A Thought on Wages

Wall Street is now starting to complain that wages are too low.

“Without a real acceleration in wages it is hard to get a meaningful pickup in consumer spending,” explained Michelle Meyer, senior US economist at Bank of America Merrill Lynch.

Weak consumer spending holds back profits and economic growth….

And

Weak wage gains also are making it hard for the housing market to return to normal, Mr [Jack, Executive Vice President and Chief Investment Officer at BMO Private Bank] Ablin said.

He calculates that new single-family home construction is running at less than 500,000 a month. Demographics say it should be twice that….

The State of the Obama Recovery

…now that we’re in the fifth year of it.

Real gross domestic product—the output of goods and services produced by labor and property located in the United States—decreased at an annual rate of 1.0% in the first quarter according to the “second” estimate released by the Bureau of Economic Analysis. In the fourth quarter, real GDP increased 2.6%.

It might not get better soon:

Personal consumption—which captures spending on goods and services—fell a seasonally adjusted 0.1% from March[.]

Nanny State and School Lunches

The fight over school lunches intensified Tuesday as first lady Michelle Obama defended her signature school-nutrition program during a meeting with school officials and decried efforts in Congress to allow schools to delay the program.

“Now is not the time to roll back everything we have worked for,” Ms Obama said[.]

Part of the fight, presently, is over a House proposal to waive the school “nutrition” program’s requirements for those schools that can’t afford to comply. Part of the fight is over puny servings that leave the student hungry—and so just as distracted from learning as if he had eaten a sugar-laden lunch. Part of the fight is over who should pay for the mandated lunching system, even by those schools able to “afford” those costs.

College, and What Degree Are You Looking For, Again?

From Millennial Branding and their report The Multi-Generational Job Search (done in conjunction with Beyond.com), centered on a survey of “job seekers and HR professionals,” come these tidbits.

On the matter of whether going to college is, of necessity, for everyone:

[T]he majority of hiring managers (64% [2,978 respondents]) would still consider a candidate who hadn’t even attended college.

And

73% feel that college is only somewhat preparing students for the working world.

Then, this:

Liberal Arts majors (who are historically more focused on communications [and communications skills sought by 83% of respondents]) were shown to be the least likely to land a job, with only 2% of companies actively recruiting those graduates.

ER Visits Up with the Advent of Obamacare

Stephanie Armour and Louise Radnofsky pointed this out earlier in the week in The Wall Street Journal.

Among other things, they mentioned

The median ER charge was more than $1,200 for the most frequent outpatient diagnoses in a study of over 8,000 ER visits in 2006-08….

This is right before Obamacare was enacted.

Notice that ER charge. A significant fraction of the deductibles on Obamacare health coverage plans is larger than that—ranging from $2,000 to above $10,000, depending on family size, the specific plan selected, and so on.

Another Administration Overreach

A family built a stock pond on their private property in order to provide more reliable water for their cattle.

The Johnsons believed they had done everything necessary to get permission for the pond, where the tiny Six Mile Creek runs through their property south of Fort Bridger, WY. The Wyoming State Engineer’s Office provided the permit and even stated in an April 4, 2013 letter to the Johnsons: “All of the legal requirements of the State Engineer’s Office, that were your responsibility, have been satisfied for the Johnson Stock Reservoir.”

Not the Best Move

According to Spiegel Online International, the European Central Bank intends to introduce a negative rate on cash deposits member banks make into their ECB accounts—a rate of -0.1%. This means that banks would be paying the ECB to deposit their money with the central bank: if a member deposited €100 million with the ECB, the latter would take a €100,000 fee.

The central bank’s motive is to stimulate more lending by those private and commercial banks, to get more money flowing in the EU’s economy. But with loan rates already at historic lows (the ECB itself is only charging 0.25% and intends to reduce that to 0.15%), it hardly seems likely that loan demand is the only impediment to lending—loan quality, borrower quality also are major factors.

Demon Oil

…and its evil carbon footprint. Here, courtesy of Mark Perry, writing for AEIdeas, are 10 examples of the destruction demon oil has wrought in North Dakota.

1. … [I]t took almost 58 years for the Bakken oil fields to produce the first 500 million barrels of oil from 1954 to July 2012; and then, thanks to the shale oil revolution, the Bakken oil fields produced the second 500 million barrels in less than two years—from July 2012 to March 2014!

Taxing False Premise, Second Round

In a recent Wall Street Journal op-ed, Senator Ron Wyden (D, OR), Senate Finance Committee Chairman, labored under the same false premise as the international collaboration effort.

While decrying the loss of US companies as they move overseas to avoid the US’ highest in the world corporate tax rate, he insisted

America’s tax base erodes at a cost of hundreds of millions of dollars in revenue, increasing the burden on other companies and individuals. America also loses good jobs, talent, investment, and the ability to compete on a global stage.

Legal or not, this loophole must be plugged.

Taxing False Premise

The US is about to join an international tax collaboration scheme involving the People’s Republic of China, Australia, Japan, and Great Britain that’s designed to improve tax collections from multinational corporations. It’s also designed to increase government reach into private enterprises and government control over them.

Leave those last two design purposes aside, though.

Australia’s Commissioner of Taxation, Chris Jordan, said this about the scheme:

This collaboration has allowed us to better understand what is happening in our own countries and determine whether what is being represented in one country reflects what is being represented in another.