Ingrained European Unemployment

Much of Europe is on the edge of bankruptcy amidst its permanent 10%-Plus unemployment. And its experience with younger workers, who do not get counted as unemployed because they give up early on, and are, in fact, permanently on the dole the moment they leave school in their teens.

If they excel at something, it’s in their demand for funds from their neighbors’ taxes. Those neighbors who work.

This is the society many of our left-leaning politicians fail to point to, when they sell us on government-supervised services the Europeans get so “cheaply.” (See the Earl J. Weinreb NewsHole® comments and @BusinessNewshole at Twitter.)

Our Habits Govern Us

No matter what we may learn in school or in the media we stick to what we believe in our hearts. Even when we learn facts which may tell us that our past feelings are incorrect. And what our education or the media may have failed to properly inform us.

All because of poor ingrown habits. Influenced by our political persuasion or prejudices or ignorance. (See the Earl J. Weinreb NewsHole® comments and @BusinessNewshole at Twitter.)    

The Media’s Distaste of Free Market Principles

Few general media reporters, columnists and editors have free market views and 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, Thomas Sowell, Walter E. Williams, among others.

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

Government “Experts” and 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 at Twitter.)

ObamaCare Efficiency Comparisons

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.

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 and tort reform and fraud correction, (See the Earl J. Weinreb NewsHole® comments and @BusinessNewshole at Twitter.)

Americans Ignore the Constitution’s Meaning

I often write about our inefficient schools and how they prove to be a waste of so much 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 one of his columns. 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 that 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. (See the Earl J. Weinreb NewsHole® comments and @BusinessNewshole at Twitter.)

Health Malpractice Courts Will Sharply Cut Costs

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 amounts of lawsuits against providers. And fraud that permeates the system.

The result: The high outlays due to defensive medicine and doctor malpractice insurance premiums.

ObamaCare 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 outsize sums that ordinarily come from ignorant jurists. While seeing that patients are compensated for actual malpractice. The courts would be financed from doctor insurance premiums. (See the Earl J. Weinreb NewsHole® comments and @BusinessNewshole at Twitter.)

World Central Bank Political Independence?

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 surely lost its independence as well. I have commented on this over recent years.

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

Costly College Inefficiency

                  

I revisit college problems and whether many students actually ought to be attending in the first place.

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, and 17% of baggage porters and bellhops have college degrees, along with 15% of taxi/ limo drivers.(See the Earl J. Weinreb NewsHole® comments and @BusinessNewshole at Twitter.)

Deficits Do Curtail Economic Growth

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. The other, privately imposed decision is, however, more likely to conform 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 at Twitter.)             

Misleading Media 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 what executives of a private enterprise would be arrested for.

Right now the unemployment rate is supposedly 7 or so percent. 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 true rate is about 13% and growing.

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 at Twitter.)

Politics the Media Overlooks

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. 

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 at Twitter.)

Polls as Ordered

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

State/City Union Pension Fantasies

One reason why most state budgets are out of control is attributed to union-contracted, public employees pensions.

Unfortunately, the unions continue to feel optimistic about the ability of their pensions to accommodate their coming obligations by earning more on their investments than most experts envision.

Unions find it easy to be optimistic about the future return on investments, far much higher than what most market observers consider possible in the light of our budget deficits and their effects on investment markets. And prospective future inflation.

Government union pension bigwigs entertain lots of false optimism. (See the Earl J. Weinreb NewsHole® comments and @BusinessNewshole at Twitter.)

   

Poor Regulators Under Dodd-Frank

I continue writing about our poor federal regulators, about their actions and how they do everything but regulate what they set out to do.

I have taken particular aim at the 2010 Dodd-Frank Act with its over 250 provisions, with so many countless, unforeseen negative effects.

Such as forcing the banks “too big to fail” to keep adding to capital. This makes them less profitable, when they must be able to attract necessary capital for a thriving economy.

Moreover, it’s foolish when capital cushions can be wiped out overnight whenever you mark-to-market the bank’s assets in poor markets, as in 2008. (See the Earl J. Weinreb NewsHole® comments and @BusinessNewshole at Twitter.)

Aides for a Job Resume

Job resume suggestions generally involve what not to mention. So many job applicants add superfluous information which helps impede the essential message. It’s of course important that everything, particularly your educational background, be truthful.

Topics such as the salary you’re seeking ought to be left off the resume. That question should come up only if the interviewer decides to ask about the subject during the first interview.

Your hobbies can be listed only if they specifically apply to the work you’re to do.

Your photo is not required and is generally left out unless your appearance is a prime aspect of the job. (See the Earl J. Weinreb NewsHole® comments and @BusinessNewshole at Twitter.)        

Government’s Business Management

According to those on the left, government can outperform corrupt “capitalists.”

So we have the perfect example of how government manages to handle business.

Example: General Motors decided to close dealerships after the government took it over. Closed dealers contacted their congressmen and senators, and the orders were then mostly rescinded, by political influence.

Valid business decisions became arbitrary. The exact opposite the administration promised would never happen, when it took over GM control.

Politicians need voters; they cater to voter pressures. That means private industry employees will lose out to political influences.

Business people need profits and do what they must to get them, or they go bankrupt. Bankruptcy resolves problems. Otherwise those difficulties fester for years at taxpayer expense, as they do under government control.(See the Earl J. Weinreb NewsHole® comments and @BusinessNewshole at Twitter.)

Lay Off The Inept Before Essential Police and Firemen

Politicians on the left who are beholden to government unions for political funding and patronage; they have a way of cutting spending.

It’s a favorite resort if you are going to spite those greedy taxpayers who refuse to keep paying salaries and benefits to those who earn more than they do.

The political payback device of the leftists? Lay off or fire the cops and firemen or let the prisoners out of jail.

In a society where the kids are getting dumber each year and only a third are educationally prepared to go to college, why do average class sizes have to remain at about 20 or so students? The small classes are still not working. Why not 40 kids in a class? It was in my youth, and the kids were smarter and better behaved.

And the larger class size with astute teachers would save sufficient educational outlay, while keeping cops, firemen, and criminal vigilance intact.(See the Earl J. Weinreb NewsHole® comments and @BusinessNewshole at Twitter.)

Ethics Teaching in Graduate Schools

Graduate schools who specialize in high-priced MBAs go out of their way to be politically correct and fashionable. To do so, and be PC while charging exorbitant fees, they teach ethics.

In fact, the MBA schools are going out of their way to teach ethics in return for the obscenely, unconscionably high tuition they charge.

Why not teach the subject in high school and undergraduate college? It’s too late to bother if the graduate student has to be taught ethics.(See the Earl J. Weinreb NewsHole® comments and @BusinessNewshole at Twitter.)

Illegal Immigration

You find illegals in states such as New Jersey, New York and Illinois, yet not heavily in states that surround them. Pennsylvania, Ohio, Missouri and Michigan, have them, though not heavily. Nor are they heavily populated in North and South Dakota or Montana. You do not find them concentrated in Mississippi. But next door in Alabama, Louisiana and Arkansas, there are larger percentages.

Would it be social benefits or schooling or legislation? There must be a particular combination of reasons.

Those reasons can be addressed if the state governments truly wanted to correct them.(See the Earl J. Weinreb NewsHole® comments and @BusinessNewshole at Twitter.)

Should European Financial Fiascos Finally Go Bankrupt?

I know this is not not popular wisdom: A Greek or other European financial basket case bankruptcy would probably be the best solution and their populations, and the United States.

It would actually be the best medicine for the world, despite the gloom and doom portents being given. The pain would be severe but short lived. Not much more than what is still festering after the current efforts.

The result would have been the lesson Greece, Europe and the U. S. desperately need; that you cannot avoid living forever on air or the productive energy of other taxpayers. Debtors would learn to tighten their belts today, not down the road, tomorrow.

Bailouts always fail except for politicians in office who keep kicking the solution-can down that road.(See the Earl J. Weinreb NewsHole® comments and @BusinessNewshole at Twitter.)

   

The Media Can Teach Economics But Fails At It

The Dow Jones Economic Sentiment Indicator tries to gauge the U.S. economy by weighing the balance of sentiment in articles published by fifteen major American newspapers. The Indicator analyzes published stories. They look for key words that indicate changes in economic sentiment.

Journalism schools do not teach enough economics. If they have any real economic study at all. Because that would entail a balance of conservative as well as liberal thinking on the subject. The results of the work of their graduates show a deficiency.

About 50,000 newspaper journalists work in the U.S., with thousands of published articles daily, Economics are integral to the news, particularly finance and its relation to politics.

Unfortunately, schools do not teach news balance. Journalists do not know enough to screen what has worked and not worked economically in the past.

And to avoid passing along political nonsense without critical oversight. (See the Earl J. Weinreb NewsHole® comments and @BusinessNewshole at Twitter.)

Government Spending Does Not Makes Jobs

It has become a mantra of the left and the Administration. It is discredited Keynes Economics. Yet it keeps getting repeated over and over.

It does not work. It did not work during the Great Depression. It did not work for stimulus efforts and all other allied spending programs. It certainly did not work for Greece and other failed economies, present and in the past.

But because the concept appeals to the lowest mentalities with no idea of the past, those who also vote, the lame mantra happens to be an extremely useful political tool.

So supposedly intellectual politicians continue to pontificate the Keynesian spending mantra over and over, in an attempt to get reelected again and again. (See the Earl J. Weinreb NewsHole® comments and @BusinessNewshole at Twitter.)

   

Financial Meltdown Facts

I note a book that has documented what many observers and I have been saying for the past several years, confirming our efforts to overcome the drivel on the perceived story behind the financial meltdown of 2008, that the left, abetted by the conventional media blamed on “greedy” bankers.

Ironically, the liberals and left who were chiefly responsible for the financial meltdown, were able to further legislate their failed regulation into the even more questionable, flawed Dodd-Frank Act, naming the bill after two of the legislative actors responsible for the original debacle.

Surprisingly, the book is from a long-time New York Times reporter, Gretchen Morgenson, and the financial analyst, Joshua Rosner, and is titled "Reckless Endangerment." The Times represents the media who I consider particularly friendly to the left-leaning sentiment that has permeated the thinking on the subject.

Morgenson and Rosner have offered their critique on all the participants in the financial mess; the rating agencies, investment bankers, real estate brokers, etc.

However, with Fannie Mae and Freddie Mac and to their political benefactors, mostly  Democrat politicians and organizations, the incentives were always there for more mortgage production, more insider profits, and more party campaign contributions.

The warning signs were there. The admonitions for caution were there. Key members of Congress were in the forefront of waiving off disciplinary warnings.

With a couple of prominent exceptions, the politicians were Democrats claiming to do good for the poor. The supposed idea was to give homes to the poor but the rich got much richer, while the poor couldn’t even afford what homes they got for so little.

Along the way, insiders enriched themselves and their friends, stuffed their campaign coffers, and resisted all attempts to enforce market discipline. When the inevitable collapse arrived, the entire economy suffered,  (See the Earl J. Weinreb NewsHole® comments and @BusinessNewshole at Twitter.)

Business Men as Gurus

The media glorifies many rich business men and women, as business gurus because they happen to have made billions in business. Yet these folks have never really operated a business.

They may have started a business for which they received stock certificates that have become very valuable. But they have never run a business.

The public is duped by the difference simply when they see so much wealth.

I find there is a difference. Yes, some actually have run businesses. Sam Walton who originated Walmart was one. People who opened up and closed the premises, and who did the hiring and made up the payroll.

If you oversee just the stock price and merge companies and buy others, you are a different sort of business person. The public too often makes no distinction, yet hands out the same plaudits.  (See the Earl J. Weinreb NewsHole® comments and @BusinessNewshole at Twitter.)

Merger and Acquisition Problems

When corporations announce mergers or acquisitions they love to give the reasons why there is a premium invariably paid by the acquirer to shareholders of the company being acquired.

After all, there has to be an incentive to sell the business. And sometimes, that premium of the targeted company’s book or operating value can be quite high, well above current market pricing.

One of the main reasons often given for this premium is the alleged value of synergy. That is, the innate benefits to be derived from having the merger. 

However, studies show that synergy frequently is not as beneficial as it’s made out to be. Problems always arise where unexpected, from merging staffs and personalities. And they may not be easily minimized.

It’s difficult to determine who really gets the benefit. I feel takeovers are usually done too fast, and far too often only for CEO ego satisfaction. (See the Earl J. Weinreb NewsHole® comments and @BusinessNewshole at Twitter.)

Unemployment Numbers That Lie

Monthly government unemployment numbers often have little to do with reality. If corporations spewed out such faulty figures they would be hauled off to court and officials jailed.

The media emphasis usually goes along with the official government charade by placing a spin on what you are supposed to make of the raw figures, depending on the political party they favor.

One illustration was the administration’s creation of the “jobs saved” number. When actual “job lost” numbers are the norm. Jobs saved were merely estimates of the “coulda and if” variety, that could not be truly measured.

But worse, unemployment statistics leave out those who have given up looking for work, or are counting part-timers who cannot find full-time work. 

Right now the government is reporting unemployment of about 7% when it’s well near Great Depression levels. And for minorities, it is running much higher.  (See the Earl J. Weinreb NewsHole® comments and @BusinessNewshole at Twitter.)    

Why Reduce Corporate Income Taxes?

The U.S. corporate income tax is too high, in relation to what is being imposed by other countries, many who unabashedly claim to be socialist or who have otherwise managed economies. They definitely don’t profess to have capitalist underpinnings. And I include Communist China.

Yet, they all realize the importance of relatively low corporate tax rates.

The Democrat party in America has a social mantra of “soaking the rich” and the corporation is targeted as rich, though the taxes paid are really a cost of doing business and must be priced into what’s sold.

There is no logic in keeping U.S. corporate taxation as high as it is, when you want to keep American business competitive in global markets and at home.

Suggestion: let American corporate already-taxed earnings overseas come back home, tax free, The funds can be used here. (See the Earl J. Weinreb NewsHole® comments and @BusinessNewshole at Twitter.)

Spending On Private Health Care

Much is made about how much Americans spend on health care, compared to others; the French, as just one example.

We spend about 16% of the GDP on health-related services. It's perfectly acceptable to do so, if we get the best care available. 

Provided it’s not directed and controlled politically by the government. That is when mismanagement sets in, as it has whenever government runs any business or service,

But while the French spend about $6,000 per household less on health care, they get far less in services and quality than Americans do, a fact that proponents of ObamaCare never disclose, (See the Earl J. Weinreb NewsHole® comments and @BusinessNewshole at Twitter.)