Most Labor Unions Distort Fair Wages?

In an ideal productive society, a worker gets what he or she produces. Labor has to be productive. If it is not, there is an eventual disconnect somewhere.

The perfect example is the downfall of the American automobile industry which priced itself out of business primarily because of its labor costs. You can talk style and product non-competitiveness, but the bottom line was this: Management was bulldozed into giving catastrophic labor contracts, in order to avoid immediate catastrophic union walkouts.

The breakdown in schools can be attributed to the same cause. Here it is the avoidance of competition in the form of breaking the public-school-only monopoly unionized teachers have. A choice of vouchers would make for better productivity of teachers and better schools.

Unfortunately, the labor unions and real wage conflict has grown into the American social and cultural contract, and has been so highly politicized by union campaign funding, it will be almost impossible to rectify in the foreseeable future.

(See the Earl J Weinreb NewsHole® comments and @BusinessNewshole tweets.)

Poorly-Run Colleges

Too many schools market themselves by appealing to the baser instincts of students. The idea is to fill the rosters by making it easier to attend. So many graduates are unable to find practical jobs. It's why we have so many with easy-to-get law degrees and few who are doctors and scientists.

Also, affirmative action is practiced, not just for conventional minorities. It is there for any group that is not equally represented on attendance roles.

In addition, few undergraduate students have celebrity professors. They often are taught, instead, by graduate students.

In fact, Colleges and universities engage in "bait and switch;" they confer what are actually deficient degrees, and engage in other practices that would bring legal sanctions if done in any other business.

Parents and taxpayers pay billions of dollars to colleges and universities. Schools make money whether students learn, whether students graduate, and whether they get good jobs after leaving school.. (See the Earl J Weinreb NewsHole® comments

College Education Has Become a Scam

 College education has become a scam in many ways. 

College administrators should drop promotional hype. Higher college enrollment and government loan programs and subsidies may be good for the college marketers, but they don’t produce the training needed to fill real, paying jobs in industry.Too many degrees, especially from four-year institutions, offer graduates little skills but a resume, when they go looking for a job in the real world.(See the Earl J Weinreb NewsHole® comments and @BusinessNewshole tweets.)

Street Demonstrations Can Happen Here

Europeans generally earn about as much for not working as they do on the job; their unemployment insurance is really comfortable welfare.

At the same time, they are accustomed to government handouts of all kinds, despite government bankruptcy; the laws of economics mean nothing to them or their elected officials.

No wonder Europeans take to the streets whenever belt-tightening is suggested as the only solution.

Unfortunately, the majority of U.S. voters are on a similar lemming-like track. (See the Earl J Weinreb NewsHole® comments and @BusinessNewshole tweets.)

Practical Retail Medical Offices

 This is another potential ObamaCare casualty. However, it can be resuscitated.

Mall medical services have been designed to accommodate everyday, urgent medical problems that may arise, where patients want to immediately know how serious their illness may be. The idea is to avoid overcrowded conditions in hospital emergency facilities. ERs are there for specific purposes, other than routine health evaluations.

Such medical offices can be made adjuncts to other types of retail facilities. Many already are in operation. They are supervised on staff by licensed nurses, while overseen by licensed physicians. Doctor referrals are made by those nurses.

Different states have varying regulations, depending on pressure groups, who would prefer not to have this form of competition.

  It's a form of reliable, private choice, low-cost, health care coverage.(See the Earl J Weinreb NewsHole® comments and @BusinessNewshole tweets.)

Social Security Machinations

Everyone has heard of Ponzi schemes. The loose definition describes a scam whereby someone takes funds from an investor and then skips. But there are variations and degrees of scam sophistication.
Generally, a so-called money manager takes funds from investors and after a while decides to use at least some of the funds for himself. He pays off original investors with funds received from new investors.When everyone wants their money back at once, and there isn’t any to give them, the frauds are uncovered.   

But there are many schemes which, unfortunately, escape notoriety. They are Ponzi schemes, but are never labeled as such. Take Social Security as the perfect example It started off as a so-called insurance program, but never was comparable to what you get from a private company. There are no locked-up reserves. Active workers are taxed so that they can get future retirement benefits only from taxes placed on other, active. workers. (See the Earl J. Weinreb NewsHole® comments and @BusinessNewshole tweets.)

Temporary Jobs Can be Important

 Why not look for a temporary job when permanent opportunities are scarce? There are a variety of temporary positions in different industries, over a variety of activities.

This advice is for those just out of school with a new diploma but with no job offers in their chosen profession. Or a suggestion for those of you who have no idea what it is, exactly, you would like to work at.

You will get the on-the-job experiences you need, though few may relate in any way to what you studied at school. You may even wait tables in some instances.

But they will all add to your practical education. And, importantly, to your pocketbook. (See the Earl J Weinreb NewsHole® comments and @BusinessNewshole tweets.)

A Bureaucracy With Less Workers?

I recently saw some numbers, pertaining to employees working at the Federal Deposit Insurance Corporation or FDIC. We know the organization as the overseer of deposit insurance and the caretaker for solvency of banks which fail.

In 1995, the agency had had about 12,000 employees; the number is now down to about 4,500.

I cannot say why this occurred while the other agencies grew. . Politics and inter-agency bickering is probably the underlying reason. I may add, however, that the FDIC has done a far better job than many of the other banking and monetary agencies the U.S. government employs. (See the Earl J. Weinreb NewsHole® comments and @BusinessNewshole at twitter.)

Economic Misinformation in the Media

 Listen to late night/early morning call-in radio to hear how people around the country think about everyday living matters.

They talk about personal finance, economics and business and related political slants.

I find it a difficult chore because most folks are in the dark about the basics that they should have acquired in public school. College graduates often are just as lacking in fundamentals.

Except for any leftist indoctrination they may have gotten from professors. Most have no knowledge of basic finance, economics and business.

And unfortunately, most radio and TV moderators and anchors have had similar “liberal” schooling, and are in no position to correct such views. (See the Earl J Weinreb NewsHole® comments and @BusinessNewshole tweets.)

Regulation of Banks Are Causing Financial Instability?

There’s lots of competition among banking regulatory agencies. You have
the FDIC, the Office of the Comptroller of the Currency (OCC), the SEC and the Office of Thrift Supervision (OTS). They’re  made up of bureaucrats vying for dominance and power. Criticism varies; as one example, the OCC is said by some to be too close to the big banks.

The question is whether such competition is healthy in that it may be imposing directives that make banks even more unstable in an emergency.  (See the Earl J. Weinreb NewsHole® comments and @BusinessNewshole at twitter.)

The College Education Bubble to Nowhere But Debt

Interestingly, Richard Arum and Josipa RoksaIn in their study of 3,000 students at 29 colleges and universities, have found that after two years in school, as much as 45%  "did not demonstrate any significant improvement in learning." And after four years, 36% did not.

To add insult to injury-by-education, students’ debts have increased well over 500% since 1999; many are in default.  (See the Earl J. Weinreb NewsHole® comments and @BusinessNewshole at twitter.)

The College Cost Run-A-Way Bubble

Why should college costs have doubled, compared, as one example, to  what is  expensive health care? At least health care has vastly improved over the years, while education has stagnated.

In fact, it’s estimated  that going-to-college, despite its futile results, has seen its costs far, far outpace what the average graduate earns. Moreover, too many grads work at jobs for which they need mere high school education. (See the Earl J. Weinreb NewsHole® comments and @BusinessNewshole at twitter.)

Preferable Non-Profit Companies?

Government-operation proponents are always enthusiastic about non-profit business. They rant against profit-making businesses.

The so-called non-profits can lose fortunes for their backers, while the for-profits can make pennies-on-the-dollar of sales. Yet, the government-operation fanatics remain committed to such left-wing perception and deception.

It is impossible for private business to compete for long, whether it be the insurance business, health care, energy production, whatever, if opposed by taxpayer funds, grabbed by government for capital and operating capital needs. (See the Earl J Weinreb NewsHole® comments and @BusinessNewshole tweets.)

The Fed Is Ruining the Economy

 Ordinary Main Street savers, who normally are seeking havens for their funds, have been cheated by Federal Reserve policies over the past few years.

Investors see how little they can earn on their money, if risk avoidance is their concern. It’s the Fed that’s primarily responsible.

And the Fed will continue with the mistaken notion and policy, that in effect is inflating the currency while attempting to stimulate the economy. It will not work before complete financial disaster.

A debacle is inevitable because such Fed policy also scares business folks and deters lenders from normal activities that foster the economy the Fed overlooks with its monetary maneuvers. (See the Earl J. Weinreb NewsHole® comments and @BusinesNewshole at Twitter.)

The Climate Pays Off For Many

Climate control is always bound to get media attention.

There are adherents who treat climate control as a religion and have no doubt the earth is warming.

To others it’s a political cause that creates a road to office and helps to keep them there.

To still others in government, it’s a subterfuge for quietly and indirectly raising taxes on consumers, as well as industry.

And for others, it’s business in which you can buy and sell so-called cap and trade credits.

They market a green philosophy in a variety of industrial and consumer products that you choose to develop for profit.

Eventually the now-gullible public will find out the climate promoters can be grouped with the types who used to tell us the world would come to an end by a certain date. When that never occurred we just forgot about the quacks. (See the Earl J Weinreb NewsHole® comments and @BusinessNewshole tweets.)

Importance of the Dollar's Use as Reserve Currency

The potential loss of the dollar as a reserve international currency is underway. The ability to protect U.S. global interests will be diminished in this process.

Do not treat unlimited government spending lightly. The repercussions can be extremely serious in matters of our economic and also national security. We're in trouble if other countries fail to want dollars for their currency.

A budget deficit that cannot be overcome without massive taxation guaranteed to stifle economic growth to prevent deficit reduction is the major difficulty. ( See the Earl J Weinreb NewsHole® comments.)

Bernanke of the Fed and His Financial Thinking

 Ben Bernanke has made an avid study of the actions of Franklin D, Roosevelt, in office during the Great Depression.

Roosevelt made many errors, including raising taxes, and enormous spending after signs of economic recovery became apparent. Roosevelt never got us out of the depression. The war effort did.

Yet, Bernanke is following a similar easy-money route that is not working.

Also, Roosevelt’s administration, as present-day Obama’s, was dedicated to class warfare and “soaking the rich.” (See the Earl J Weinreb NewsHole® comments and @BusinessNewshole tweets.)

Government's Lack of Business Efficiency

 Whenever the government proposes a function that is now done by private industry, the taxpayer will be contributing the necessary capital and operating funds. And will be taking all the risks that is taken on by the stockholders of private industry. As well as responsibility for the losses, which are bound to happen under government operation. 

Think Post Office as an example.

So be careful of any government attempt to reduce costs by competing with private enterprise. (See the Earl J Weinreb NewsHole® comments and @BusinessNewshole tweets.)

Our Teachers Keep Flunking

The National Assessment of Educational Progress has been called the Nation’s Report Card. It reported that only 23% of fourth-graders, 30% of eighth-graders, and 21% of 12^th-graders were” proficient” or “advanced” on their national geography exam, given in January to March, 2010. Progress has not been evident since, I may add.

(I saw one of the simple questions posted in the Wall Street Journal. The newspaper reported that only 33% of eight-graders got it right.)

With a student body such as this in the U.S. we certainly do not get our money’s worth with education cost. But I do notice teachers’ unionized pay and benefits are highest ever.(See the Earl J Weinreb NewsHole® comments and @BusinessNewshole tweets.)

Securities Analysts' Ability

Securities analysts give you investment advice. They suggest what securities to buy and sell.

Analysts constantly critique management of publicly owned companies. They claim to know what products and services companies ought to produce and what they should charge. Analysts propose when to hire and fire top executives.

Yet very few analysts have hands-on ability to understand how any business operates from the inside. They are not even that proficient concerning Wall Street inner activity.

As I have often said ( see my Earl J Weinreb NewsHole® comments), they haven’t the business experience to successfully run a pushcart. (See the Earl J. Weinreb NewsHole® comments and @BusinessNewshole tweets.)

Government “Experts” Enhance Over-Spending

 

Americans should always think seriously about politicians who tell them government “experts” know all about spending and deficit control.

Any politician or bureaucrat with a short-term horizon is never reliable on this score. Especially a politician unfriendly to, or unfamiliar with the true understanding of capitalism.

Our tremendous deficit will spell enormous inflation. Or a loss of currency value. And the certain loss of the eminence of America, as an economic and, therefore, a political and military entity. (See the Earl J Weinreb NewsHole® comments and @BusinessNewshole tweets.)

The Media’s Poor Free Market Understanding

Few general media reporters, columnists and editors have free market views and, certainly, a background on financial subjects.

In addition to what generalities journalists are ever taught, they receive a modicum of economic and financial training in school.

Not theory from economists such as Friedrich Hayek, Milton Friedman, and present-day commentators such as Thomas Sowell, and  Walter E. Williams, among others.

Thus you get left-leaning slants in many financial articles. (See the Earl J Weinreb NewsHole® comments and @BusinessNewshole tweets.)

ObamaCare- To Be As Efficient As The Post Office?

 Everything the government has done, including its health care under Medicaid, have been inefficient with equally poor service, comparable to that of the Post Office.

Government never fosters competition. It can cut out competition when it is permitted to write rules to have taxpayer money undercut the pricing of products or services of potential private producers. As with ObamaCare.

The Post Office will not give up its first class mail handling privilege. It knows it cannot compete if it has competition. Other forms of non-first class package shipping are handled by private shippers efficiently and at low cost. While private carriers would love to carry first class mail, the Post Office continues to maintain its monopoly.

The Post Office says it provides service to areas no private carrier will want to service. Not true, as evidenced by cutbacks the Post Office constantly imposes. And destinations to which private carriers now go.

ObamaCare claims to provide everything private medicine can do better and cheaply but government has never allowed it. Such as interstate competition,  tort reform and fraud correction, (See the Earl J Weinreb NewsHole® comments and @BusinessNewshole tweets.)

Damaging Ignorance of the American Constitution

Our inefficient schools prove to be a waste of so much of our educational funds. They appear to do more for the welfare of the teachers than they do the kids being taught.

As an example I refer to Prof. Walter E. Williams, in a past column. Professor Williams, is now retired as head of the Economics Dept. of George Mason University but still actively writes and comments about his specialty.

According to one survey, Dr. Williams says, only 28% of students can identify the Constitution as the supreme law of the land. And fewer than 25% of students knew that George Washington was the first president of the United States.

And that only 26% of students knew that the first ten amendments to the Constitution are called the Bill of Rights.

Years ago, kids did better, when they sat, 30 and 40 to a class, and in one-room school houses. And so did the taxpayers funding their education do better. (See the Earl J Weinreb NewsHole® comments and @BusinessNewshole tweets.)

Health Malpractice Courts Are The Answer

We have special courts for bankruptcies where judges handle creditor and debtor claims, tax liens, workers compensation, and so on.

One of the complications that requires change, and proves costly with health care, is malpractice cost. The problem is primarily due to the huge amount of lawsuits against providers. And fraud that permeates the system.

The result is the high outlay due to defensive medicine and doctor malpractice insurance premiums.

ObamaCare intentionally does nothing to stop this menace.

The practical solution: Arbitration courts made up of judges, trained in science and medicine. That would eliminate awards because of “junk science.”

The courts could eliminate attorney’s cuts of the award proceeds and put a cap on out-sized sums that ordinarily come from ignorant juries and jurists. While seeing that patients are compensated for actual malpractice. The courts would be financed from doctors' insurance premiums. (See the Earl J Weinreb NewsHole® comments and @BusinessNewshole tweets.)

Type of Gold Ownership Dilemmas

 As with other financial investments, folks learn from experience, often events that are costly to them.

Currently, gold investors are learning that the price of the commodity can at-times drop even when there is inflation that promises to become rampant, and the U.S. dollar buys less at home. Even when the European economies are failing and the American system is closely following a similar disastrous budget-deficit path.

Obviously, all those reasons for buying gold have not always panned out for American investors. Unless the actually clueless Federal Reserve goes on another useless loose money escapade.

The truth is, gold has never been an inflation hedge, only a bulwark against a cheapening dollar. The latter can get stronger, however, compared to other currencies. Such as the Euro. Or the Indian Rupee. (India is a big factor in gold purchases.) At which time the dollar can get stronger and gold cheaper. (See the Earl J. Weinreb NewsHole® comments and @BusinessNewshole tweets

Politicized European Central Banks

Central banks are supposed to be completely independent, The European Central Bank or ECB took this position until recent years.

Thanks to the Greece and related European Union bailouts, the central bank no longer is an independent vehicle.

In Great Britain, the Bank of England is a centuries older counterpart. The BOE, too, has always been entrusted with being an independent, non-political, overseer of the British pound. But the BOE now is also in the management game.

Americans are no better off.The Federal Reserve slowly but definitely and dangerously has lost its independence, as I have commented on, over recent years. (See the Earl J Weinreb NewsHole® comments and @BusinessNewshole tweets.)

The Odds of Tossing Coins-- Heads or Tails

 
It’s interesting to note observations and tests of folks who are asked to bet or choose heads or tails when tossing coins.

The odds of a coin toss being heads or tails is always 50-50. Yet, when for example, heads comes up twice in a row, a large percentage of players will think that the odds will then favor tails as the next result.

True, over a total of as many as 1,000 coin flips, you may not get exactly 500 heads and 500 tails, but you can expect a figure extremely close. Still, many folks continue to believe that over the shorter-term, a following coin-toss will have a bearing on past results. (See the Earl J. Weinreb NewsHole® comments.)

College's Huge Consumer Extravagance

I revisit college problems many students ought to be attending to..

I suggest reading "Going Broke by Degree: Why College Costs Too Much," by Richard Vedder and "Faculty Lounges and Other Reasons and also Why You Won't Get the College Education You Paid For." by Naomi Schafer Riley,

In the Vedder book, for instance, you learn that two out of five students entering four-year study programs don't achieve a bachelor's degree after the sixth year. And that colleges accept these students because of the money they bring, usually government-guaranteed loans.

Comments are quite instructive; you will learn why it appears so many of our Ivy-League graduates appear to be far dumber than ordinary plain-vanilla grads of the not-so-distant past.

Another example of college being useless: Vedder states there are 80,000 bartenders in the U. S. with bachelor's degrees, and17% of baggage porters and bellhops with college degrees, along with 15% of taxi/ limo drivers. (See the Earl J Weinreb NewsHole® comments and @BusinessNewshole tweets.)

Buying Gold or Art As Inflation Protecttion?

The question frequently arises whether art is an inflation hedge. 

It isn't per se. More often the answer to beating inflation may be buying gold. However, the correct answer here is not what you probably expect. (Follow my past comments on beating inflation.)

Gold sounds plausable to many as I have commented in the past on the pros and cons.

But what type of gold investment are you seeking? You can trade gold as a commodity, as many do. At times, even government trades impact short-term supply/demand and thus prices..

Want a genuine inflation hedge? Sorry. For 25 years, from 1985 to 2010, consumer prices went up a bit more than 200%. Yet, during this time, gold prices were off by about 20%,

Want to head for the hills in an emergency? Gold bars are too heavy; rare gold coins would do it. But try this only in a dire emergency.

Need a weakened dollar hedge? Gold is still not a panacea. It offers no earnings. And has storage and insurance costs if bought outright. This isn’t too bad when interest rates are low, but proves costly when interest rates rise. And you can be sure interest rates will go far higher as inflation becomes more of an economic factor for the Federal Reserve’s attention.

Moreover, higher interest rates generally spell a stronger dollar, and more pressure on gold.

Budget Deficits Make True Economic Growth Impossible

This is seldom taught in high school, or for that matter, college: There is a major difference between a dollar “invested” by government and a dollar invested by private industry.

State-control, liberal-leaning politicians believe that they’re the same. That it’s better if government makes the decision to spend. Or as the administration says, “invest,” as opposed to private enterprise doing the function.

The government allocation is made by a political decision. That is often subject to pressures which have nothing to do with supply and demand. Rationing and corruption are bound to follow. Privately imposed decision is, however, more likely to conform to what the public wants.

Moreover, private industry investment has a multiplier effect, while government spending does not. Government jobs have no leverage impact on the economy. Their purpose often has political, social and environmental intentions.

Governments do not innovate and create new companies and multiples of jobs. Nor do they enervate the needed psychology of a booming economy. Psychological effect is most important. (See the Earl J Weinreb NewsHole® comments and @BusinessNewshole tweets.)

 

  Buy Diamonds or Art for Investment?

Unlike many other valuable commodities, you cannot buy diamonds in the form of shares or an ETF fund or as a conventional commodity. It has to be bought as is.

Because you can pack lots of value in a tiny item, the diamond can be highly valuable in an emergency for someone who has to leave his country or salvage assets in a dire emergency. This makes diamonds more convenient than most works of art.  But how does it shape up as an investment?

Not very well, despite smaller size, for a number of reasons. Importantly, quality determination and value require expertise. There is the danger of loss and/or theft. The difference between cost and sales figures can vary greatly because of unestablished markups.

Remember also, diamond supplies have to be controlled for values to be stable on a global level, especially these days when artificial diamonds can be so close to the real thing in appearance and usage. (Remember, always, the basics of general art originality.)

Contrived Unemployment Reports

 We keep getting unemployment reports that have little to do with true unemployment. It’s yet another case of the administration getting away with chicanery for which the executives of a private enterprise would be arrested.

Right now the unemployment rate is supposedly under 8%. The media tells us so, and they are out to report on all the dirt they can find, or so they say.

But if you look even deeper in the report’s U-6 unemployment rate, which includes folks who are underemployed and seeking full-time jobs that they can't find, that rate is over 15% and growing.

By the way, the U-6 number doesn't include those who have given

up seeking work.

I would suggest viewers look up the Bureau of Labor Statistics site at bls.gov for details on the different facets of unemployment the media forgets about. (See the Earl J Weinreb NewsHole® comments and @BusinessNewshole tweets.)

Art for Small Collectors

 

I have always suggested original prints in limited editions for small collectors, who are starting out as buyers of worthwhile art.

The art process ought to be original, such as lithography, and be supervised by the artist. It’s absolutely essential that the work be in limited quantities, and if done in modern times, be signed and numbered by the artist. I personally look for editions of no more than 50 signed  and dated copies, in all.

I like conceptional art because it requires  thought and ideas, as befits any attempt at creating a work of art. (Remember, always, the basics of general art originality.)

The Usually One-Sided Political Negotiation

Two political sides attempt to negotiate a budget deficit. The question is to cut spending and size of the budget.

When one side says it will severely cut spending a few years in the future but in the meantime takes current funds from taxes or keeps on spending, you just know that one of the two bargainers has just gotten ripped off.

Why? No politician has ever followed through on promises made years earlier to cut budgets.. Never. Look it up.

So all negotiated deals of this kind have always been decided in favor of the big government spenders and taxers. (See the Earl J Weinreb NewsHole® comments and @BusinessNewshole tweets.)

Earnings From Owning Art

It’s misleading seeing reports comparing earnings possible from holding various forms of art, compared to what you get from stocks and bonds.

For three reasons:

One, the investments are not comparable. It’s like comparing proverbial apples and oranges because it’s hard to measure true art prices.

Secondly, there is a big margin between the price you buy at, and the one for selling. This makes an even sharper difference in values with shorter term transactions.

And three, there is little liquidity with art. You will not always be  able to sell what you have when you need the funds. (See the Earl J. Weinreb NewsHole® comments and @BusinesNewshole at Twitter.)

Polls to Create Results

Before you believe a political, business or scientific poll, ask yourself: Who pays or sponsors it? That can affect the results.

The samples can be selected to give different results. Questions can be posed to produce preferred answers. Demographics can be altered to assure outcomes. And of course, interpretations can be subjective.

Sponsorship, for that matter, can also influence the results of research. The Food and Drug Administration carries on quite a bit about that. (See the Earl J Weinreb NewsHole® comments and @BusinessNewshole tweets.)