Undemocratic Union Control of Government

 
In my reports on federal, state and local government unionization I have  said that total outlays for wages and pensions are about triple what they are for comparable private industry jobs,

I have mentioned how these unions control government, with their political contributions and the ability to close down government operations, along with their control of budgets because of their size.

The problem will persist until politicians are no longer beholden to unions for funds and getting out the vote. (See the Earl J Weinreb NewsHole® comments and @BusinessNewshole tweets.)

Budget Deficits Hinder Real Economic

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.)

Public Employee Union Stimulus Aid

Want to know why the stimulus did not produce the jobs it supposedly was intended to do, but, instead had another primary purpose?

The funds were partially used for "donations" to those "friendly" states (in the opinion of the Administration) who had budget deficits. The latter are always primarily due to fancy state and local government contracts. 

 The stimulus had become more of a political slush fund than an overall job creator.

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

 

Problematic, Unionized Government Employees

There are serious problems when government workers are unionized. This started on the federal level requiring no Congressional approval and has now grown in all layers of government.
 

It was a JFK executive order 10988 in 1962 that started what has grown into a political-influenced monster, taking over our states and city governments as well. Unionization controls whatever it touches.

Unions now influence state and big-city government bureaucracies and, therefore, too many state and local political machines.

Public employees are being unionized at a rapid pace when private employment is only about 7% unionized.

Union wages run much higher than comparable wage scales; by about one third, and more beyond private earnings. Pension funds and terms usually far surpass that of private industry. In some instances, five or more times. In general, total government unionized pay packages are about triple those of comparable private industry jobs. All have been budget-busting, and almost impossible to control.

And taxpayers making less pay are paying the bills.(See the Earl J. Weinreb NewsHole® comments and @BusinessNewHole tweets.)

Forced Corporate Takeovers

In many instances, corporate proxies may make it easier for hostile takeovers. It is not always true that making it easier to foster corporate takeovers, is in the best interests of all stockholders.

The objectives of many of the takeovers are often solely for quick, short-term profits. That may not be the long-term interest of the corporation or most of its shareholders.

Yet, much of the legislative pressure in Washington from the administration has been to accomplish this purpose.

This does little for corporate democracy. It does help reimburse party and lobbyist funding.(See the Earl J Weinreb NewsHole® comments and @BusinessNewshole tweets.)

Are Tax Credits to Business for Hiring Worthwhile?

Experience shows that giving business tax credits for hiring does not generally work. Businesses eventually hire anyway in most instances.

What is important and damaging to business, is recurring taxes, not the need for credits. Research has shown this time and again. But left-leaning politicians hand out tax credits under pressure, as they cannot abide permanent tax relief.

So they continually talk about temporary tax credits, to impress potential voters. Moreover, if the public is unfamiliar with business, politicians get away with the ruse. (See the Earl J Weinreb NewsHole® comments and @BusinessNewshole tweets.)

Politics and Business

 Too many of our law makers in Washington and state houses, are lawyers. It’s no small wonder; we have too many lawyers graduating college. They need something to do other than seek litigation briefs.

It helps explain why we have too little doctors, scientists and mathematicians. When you can't cope with science or math, it’s far easier to become a lawyer. Years ago, you could become a lawyer without going to college. You took the bar exam after clerking in a law office.

Too many lawyers in government have become a major problem. We need representatives who actually represent the people; they ought to come from different job experiences.

I also strongly feel that we need small business men and women in Congress and  state houses. It would change the legislative outlook about taxes, business and everyday problems of the middle class as well as the poor.(See the Earl J Weinreb NewsHole® comments and @BusinessNewshole tweets.)

Conflict of Interest at The Fed

 The Federal Reserve has a conflict of interest in its very mandate. The Dodd-Frank regulation law has tilted the effect of the Fed in many ways, giving the executive branch of government much more influence on the Fed.

Despite the logic for the Fed’s independence, Congress always has wanted to impose influence. It has to an extent. Since 1978 the Fed has had to enforce the Full Employment and Balanced Growth Act, known as Humphrey-Hawkins. That conflicts with the Fed’s stated currency/inflation activity.

The Humphrey-Hawkins Act enforcement creates an inflating bias; certainly not one of dollar stability. So there is always a conflict of interest.

Remember, the Fed handles monetary policy. The president, through the Treasury Department, is in control of fiscal policy. It’s difficult for the Fed to control outlandish spending by the government.(See the Earl J Weinreb NewsHole® comments and @BusinessNewshole tweets.)

The Federal Reserve has a conflict of interest in its very mandate. The Dodd-Frank regulation law has tilted the effect of the Fed in many ways, giving the executive branch of government much more influence on the Fed.

Despite the logic for the Fed’s independence, Congress always has wanted to impose influence. It has to an extent. Since 1978 the Fed has had to enforce the Full Employment and Balanced Growth Act, known as Humphrey-Hawkins. That conflicts with the Fed’s stated currency/inflation activity.

The Humphrey-Hawkins Act enforcement creates an inflating bias; certainly not one of dollar stability. So there is always a conflict of interest.

Remember, the Fed handles monetary policy. The president, through the Treasury Department, is in control of fiscal policy. It’s thus difficult for the Fed to control outlandish spending by the government.(See the Earl J Weinreb NewsHole® comments and @BusinessNewshole tweets.)

Public Moods and Sentiments

I have always discussed how moods are relatively long-lasting emotions; sentiments are shorter-term. Correspondingly,they can affect how stock market cycles react and can precipitate booms and busts in industry.

Therefore, our president, in the midst of a deep recession, should never make it a practice of singling out an industry, whether industrial, communications, banking, insurance or lender of any type, as a scapegoat, when he wants the economy to recover and produce jobs. (See the Earl J Weinreb NewsHole® comments and @BusinessNewshole tweets.)

Trade Secrets Protection

The best and cheapest way to protect your trade secrets is to keep them under lock and key the best you can. Be sure your employees, customers or clients are not able to get at data that should not be made public. Of course, this is never simple.

Also, it’s logical at the very onset, to use trade names and logos that are hard to duplicate. Example: A made-up name.

The best and cheapest way to protect your trademarks, aside from registering them, is to actively use them in commerce. The laws are friendly only to those who fully employ the names, marks or logos they want protected. Even registration is not an outright guarantee.

Stay out of courts if you possibly can, when you have disputes that concern trade secrets or trademarks. Those with the most money to litigate will win.

Unfortunately, patent and trademark litigation contests often are not prime examples of prevailing justice. (See the Earl J Weinreb NewsHole® comments and @BusinessNewshole tweets.)

The Dollar's Gold Connection

From 1947 until 1967, when we had gold-dollar convertibility, unemployment averaged only 4.7%, with economic growth about 4% annually. Plus the fact inflation remained relatively low.

In 1971, during the Nixon Administration, the Bretton Woods agreement set up a new system, including the International Monetary Fund and the International Bank for Reconstruction and Development, part of the World Bank Group. The U.S. dollar became the world reserve currency for the member states. However, slower growth has ensued from that point, and gold today appears to be the preferred reserve of many countries. America seems to have flubbed the job.(See the Earl J Weinreb NewsHole® comments and @BusinessNewshole tweets.)

Dodd-Frank Adds More Risk ?

Risk was never overcome by regulation. The media can more fully explain this, if they tried to find facts for themselves and report them.

Example: Fannie Mae and Freddie Mac were risky semi-government agencies who were instrumental players in our sub-prime crisis. There was no lack of regulation. But that financial meltdown has resulted in even more regulation with the likes of the Dodd-Frank Act, around since 2010..

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

The EPA and Lack of Democratic Principles

Congress never was able to pass a Cap and Trade bill. The public realized the proposed legislation was a device for powerful government taxation. The measure is more a means for imposing taxes on industry and consumers, than it is for environmental protection.

So what does the Administration do, in its effort to help reduce emissions it claims the bill will reduce? Especially when global warming is not scientifically proven.

It imposes controls through unelected bureaucrats in the Environmental Protection Agency (EPA). (See the Earl J Weinreb NewsHole® comments and @BusinessNewshole tweets.)

Job Creation Theories

When you hear that jobs are being created always consider:

One: Are jobs make-work for government or are they permanent?

Two: Are the jobs full time or part time? And if so, for how long?

If the work is for government, are they unionized with special pension programs? If the answers are that they are overwhelmingly government-oriented, you know they may be phony and costly. Particularly when so much of the so-called administration stimulus went to states which added government jobs.

Another important statistic: While economists may differ, spending for a government job is known to have an economic multiplier effect of 1.4 or 1.5, On the other hand, private jobs have an economic multiplier of close to 3.5.

So beware of job claims during a recession, especially when you get those politically-inspired varieties. (See the Earl J Weinreb NewsHole® comments and @BusinessNewshole tweets.)

Permanent Unemployment Checks?

Unemployment benefits have an impact on unemployment statistics. Extending benefits tends to make the unemployment rolls greater because it’s generally a disincentive for seeking jobs.
 

Studies show that most unemployed ,who are not desperate, put off looking for work until unemployment checks are ready to run out.

But the media operates with just selective reportage. They find a small percentage who truly need more benefits and make it appear that all the unemployed require to be on a dole forever, or else they starve.

With no remedy other than an unemployment check. (See the Earl J Weinreb NewsHole® comments and @BusinessNewshole tweets.)

Getting at Real Unemployment Numbers,

Average unemployment numbers are what we get, covering all age groups. That average can consist of different classes, each of which is affected differently.

 Classifications contain teens up to age 25. Or all adults 25 and older Or high school graduates, or college graduates; skilled and unskilled.

The adjusted unemployment rate now is closer to 15%, not the under 8% reported by the media and the government. The youngest job-seekers are suffering the most from the current recession.(See the Earl J Weinreb NewsHole® comments and @BusinessNewshole tweets.)

Unemployment Figures Often Lie

Government unemployment numbers are misleading. They must be carefully interpreted. They never fully are in the media, often for politically-slanted purposes.

Examples: Unemployment numbers don’t tell you how long the unemployed have been out of work. Or how many are not working full days, nor have permanent jobs. Or how many have given up looking for work. Those out of work a long time may not even be looking for employment, and are not being counted as unemployed,

All that results in a better than reported unemployment figure.

Moreover, the time of year reported is a factor. And weather conditions may have much to do with short-term implications of job statistics. Furthermore, those tricky "estimates" that compose many of the statistics. (See the Earl J Weinreb NewsHole® comments and @BusinessNewshole tweets.)

Evaluating Management Ability

It's true that an executive must operate with the hand being dealt. If the business environment or the economy is poor, an excellent manager may do extremely well by just minimizing losses. There are no real standards to go by.
 

Management techniques used are all about the same. The same acronyms to describe managerial approaches. Those that worked in the past may not be working now. The ones that did not work in the past may be working today. 

 

A lot of luck is involved and persistence. You do need an earnest game plan Also an eye on protective management technique that actively avoids serious problems. That, for example, to keep away from damaging lawsuits, especially employee harassment and EEOC complaints. Management has to consciously stick to the employee manuals that are set up. (See the Earl J Weinreb NewsHole® comments and @BusinessNewshole tweets.)

The Real Role of The CEO

Studies show that top management changes account for only about 10% of added profitability.

Often it's other circumstances that result in a company’s doing better or worse. The economy, business or general industrial conditions may have much to do with any company’s near-term fortune.

There are business cycles. Moreover, the bigger the company, the harder it is for a CEO to turn operations around on his or her own, The CEO is certainly important, but never to the extent the public, or the media, may believe.(See the Earl J Weinreb NewsHole® comments and @BusinessNewshole tweets.)

Speaking Before an Audience

The inability to speak on our feet has brought about a term I have called Teleprompt-torical.

President Obama appears to be vying with ancient Roman senators who stood about in togas making speeches. Interestingly, they did so without the use of teleprompters.

He, however, has changed things in this country, even the world. You might say, his speeches are very teleprompt-torical.

I would think that schools today ought to include courses on debating, in addition to their regular curricula. The ability to think on your feet without having something to read from in front of you, other than note outlines, would be a benefit to all.

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

Need an MBA for Environmental Work?

 There is enough evidence to show that the entire scientific evidence behind global warning is suspect.

Environmental studies programs depend to a great extent on the premise of global warming. Cap and Trade legislation was actually a ruse to create taxation, based on dubious global warming science.

So why start off on a career with a new MBA degree in this specialty? It is either a marketing ruse to get a job that defies science, or your own credibility, when an MBA has become tainted by scientific doubt.

Just another marketing scam our vaunted institutions of higher learning have developed.(See the Earl J Weinreb NewsHole® comments and @BusinessNewshole tweets.)

Government-Inspired Bubbles

Politicians are having a fine time orating how they intend to stop future financial bubbles. They think they succeeded with enacting Dodd-Frank.
 

Bubbles are man-made, enforced by government policy and regulation. They breed on human psychological extremes. And feed on panic.

The onus and guilt may be thrust on private parties for political purposes, but bubbles exist only if government agencies permit them to do so.

Actually, it’s far better that the powers-that-be in government sit on their hands, than “do something” in the way of remedies. A long-term hands-off policy in a bubble event often takes care of problems better than short-term political panaceas.

Apart from those called in to do the short-term, patchwork remedies, If there has to be basic blame for recent bubbles in the U. S. it can be placed on the heads of the governors of the Federal Reserve. They are the guilty, who have made money too cheap. That is always fuel for a bubble.

Bubbles can be dampened when the availability of currency is tightened. However, the opposite monetary policy has been the story in U. S. bubble experience.(See the Earl J Weinreb NewsHole® comments and @BusinessNewshole tweets.)

Are American Voters Familiar With Definition of Corporate State?

The majority of Americans will fight you to the death, should you accuse them of any fascistic offense. Yet they are, nevertheless, guilty of corporate state politics..

Their argument is that super financial regulation, such as Dodd-Frank, is the answer to stopping bubbles and financial risk. More regulation, they say, will reduce financial meltdowns; that same financial risk that past regulation failed to catch.

And if large companies “too big to fail” look ready to do so, the U. S. ought to be the employer of last resort, to bail them out. While government, in effect, operates them. In the past, the bankruptcy laws remedied the problem without political input.

Well, that is corporate statism, pure and simple. That was the road taken by the administration with autos and banks and insurance in 2009, and it is now a permanent fixture.

There were alternatives.. Actions that would have been better solutions and less destructive to our long-term economy.(See the Earl J Weinreb NewsHole® comments and @BusinessNewshole tweets.)

Getting Your College Money’s Worth?

More kids go to college. More get into debt. More of their parents are going broke financing their education.

According to the National Assessment of Adult Literacy, the percentage of college graduates’ ability in literacy had declined from 40% to 31% in the past decade. About 20% of college seniors did not have the ability to estimate whether their car had enough fuel to get to a gas station.

But more kids and parents can show those fancy diplomas to friends and relatives. So I guess all is not lost after all? (See the Earl J Weinreb NewsHole® comments and @BusinessNewshole tweets.)

Today’s Wrong, Would-be Keynesians

If John Maynard Keynes were around today,  he would  criticise, along with conservatives, the  way politicians employ so-called “keynesian economics”  as being his.

Lord Keynes wrote  his "General Theory of Employment, Interest, and Money" in 1936 and free-spending politicians took on his teachings as if they were gospel.

However,, despite his current fans who think basically differently,        
Keynes said the market system is "the best safeguard of the variety of life," preserving "the most secure and successful choices of former generations," This isn’t the thinking of present-day “keynesians.”

His work was meant for fast action as a jolt for the 1930’s  Great Depression. He had no aversion to tax cuts,  as do too many politicians today who call themselves keynesian. The latter primarily are interested in taxing the rich as a social issue.

Among conventional pump-priming ideas we attribute to Keynes, he also said real wages must fall to help cure unemployment. Can you imagine liberal labor unions allowing pay cuts?

Keynes also didn't approve of on-going budget deficits or continued inflation as a solution, of which today’s Keynesians approve. His remedy was specific for the 1930’s. When not in a Depression, governments should budget surpluses to make up for Depression-jolt deficits. 
 

Keynes today would be considered too conservative by those who use his name to further their political goals through economic action. (See the Earl J. Weinreb NewsHole® comments and @BusinessNewshole at twitter.)

Useless, Expensive College Degrees

Some people look down on vocational school. A degree from a four-year college is considered first class. A vocational-school degree is not. That should be a prejudice to overcome because that is what many students would be better off with.

Those who have employable skills will earn top dollar at jobs that employers want, even in deep recessions. Others, with their fancy-school diplomas sit around depressed for the lack of opportunity, despite all their effort toward those impressive but impractical and useless degrees. It’s rough spending a fortune to get through college, only to get a degree that does not enable you to find a viable job.

It is worse when that a career puts you in extreme debt.(See the Earl J Weinreb NewsHole® comments and @BusinessNewshole tweets.)

Earning Good Money Without a College Diploma

You don't need a four-year college degree to be successful. Vocational education does pay off better for many of those who have lost jobs or are seeking entry-level positions in trades.

Even lower-level electricians today make on average $48,000 a year. Plumbers make $47,000. That's much more than the average American earns. And those jobs may be more plentiful.

A Wall Street Journal 2010 survey reported numbers that apply today: Accountants and engineers thought that schools played an important role in employer consideration but the numbers were not that overwhelming. For business and marketing majors, the survey appeared to show that the schools were not that important, especially when cost was considered. 

 

That going-to-college myth is slowly shrinking with our Great Recession.(See the Earl J Weinreb NewsHole® comments and @BusinessNewshole tweets.)

Genuine Planning for College

 Are you or your kids really college material and worth the sacrifice of cost and effort?

Be realistic about yourself or any of your children going to college. It’s a major budget-buster that has been tossed about for years in a sea of misinformation. The facts about education, especially college, are about as corrupted as those that surround investing. 

 

They also seriously impact the family net worth, and deserve full family thought, discussion and proper, realistic planning. (See the Earl J Weinreb NewsHole® comments and @BusinessNewshole tweets.)

College Teaching's Poor Quality

Over 4,000 colleges and universities now enroll over 17 million students. College has become a huge growth industry. Unfortunately the industry has also changed and mutated negatively, with far too little oversight of quality.

Colleges appear to be primarily in the business of acquiring students, differing to a degree, only in their approach to marketing.

Some do so as research centers. They may boast professors with science awards and Nobel Prizes. These are very appealing marketing devices. Such esteemed faculty also attract grants and endowments, as well as students. 

 

But that’s a façade and not a teaching-type institution in which to attend.(See the Earl J Weinreb NewsHole® comments and @BusinessNewshole tweets.)

Credit Default Swaps Are Not Villains

Credit Default Swaps (CDS) are back from perdition of 2009 and that’s not bad. Except when politicians in Washington are looking for scapegoats again.

They’re an insurance policy in the event an issuer of a bond or note defaults. They thus come in handy in volatile markets. Credit Default Swaps make it easier to sell bonds and notes because traders are then willing to deal and trade in them to facilitate the bond/note market.

Default Swaps were the type of obligations that became well-known in the past financial meltdown. So they became the targets of official abuse. Underlying causes of the meltdown could be attributed to government policies, as I have noted before, in my comments.

CDS’ reputation got scapegoated. But they are a valid and useful investment vehicle when traded in open markets. (See the Earl J. Weinreb NewsHole® comments and @BusinessNewshole tweets.)

Recap: TIPS Make Little Sense

Inflation has been growing. Rampant inflation is inevitable with our U.S. budgetary habit. As a result, many investors are being lured to the use of TIPS or Treasury Inflation-Protected Securities.

The investment fails to offer enough return on your investment. Judicious use of bonds, using duration principles will give you far better returns.

Furthermore, TIPS owned outside a tax deferred retirement account, such as an IRA or 401 (k), require tax payments for inflation benefits you get. and in the year in which they occur. This applies as well in a mutual fund, whether your investment is in or out of a tax-deferred account. You have to closely check the fund treatments of TIPS..(See the Earl J. Weinreb NewsHole® comments and @BusinessNewshole tweets.)