Economy

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?

Remain Calm: All is Well!

Mark Noonan6 Comments

Just had to put this up from Zero Hedge:

China Bans Use Of Terms “Equity Disaster” And “Rescue The Market”

…And so, with every attempt to manipulate the (Chinese) market higher falling flat in the face of selling pressure from the hairdresser/ farmer/ banana vendor day trading crowd (which has now thrown in the towel on the whole “it’s easier than farm work” theory and now just wants to break even and head for the hills) the only thing left for China to do is “fix” the narrative.

In other words, when banning selling doesn’t work, the logical next step is to ban talking about selling…

…So apparently, Beijing will now prevent journalists from accidentally jawboning the market lower so that Party mouthpiece media outlets are free to jawbone the market higher.

Needless to say, we doubt if this hail Mary attempt to rescue the market will do anything at all to save China from its homemade equity disaster.

Indeed. I haven’t paid too much attention to the market slide in China because I just figured the Chinese government would order stocks to go higher – telling the money bags in China that they’d better buy or else, ya dig? But if China’s market has got a huge number of small traders who are now getting burned…well, you can shoot a dozen bankers who don’t cooperate: its a much more difficult prospect to shoot 100,000 small investors who are bailing out.

There is one thing I do know about markets – when average folks start borrowing money to invest in it because it will always go higher, then it is crash time.  We’ll see how this plays out – but China has already lost $3 trillion in stock value since June…ain’t looking too pretty.

Attacking Big Corporation as a GOP Campaign Issue

Mark Noonan37 Comments

See? It’s not just me any more – Glenn Reynolds (Instapundit) weighs in on how the GOP can leverage a bit of anti-corporatism for electoral victory:

…the fact is that many big businesses are unpopular with the public, aligned with the Democrats, and wide open for attack. And after eight years of the Obama administration’s naked cronyism and support of Wall Street even as the middle class has suffered, the opportunities are there.

One of the most appealing targets would be the tech industry’s wage-suppressing hiring habits. Not only have tech giants like Apple and Google engaged in what a federal court called an “overarching conspiracy” to prevent wage competition, but Silicon Valley firms also abuse H-1B visas to bring in immigrant competition at lower wages, a practice that’s now spreading to other industries. (In Los Angeles, Southern California Edison is firing workers and replacing them with immigrants now)…

Reynolds goes on to note how big corporations – especially big tech – are abusing the H1-B visa program to get rid of well-paid American workers and bring in low-paid foreigners, thus abusing both Americans and foreigners in the name of increased corporate profits. That is just one in a very long line of issues where Big Corporation is working against the United States. We on the GOP side have got to wrap our minds around the fact that big anything is bad. Once a concentration of power and wealth exceeds a certain size, it becomes baleful…and must be controlled carefully, lest is wreck everything. We understand this regarding things like the Department of Education, but we’ve failed to understand that General Motors is just like the Department of Education…an bureaucratic behemoth most interested in using raw, political power to preserve itself.

It is the free market we must defend – not those who are on top of the market and who are abusing their position. That the leaders of these corporations also largely support Democrats (or are at least de-facto liberals), just makes attacking them doubly advantageous for us. It becomes best of all when we realize that a lot of people who vote liberal (but who are not particularly liberal, themselves) can be moved to vote for us when we do this. Defending the worker against ruthless exploitation by Big Tech is just a splendid way to move the needle in our favor…let Democrats defend the H1-B visa program, we’ll defend the workers.

We have a grand opportunity to take the abysmal failure of the Obama years and use it to destroy liberalism as a political force forever. All we have to do is dare to take it.

Global Warming Hoax Update

Mark Noonan7 Comments

Just more of that good, old global warming climate change climate disruption heading towards the midwest:

Following several weeks of economic data that has been, despite erroneous expectations of a Fed rate hike, one major disappointment after another including regional Fed reports, housing data, manufacturing surveys, construction spending, and durable goods data, the US economy is about to get the slowdown scapegoat it so desperately needs: according to Weather.com, following a brief overnight respite from cold temperatures, entering the first full week of January, both the Midwest and the East will see a plunge to the coldest temperatures of the season. This blast of cold temperatures will be different than the Arctic chill that ended 2014, which was mainly confined to the northern tier. This time the frigid air will push farther south and east.

Only thing I can figure is that Al Gore must be making a speaking tour through the area – but, as Zero Hedge notes, this is going to cause sighs of relief through our Economist and Banker classes…that it is cold in January will be used to explain away the poor 1st quarter GDP data we’re going to get in April (and, as usual, this exceptionally cold spell will be used to “prove” global warming…because if we weren’t warming, you see, we wouldn’t get weather that is unusually cold). The thing about our modern system is that it is so hopelessly corrupt that both global warming and fake-money economies can be kept going for quite a while…

The Official Unemployment Rate is, Well, Bogus

Mark Noonan25 Comments

For lack of a better word:

The U.S. jobs report, a key measure of how well the economy is doing, has gotten increasingly less accurate in the past 20 years. The fix for that problem could be in a surprising place: Twitter.

Those are the conclusions of two separate reports out this month. The first report, published by the National Bureau of Economic Research, found that the unemployment number released by the government suffers from a problem faced by other pollsters: Lack of response. This problem dates back to a 1994 redesign of the survey when it went from paper-based to computer-based, although neither the researchers nor anyone else has been able to offer a reason for why the redesign has affected the numbers.

What the researchers found was that, for whatever reason, unemployed workers, who are surveyed multiple times are most likely to respond to the survey when they are first given it and ignore the survey later on…

This works out to an under count of the unemployed and/or an over count of people not in the labor force – the bottom line is that the official unemployment rate doesn’t really reflect the unemployment picture. This is something we’ve known for a while just by the labor force participation rate: if we are in a recovery, it should not be going down. The fact that it is down means that something is off – and calculations of unemployment based upon, say, a 2007 level of participation would still likely have the official rate in double digit territory. But now we see that aside from that, the basic survey is just flawed.

I’ve long had grave doubts about the whole methodology we use to judge the state of the economy.  We aren’t quite as bizarre as Spain, which is apparently set to use transactions in, shall we say, ladies who work in a very specialized form of entertainment, as part of their GDP, but we’re close. To me, there is something absurd in counting government spending as part of GDP, let alone counting what a lonely man blows a hundred bucks on. Real economic strength should be judged by what we make, mine and grow.

If the economy is improving, we’ll see it in statistics of corn production, gasoline refined, tons of iron ore mined, and things like that. These things can’t lie and they can’t be fudged. Did we, or did we not, produce more steel in July of 2014 than in June of 2014? July of 2013? July of 2004?  If the answer is “less” then that would be a bad indicator.  It still might be partially explained by other factors (maybe we’re more efficient in our use of steel, for instance), but the bottom line is that if the production is up, then things are better than if production is down…because people don’t produce for customers that don’t exist. I want to know the measure of production for real goods that people use – I want to know what it is last month, the month before that, the year before that and ten years before that…this way I can see how things are going in both the short and long term; and no need to seasonally adjust: each July will be pretty much like all other Julys. Just tell me what was made, mined and grown – I’ll then see for myself if things are worse, better or just the same…and that will also inform me of what the employment picture is like. If we’re producing less steel, it is a cinch that we’ve got less steel workers, and so on.

We don’t need to know how many people are working in the legal industry – it produces no wealth. Don’t need to know how many people are working in the tourist industry – it also produces no wealth, once you understand that wealth is not a casino mogul in Vegas raking it in hand over fist, but a farmer in the midwest growing corn. The reality is that the entirety of our economy – all of that government and law firms and casinos, etc – is dependent upon the ability of the United States to make, mine and grow things. If we don’t make, mine and grow enough things, then the economy is doomed, no matter how much money the Fed prints to keep things going for years after the economy collapsed. So, let’s start counting what matters and see what our economy is actually like – it’ll tell us what we need to do.

 

The Art of Redundancy

Cluster78 Comments

If it is one thing the Democrats are very good at, and one thing that their legions of progressive sycophants depend on – it’s redundancy. The Democrats bleat on endlessly over contrived issues and the repetition thereof results in an allegiance amongst their base that rivals that of the most famous Tyrants. It’s at a level now that I have never seen before and the most recent Paul Krugman article is a great example. You may remember Paul Krugman – the Nobel prize winning progressive economist who decries the inequities of a capitalist society and whom recently accepted a six figure position with an institution of higher progressive learning for offering his valued opinion on matters of import, yet not required to lower himself to the masses and actually teaching in the classroom. This latest Krugman article perpetuates the infrastructure redundancy that progressives seemingly fall back on every time they need an economic issue to distract voters with. You may remember the Obama proclamation of 2008 wherein the great orator decreed:

“We will create millions of jobs by making the single largest new investment in our national infrastructure since the creation of the federal highway system in the 1950s. We’ll invest your precious tax dollars in new and smarter ways, and we’ll set a simple rule – use it or lose it. If a state doesn’t act quickly to invest in roads and bridges in their communities, they’ll lose the money.”

Subsequently, in March of 2009, the single greatest stimulus package was passed and funds were given to the administration to use where they sought fit. Strangely, the infrastructure still seems to be a problem, and an issue of which progressive elites like Krugman feel that they can foam up the base with one more time:

“In prosperous times, public spending on roads, bridges and so on competes with the private sector for resources. Since 2008, however, our economy has been awash in unemployed workers (especially construction workers) and capital with no place to go (which is why government borrowing costs are at historic lows). Putting those idle resources to work building useful stuff should have been a no-brainer.”

Now, did Krugman forget his Messiah’s 2008 proclamation and subsequent spending spree, or is he being purposely deceitful? I will leave that to your own imagination, but you can all easily imagine is what Krugman’s answer is to this on-going infrastructure problem – more taxes of course:

“It’s hard to think of any good reason why taxes on gasoline should be so low, and it’s easy to think of reasons, ranging from climate concerns to reducing dependence on the Middle East, why gas should cost more. So there’s a very strong case for raising the gas tax “

The progressive Democrats have yet to find a problem, real or contrived, that can’t be resolved by raising taxes. The problem for them is that these issuess are never resolved despite how many taxes they raise, and fortunately for those of us in “realville”, the majority of voters are starting to come to that realization. One thing is for certain though, you can expect this issue, , and the other redundant issues of climate change, and the patently absurd “war on women” to be part and parcel to the Democrats 2014 and 2016 agenda.

Finished? I Don’t Think So.

Leo Pusateri5 Comments

As Rush Limbaugh asserted on his radio show Wednesday, the Obama presidency is far from over.

The events to which we are witness presently– world unrest, trampling on personal property rights and State sovereignty, assault on affordable energy–continuous assaults on our ability to grow our economy– is all part of Obama’s original campaign promise to “..fundamentally transform the United States of America.”

I know I’ve said this before, but it’s an important phrase to ponder. “FUNDAMENTALLY” TRANSFORM THE UNITED STATES OF AMERICA.” Think about that. Let that short, simple, yet all-encompassing phrase sink in. First focus on the word “TRANSFORM” and then the root word of “FUNDAMENTALLY.”

To “transform” something, by definition, is to make something evolve into something radically different from what it has traditionally been. “Fundamental” by definition is a defining, basic characteristic. A building block–something foundational to its being.

Now, to “FUNDAMENTALLY TRANSFORM” means to radically transform the United States from what it has traditionally been– the “shining city on a hill”- the land of opportunity–based on the premise of individual liberty and the affordance of self-determination–yes–to transform that– into something *fundamentally different* and thus diametrically opposed to that foundation.

The Third World Despots, the Kruschevs, the Fidel Castros, the Kim Jong Ils and Uns of the world, have given hours-long speeches about their hopes for the destruction of the Free World, but never have they been able to put it so succinctly and eloquently as has Obama in that one simple, yet profound phrase. “..We are five days away from fundamentally transforming the United States of America.”

Many people chalked that phrase to meaningless boilerplate rhetoric, as so much rhetorical fluff. But of all the promises Obama made that were broken, whether it was closing Guantanamo Bay, allowing people to ‘keep their doctors or their health plans–period,” or to decrease health insurance costs by $2500 per year, this– this seminal promise–(along with bankrupting the coal industry)–was the one he meant from the bottom of his joyless, cavernous heart.

No people. The Presidency of Barack Hussein Obama is not ended. He still has a lot of ‘fundamental transformations’ to perform.

Barack Obama’s “scorched earth” policy against America and its people has only just begun.