Category Archives: Economics

Miscellaneous economy stuff

Some Labor Day Questions

Posted on by
Reply

The Wall Street Journal asked some questions on Labor Day 2012, and supplied some answers.  Here are some of those questions and answers, which remain as valid this Labor Day.

  • Q: How are America’s workers doing? Not good. Over the past decade, over the ups and downs of the economy, taking inflation into account, the compensation of the typical worker — wages and benefits—basically haven’t risen at all. … The Labor Department recently said that 6.1 million workers in 2009-2011 have lost jobs that they’d had for at least three years. Of those, 45% hadn’t found work as of January 2012. … Federal Reserve Chairman Ben Bernanke said Friday that unemployment is still two percentage points higher than normal….
  • Q: Things ARE getting better, though. The U.S. economy is creating jobs, right?  Back in December 2007 when the recession began, there were about two jobless workers for every job opening.  When the economy touched bottom in mid-2009, there were more than six unemployed for every job.  At last count, the BLS says there were 3.4 jobless for every opening.
  • Q: How much of this elevated unemployment is because the unemployed just don’t have the skills that employers are looking for right now?  Some.  …the bulk of the evidence is a lot of the unemployment really is the old-fashioned kind: the kind that would go away if the economy was growing at a stronger pace. Mr. Bernanke said as much at the [2012] Jackson Hole conference….

The Democratic President has taken a bad situation and done little to improve it.  He has, though, actively attacked businesses—the hirers—demonizing them, (over)regulating them, demanding to raise taxes on them.

Happy Labor Day.

Another Government Takeover of an Industry

Posted on by
Reply

…and for what purpose?

The US government has used the merger-approval process to increase its influence over the telecom industry, bringing more companies under its oversight and gaining a say over activities as fundamental as equipment purchases.

The leverage has come from a series of increasingly restrictive security agreements between telecom companies and national-security agencies….

And

The security agreements…compel [telecom companies] to honor requests to access their systems.  What’s new is that consolidation in the industry and an influx of overseas investment have left much of the industry under the government’s sway.

Thus,

Three of the top four wireless carriers now operate under such agreements….

Three of the major equipment suppliers have come under these agreements in recent years as well.

What requests?

The deals routinely require the companies to give the government streamlined access to their networks.  At their most restrictive, they grant officials the right to require firms to remove certain gear and approve equipment purchases and directors.

And

when T-Mobile and MetroPCS sought approval for their merger this year…the US secured 30 days’ notice before the company uses a new vendor for network equipment, and T-Mobile agreed to resolve any security concerns the government raises relating to new equipment providers, according to a 2013 amendment to the 2001 security agreement.

All of this comes under the mirage of trading freedom for security.

Makes me wonder what the government isn’t telling us about why they blocked the AT&T-T-Mobile merger a couple years ago.

An Argument for Reducing Federal Spending

Posted on by
Reply

Treasury Secretary Jack Lew wrote a letter to House Speaker John Boehner (R, OH).  The gist of it:

[T]he Obama administration warned House Republicans that a deal on increasing the federal debt limit may have to come sooner than expected.

Anyone but a Progressive would see this as confirmation of the need to reduce spending, so as to reduce the debt and, consequently, the need to raise the debt ceiling.  The Progressives in our government, though, see this as a need to raise the debt ceiling: we have a credit card; of course there’s still money in the bank.

Or, it’s Mardi Gras all year ’round for Progressives.

Laissez le bon temps rouler.

As Sander Levin (D, MI), Ranking Member of the House Ways and Means Committee confirms:

It is time for Republicans to do the right thing

and spend and borrow more.

Political Honesty

Posted on by
Reply

The German poet Matthias Claudius commented some years ago,

Say not all that you know, but know all that you say.

Spiegel Online International thinks that’s good advice in a particular circumstance today:

That would be a good lesson for those politicians who are handling the euro crisis.  Absolute honesty, which many are now demanding of the German government after its most recent comments on Greece, is simply not wise.

SOI justifies their position this way:

…the EU approaches the euro crisis through negotiations between member states.  And a fundamental principle of these negotiations is that not all cards are laid on the table at once.  It’s a classic way in diplomacy of avoiding bursts of outrage.

And, citing an aspect of Robert Putnam’s Two-Level Games Theory,

Politicians have to sell their policy goals both at home and abroad.

Which is true enough in winning games, but it overlooks one essential secular fact, and one fundamental moral fact: the only place the sale has to go through is at home—those are the folks who will be forced to pay for the politician’s…decision.  The fundamental moral fact is this: the folks at home are the ones who will have to give up a significant portion of the security and prosperity they’ve hard-won for their families in order to pay for the politician’s…decision.

Such a policy might have been defensible early, in the run-up—even the after math—of the EU’s first Greek bailout.  But now, after the debacle of two failed Greek bailouts and amid talk of yet a third, the policy has outlived its usefulness.  It’s time to lay it all out.  Let the people who will be required to pay for yet another bailout with their hard-earned money taken as tax know what the politicians know and think they know about the situation.  Let the people whose money it is decide for themselves whether a third bailout is warranted.

Else, what are the politicians covering up?

Obama’s Debt Ceiling Strategy

Posted on by
Reply

Pass increased spending and give me more tax revenue.  Period.  Oh, and hands off my pet projects.

The House of Representatives will agree to a debt ceiling increase (want to agree, for good or ill), if President Barack Obama will agree to spending reductions equal to, or greater than, the increase in the ceiling.  Obama says he refuses to negotiate at all on the debt ceiling.  Just raise it.  Or he’ll be forced to shut down the government for lack of borrowing authority.

The House of Representatives, along with a bipartisan collection of Senators, want to reform our tax code and use any increases in tax revenue that might result solely to pay down the national debt (and so to mitigate any future need to raise the debt ceiling anew).  Obama says that tax reform must, by design, result in increased tax revenue, with that increase to be committed solely to support increased spending.  Otherwise, he’ll be forced to shut down the government for lack of revenue.

Many Republicans want to pass a budget for the coming fiscal year, or failing that a Continuing Resolution for the coming months, that contains clauses that defund Obamacare—a program that Obama has already admitted isn’t ready for adult use.  Obama has said he’ll veto such a budget, even if it means he must shut down the government for lack of spending authority or income.

Obama is perfectly willing to shut down the government and blow up our economy if he can’t have all of this.  Not one or two of them—all of them.