Economy

Financial Crimes

Mark Noonan15 Comments

The Game Stop scandal once and for all exposed just how corrupt the financial system is. The bottom line is that regular folks simply outwitted the Experts and the Experts, rather than take the loss and learn the lesson, called on the power of major corporations and government regulators to squash the regular folks. They do want us to take our savings and dump it in the market, but they don’t want a million of us, each using our $1,000.00, to do what they do all the time – manipulate stock prices for personal benefit.

This was also a rare moment of unity where everyone from Commies to MAGA were united in their outrage. Naturally, most solutions proposed for this are ineffective. I’m still in favor of breaking up all large corporations and confiscating all personal wealth above $5 billion (the proceeds to be distributed by lottery to American citizens in $100,000.00 lots). But even the Commies aren’t in favor of that. So, as we won’t actually solve the problem, a few other proposals.

  1. You can’t sell stock you don’t own (they really do this).
  2. The additional capital gains tax on a stock held less than 24 hours is 90%. Less than a week, 50%. Less than a month, 40%. Thirty one days or longer, no additional penalty. The idea here is to get people to be investors, rather than gamblers.
  3. Corporate boards are responsible, civil and criminal, if financially critical corporate information leaks before public announcement (this to hamper insider trading; don’t go after the guy who acts on a tip – go after the tipster).
  4. Shares of corporations bidding for government contracts in excess of $10 billion cannot be traded until after the contract is released. Once you start the bid process, no one can buy or sell your stock (this to prevent government people from insider trading).
  5. No bail out, ever, for any financial corporation. Sink or swim.
  6. No corporate executive can become a government employee until five years after leaving corporate employment. No government employee can become a corporate executive or board member until ten years after leaving government.
  7. Corporations with a market cap in excess of $1 billion cannot donate to political parties; pay speaking fees; employ spouses, siblings; children, grandchildren, parents, first cousins or in-laws of government officials

I know we’ve all defended free markets – and, in fact, we still do. But the reality is that we don’t have free markets. We have a quasi-feudal, bastard child of Capitalism and Socialism. The economy isn’t for GDP. It isn’t to get rich. It isn’t to provide a tax base. It is to allow one person, working hard and living frugally, to support a family and leave a legacy for children. Anything that is not geared towards that is bad and must go. Until we wake up to the fact that the system, itself, has to go, we really won’t get anywhere.

Thinking About Ships

Mark Noonan6 Comments

The Trump Administration has forced a Chinese company to sell its ownership stake in the Port of Long Beach. This is good, but it got me thinking for a bit about the sad state of America’s merchant marine. Not counting nations like Panama because lots of ships are registered there for tax purposes, the bottom still is that our merchant marine is pathetically small. There are both national security and economic issues at stake here. We need a large merchant fleet because during wartime we’ll instantly need a large number of experienced mariners, as well as a large sea transport capacity. We also need a large merchant fleet because having such gives us the benefit of our control of the seas (right now we keep the sea lanes open for everyone else), maintains a large shipbuilding industry vital for war and, of course, provides a large market for American-made products which go to make up ships.

Our Libertarian friends are going to hate this, but if building up and maintaining a large merchant marine requires protectionism, then that is what we’ll have to do. I’d make it that imports into the USA are taxed at a 25% lower rate if they are carried in American-flagged vessels. 50% lower rate if they are American-built, American-flagged US ships. 75% lower rate if 50% of the crew of that American-built, American-flagged ship is American citizens. I’d make it that all trade ships entering US ports must pass American inspections both as to seaworthiness and the training of the crews (I’m especially interested in the cruise trade here…how many times do we see cruise ships going dead in the water?).

I also believe that if we wanted to, we could build ships of higher quality than any other nation on Earth. Ships that will move faster, be more seaworthy and be cheaper to operate. We are Americans: we can do whatever we want. All we have to do is set our mind to it.

Tariffs

Mark Noonan41 Comments

They are bad! Evil! No good! Or, so we’re told – they are at tax on consumers to benefit corporations! They stifle competition! They caused the Great Depression! Yadda, yadda, yadda. I used to believe all that. Seriously. Bought it hook, line and sinker. But over the past 10-15 years, my views have modified.

Britain was the first nation to really go for free trade. They enacted it in the mid-19th century in service to the Liberal view that the freer the market, the better for everyone. There is, of course, much to be said for this: certainly the “Corn Laws” which the British Liberals got rid of were a horrible anachronism which kept food prices for the poor high just to provide a higher profit for rich landowners. But the dogmatic idea that free trade is always good is, in my view, flawed. And I think the experience of Britain proves it.

Right about the time that Britain went for free trade, it was the economic powerhouse of the world. No one could compete with British manufacturing. If you wanted something, you pretty much had to buy it from Britain. In comparison, the manufacturing capacity of the United States and Germany at the time was negligible…while nations like Russia, Japan and France didn’t even really count in the global marketplace. The introduction of free trade did seem to work. Food prices dropped like a rock as cheap, American grain flooded into the British market and Britain’s economic dominance continued for some time. Until, that is, right around the mid-1870s. At that point, the Germans and especially we Americans started to rapidly overtake Britain economically. This shifting of economic dominance was temporarily obscured by the fact that Britain remained until after World War One the financial center of the world – with vast investments, especially, in the United States, Britain’s financial dominance continued unchecked…but in things like coal and steel production, Britain was rapidly feeling the pinch of growing American and German competition. And it was competition from German and American manufacturers who were still protected by tariffs.

The United States kept high import tariffs in place from the Civil War until after World War Two. There were fluctuations, but they were vastly higher than anything we impose today. In some periods of time, ten times higher than they are today. During the time of high tariffs, the United States went from an economic backwater to the economic master of the world. Trouble is, tariffs went into bad repute in the United States because a high tariff enacted at the start of the Great Depression was blamed for deepening and lengthening that economic blight. And, truth be told, it might not have been helpful to impose that tariff at that time. But, really, I don’t think the tariff made the Depression any worse. What I honestly think people miss when discussing the Great Depression is that a combination of war and disease had knocked out of the global economy about 20-30 million young people who would have been both highly productive and who would have also greatly increased demand…no just in themselves, but in the children they would have had. That sort of hole in the economy was going to cause a major problem eventually. In 1929 it did – but years before then, Britain was already mired in Depression and Germany was only kept afloat by loans from the United States (loans made possible by the massive amount sold by the US to the Europeans during World War One).

In the end, I think it is a mixed bag, as is usual in human affairs. Dogma is for theology and not much else…and Free Trade is a dogma who’s time has come and gone, in my view. In general, you do want a free flow of goods, ideas and people. The nations who trade the most tend to do the best because of the cross-fertilization of ideas and methods which results from that trade. What our Progressive friends call “cultural appropriation” is, in reality, how people develope and expand. The more streams of ideas which flow into your nation, the better off you’re likely to be in the long run. That said, there is also the other side of it: the absolute requirement that a nation, as far as possible, remain master of it’s own destiny. It is simply asinine to think that the United States is better off if a majority of, say, our steel making capacity is outside the United States. At the end of the day, we can’t rely on anyone but ourselves…and so we must have the capacity to take care of ourselves in an emergency. And that means we have to retain sufficient productive capacity to do so – and if that means we have to ensure that some level of American production remains via Protection, then that is what we must do.

You see, the economy is not just a number…it isn’t just how much money is flowing through the land. This is especially true now that we use fake money rather than gold and silver backed currency. The economy is what we do to make a living – what we eat, wear, drive, live in. We are 317 million people and in the final analysis we must retain the ability to survive without importing a single thing if necessary. It won’t do us any good to have a bank account fat with fake money if, when a war comes, we can’t produce enough steel to build the ships and tanks we’ll need to fight and win.

We have to strike a balance between the good of having trade and the good of having the ability to take care of ourselves. There is no “right” answer here. What works may change from time to time and we have to remain flexible. To just Protect a dying business is stupid…but to Free Trade ourselves to the point where our business is dying is equally stupid. I think we need to adjust how we measure our economy – throw out the GDP measure. Let’s measure what we make, mine and grow at home. That will tell us how we’re doing. If in Year X we’re producing 10 million tons of Good A, but we find that in Year Y it has declined to 5 million tons, we should look into why. Is it happening because we’re using less of it? Or is it because we’re now importing 5 million tons of it? And then we have to ask ourselves: in any emergency, how much of this stuff do we need to produce? On the flip side, if we find we’re producing 10 million tons but consuming 20 million, we should look into whether or not our tax and regulatory policies are harming our production or whether its a matter of we’re doing all we can and just can’t meet demand via domestic production. That sort of thing will tell us what needs Protection and what needs Free Trade.

The main thing is to not lock ourselves into a Dogmatic view of these things. We need to look at this in the largest sense of what is overall best for us – not for the world; not for the bankers and the mega-corporations…but what is best for us; the people who have to make a living off the economy.

Find the Jobs

Mark Noonan36 Comments

Here’s a story that is bound to bring a smile to Conservative faces: Progressive pizza shop that tried to pay fair wages (as defined by Progs) goes out of business. And, yes, reading it you can see the utter silliness of Progressive thinking. But what isn’t being noticed is, in my mind, the most important thing: the Progs are trying to gin up $15.00 an hour jobs out of $5.00 an hour jobs because they cannot see other types of jobs.

A Progressive sees things like “lawyer”, “professor”, “community organizer” and says, “hey, what great, well-paid jobs!”, while also realizing that not everyone is cut out to be such…but they have to do something, right? So, $15.00 an hour for making pizza. But is it any better on the right? Not really – most on the right also don’t see any jobs but the sort of jobs they know about…and if you can’t get them, well, to bad, so sad. This has the benefit of not stupidly believing that a pizza slicer can make $15.00 an hour, but it has the drawback of not having any sort of $15.00 an hour job for average folks out there. A bit of a shift in understanding is required.

In 2015 (the most recent year I can find any numbers on), the United States consumed 132.8 million metric tons of steel. In that same year, the United States produced 78.9 million metric tons of steel. Do the math and you can see we imported 53.9 million metric tons. The American steel industry has been operating for some years now at about 70% of capacity. What can we get from this?

1. We produce a lot of steel.
2. We can produce a lot more steel, even without building more plants.
3. We import a lot of steel.
4. Given how much we use, there is clearly a massive market for steel.
5. Given that we do produce quite a lot of it, we can make steel profitably.

So, if we use that much steel and we can make that much steel at a good enough profit to justify making steel, why do we import any steel, at all?

Right now, a steel worker makes a bit more than $20 an hour. Not a bad wage. Given that we import 40.58% of our steel, it stands to reason that we can employ a very large number of additional people making steel at $20.00 an hour. It also seems to me that figuring out a way to boost American steel production is a much better way to provide better wages than to either ignore the problem (as the right mostly does) or to demand that burger-flippers get paid near-steel industry wages (as the left stupidly demands). Do keep in mind, this is just talking about steel workers – but steel is made of things like iron and coal and a host of other materials that have to be produced, refined and shipped…all jobs that, also, pay more than burger flipping and which are clearly profitable industries in the United States because we already do them at a profit.

I’m sure the answer is varied for why we don’t. Our tax policies are insane. Our regulatory policies even more so. We allow foreign producers to dump their product on our market because our investor class has a vested interest in high profit margins on their overseas investments. We have environmentalists going nuts over any sort of productive activity. We have upper class twits who don’t want dirty industries anywhere near them. On and on like that – but we must cut that all out. If you want to see the future of America, think of it as 150 million welfare bums, hooked on drugs, sitting around while Progs “fight for 15” and Conservatives write another article about how great free trade is. Unless, that is, we find a way. Just do it – there’s a way to get the United States not only producing the 132.8 million tons of steel we use, but also exporting an additional 100 million tons. Don’t tell me it can’t be done – it can be done. It already is being done…and if it isn’t being done in sufficient volume to employ every single American in a well-paid job, then it is simply because we’re preventing it from happening.

Dogmatic Adherence to Free Trade is Wrong

Mark Noonan5 Comments

For all my adult life I’ve seen the arguments against any sort of Protectionism – and since the rise of Donald Trump, just more so. I understand fully the argument – the free flow of goods, capital and people tends to work to the benefit of those nations which allow such free flow. This is pretty obvious – the more we allow people the freedom to move about and do as they wish, the better, overall, things are. No one will ever be able to construct a rational argument in favor of just locking everyone out (and everyone in). But this does not mean that there is no argument to be made for Protectionism.

In 2015, the United States produced 79 million tons of steel – not a shabby number. But that number was 35 million tons less than in 1967 and wasn’t quite 10% of China’s 2015 production. The fact that China is producing north of 800 million tons of steel does indicate there is a large market for steel. In fact, the United States just in November of 2016 (ie, last month) imported a bit more than 2.2 million tons of steel. You can rely on it, that come war-time (real war – World War type of war) we’re going to need more than the 79 million tons of steel that we currently produce…and while I haven’t been able to find a break down of just where that 2.2 million tons in November came from, how much you want to bet that a very large portion of it came from China? You know – the nation we’d most likely find ourselves opposed to in a major war. I’m sure there’s some slack in our steel mills; I’m sure, that is, that we can ramp up production. But, how much? How fast? Of what types? How fast, to get down to nitty-gritty, can we increase production of ship and tank armor? A big war means we’d need a lot of tanks and ships. Could we build them?

I bring this up because, first off, steel isn’t something that most people think about – but the world produced nearly 1.6 billion tons of the stuff in 2015. It is a gigantic part of the global economy. And steel is the finished product. You’ve also got to add in all the coal and iron mining and a host of other feeder industries which are in existence just to get you that new car…or that new tank, depending on your need. Our elite leaders like to think in terms of the hot, new technological application – they don’t even think about things like how much steel we have, or how much we might need in an emergency. I also doubt they think of things like corn production, copper mining, finished lumber products…the things which are actually necessary for a functioning economy. A cool new ap to tell you how to get to the grocery store is fine, but it isn’t a necessity. When push comes to shove, you’d better have lumber, and corn, and steel.

I’d like to point out that for all the horror stories of how the Smoot-Hawley Tariff destroyed the global economy in the 1930’s, there still is the fact that the United States rose to economic dominance in the world while we lived in a Protectionist regime. We didn’t become a Free Trade citadel until after World War Two. I also note, with great care, that it was after World War Two that our domestic industry got smacked by global competition. There was some good in that – let’s face it that American cars were becoming pretty lousy until foreign competition forced domestic auto makers to improve. On the other hand, domestic autos were improving massively from the early part of the 20th century until the 60’s. Perhaps the fact that we wound up with the Big Three automakers had something to do with our hidebound auto manufacturing in the 1970’s? If lack of international competition is bad, then lack of domestic competition isn’t all that great, either.

But I also have never fully bought the notion that tariffs caused or prolonged the Depression. Just as I never bought the Progressive idea that rampant Capitalist greed brought on the Depression. I’ve figured for ages that everyone looking at the Depression was ignoring the elephant in the room: World War One and the Spanish Flu epidemic. Ten years before the Depression hit the United States, the world had just finished up slaughtering 10 million fit, young men in war. Add to that the 10 to 20 million fit, young men and women who were laid low by the Spanish Flu in the immediate aftermath of World War One. Add in things like the massive market for manufactured goods in Russia was gone (blasted away by war, civil war and Stalin’s determination to industrialize Russia via slave labor rather than foreign investment); the fact that there was a massive over-capacity in manufacturing (a lot of hot-house manufacturing capacity was built during the war), the fact that rather than building armies and navies the world was rapidly shrinking them and you get a situation where there was bound to be an economic contraction. Just in terms of the fact that upwards of 30 million young people weren’t placing demands on the global economy – weren’t having children, etc – because they were dead and you just know that there had to be a readjustment of the global economy. A readjustment which was bound to be painful – and which wouldn’t be ended until global population was substantially higher than prior to World War One.

The main thing here is to not look for a main thing – it was a host of factors, almost all of which were entirely out of control by anyone, which caused the Depression. Tariffs didn’t kill the economy and free trade wouldn’t have restored it. The economy, as a thing, is that which provides for the needs of the people…and if you suddenly lose 30 million of your most productive (and highest demand) people, you’re going to have a problem. Period. And that brings me to my point: a dogmatic assertion that Free Trade is always best is as asinine as a dogmatic assertion that Protection is always what is needed.

What is needed is a bit of thought – and thought coupled with an understanding that there are no neat and tidy economic prescriptions which will cover all eventualities. In general, Free Trade is good. But in the specific, we need a very large capacity to produce goods here at home – both for our own long-term economic well-being, but also in case of emergency when our trading partners are either at war with us, or simply not able to send us the necessary goods because of the stresses of war.

The most important thing, for me, in looking at the economy is to look to the needs of our people both in war and peace. What do we need to have? Do we have it? If we don’t have it, how do we get it? There are lots of things which will go into answering those questions – perhaps we just need to adjust our tax rates? Reform our regulations? Work out better trade deals with our trading partners? But, also, just perhaps – maybe we need to throw up a few tariffs in some crucial areas to make certain that we have the capacity to look after ourselves at need? As a Catholic, I’m big on Dogmas – you can check out the Catechism of the Catholic Church if you want to start running through them. But all that has, ultimately, to do with the one, immutable thing in the universe: God. Outside of God, everything is a bit fungible, to one degree or another. A low tax, low regulation, Free Trade economy is generally the thing you’re searching for…but it won’t do us the least bit of good to have low tax rates and no ability to feed our people by our own efforts in a crisis.

Don’t get hung up on hard-and-fast rules. Seek for what is best. Be willing to experiment. If one thing doesn’t work, try another. If we try to make dogmas out of transitory economic events, we’re just going to get burned. Remember, once upon a time it was said “what is good for GM is good for America”. Not quite like that any longer – in fact, an argument can be made (and has been made) that if GM had gone defunct in 2009, we might be better off. I think we would have been – because it’s not like no one would pick up the slack on auto manufacturing if GM went belly up. Someone was going to take over the famed names owned by GM and make new cars…and perhaps better cars for a lower price. Holding on to things like corporations just because they’ve been around for a while is silly – but just as silly as holding on to a notion about Free Trade which isn’t really supported by the facts of history…nor by the needs of our nation.

Kevin Williamson to Working/Middle Class: Go Die in a Fire

Mark Noonan11 Comments

Saw this excerpted at Hot Air earlier today and I was astounded by it. I wanted to get the whole article from National Review, but something was screwy with the website and it wouldn’t take my 25 cent payment for it, so I have to go on what is quoted rather than being able to read the entire article. At all events, Kevin Williamson over at National Review has this to say of the sort of people who are backing Trump – and how they view the world:

It is immoral because it perpetuates a lie: that the white working class that finds itself attracted to Trump has been victimized by outside forces. It hasn’t. The white middle class may like the idea of Trump as a giant pulsing humanoid middle finger held up in the face of the Cathedral, they may sing hymns to Trump the destroyer and whisper darkly about “globalists” and — odious, stupid term — “the Establishment,” but nobody did this to them. They failed themselves.

If you spend time in hardscrabble, white upstate New York, or eastern Kentucky, or my own native West Texas, and you take an honest look at the welfare dependency, the drug and alcohol addiction, the family anarchy — which is to say, the whelping of human children with all the respect and wisdom of a stray dog — you will come to an awful realization. It wasn’t Beijing. It wasn’t even Washington, as bad as Washington can be. It wasn’t immigrants from Mexico, excessive and problematic as our current immigration levels are. It wasn’t any of that.

Nothing happened to them. There wasn’t some awful disaster. There wasn’t a war or a famine or a plague or a foreign occupation. Even the economic changes of the past few decades do very little to explain the dysfunction and negligence — and the incomprehensible malice — of poor white America. So the gypsum business in Garbutt ain’t what it used to be. There is more to life in the 21st century than wallboard and cheap sentimentality about how the Man closed the factories down.

The truth about these dysfunctional, downscale communities is that they deserve to die. Economically, they are negative assets. Morally, they are indefensible. Forget all your cheap theatrical Bruce Springsteen crap. Forget your sanctimony about struggling Rust Belt factory towns and your conspiracy theories about the wily Orientals stealing our jobs. Forget your goddamned gypsum, and, if he has a problem with that, forget Ed Burke, too. The white American underclass is in thrall to a vicious, selfish culture whose main products are misery and used heroin needles. Donald Trump’s speeches make them feel good. So does OxyContin. What they need isn’t analgesics, literal or political. They need real opportunity, which means that they need real change, which means that they need U-Haul.

If you want to live, get out of Garbutt.

I don’t know quite where to begin with this from a man who, to this point, has been one of the more intelligent observers of politics. Garbutt, for those who don’t know, is a small town in upstate New York. It’s main product in the past was gypsum – a material used in such things as plaster and drywall boards. Williamson’s point is that it is the fault of the people of places like Garbutt that their lives are miserable. They were morons who didn’t realize you can’t make a living out of gypsum and so should have just moved somewhere else and learned a new trade…like, I guess, moving to New York City and becoming investment bankers, art critics or, well, writers for major national publications. Here’s the thing, though: China produced 132,000,000 metric tons of gypsum in 2015. I have a guess that China would not produce that much gypsum if there wasn’t a market for it. Meanwhile, the United States produced a mere 11,000,000 metric tons of the stuff in 2015…but there lies the tiny town of Garbutt, sitting atop a mountain of gypsum and no one is mining it. Garbutt could be a fine, prosperous community based upon gypsum mining but for some reason we just don’t mine it there any more.

The exact why of it all is beyond my immediate knowledge. I’m sure it was a slow decline of the industry over time and a host of factors provided the reasons for the decline. Could have been bad business practices. Maybe labor troubles played their role. The mining companies might not have installed the latest and most efficient means of mining. Wouldn’t be at all surprised if taxes and regulations made it increasingly difficult to mine at a profit. But I’ll also bet that our various “free trade” agreements opened up our gypsum market to foreigners who sweat their labor and don’t give a darn about worker safety or environmental concerns. But whatever the reasons for the cessation of mining in Garbutt, we should be working to restore it – we use gigantic amounts of gypsum in the United States every year and as we clearly have lots of gypsum in our soil, it is pure idiocy to not take advantage of what we have. Why send our wealth to China for something we can obtain right here at home? And don’t try to lay on me a bunch of globalist nonsense about how China’s gypsum has to be cheaper and it is the mere workings of the free market which dictate gypsum comes from China and Garbutt becomes a dead town. It isn’t the blind hand of market economics which makes this happen – but the warping of economic life by government policy that does it; and warping which is often as not done at the behest of big business which isn’t at all interested in wise policy but in just getting a slightly larger profit.

Because we do, as a matter of fact, produce gypsum in the United States. Nevada produced just under 2.3 million metric tons of the stuff in 2014, representing a 40% increase over the year before. Clearly, good profits are available within the United States in gypsum mining. The conditions which allowed Nevada to produce that much gypsum could obviously be duplicated in New York – but they aren’t. Those jobs are gone, boys, and they ain’t coming back – so goes the old Springsteen song and so go plenty of people in the United States…curiously enough, it is always people who don’t do the jobs that ain’t coming back who assert in forthright terms they ain’t coming back. I wonder if we advised Mr. Williamson that his job is being sent to a guy in China who will do it for 40% of Williamson’s wages how he’d feel about it? After all, I’m sure we can get plenty of Chinese who are just as willing to tell large swaths of the American population they are just miserable failures. It’s just economics, Williamson – the blind hand of a completely free market, you dig?

But what about the immorality Williamson notes? True, our moral failures are all our own. We are created by God with free will and everyone is ultimately responsible for their own choices in life. But it wasn’t the people of places like Garbutt who demanded sex, drugs and rock and roll. That demand was created in places like New York City and Los Angeles by bored, rich people who wanted to spice up their dead, empty lives – and woe to anyone in Garbutt who even made a peep about not wanting it in their community. It is a curious thing we’ve seen for well more than a century – the least eccentricity of the rich must become a requirement among the poor. The rich wanted to live in Babylon, and so everyone must live in Babylon as well. Can’t have some rich guy being held up to moral censure, right? So, the vices a rich man can afford because of his wealth must also become vices among those who can’t afford them, at all. Think of it – the Hollywood producer who puts out pop culture garbage which glorifies bad choices can afford to send his drug addicted son to rehab and bail him out of jail time and again…but the poor slob in some small burg? Can’t do it – his son dies of a drug overdose, or becomes a serial jail bird. But let’s not have any nonsense about calling the purveyors of popular culture to account. After all, no one will want to censor it – but it’s not even that; we can’t even call it wrong to do…that would make people feel bad and, worse, it could lead to a drop off in sales of popular culture products. That, of course would be the worst possible thing – a lowering of profits in the corporations making the product.

Understand this – the support for Trump is precisely among those who have been victimized by a system they don’t control. No, there isn’t a Conspiracy making it happen – just rank immorality, as is always the case when things in human life go wrong. A host of factors have all played their role in destroying communities both economically and morally – and our job is not to arrogantly say, “too bad, so sad” but to identify where we went wrong and then fix it. It is not stupid to want small and mid-sized communities of hard working people. It is the only thing a Conservative should want, for crying out loud. What the heck does Williamson want to conserve? Manhattan? Sweated labor and bribery in the People’s Republic of China? What? Trump is, as I’ve said again and again, no answer to anyone’s problem but he or someone like him will continue to garner support as long as people who should have answers don’t provide them. And as 2016 has gone on, I’ve come more and more to the conclusion that a very large number of people on the alleged right don’t even want to try for an answer – they’ve got swell lives as it is and don’t want to rock the systemic boat which allows them to maintain their swell lives. But grab a clue – there are many, many more millions of people who are shut out than doing well…their numbers grow. Many of them have been suckered into voting Democrat because at least the Democrats say they care…but even that is wearing thin. Trump likely won’t get anywhere, even if he did manage to win the White House but if we on the right don’t start thinking about how to fix this broken nation then mark my words, some sort of authortarian dictator who says he or she will fix the problem will gain majority support in the United States.

And fixing this broken nation means, precisely, finding dignified, profitable work for people who are now out in the cold…and not just in dead mining communities like Garbutt, but in the hollowed out cities like Detroit. People don’t want to live without hope – either we give them real hope, or a tyrant will give them false hope. You can say all you want that the feeling of betrayal by Trumpsters and BLM people is based upon falsehood. It doesn’t matter – it is what they believe. And, truth be told, even if the over-arching narrative such people have is false on many points, it is based upon a true enough situation. A working or middle class African-American man can easily feel that the system is against him; that the cops are unfairly targeting him; that he can’t get out from underneath a byzantine set of laws. A working or middle class white man can also feel that the system is against him; that his job was sent to China for no good reason; that Corporate and government bosses are living high while he’s left with scraps. The two men live it, every day – telling them they are wrong to even think that way just insults them.

I think our best bet is to go to people where they are – listen to them, acknowledge their grief and propose solutions to the problems they think they have. I was out and about among the people today – just regular folks at the swap meet. Working people; people with families to support. If I’d been taking a poll, I bet I would have found two men who would be spoken of most highly among these people: Donald Trump and Bernie Sanders. Neither Trump nor Sanders are what these people need – but they are what these people are going for, because no one else is even giving them the time of day. What’ll it be, folks: leave these people to demagogues who will use their rage as the path to personal power, or will we step up and provide them something better? It’s our choice, for now. Very soon, if we do nothing, it will be taken forever out of our hands and we’ll just have to endure what is chosen with no reference to us. One thing is certain in my view, if we just yell about how stupid they are for believing as they do, we’re going to lose.

UPDATE: After I had written this and pondered it for a while, it occurred to me just what I was trying in my very poor way to say – and then I recalled where I had read it before. Below the fold you’ll find it:

Continue reading →

I Think I’ve Figured This Out

Mark Noonan3 Comments

On Wednesday I was driving around and I had on the radio the Rush Limbaugh Show. I don’t listen too often because, well, Rush usually doesn’t tell me anything I don’t already know; his opinions that I agree with are already internalized and those I don’t agree with never shake me from my views. But, there he was, happily talking away. And then he said it – he asserted that it is absurd to think that we can get Apple to return I-phone manufacturing to the United States…I can’t remember the exact words, but it was something along the lines of there are 500,000 people working for Apple in China with a built infrastructure for the entire manufacturing process and we just can’t duplicate that in the United States. It infuriated me to hear anyone say that the United States can’t do a thing – and then later that day I happened to run across several other people making the same assertion. And said assertion is nonsense.

I know – labor costs. I realize that China pays it’s workers nearly nothing. I also realize – though our Capitalist Captains of Industry never like to mention it – that to do business in China requires massive bribery…but with that bribery you can pretty much do as you like. No need to trouble yourself too much over environmental regulations, safety measures or other trivia like that. But even with that, I just don’t buy the notion that you can’t make something better and cheaper in the United States.

Go to a hardware store and look for a hammer – I’ll bet dollars to donuts that almost all you find are made in China. What is a hammer? Just a piece of steel fashioned in a certain shape. It isn’t rocket science. It isn’t a complex device. I defy anyone to tell me that we can’t replace that Chinese factory using 500 workers to make hammers with a factory in the United States employing 50 workers in a highly automated manufacturing system…and by using our ability to automate along with our superior infrastructure to make that hammer cheaper than the Chinese can, especially as they then have to ship it thousands of miles before it even arrives in the American market. Oh, I realize that right now – at the moment – we can’t because our tax and regulatory system makes it exceptionally difficult to build and open a factory. But don’t tell me it can’t be done. It darn well can be – as soon as we want to do it. It just takes the political will to say “screw you” to people raking in profits off of sweated Chinese labor.

And thinking all that over, it occurred to me – there is the appeal of Trump in a nutshell. Lay aside for a moment the nauseating racists and anti-Semites who have latched on to him, solely on the strength of his early immigration comments. Such people are numerous, but not all that much – remember, we live in a nation of 317 million people, if even 1% of them hold to a particular view it can seem like a lot – especially with Social Media to magnify their voices (Twitter seems gigantic, until you realize that every day 83.31% of Americans don’t use Twitter, at all). A guy getting Trump’s vote totals – and goosing up GOP turnout numbers to some-times record levels – isn’t getting that because a few people like his Great Wall of Trump idea. He’s getting that level of support because a lot of regular folks are moving his way. And my view is that they are turning out for him because he says we can be great.

Keep in mind when someone says, “those jobs aren’t coming back”, it is invariably someone with a well-paid gig that isn’t affected by jobs moving to China. Lawyers, bureaucrats, corporate executives, consultants, MSMers, professional politicians…it is that sort of person who tells the blue collar slob that his blue collar job is gone for good…and even if he takes a job at Disney at 60% of his previous factory wage, he’ll have to train a foreign replacement, brought in quite legally via the H-1B visa program. Meanwhile, China doesn’t seem to want us to outsource our army of consultants and lawyers probably because the Chinese are smart enough not to want such people in large numbers lawyering and consulting an economy into ruin. An army of experts will rise to ridicule the idea that we can make things in the United States better and cheaper than foreigners can – and I’ll bet not one in a thousand of the people telling us such things have ever made one thing in their whole lives. And the people who do make things are rather angry that they are reserved for the “short end of the stick” portion of American life.

This is the United States of America! We’re the people who in just over a century rose from a colonial backwater to the most powerful nation in human history. We went to the Moon! And someone is going to tell me that this nation that did all that can’t make a hammer? Can’t even make a belt or a pair of shoes? Nonsense! It is our economic policies which have priced American manufacturing out of world markets, not some fundamental inability of Americans to compete. And let me tell you, if you really hold the view that we can’t out build and out compete every nation on Earth, then we might as well close up shop as a nation – allow ourselves to be annexed by some other nation with a bit more grit and determination. Grab a clue – a nation which can’t make things eventually can’t buy things, either. American consulting isn’t going to be enough on the global market to satisfy our demand for consumer goods, folks – in order to continue to get, we’re going to have to give. For 50 years we’ve just been giving money – magically printed up for the occasion by the Federal Reserve…but eventually you can’t print enough money to convince people to provide your needs and desires. Eventually they will want something and your degree in business management won’t be it.

I have been saying for a while now that the way to beat Trump is to out-Trump him – not in the vulgarity, but in the gut…where people live and feel. People who back Trump rather absurdly believe that Trump is on their side even though there is zero evidence that he is actually on their side…but he’s saying he is, and it is working with large numbers of people. So, beat him at it – say you’re on their side, as well…assert that the United States will be the manufacturing leader of the world; the export leader of the world; the agricultural leader of the world; the mining leader of the world; the energy production leader of the world…that we’ll clear out of the way every last tax and regulation which makes it hard for Americans to build and grow. Leave it to the Democrats to tell their voters that they’ll manage the decline and provide a bit of welfare and job training for non-existent jobs…we take the path that says, “we’ll reform things so that there will be X Million new manufacturing jobs by 2020”.

Of course, results will matter – once you promise, you’d better deliver. But if all you’re promising is low-rent stuff like “improving opportunity” then you’re not saying anything at all. What is “improving opportunity”? It is a meaningless phrase which makes it sound like you’re going to do something, maybe. Tell people you’ll bring the jobs back from China and it sounds much more vigorous…and as you’re not Trump, you can actually come up with some plans which will do just that. Part of our problem, of course, is that Rubio and Cruz are both lawyers…lawyers have a hard time understanding regular folks (so, too, do real estate tycoons like Trump…but somewhere along the line he found out that people at least want to hear that something concrete is going to get done for regular folks which doesn’t amount to a government poverty hand-out). Come on, Ted and Marco – think about it! And then go out and say it. Sure, those invested in the current system will rise in fury and scorn over any promise to bring jobs back…but you can see how much such words work regarding votes. And you guys needs some votes – the only way to really stop Trump is to get more delegates than he does, and time’s a wasting.

Anyways, that is how I see it right now – Trump is at least speaking to desires; Rubio and Cruz are speaking to theories and playing around with “vote for me because Trump sucks”. That won’t do the trick…might deny Trump a first-ballot nominating majority, but it won’t actually stop him, nor get either Cruz or Rubio in to the White House.

So, How’s That Whole Economy Thing Working Out?

Mark Noonan12 Comments

I think we’ve all wondered just how long an economy built on fake money and debt can keep going – we may be about to find out.

Forget about the stock market slide for a bit – at any rate, it might shoot up 500 points tomorrow on a rumor that the Chinese central bank is going to print up 67 trillion-zillion Yuan. But there are some things which make you wonder about how things are going:

Walmart is going to close 269 stores. Of course, they also plan to open some stores – but it will be a net reduction in Walmart locations in 2016.

Conveniently after the market closed, the Fed estimated 4th quarter 2015 growth at a mere 0.6%.

Empire State manufacturing drops to a low not seen since 2009.

GM/Ford credit risk is pretty high.

Corporate earnings are not exactly what you’d like them to be.

Sports Authority decided they’d rather not pay their debts right now. The energy isn’t right, I guess…

And, a house which has sat empty in San Francisco since 2000 and has holes in the roof and fire damage is listed for $600,000.00.

If all of this – and there is plenty more out there – doesn’t give you a whiff of 2008, then I don’t know what will.

To be sure, I’m ready for some magical trick of debt and fake money to pull us through at least until the day after Election Day. The Powers That Be have managed to keep this ball in the air for seven years and I’m not at all certain they don’t have more in their bag of trickery (though getting unemployment down to 5% by magically removing people from the labor force appears to have gone as far as it can…to get it to 4.5% would take some really interesting “calculations”). But the fundamental problems remain:

1. We have far more debt – personal and government – than we can repay at the moment. This is because

2. We don’t make, mine and grow nearly enough to pay for our debts and current operating expenses and

3. Far too many people are out of the productive economy for the productive economy to support.

Eventually, it all goes smash. Whether it happens this year or next or in 2019 or what have you is immaterial – it will go smash unless and until we radically alter how we do business. We need to balance the budget (it could be done in under five years from any day we say, “go” on); we need to remove the taxes and regulations which prevent full exploitation of America’s vast resources; we need to make welfare far more inconvenient than working (and thus force people back into the productive economy if they are in any way capable of participating). All of these things are currently impossible – because the political class in power doesn’t want to do it. And they don’t want to do it because doing it would remove the need for, precisely, the political class in power (ie, politicians who “solve” problems and “do the business of the American people”). Will 2016 usher in a different sort of political class? Probably not – even electing someone like Ted Cruz would only be a step in the right direction…but unless someone is really willing to go to the mat (like Scott Walker did in Wisconsin) to take on the deep, structural reforms, all we’ll be doing is, at best, delaying the day of reckoning.

Ok, So Maybe the Markets are Getting Pretty Bad

Mark Noonan8 Comments

Haven’t paid much attention to the global crash in stocks over the past couple weeks because I’ve been figuring, after all these years, that the central banks would be able to make them go higher before things got bad. I know full well that an economy based upon fake money and debt cannot go on forever, but after watching it keep going for 7 years, I figured they’d be able to keep the ball in the air for a few more years. But, maybe not – from Zero Hedge:

FACTS: By midday break, nearly 2000 stocks down 10% daily limit in Chinese market — only 13 stocks up; Shanghai benchmark index down 8.45%

And:

…It is unclear just what is going on, or whether some prop desk or hedge fund just got tapped out, and/or how the Fed will react but the last time we had action like this, the Fed confused a liquidating SocGen trader for an economic collapse, and cut rates by 75 bps in January of 2008. This time it does not have that luxury.

Indeed – back in 2008, the Federal Reserve – and pretty much every other central bank – got into money-printing and zero percent interest to support the collapsed market: what do they do, now? I don’t know – but we’ll see. I was fully expecting the DOW to sky rocket on Monday morning after Friday’s sell off…and that still might happen. We’ll see.

Another Monday Comes

Mark Noonan

We just can’t avoid them, now can we?

Seems that whole economy things still isn’t working out as well as promised.

ObamaCare – the disaster that keeps on disasting:

State-run health insurance markets that offer coverage under President Barack Obama’s health law are struggling with high costs and disappointing enrollment…

…”The viability of state health insurance exchanges has been a challenge across the country, particularly in small states, due to insufficient numbers of uninsured residents,” said a statement from the office of Hawaii Democratic Gov. David Ige, announcing last month that his state’s sign-ups were being turned over to the federal government. (emphasis added)

Insufficient numbers of uninsured residents? But, wait – weren’t we told of tens of millions of uninsured who were all going to die horrible, painful deaths unless we passed ObamaCare? Could it be that – and I’m just spit balling here – they exaggerated the numbers of uninsured in order to create a crisis which they would not let go to waste?