Nuclear Power Still a Valid Option

Despite the recent Japanese problem which is unique because of location, nuclear power is still an option.

It’s expensive to build a nuclear power plant, but atomic power is cheaper to produce once the plant is built. And the taxpayers do not have to constantly subsidize operations as they do with alternative “green” energy sources, such as wind and solar power.

And It took a tsunami plus an earthquake to cause the century-rare damage that occurred in Japan. This can be easily avoided here.

Atomic waste can be used so that it is minimized. We have a vast mountain in Nevada to store what little there is. The bulk of French electric power comes from atomic source. They store their relatively little waste in one room in a small town.

Tests prove a passenger jet at full speed could not dent the walls of an atomic installation. Only past misconceptions cause prejudice that prevails against atomic power, particularly on the political Left. (See the Earl J Weinreb NewsHole® comments.)

Alternate Energy at Any Cost?

The government has been sponsoring what it calls clean, alternative energy. So it is going full steam ahead in its attempt to achieve “green” sources at any cost. Despite the fact we are in the midst of a stagnant economy when industry cannot afford added costs that subtract directly from economic growth.

Apart from the damage of the mad dash for high-cost, taxpayer-subsidized alternate energy, there are social burdens. Such as the fact the commercial windmills used for energy make lots of noise. So much noise that folks living near them find them unbearable? Any residence has to be well over a mile away.

And that thousands of birds are often killed in recurring incidents. And then you have the landscape eyesore. (See the Earl J Weinreb NewsHole® comments.)

Green Energy is Lagging Behind

Despite all the billions in grants, loans and subsidies by government, the aid to so-called green energy sources has produced little in the way of usable energy. 

Solar sources represent less than 1% of our needs. The total of all renewable sources is only13%.  (See the Earl J.Weinreb NewsHole® comments.)

Did The Government Invent the Internet?

To get the information straight despite some of the political blather we get from time to time: What was a basic form of communication line set up by the Pentagon for defense purposes was not the internet as we have known it the past few decades. It was a rudimentary system that the government sat on.

Private entrepreneurs came along, many working at their homes and garages, to produce the real internet system. It’s like the word processor improving on hand written engravings of yore.

Entrepreneurs and producers, not the government, created the internet. (See the Earl J. Weinreb NewsHole® comments.)

How Effective and Helpful Is Government?

Further to all the talk about how important the role of government is, in aiding business, especially the small business backbone of the country.

I started and operated an employee contracting company, which then expanded in the U.S. and Canada to 74 offices, by the time I sold my interest. I supplied personnel from clerks to nurses and even doctors.

And I competed directly with government agencies who supposedly were there to do much of the recruiting, training and assignments that my private company successfully did.

But we did it well where the government agencies foundered. They had all the advantages of taxpayer capital.. But we did a better job for the employees than they did, and we had operating profits for the 17 years I was at the company. Very few, if any, government agencies accomplish their mission, or operate in the black. (See the Earl J. Weinreb NewsHole® comments.)

Competing With the Government That’s There to Help

There has been a great deal of talk about how important the role of government is, in aiding business, especially the small business backbone of the country.

Anyone who has been in the smallest of business enterprises can tell you that government regulation is costly and stifling, whether you have one employee or 100.  

A bureaucrat on a salary has no empathy with the self-employed who is never assured of a penny in earnings at the end of an endless workday.(See the Earl J. Weinreb NewsHole® comments.)

Harmful Regulatory Rules

A review of the Dodd-Frank Legislation is always in order as a lesson why intended regulatory rules never work in real life.

Such rules give regulators unlimited powers to do what corporate experts have always found difficult to accomplish. Still, politically-oriented bureaucrats attempt to undertake the tasks anyway, despite their lack of business acumen.

A Treasury committee determination of which financial entities pose systemic risk to our economic system is impossible in the real world, where risk is hard to identify. This cannot be easily done in the political world. Determining potential systemic risk is 100% conjecture. What steps to take, and when to take them, in order to eliminate problems, is not a practical matter.

Few experts in the business world have had the foresight to make the decisions for past incidents. Rarely do bureaucrats at the Fed or Treasury have the ability or objectivity. The Fed and the Treasury did a poor job with the past financial meltdown and bailout function. (See the Earl J Weinreb NewsHole® comments.)

Bank Help Folly

The bank bailout idea was a theoretical and practical failure; done by academics, in combination with Wall Street insiders with only securities trading background. Real banking acumen was missing.

They saw to it that banks acquired more clean capital and reserves, having gotten rid of some, not all of their questionable assets.

Government honchos have seen to it that banks now earn interest kept on reserves over at the Federal Reserve. Banks can borrow from the Fed at practically no cost.

That adds to bank earnings. But regulators cannot force banks to make loans to their customers. Not when customers are spooked by anti-business tax and anti-industrial rhetoric and policy.

In fact, banks are now sitting with loads of available cash for industry and consumers but relatively little is getting out. Because they are still afraid to lend it as they do in normal times. They can make more, investing in securities.

So much for the smart guys in government with trillions of inflationary bailout money. All they had to do to bail out banks in the first place, apart from seeing that banks added to capital, was guarantee their assets.

No inflationary bailout loot required.(See the Earl J Weinreb NewsHole® comments.)

Comparing CEO and Athlete Income

Hiring, firing and controlling employee wages by government bureaucracy is now an American fact of life and has been evidenced by the forced firing of a pharmaceutical CEO who has not been found guilty of a crime.

Yet you must also consider how government stimulus funds affected even entertainers such as sports stars. Government can be very uneven-handed and injudicious.

Athletes probably get far too much salary for what they do. Considerably more earnings than top-notch CEOs. But they are under the public’s radar. So the media, in its ignorance, let’s them get away with the notoriety executives must suffer.

Ballparks and ball clubs are subsidized by state and local taxpayers. Each time a new ballpark is built, some government body has provided long-term assistance in the financing, via cash, tax abatement or bond funding.

Federal stimulus funds backed local and state entities. So funds were made available to fund ball clubs.

Remember: Money is fungible. The payment does not have to be direct. Money can be substituted from one recipient’s pocket to the other, to hide the source of funding. It all adds up to the same total outlay.

The public complains about an executive getting more than is “fair.” What about a ball player who operates no business, and hires no one, who makes up to thirty million, and more a year? And may actually be a loser on the field? (See the Earl J Weinreb NewsHole® comments.)

U.S. Government Controls Vs State Control in Italy's Past

I have noted in my reports how the present government has set wages of some employees. How they fire some employees, as the feds have done with General Motors and Chrysler. Or how bank management are controlled.  Boeing is being told where to build new planes in order to give preference to its union employees.

This happens with excessive federal government politics, and it is one of the problems encountered in such forms of state control.

If you think I am exaggerating, look up the discussion of state controls in an encyclopedia. Review your history of Italy under Benito Mussolini in the 1920s and 1930s. It will be an eye-opener for every American today, who worries about the government controlling or influencing industry. (See the Earl J Weinreb NewsHole® comments.)

Solving The Enormous Debt Problem

How will we be able to ever surmount the extraordinary U.S. debt? Despite what the politicians on the left say and the Federal Reserve attempts to reassure us, there is probably only one way governments do it. Inflation. Governments inflate themselves out of the debt.

Jobs and a booming economy can produce tax revenues without increasing tax rates. But I’m talking 7% to 10% growth, not 2%.

You can be sure of certain events never happening. You cannot tax yourself out of debt. It has never been done before. (See the Earl J. Weinreb NewsHole® comments.)

Exports, Imports and Political Gibberish

A politician in office, or one seeking office, need not be too bright when it comes to getting votes or keeping voters happy. That is, if he or she is willing to resort to some basic gibberish, which will act as bait to keep the public loyal.

One tack is to take the position that exports are fine but imports are bad. Outsourcing of jobs is terrible and is tantamount to treason.

But it takes common sense and thought to delve into available numbers. So-called imports may not be finished products but become part of domestic production. Outsourcing of certain jobs may be a means of producing more value productivity and jobs domestically.  Besides, as an export nation, the U.S. cannot invite retaliation from its overseas customers by refusing the latter’s offerings. (See the Earl J. Weinreb NewsHole® comments.)

The Federal Reserve’s Failing Job and Thus Inflation’s Cost to You

The media generally flubs this subject: The main job of the Federal  Reserve is not to help the Treasury of the U.S. in its fiscal policy,  It is to stabilize the currency. It’s basic job is monetary policy. The Fed’s function under the Humphrey Hawkins Act for full employment is really secondary’

Yet, every step the Fed has  taken the last few years has been extremely inflationary, with a reaction down the road that will cause enormous pocketbook trauma for the poor and middle class. 

Example: You just cannot buy three-quarters of the national debt as the Fed has done without creating eventually worthless paper money. Because the Fed will not be able to hold that debt forever.  (See the Earl J. Weinreb NewsHole® comments.)

Banks and Loan Discrimination

Do banks really discriminate against minorities when they issue loans or mortgages?

It depends on where you come from politically and also with your personal knowledge of business.

Banks are in business to make money. The only discrimination that affects this urge is the amount of risk involved in the pursuit of profit. If the risk is higher, they charge more or reject the transaction.

Unfortunately, many minorities are poor and are thus poorer risks when in the market for loans and mortgages. As a result, they may be turned down or asked to pay more to offset risk.

Repeat: Banks are in business to make money, not discriminator. On the other hand, politicians are in business only when they get votes. Citing banker bias helps their political cause. (See the Earl J. Weinreb NewsHole® comments.)

The Tainted U.S. Free-market System

In 1938, government spending was 15% of GDP, after the New Deal of Franklin Roosevelt spent and spent, trying to get us out of  a deep depression.  It’s now over 36% and fast growing.

We are already like Europe with its unsustainable debt, but going full steam ahead with more and more budget deficits, to gather political votes. Our debt to GDP ratio is over 103% and growing. Worse than some tottering European countries. (See the Earl J. Weinreb NewsHole® comments.)

Do We need More Teachers?

In the last forty years, the number of public school employees has doubled. Of this number, about two-thirds are teachers and teachers’ aides.

Yet, the student population has increased about 9%.

Still, free-spending politicians, beholden to teachers’ unions, keep preaching and pleading for more teachers. Our budget deficits are an indication of what has resulted.

The truth is, all this added educational expense has produced negative results in our educational system. Kids are not smarter and are lagging the rest of the world in achievement. Especially when private schools turn out a better product with less financial outlay.

Perhaps the unthinkable makes more sense. We would do better with less teachers and better school management. See the Earl J. Weinreb NewsHole® comments.)

How About Reporting the Real Unemployment Rate?

The media persists in relating unemployment figures which are inaccurate, yet uses them as if they were gospel. And the media consistently fails to remedy the error.

You cannot include in unemployment figures those who have given up looking for work, and or, for some reasons, have left the labor force. And not make a distinction between full-time and part-time or temporary workers.

The labor force participation rate in the year 2000 was well over 66%. It’s now below 64%. The U.S. has gained population in a decade but has lost millions of workers.

It’s about time Uncle Same reported that true unemployment figure, which today is slightly under 15%, not just over 8%.  (See the Earl J. Weinreb NewsHole® comments.)

The Libor Scandal--A Phony Blowup?

If you happen to scan the financial headlines you find the media has come up with a new set of bank ogres with which to fill the news.

And the British and U.S. governments have found a way of reducing at least  a small part of their budget gaps by charging the main bank involved some hefty fines.

Libor, an interest-setting group of 18 banks, (officially known as London Interbank Offered Rate), provides a daily estimate by its banks of what it would cost them to borrow from others. The reference is in a number of currencies.

The four highest and four lowest estimates are excluded and what is included is averaged,

The charge now against the banks is that the Libor figure, which acts as a world standard, was purposely set too low. In other words,  a fraudulent conspiracy was set up by one or two banks,.

The problem with this accusation is that during the time frame of such scandal, (the 2008-09 financial meltdown),  government agencies themselves were possibly exerting pressure on the banks to keep Libor rates low.

Yet, these government overseers today are pointing fingers and leveling huge fines against the banks they closely regulated during the emergency. (See the Earl J. Weinreb NewsHole® comments.)

Break Up the Big Banks for More Value

This is a fact worth repeating: Big banks would be worth more to their shareholders if they were divided up into their subsidiaries which specialize in their various sectors. 

And banks can be asked to pay for failure insurance. This protects taxpayers if done correctly. How? One way is that the cost of that insurance can be easily determined, It already is by market values of credit default swaps on the banks. (See the Earl J. Weinreb NewsHole® comments.)

Today’s Poor, Fleeting Innovations

We are these days seeing lots of patents issued in the U.S., generally in high tech, but we’re not seeing genuine innovation. I mean the type that creates new industry and products, as opposed to new ways of contacting “friends.”

I would like to see real technological advance from our young techies who are becoming billionaires almost overnight, without genuine business plans that have been created to perform relatively ongoing consumer acceptance for some reasonable time. The type that competes in the world economy.

What a waste of talent! (See the Earl J. Weinreb NewsHole® comments.)

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7/12/12 Today’s Poor, Fleeting Innovations

We are these days seeing lots of patents issued in the U.S., generally in high tech, but we’re not seeing genuine innovation. I mean the type that creates new industry and products, as opposed to new ways of contacting “friends.”

I would like to see real technological advance from our young techies who are becoming billionaires almost overnight without genuine business plans that have been created to perform relatively ongoing consumer acceptance for some reasonable time. The type that competes in the world economy.

What a wate of talent! (See the Earl J. Weinreb NewsHole® comments.)

Version:1.0 StartHTML:0000000167 EndHTML:0000001433 StartFragment:0000000457 EndFragment:0000001417

7/12/12 Today’s Poor, Fleeting Innovations

We are these days seeing lots of patents issued in the U.S., generally in high tech, but we’re not seeing genuine innovation. I mean the type that creates new industry and products, as opposed to new ways of contacting “friends.”

I would like to see real technological advance from our young techies who are becoming billionaires almost overnight without genuine business plans that have been created to perform relatively ongoing consumer acceptance for some reasonable time. The type that competes in the world economy.

What a wate of talent! (See the Earl J. Weinreb NewsHole® comments.)

Charging Banks for Bank Guarantees

Let me repeat what I have stated in the past, about the fallacy of bank regulations as we have them.

Bank regulators are no smarter than the bankers on the job. Many are already constantly on the bank premises.  In fact, regulators have failed to do their job in the past.

Furthermore, the current too-big-to-fail efforts by the Dodd-Frank Act has been a failure; banks have become larger than ever. (See the Earl J. Weinreb NewsHole® comments.)

Ben Bernanke's Federal Reserve

Ben Bernanke, who heads up the Federal Reserve Bank, works hard at his job, which has been dealt a rough hand, and his intentions are fine.

However, I feel his four media open conferences each year will not do the American economy any good. The actions of the fed should not be disclosed to the public in advance, in any event. So why this policy?

The Fed is most effective when it creates economic shock, not by tipping off the financial world in advance. Otherwise, the financial players will act in advance
and help counteract what the fed action is supposed to do.(See the Earl J Weinreb NewsHole® comments.)

 

Importing Workers

I comment often abut the poor education American students get in public schools and in college, despite the huge drain such education takes each and every year on taxpayers.

In the high schools, the U.S. has a high dropout rate. It’s interesting to see how we compare with other countries in this regard. Our rate is about 23%, Germany’s is under 3% and Japan’s a bit more than 5%; Great Britain’s about 9%. However, Portugal’s is 37% and Mexico’s 56%.

Little is said in the media about the result of U.S. immigration policy where we import even legal immigrants who do not have high school equivalency. How do we train them for the skilled jobs we need? There are already no jobs for the able. How do we prepare for the unready? (See the Earl J Weinreb NewsHole® comments.)

Beware Of Political Misuse of Eminent-Domain

The use of the principle of eminent-domain has been usually used by governments for the purpose of acquiring private property for public use, such as road-building and essential public works.  When done, the U.S.Constitution requires ample payment to those whose property has been taken.

Unfortunately, the procedure has been misused in the past and will be misused in the future. In the past, it has been a means of taking private property on behalf of other private interests, such as real estate developers. That is not the purpose that has been generally acceptable.

Furthermore, there’s talk now by overly-ambitious government and politicians to use the procedure to take over property whose mortgages are in arrears, and award the property back to the homeowner. Without any further thought to rights or constitutional principles.

The proper principle, however, does not assure votes at the ballot box for politicians. (See the Earl J. Weinreb NewsHole® comments.)

Inflationary College Costs

Many costs are rising faster than inflation. Such as going to college.

One reason is that the government subsidizes this effort with tax breaks. Schools are, therefore, not under pressure to reduce their charges. They do give scholarships, but charges tend to rise far too much beyond normal inflation.

Schools claim their own expenses are rising but they may not be exerting enough effort to exert budgetary controls, with government subsidies and income tax accommodations assured. (See the Earl J Weinreb NewsHole® comments.)

Why Buy a Franchise?

Do you know what should be the two major reasons for buying a franchise?

One is name recognition. The other is the training that they ought to give you.

However, few franchisers give you real name recognition and training.

Yet, franchises are not cheap.You pay up front for a license, and the royalties thereafter will be a big cut of your bottom line. In fact, those royalties may equal half your net profits, if you ever manage to get any.

I hardly ever recommend the purchase of a franchise because franchisees never really get true name recognition, nor the required training from the average franchiser. Only a handful of franchises are worth buying. (See my Earl J Weinreb NewsHole® comments).

Stop Import Duties to Benefit All

Use online searches for the work of David Ricardo, the British economist, philosopher  and investor, who believed that every country, in its own way, had its own relative or comparative advantage. Something at which it was most productive. And that it thus could trade that advantage in the world market.
 

Every country, even those major nations who belong to the G-20 group, is guilty of attempting to protect its own industries with protectionist tariffs. And despite the fancy talk when the country heads get together, they all are afraid of pure free trade. To their own detriment. (See the Earl J. Weinreb NewsHole® comments.)

The Jobs of the Future

Some job prospects for the future follow. 

Note that they do not all require a college education. Some may require a college degree simply because the prospective employers are too lazy to properly select employee talent.

Those who need college for which degrees are needed as a form of certification are doctors and surgeons, and scientists in different areas and protocols.

Higher-paying positions will be available among accountants, accounting aides, skilled technical experts, marketing and advertising, and with health care  lab technicians and nurses.

Skilled construction artisans and mechanical technicians and plumbers and electrical workers will be among the higher-paid.

Middle income workers will be those with lesser skills in previously mentioned industrial sectors.

Lower-paying job availability will include building security services, home health care and nursing aides and food and drink preparers and workers. (See the Earl J. Weinreb NewsHole® comments.)

Government is a Competitor

An often misunderstood lesson: Government spending crowds out private spending with its added disadvantage of having zero multipliers.

When the U.S. Government borrows to spend money, it takes funds that ordinarily would be used by the private sector. This is especially the case when interest rates are not being artificially and dangerously nudged lower by the federal Reserve into a liquidity bubble.

At the same time, research shows that government dollars spent do not multiply in the economy as do private industry dollars. This, despite political jargon by left-wing politicians. (See the Earl J Weinreb NewsHole® comments.)

Buy or Start Companies?

Larger companies often have to decide whether to build their business or a new operation from scratch or buy a company outright, that is, one already in operation.

Many companies, especially in the pharmaceutical business, prefer the acquisition route. It’s expensive because you pay a big premium for a company after it has developed an expensive new drug.

On the other hand, if you attempt to research new drugs, with all startup losses and heartbreak expenses, you have lots of cost as well.

My feeling from my observations is this: In the long run, pharma companies, at least, will pay less for in-house drug product development; there’s a major premium for successful products. (See the Earl J. Weinreb NewsHole® comments.)

MBAs Necessary?

 

An MBA or Master of Business Administration degree is available for almost any college program from accounting, business management, criminal justice, education, engineering, finance, government, politics, real estate, in a variety of arcane subjects.

There’s an over-abundance of MBA students and graduates with MBA degrees. The latter have become relatively useless, except, for their use in a resume. There are simply too many to attract the attention they formerly did.

MBAs are expensive to get and, someday, students may realize they are not even worth their use on a resume. (See the Earl J Weinreb NewsHole® comments.)