Media Failure With Basic Economics

                       

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 and has 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 tweets.)

Government Spending and Private Industry Jobs

                       

Unfortunately, government spending does not produce private industry jobs.

It has become a mantra of the left and the Administration. It is Keynes Economics 101. It's 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 mantra over and over, in an attempt to get reelected again and again.(See the Earl J Weinreb NewsHole® comments and @BusinessNewshole tweets.)

Taxation For Social Justice?

                       

Taxes imposed today are not really used to get optimal revenues for the government. They’re used by politicians to get at the so-called rich.

                       

Take the estate tax as an example. The rich use foundations as an escape. But the estate tax is really a means of making it appear the government is evening out the playing field of the economy. 

The tax produces only about $10 billion or so in revenue for the federal tax maw. But it helps the politicians give an appearance it’s for the little guy. Yet, it sees to it that family businesses and farms tend to be sold out to big business to pay the penalties. And it sells lots of life policies to meet the tab, for the insurance giants' gain. (See the Earl J. Weinreb NewsHole® comments and @BusinessNewshole at twitter.)

College is No Job Guarantee

Why the vast majority of folks believe that college education will guarantee a job

is a myth that keeps its life only because of ignorance among the would-be educated.

There’s absolutely no assurance that a college course will prepare you for the basics of a job unless that job calls for a very specific skill taught in schools, such as high technology, medicine and science.

                       

A so-called liberal arts education you can pick up on your own investigations in the library or the internet does not require a degree, nor does it assure the wherewithal to fulfill employer needs. (See the Earl J. Weinreb NewsHole® comments and @BusinessNewshole at twitter.)

Responsibility For The 2008 Financial Meltdown

                       

A book has documented what many observers and I have been saying for the past several years, 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.

                       

A recap is periodically necessary.

                       

Ironically, the 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 friendly to the left-leaning sentiment that has permeated the thinking on the subject.

                       

Morgenson and Rosner have offered critiques of  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 liberal 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 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 tweets.)

Business Men or Stock Traders?

                       

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 once 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 tweets.)

Problems With Mergers and Acquisitions

When corporations announce mergers or acquisitions they give the

reasons why there is the 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 deal. 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. Deals are usually done too fast, and far too often merely for CEO ego satisfaction. (See the Earl J Weinreb NewsHole® comments and @BusinessNewshole tweets.)