Us in our quest for something better than this raft of S**t!
The first Step is to account all federal taxes, except Excise taxes, to be Tax payments. The second Step is to find the lowest Taxation demanded on the first $20,000 (I would have suggested $10k except then the Tax would equal 0). One cannot tell where legislators would set the Tax level at this point, but hopefully between $700 to $2300. We state for third Step that all Taxes are to be considered within the $20k segments, with Incomes falling within a segment following the first segment paying a percentage of tax equal to the percentage of Income earned within the segment. We stride forth and acclaim that Everyone must pay the same Income tax on every $20k segment, no matter what their Income happens to be. We slip in a few Odds and Ends, like doing away with all Tax breaks, Exemptions, and Deductions–this makes it a straight Tax. We study on the Issue somewhat, and state firmly that WE can see no difference in Income between Personal Income, Capital Gains, Corporate Income, Business Income, Partnership Income, or even Inheritance Income; it all seems to spend the same, be invested the same, etc. ad infinitum. Remember that this is no Straight Tax, but a modified Straight Tax–because not Tax Breaks, Deductions, or Exemptions are allowed. It is simply the least amount which legislators can seem to agree on at any given Moment.
Did I mention about the tax on Patent Rights and Royalties? I would allow these to remain low, but on second thought, I think not! None ever seems to wind up in my bank account anyway. Here We have the simplest Tax Plan: no favoritism possible, and Everyone after the least amount possible in tax payment. The Plan will not only generate Curses, but tax revenues. No one will be able to claim bias–except possible against me! lgl
The first Step is to account all federal taxes, except Excise taxes, to be Tax payments. The second Step is to find the lowest Taxation demanded on the first $20,000 (I would have suggested $10k except then the Tax would equal 0). One cannot tell where legislators would set the Tax level at this point, but hopefully between $700 to $2300. We state for third Step that all Taxes are to be considered within the $20k segments, with Incomes falling within a segment following the first segment paying a percentage of tax equal to the percentage of Income earned within the segment. We stride forth and acclaim that Everyone must pay the same Income tax on every $20k segment, no matter what their Income happens to be. We slip in a few Odds and Ends, like doing away with all Tax breaks, Exemptions, and Deductions–this makes it a straight Tax. We study on the Issue somewhat, and state firmly that WE can see no difference in Income between Personal Income, Capital Gains, Corporate Income, Business Income, Partnership Income, or even Inheritance Income; it all seems to spend the same, be invested the same, etc. ad infinitum. Remember that this is no Straight Tax, but a modified Straight Tax–because not Tax Breaks, Deductions, or Exemptions are allowed. It is simply the least amount which legislators can seem to agree on at any given Moment.
Did I mention about the tax on Patent Rights and Royalties? I would allow these to remain low, but on second thought, I think not! None ever seems to wind up in my bank account anyway. Here We have the simplest Tax Plan: no favoritism possible, and Everyone after the least amount possible in tax payment. The Plan will not only generate Curses, but tax revenues. No one will be able to claim bias–except possible against me! lgl
Wednesday, September 29, 2010
And They call Me a Fool!
I will leave it to the Readers to guess how best to limit the looming deficits. There is no easy solutions, and no one will like any Outcomes. All programs had been developed as a form of Christmas Present, promising vast Savings to a strapped American. We cannot live up to the Promises, and everything keeps getting more expensive because We even try. Here are some of the hard choices I would recommend:
1) Combine Social Security, Unemployment Insurance, Medicare, and Medicaid. Set one flat payment per Week for every qualified Recipient of such Aid–one and only one payment per Week, no matter the combination of the Need. Here it does get Tricky–the flat payment never alters, One gets Security and Sustenance from the payment–or one failed to do so, and We are back to Charity.
2) Taxpayers must not only pay the Wage for Tax Preparers, but also for the Time involved of federal labor to review and accept the Tax filing. The Jury is still out on whether We should let Taxpayers deduct the Cost of either the Tax Preparers or Reviewers.
3) Assess a $50 Filing fee for every use of a special Tax Break or Deduction in Tax returns. You should pay some Charge, if the Tax Savings is in the Hundreds of Dollars.
4) Every federal employee must prove their use of Public Transport to come to Work, or pay $5 per Workday as Parking or Congestion Fee.
5) Every federal agency and Dept. must file a Income Tax Return, and a Special Tax Review Committee will review every such Return, and assess a Agency tax based upon the relevance of the Expenditures according to Congressional Audit Rules, which the Agency or Dept. must pay out of its future budget.
Does this sound sufficiently ‘Big Brother’ for you? The goal is to take the Graft out of Government, and grant the Citizenry what advantage they should have from their governance. Notice that the first programs have been turned into a pure ‘Shift of Wealth’ payments; the only type of Payments which really work. They are also the only type of payments which can be paid for! The middle initiatives would limit the gout of bloodletting from tax revenues caused by Congressional granting Tax Breaks for Votes. The last factor would establish a real supervisory organization to control excesses of Government Spending; it produced by real loss of budgetary funds. As Clint would say: "Go Ahead,. Make my Day!" lgl
1) Combine Social Security, Unemployment Insurance, Medicare, and Medicaid. Set one flat payment per Week for every qualified Recipient of such Aid–one and only one payment per Week, no matter the combination of the Need. Here it does get Tricky–the flat payment never alters, One gets Security and Sustenance from the payment–or one failed to do so, and We are back to Charity.
2) Taxpayers must not only pay the Wage for Tax Preparers, but also for the Time involved of federal labor to review and accept the Tax filing. The Jury is still out on whether We should let Taxpayers deduct the Cost of either the Tax Preparers or Reviewers.
3) Assess a $50 Filing fee for every use of a special Tax Break or Deduction in Tax returns. You should pay some Charge, if the Tax Savings is in the Hundreds of Dollars.
4) Every federal employee must prove their use of Public Transport to come to Work, or pay $5 per Workday as Parking or Congestion Fee.
5) Every federal agency and Dept. must file a Income Tax Return, and a Special Tax Review Committee will review every such Return, and assess a Agency tax based upon the relevance of the Expenditures according to Congressional Audit Rules, which the Agency or Dept. must pay out of its future budget.
Does this sound sufficiently ‘Big Brother’ for you? The goal is to take the Graft out of Government, and grant the Citizenry what advantage they should have from their governance. Notice that the first programs have been turned into a pure ‘Shift of Wealth’ payments; the only type of Payments which really work. They are also the only type of payments which can be paid for! The middle initiatives would limit the gout of bloodletting from tax revenues caused by Congressional granting Tax Breaks for Votes. The last factor would establish a real supervisory organization to control excesses of Government Spending; it produced by real loss of budgetary funds. As Clint would say: "Go Ahead,. Make my Day!" lgl
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