Showing posts with label Economy. Show all posts
Showing posts with label Economy. Show all posts

Saturday, March 05, 2011

Hey, I finally found a place where Dick Trumka and the other union bosses are truly, desperately needed

Someone alert the Otrumka administration that organized labor's services are desperately needed in Red China.

The Yuwei Plastics and Hardware Product Company Ltd in Dongguan, China produces auto parts for export to Ford which, according to workers, accounts for 80 percent of total production.  The Yuwei factory has a U.S. office and warehouse in Ann Arbor, Michigan.
  • Workers earn a base wage of just 80 cents an hour, while working 14-hour shifts, seven days a week. During the peak season, workers will toil 30 days a month, often drenched in their own sweat. Prospective hires are told they must "work hard and endure hardship."
  • On March 13, 2009, twenty-one year old Worker "A" had three fingers and several knuckles torn from his left hand when it was trapped in a powerful punch press, or stamping machine. He was making "RT Tubes" for export to Ford at the time of his accident. Management deliberately instructed the worker to turn off the infrared safety monitor device so he could work faster. "We had to turn it off. My boss did not let me turn it on," said Worker A. He had to stamp out 3,600 "RT Tubes" a day, one every 12 seconds.
  • We are aware of at least four serious injuries-maimed hands and fingers-over the last several years. "Minor" injuries occur every one or two months. Seriously injured workers are fired after a year or two.
  • New workers receive no training or safety instructions before being assigned to operate dangerous machinery.
  • Worker A received a total compensation payment of just $7,430 for the loss of three fingers, leaving his hand basically inoperative. In the U.S., Workers Compensation for a similar injury would result in a $144,292 payment. Worker A was also shortchanged of his severance pay before he was fired.
  • If a worker misses one day's work, as punishment he will be docked three days' wages.
  • While millions of democracy advocates are launching protests across the Middle East and North Africa, workers at the Yuwei factory have never heard the word "union" and have no idea what a union is or how it could help them.
  • Ford must immediately conduct a thorough inspection of the Yuwei factory. The infrared safety monitoring system must never again be shut off, especially on the dangerous punch press machines.
  • Factory management and Ford must provide additional compensation to Worker A of $72,126, which is just one half what workers compensation in the U.S. would be.

Conversely, public sector unions are a relatively recent phenomenon in the United States and not related in any way to protecting workers' rights when civil service, OSHA and a variety of other regulations already guard against abuse. Public sector unions and their political arm -- also known as the Democrat Party -- exist for one reason and one reason only: to bleed the American taxpayer.

Dick Trumka and Andy Stern should head to China where their efforts are truly needed and where they would be more gratefully received.


Friday, March 04, 2011

New York Times and Ezra Klein celebrate imaginary unemployment rate of 8.9% (shhh... real rate is 16% or more)

The New York Times gleefully trumpeted the Bureau of Labor Statistics' jobs report today

The waiting game still is not over, but it may be soon.

The nation’s employers added 192,000 jobs in February, up from a gain of 63,000 the previous month, the Labor Department reported on Friday.

...Taken together, the job growth for the first two months of 2011 has not been much better than it was last fall...

...The unemployment rate ticked down to 8.9 percent, falling below 9 percent for the first time in nearly two years. This rate, which comes from a separate survey and is based on the total number of Americans who want to work, has remained stubbornly high in the last year despite payroll growth...

...Economists say the unemployment rate may rise temporarily in the next few months, as stronger job growth lures some discouraged workers back into the labor force. Right now the share of working-age population that is actively involved in the work force — that is, either in a job or actively looking for one — is at 64.2 percent. That is the lowest labor force participation rate in 25 years, an indication that many Americans are waiting for hiring to get better before resuming the job hunt.

Or perhaps they've simply decided to ride 99 weeks of unemployment until they need to work for a living.

Earlier today, economist Mike Shedlock explained the true job numbers. Fortunately for Washington Post cub reporter Ezra Klein, he used very small words.

In the last year, the civilian population rose by 1,853,000. Yet the labor force dropped by 312,000. Those not in the labor force rose by 2,165,000.

In January alone, a whopping 319,000 people dropped out of the workforce. In February (this months' report) another 87,000 people dropped out of the labor force.

Were it not for people dropping out of the labor force, the unemployment rate would be over 11%.

Given the total distortions of reality with respect to not counting people who allegedly dropped out of the work force, it is hard to discuss the numbers...

...The official unemployment rate is 8.9%. However, if you start counting all the people that want a job but gave up, all the people with part-time jobs that want a full-time job, all the people who dropped off the unemployment rolls because their unemployment benefits ran out, etc., you get a closer picture of what the unemployment rate is. That number is in the last row labeled U-6.

While the "official" unemployment rate is an unacceptable 8.9%, U-6 is much higher at 15.9%. Moreover, both the official rate and U-6 would be much higher were it not for huge numbers of people dropping out of the workforce.

Things are much worse than the reported numbers would have you believe.

Of course they are, Ezra. When you have a government that restricts access to energy, dumps thousands of pages of regulations on small businesses, attacks and vilifies industry after industry, takes over vast swaths of the free market, and makes an already byzantine tax code even more complex, you better believe things are getting worse, not better.

Don't believe me. Just ask your neighbors. Unless, that is, you live in Washington, DC.


Hat tip: Memeorandum. Linked by: Michelle Malkin. Thanks!

Thursday, March 03, 2011

California's budget disaster -- by the numbers

Sylvia Cochran's analysis should given anyone pause, especially residents of Governor Moonbeam's state.

$12 billion: the amount of 'temporarily' increased taxes that Gov. Brown wants to maintain on the books though they are slated to end this year.

$21 billion: California's estimated annual expenditure to support illegal aliens including health care, welfare, imprisonment and other charges.

$25.4 billion: California's FY2011 budget deficit.

$37.8 billion: 2011 state and local pension obligations, with 2012 estimates at $41.5 billion and 2016 at $60.5 billion.

$57.5 billion: California's estimated annual welfare spending at the state and local levels. The number is anticipated to increase to $62.84 billion in 2012, $68.87 billion in 2013 -- and $91.99 billion in 2016.

$466 billion - California's total estimated statewide and municipal expenditures for 2011. This figure, in spite of the recession, has risen over the last two years. And despite budget cuts, 2012 spending is estimated to total $485 billion... and by 2013 the state could pass the half trillion dollar mark.


President Launches Sweeping New Programs to Combat Government Redundancy, Bloat and Fraud [Biff Spackle]

"...We will launch a sweeping effort to root out waste, inefficiency, and unnecessary spending in our government, and every American will be able to see how and where we spend taxpayer dollars..." (Barack Obama, 1/28/2009)

By Cub Reporter Biff Spackle, reporting from Tampa

Citing reports that the federal bureaucracy wastes up to $200 billion annually in redundant and wasteful programs, President Obama today announced his Streamline 2011 initiative aimed at combating waste, fraud and abuse.

Streamline 2011 will create three dozen new federal offices that will spend the next 20 months reviewing all aspects of the government's operations -- including their own -- to determine whether the GAO's reports are accurate. At the conclusion of their efforts, just before the 2012 election, the offices will issue a joint, comprehensive report detailing their recommendations.

When asked why so many new offices were needed, the President responded with a rhetorical question. "We've all heard it," he said, "'Who watches the watchers?' To ensure that there are no conflicts of interest, each new office will examine one of its sister offices. We call this a 'Daisy Chain of Detective Work' and is the most foolproof, multi-faceted anti-redundancy program imaginable."

The president was optimistic that this approach would succeed in cutting down waste, noting that he hoped it would be "...just as effective as my deficit commission."

Continued on page D-12

Wednesday, March 02, 2011

That thumping sound you just heard was Mitt Romney getting thrown under the bus by Paul Ryan

I'll be frank. It may not have been a popular position, but I've always been a fan of Mitt Romney. He appears to be an honest guy, a good businessman and a turnaround specialist. But there's a lot of merit in Paul Ryan's assessment of the former Massachusetts governor's flagship program.

Asked about the Massachusetts health care plan signed into law by Mitt Romney, Ryan said, “It’s not that dissimilar to Obamacare, and you probably know I’m not a big fan of Obamacare. I just don’t think the mandates work … all the regulation they’ve put on it.”

“I haven't studied in depth the status of it," he continued, "but I think it’s beginning to death spiral. They’re beginning to have to look at rationing decisions. I don’t think this health care system works. That’s why I’m a believer in a consumer-based medicine, in consumer-based patient-centered reforms health care reforms.”

Asked if he would rule out running for the presidency himself as emphatically as Chris Christie did by threatening to commit suicide, Ryan replied, with a laugh, "I guess I wouldn't talk in suicidal terms."

Ryan, Michele Bachmann and Allen West would all make eminently credible -- and electable -- candidates for office.

In fact, it would be quite the trick for the Democrats to try to paint Ryan as a dimwit, as they did with varying levels of success with Ford, Reagan, Bush 41 and number 43. That crap ain't gonna fly with the Wisconsin numbers whiz.


Poll Finds Lack of Support for Arithmetic, Logic and Reason

Perhaps the questions used in this poll were crafted 'inartfully'. Otherwise this news is discouraging, to put it mildly.

Less than a quarter of Americans support making significant cuts to Social Security or Medicare to tackle the country's mounting deficit, according to a new Wall Street Journal/NBC News poll, illustrating the challenge facing lawmakers who want voter buy-in to alter entitlement programs.

In the poll, Americans across all age groups and ideologies said by large margins that it was "unacceptable'' to make significant cuts in entitlement programs in order to reduce the federal deficit. Even tea party supporters, by a nearly 2-to-1 margin, declared significant cuts to Social Security "unacceptable."

The mathematical formulae are unassailable, no more easily defeated than the law of gravity.

Someone told me this evening that when FDR initiated Social Security, full payments began at age 65 -- but the average life expectancy was actually a bit below that age.

This is why America needs an eloquent, conservative leader rather than an ideological sibling of Frances Fox Piven. Americans can understand and emphasize with a leader who speaks clearly and honestly about the problem. Failure to do so is simply criminal.


Hat tip: Memeorandum.

Tuesday, March 01, 2011

Death and Dishonesty

Democrats tell us that America needs more regulation. In the financial sector alone, they blamed banks, insurance companies, investment bankers, hedge funds and other private entities for bringing our economic system to the brink of collapse in 2008. It was under this rubric that they passed the Frank-Dodd financial reform bill in 2010, named for two men whose conflicts-of-interest led directly to the meltdown.

What Democrats won't tell you is that the greatest risk to our economic system lies not with Wall Street. It lies with the federal government's catastrophic debt -- and the wounded U.S. dollar -- inflicted upon us by the very same politicians scapegoating the financial services industry.

About half of the federal budget must be paid for by borrowing money from foreigners, primarily from China. This behavior has frightened global investors and severely weakened the dollar.

The Congressional Budget Office has warned the government for years that the "federal budget is on an unsustainable path -- meaning that federal debt will continue to grow much faster than the economy... [and] Rising costs for health care and the aging of the U.S. population will cause federal spending to increase rapidly..."

"... Large budget deficits [will lead] to more borrowing from abroad and less domestic investment, which in turn would depress income growth... The accumulation of debt would seriously harm the economy. [Or] if spending grew as projected and taxes were raised in tandem, tax rates would have to reach levels never seen in the United States [95%]."

Yet the same federal bureaucrats who decry the financial system are themselves addicted to spending far beyond their means. But why would they care? They will be long gone by the time their bills will come due.

Dichotomy: outside the U.S., the "biggest story in the world economy is the continuing fall of the U.S. dollar" (Wall Street Journal); while inside the U.S., the mainstream media gleefully markets the proposition that that Obamacare will somehow improve the budget deficit. Consider the lunacy of their proposition: adding tens of millions of new patients to the system will somehow save money.

Even before Obamacare became law, $9.3 trillion of new deficit spending was added to the national debt. And Obamacare used financial skulduggery -- like slashing Medicare payments by half a trillion dollars and using ten years of taxes but six years of payments -- to levy a complete fiscal fraud upon the American people.

But the mainstream media forgot to tell you that even the CBO doesn't trust its own numbers! For example, in 2009 the head of the CBO wrote Max Baucus, telling him that -- if Congress failed to cut Medicare (highly likely, given seniors' voting habits) -- the new entitlement would add catastrophic new debt to the federal budget.

But even if the numbers were real, the illogical thinking is shocking. President Obama told us that passing health care reform was central to a healthy economy. The Democrats proclaim victory with supposed deficit neutrality while our current "unsustainable" deficit grows like a devastating form of cancer.

Instead of just starting with cuts to Medicare and adding insurance taxes -- thereby cutting the 10-year deficit by $1 trillion (including interest) -- the Democrats nationalized 18% of the economy as a payoff to the union bosses who contributed nearly $100 million to Obama's 2008 campaign.

Helping a few million uninsured people get access to health insurance was a noble goal, but not at the expense of permanently destroying the United States economy. Adding entitlement programs while we can barely crawl out of the current deficit hole is suicidal behavior.

Washington must:

• Slash federal spending on needless programs
• Begin to raise the eligibility age for Medicare and Social Security
• Start offering optional, private savings accounts to young people to eventually replace the dying Medicare and Social Security programs

We are on a path of fiscal devastation. Our only hope is that a few patriotic and eloquent conservatives can pick up the gauntlet -- to brave the onslaught of media propaganda and Democrat dishonesty to lead us on the road to recovery.



Based upon: Tony Blankley's "Washington Is Nuts" via Mark Levin.

Monday, February 28, 2011

Walker to Fleebagging Democrats: You've Got 24 Hours. Make That 23 Hours and 59 Minutes.

Time is up for the fugitive Democrat state senators from Wisconsin, who are also known as the Fleebaggers (which is the term they prefer, I'm told). Governor Scott Walker has thrown down the gauntlet.

Republican Gov. Scott Walker on Monday gave absent Democratic lawmakers an ultimatum to return to Wisconsin within 24 hours and vote on a proposal to reduce the power of public sector unions or the state would miss out on a debt restructuring.

Walker stepped up the pressure on 14 Senate Democrats who fled the state to avoid a vote on the bill as he prepared to unveil on Tuesday a two-year state budget that he said cuts $1 billion from funding to local governments and schools.

What began as one small state trying to rewrite the rules of labor relations has blown up into what could be the biggest confrontation with American labor unions since then President Ronald Reagan fired striking air traffic controllers in 1981.

...The proposal was approved by the state Assembly last week but is stalled in the Senate because the 14 Democrats have fled the state to avoid a vote... The proposal includes a restructuring of the state's debt that Walker said would save $165 million. Walker said this restructuring deal was in doubt if the Democrats did not return.

"Failure to return to work and cast their votes will lead to more painful and aggressive spending cuts in the very near future," Walker's said in a statement.

If the budget bill isn't passed before the deadline, more than a thousand state employees will lose their jobs.

And that will be the Democrats' choice.


Hat tip: Memeorandum. Linked by: Michelle Malkin. Thanks!

Sunday, February 27, 2011

Dr. Marc Faber on the World Economy: 'I Think We Are All Doomed'

Courtesy Tyler Durden, we discover this enlightening interview (PDF) with economist Marc Faber -- who isn't called "Dr. Doom" for nothing.

I think we are in a money-printing environment. If something happens in China, they will print even more than the U.S. prints. If something in happens in Europe, they will also print money.

They are going to print money everywhere, and with interest rates, essentially on short-term deposits, being zero, or below zero, inflation-adjusted, in other words, if inflation rates everywhere in the world are higher than the interest rates on short-term deposits, I think, for the investor, the question is really, “How do I invest my money for the long-term?”

...I do not think that [equity] returns will be fantastic, but if you print money it is very difficult to say what the returns will be, because it is not stocks that adjust on the downside, but it is the currency that adjusts on the downside. So in theory, it is possible that the Dow could double if you print money, or it could even go up 10 times, depending on how much money you print, and with Mr. Bernanke at the Fed, I think it is quite likely that a lot of money will be printed...


...[On government holding inflation (CPI) artificially low] But you understand, you are not really helping the economy, you are impoverishing, let’s say, the honest people who are decent, who have deposits, who save money and keep it in the banking system, who simply do not want to speculate. So, it is a tax on people’s savings, and it is a very vicious tax, because it is not so obvious to them, but it will become obvious one day, when with their money they can buy less and less. In other words, the purchasing power of money goes down. That is why I am telling everyone, if you already own cash, consider gold and silver to be a component of your cash portfolio, and own some of it, because the government can appropriate it, but otherwise they cannot fiddle around with it in terms of increasing the supply.


...I think we are all doomed. I think what will happen is that we are in the midst of a kind of a crack-up boom that is not sustainable, that eventually the economy will deteriorate, that there will be more money-printing, and then you have inflation, and a poor economy, an extreme form of stagflation, and, eventually, in that situation, countries go to war, and, as a whole, derivatives, the market, and everything will collapse, and like a computer when it crashes, you will have to reboot it.

For the investor, the question is: How do I navigate through this complete disaster that is going to unfold? And I think if you look at different asset classes – real estate, equities, bonds, cash, precious metals – I suppose that you have to be diversified. I think real estate in the U.S. may go down another 10% or so, or even 15%, but I am always telling people, if you can buy the piece of land or the house you like, what do you actually care if it does down another 10%? If everything I bought in my life had only gone down 10-15%, I would be very rich, because a lot of things became worthless, especially loans to friends, and bonds, and so forth.

Look at the history, for example, of Germany, for the last 100 years. They had World War I. They had the hyper-inflation in World War II. The bond-holders got wiped out three times. If you owned Siemens, and you still own Siemens today, it was not a fantastic investment, but at least you still have something. You were not wiped out. I think that in equities you will be better off because you have an ownership in a company, than by being the lenders to companies, and the lenders, especially, to governments.


In a money-printing environment, it is very difficult to know what is actually cheap and what is expensive. Is the price of wheat high, or is it low? Inflation-adjusted, it is extremely low. In nominal terms, it is relatively high. I believe that, in March 2009 when the S&P was at 666, the market was actually much cheaper than is generally perceived, because of the money-printing, and I do not anticipate that we will see 666 on the S&P again, in nominal terms.

In other words, they are going to print so much money that the S&P could be at, perhaps, 2000, but in real terms, it could be down below the lows of March 6, 2009. Maybe in gold terms, we could one day reach a ratio of Dow Jones to gold of 1-to-1, as we were in 1980. In other words, the Dow could be perhaps at 10,000 or 12,000, and gold could be at the same level.

That is why I am advising people to accumulate gold. Can gold have a correction? Yes, there has been a little bit too much euphoria about gold, and we may have a correction, but I do not think we are in a bubble in the price of gold. In fact, I could make a case that gold, at this level of $1400 an ounce, is cheaper than in 1999, when I look at the unfunded liability growth of the U.S., at the credit growth of the U.S., and at the household growth, and at the money printing, and at all the wealth creation that happens in China and Russia.

If I interpret Faber correctly, you're better off holding precious metals than equities... and better off holding equities than U.S. debt.

Which says a lot about the policies of the current administration, Tiny Tim Geithner and Helicopter Ben Bernanke.


Saturday, February 26, 2011

State of USA, Incorporated

KPCB's Mary Meeker has created an extensive report (266 pages) on America's fiscal condition, evaluated as if it were a business. The resulting picture is, to put it bluntly, disturbing.

By the standards of any public corporation, USA Inc.’s financials are discouraging.

True, USA Inc. has many fundamental strengths. On an operating basis (excluding Medicare and Medicaid spending and one-time charges), the federal government’s profit & loss statement is solid, with a 4% median net margin over the last 15 years. But cash flow is deep in the red (by almost $1.3 trillion last year, or -$11,000 per household), and USA Inc.’s net worth is negative and deteriorating... the trends are clear, and critical warning signs are evident in nearly every data point we examine.





This analysis can’t ignore our dependence on entitlements. Almost one-third of all Americans have grown up in an environment of lean savings and heavy reliance on government healthcare subsidies. It’s not just a question of numbers – it’s a question of our responsibilities as citizens…and what kind of society we want to be.


































Linked by: The Astute Bloggers. Thanks!