“Red light cameras are all about money – not safety.”
“Governments choose tax money over safety of motorists.”
“Red light cameras are all about money – not safety.”
“Governments choose tax money over safety of motorists.”
By: George Noga – June 17, 2013
Our hearts go out to the victims of the building collapse in Bangladesh; they were hard workers striving simply to build a better future. The government building inspectors and all others who are complicit deserve severe punishment. However, it is crucial we learn the correct lessons from the workers’ terrible sacrifice. The media and their liberal camp followers have been quick to draw conclusions and to apportion blame; among the things they believe are:
Each and every one of the above beliefs is wrong; they are voodoo economics and the consequences of acting on these beliefs is highly destructive. The masses in Bangladesh already are living at bare subsistence; anything that increases the cost of employing them – be it higher wages or better conditions – comes at their expense and results in unemployment. The higher the price of anything, the less will be bought; this applies universally including in Bangladesh.
“Economic Liberty – not government intervention – creates wealth.”
Everyone desires higher wages and better working conditions for third-world workers. Ignoring the laws of economics (media and liberals) only worsens the situation. To actually bring about such results requires the maximum degree of economic freedom and the dead minimum of government and outside interference. We have seen time and time again – in Hong Kong, South Korea, India, and now China that within one generation workers are much better off. New factories open with more advanced equipment and competition for labor intensifies leading to higher wages. As wages rise, workers are willing to trade off for better conditions.
Globalization – Free Trade – Child Labor – Boycotts
Globalization and free trade benefit the poor in particular. To the chagrin of elitists, the poor grasp this viscerally; that’s why, inter alia, they embrace Wal-Mart. The greatest beneficiaries are those who live in poor countries (including Bangladesh) with whom we trade. Voluntary labor – yes including children – and even at low wages and less than ideal conditions – is not exploitative. Workers choose to work because it is better than what they had before and offers a path to a better life. This is how they work their way out of poverty.
Workers (including children) in Dickensian England were better off in the factories than the life they voluntarily left. It was the same in the United States where child labor was common until the early part of the twentieth century. My uncle began working in the coal mines at age six because young children with their small, lithe bodies could crawl into small places.
“Who do you trust to look out for children: government or parents?”
In England and the US, child labor had vanished well before the passage of child labor laws. As soon as humanly possible, parents remove their children from the labor force. It comes down to who do you trust to have the best interests of children at heart – their parents or government?
Boycotts are primarily the province of economically illiterate movie stars with too much time on their hands. Even if a boycott could be effective, the greatest harm would befall the displaced workers trying desperately to lift their families out of poverty. Low income Americans also are harmed by having to pay more for many products just to pander to the falsetto angst of Hollywood types who feel but do not think.
The media and liberals set up straw men, in this case greedy businessmen, and then rail against them. They don’t understand economics and they don’t know what they don’t know. They ignorantly call for boycotts that harm those they seek to help. Then, satisfied they have demonstrated their compassion and good intentions, they retreat back inside their plastic bubble where life is so much simpler than in the real world, where thinking rather than feeling counts.
By: George Noga – June 10, 2013
Having blogged extensively about the crisis of spending, debt and deficits, I am constantly alert for new perspectives to present the crisis in terms easier to understand. I have discovered one compelling new way to do this and it is presented herein.
First however, the media have widely reported the decline in the projected federal deficit which normally would be welcome news. Please note I referred to the projected deficit; the actual deficit continues its inexorable march to oblivion. The decline is due to two factors: (1) higher tax collections in late 2012 in advance of the Obama tax increases; and (2) payments from Fannie Mae. Both are one-time phenomena. So you may wonder, won’t the tax increases permanently shrink the deficit? If you believe thusly, you have forgotten Hauser’s Law which teaches tax rates may rise or fall, but the overall percent of revenue to GDP remains unchanged.
The Special Mathematics of a 100% Debt/GDP Ratio
Now for the fresh perspective. As the Debt/GDP ratio approaches 100%, some simple but gripping mathematics come into play. First, a few numbers. GDP now is $16 trillion and the public debt is $12 trillion (75% ratio). At the end of Obama’s term GDP will be $17 trillion, assuming a perhaps optimistic 2.0% compound growth rate. The public debt also will be right at $17 trillion based on continued annual structural deficits of just under $1 trillion combined with the frightening demographics and high annual compound growth of Medicare, Medicaid, Social Security and ObamaCare. Please note I use public debt and not total debt; this is because we must pay interest only on the public portion – a key distinction to bear in mind as you read on.
When the interest-bearing public debt equals GDP, the math gets interesting. Historically, the average maturity of US government debt is 5 years, while the average interest rate is 6%. When public debt equals GDP in 2016-2017, we can make the following observations.
“When debt and GDP are the same, the economy must grow at a rate equal to the composite rate on the debt to prevent a death spiral.”
First, the economy must grow at the same rate as the overall interest rate on government debt to keep from exploding interest costs and the deficit. If interest rates revert to the historic average of 6% while GDP grows at 2%, this will, ceteris paribus, result in a 4% larger deficit. At $17 trillion, the annual debt service (interest) will be over $1 trillion with 4%, or $680 billion, resulting from the gap between GDP growth and interest rates. Note: Interest now consumes less than 1% of GDP because of historically low interest rates – which will not last.
Second, if (miracle of miracles) the interest rate becomes equal to GDP growth, the entire benefits of the expansion of the US economy are offset by and consumed by higher debt service. To put it straight: the US economy never can grow net of interest. One can only imagine the impact of this on unemployment and every other measure of economic well being.
“If both GDP growth and interest rates were at their historic averages, there would be a differential of -2.7% , adding $400 billion a year to the deficit.”
Third, again using historic data, if the US economy grew at its average post WWII rate of 3.3% (phat chance) and also experienced its average interest rate of 6%, that would result in a differential of -2.7%, i.e. debt service would explode by nearly $400 billion more each year compounded. Even if economic growth was high at say 3+%, interest rates would be higher given the concomitant strong economy. Thus, even under such sanguine conditions, debt service would grow much faster than the economy resulting in a debt death spiral.
I hope the above perspective helps readers better understand why countries whose Debt/GDP ratios blow past 90% of their economies rarely, if ever, recover. These United States of America are headed toward a 100% Debt/GDP ratio by the end of the current presidential term. The only alternatives are: (1) massive spending cuts on the order of 30% which will wreck the social contract; (2) Draconian tax increases which will tank the economy further; (3) runaway inflation; (4) repudiation of the debt; and (5) a lost generation much like Greece is experiencing today. In fact, we are likely to experience several of the aforementioned perils. Avoiding widespread civil unrest and maintaining the rule of law will be no small feat.
By: George Noga – June 1, 2013
How often do you receive paternalistic, proselytizing and presumptive emails, both personal and commercial, that contain animadversions in the form of footnotes or subscripts exhorting you to “do not print” the email to “protect the environment”? If you’re like me, it’s far too often. This is nothing more than your friends or the businesses you deal with gratuitously foisting their politics on you.
Friends or companies, who normally would not initiate a political discussion, somehow believe it is acceptable to derogate you thusly. Businesses that do this would not deign to attach email subscripts urging you to vote a certain way. They would not presume to lecture you about abortion, gun control or gay marriage. Yet somehow they arrogantly believe it is copacetic to inflict their somewhat extreme environmental views about paper products on you.
I decided to fight back. Upon receiving an offending email, I always attach (without comment) my own footnotes to the reply; I have one for personal emails and one for business. The following paragraph contains my footnote for personal emails.
Footnote or Subscript for Personal Emails
“Please feel free to print this email along with all the attachments. Trees are a farmed product grown expressly for paper. It makes no more sense to conserve paper to save trees than it makes to conserve cloth to save cotton. Paper is natural, organic, biodegradable, renewable and sustainable. Working forests employ millions of Americans and help the environment by providing clean air and water, wildlife habitat and carbon storage. There are more trees planted commercially each year (by a vast margin) than are consumed; there are more trees than 100 years ago. In a very real sense, failure to print can hasten the conversion of forests to strip malls and parking lots. Therefore, by all means print this email and take satisfaction in knowing you are doing your part to help the environment and to save our American forests.”
Subscript for Business Emails
For commercial emails I use the above paragraph, i.e. the same one as for personal emails. Then I add the following paragraph strictly for business.
“Your company’s email contained a footnote admonishing me not to print it for the ersatz purpose of protecting the environment. By doing this you gratuitously injected contentious and argumentative politics into what should be purely a business relationship. Surely, you would not deign to tell customers how to vote; therefore, why do you assume it is acceptable to foist other political views? Politicizing a business relationship is bad business for many reasons:
You have my permission to use or to modify the above language without attribution. If you disagree with the “do not print” warning or even if you are agnostic or supportive but don’t like people cramming their political views down your throat, then – by all means – fight back!
Note to readers: During the summer months some (but not all) of our blog posts may be updates or revisions of earlier posts – usually from years ago. Our potential readership now is in excess of 100,000 as a result of various electronic journals, websites and other blogs that routinely pick up and republish our posts. Therefore, over 95% of our readers have never seen these posts before and they are just as relevant now as when originally published.
“Liberals advocate gender-selective abortion, i.e. the systematic abortion ofbaby girls arguing they must abort the girls in order to protect their rights.”
The US has the most progressive tax system in the world; the rich pay a higher share of taxes than in any other country and our corporate tax rate is the highest in the developed world. Nevertheless, liberals argue vociferously that the well off don’t pay their fair share.
Liberals are for diversity in every possible way except for thought where they oppose it.
Organic food fails every independent taste test versus conventionally grown food; isn’t healthier; requires more land; is worse for the environment; and costs more. Yet, it is a darling of liberals who oppose genetically modified food that actually is better for people.
Every one of the top 100 measures of human and environmental well being is the best it has been in the past 50-75 years and is getting better all the time. In the face of all this, liberals continue to argue counter factually that things are bad and getting even worse.
Our schools are terrible and getting worse. This has nothing to do with funding; it is the fault of educrats who regard it as a jobs program for adults and teachers unions that stand in the schoolhouse door blocking poor children from leaving. School choice is the civil rights issue of our age and liberals are on the wrong side despite their falsetto empathy.
“Liberalism: An emotional state characterized by obvious contradictions, disdain for truth, Utopian fantasies, obsessive desiresto control and to take from others and antipathy for all who differ.”
By: George Noga – February 15, 2013
You could see it in their faces; the look was unmistakable. I noticed it throughout our trip but it was confirmed by Mario on our final day in Europe. My wife and I were staying in Paris and took a hotel shuttle to the airport. We were the only 2 passengers on the shuttle van for the 30 minute ride and immediately struck up a conversation with Mario, our driver.
Mario, age 33, was trilingual and personable. We soon learned he was from Italy where he had completed his schooling but moved to France because there were no jobs in Italy. His job driving the shuttle van had zero possibility for upward mobility and he expected to remain in the same menial, monotonous position his entire working life. He was living with his girlfriend but stated he had no intention ever to marry; he was adamant about never having children. He had already begun to think about his pension which was at least a quarter century in the future.
Contemplate Mario’s situation. He left his native country and family for a low paying, dead end job in another country where he never would totally belong. He already had driven the van for 14 years and was facing another 29 years – a total of 60,000 hotel/airport round trips. He would subsist perpetually on the economic fringe of society, eschewing wife and children. Yet, according to his calculus, this hardscrabble existence was better than the life he left behind in Italy. Multiply Mario by tens of millions of others in Italy, Spain, Portugal, Greece and elsewhere and you will begin to understand the magnitude of the quiet desperation I witnessed.
“We are a lost generation for sure.”
Take Carlos from Madrid, who was quoted in a recent Bloomberg report. He graduated from university but faced Spain’s 52% unemployment rate for those under age 25. He now washes and chops vegetables for a salad bar in London. Of the 17 employees, 13 are from Spain, including 3 from Carlos’s university. “We are a lost generation for sure“, Carlos stated.
As bad as the situation is currently, it is certain to get far worse as governments and central banks impose anti-growth policies including massive tax hikes and pile on ever more onerous regulations. Even the courts add to the perdition. The European Court of Justice just ruled workers who don’t feel well during vacations are entitled to a paid makeup vacation day for every day they were ill. Meanwhile, thanks to many millions like Mario and Carlos, Europe’s demographics are imploding. Unfortunately, Europe’s problems have reached the USA.
America is Becoming More Like Europe
More and more Americans are working part time and in low wage jobs. Our unemployment rate is 15% when including involuntary part-time workers. Unemployment for those under age 25 is higher at 16% and that number is set to soar as ObamaCare kicks in and the cost of insuring full time workers skyrockets. America gradually is descending into a low wage, part-time economy with stagnant growth accompanied by decreasing social mobility.
Obama’s policies fix these trends in place for at least the next 5 years – 4 more years of Obama and at least one year to change course. The high rate of government spending, massive debt, huge deficits and higher taxes are certain to result in tepid economic growth. We will be lucky to average 2% growth per year and to avoid recession and/or an existential debt crisis.
In short, the youth (and increasingly the middle class) of America are becoming more like Mario and Carlos. They will be part of a lost generation and it is just a matter of time until we will begin to see the unmistakable looks of quiet desperation in our children’s faces.
By: George Noga – February 1, 2013
Why do some people still cling to the man-made global warming myth? As the headline above suggests, it has transmogrified into a religion. As all religions, it is based on faith in things unseen; it has its high priests and dogma. It is replete with its own sacraments (bio-fuel, windmills, ethanol) and demons (coal, oil, CO2). As a religion its core beliefs are unassailable and impervious to all countervailing facts and logic. It is harsh toward apostates, labeling them deniers. However, its high priests and numeraries succumb to all the usual temptations of money, power, politics and arrogance.
Their co-coreligionists, i.e. the state sycophant media, serve as enablers by their grotesquely distorted reporting. Let’s examine recent reportage (and non reportage) to see how this works.
Thus far I have failed to mention the ultimate apostasy, i.e. the amount of warming now projected for the remainder of the century is a net benefit to mankind. I am going to miss the warming religion when its final adherent figuratively closes the door and turns out the lights much as I have come to miss the former Soviet Union. They have much in common. Both were religions based on deeply flawed premises; they became funny (in a pathetic way) as their stars faded. And, they were such inviting targets to write about. But religions never die and there are a few die-hard commies around as there will be a similar number of warmists in a few years.
Note to readers: We have tweaked the format slightly and also added more social media sharing options which now include: email, Twitter, Facebook and Linked-in; The links are at the very top of the posting.
By: George Noga – January 24, 2013
The (“IPCC”) or United Nations Intergovernmental Panel on Climate Change, the very same folks who perpetrated the man-made global warming hoax on the world, is poised to release its Fifth Assessment Report later this year. A draft has leaked; it is posted on the Internet for all to see. I have read much of it and it is pure dynamite.
Scientists who reviewed the draft, state that data contained therein lead inexorably to the four observations listed below. Please be forewarned however; as always, the final report will be highly politicized. Its summary and conclusions will contradict data buried in the body of the report. The media and warmists will selectively extract data and quotes solely for scare purposes. Despite this dissembling, the conclusions are:
It was simple long ago to conclude man did not cause warming in any significant measure. NASA had many years of accurate readings from several planets and moons in our solar system showing their temperature changes tracked closely with earth’s. Ergo, it had to be a solar phenomenon which man could not possibly be causing.
Kyoto and Carbon Dioxide
The world little noticed, but the Kyoto Protocol on climate change expired at the end of 2012. So, just how successful was it and how did the United States (which did not sign the treaty) fare compared to the self righteous countries that did and castigated the US? Japan promised a 6% CO2 reduction but experienced a 7% increase for a net negative margin of 13%, and this from a nation losing population and in a generation-long economic slump.
Australia experienced a negative CO2 margin of 56% – bummer! Our neighbor, Canada, a rabid Kyoto supporter, had a margin of negative 30%. The Netherlands had a negative margin of 26%. The European Union as a whole met its target due solely to three factors: (1) economic stagnation; (2) rigging the starting date to coincide with the collapse of communism; and (3) the related closure of grossly inefficient Soviet era power plants and industries. Meanwhile, Uncle Sam had an increase over the past 20 years of only 10% despite economic development and population growth that vastly surpassed most of the world.
Europe Back to the Stone Age; Pineapples in Alaska
Global warming has attained the status of a religion in Europe. And religions don’t die. Zoroastrianism, which faded away over 1,000 years ago, still has hundreds of thousands of adherents. Europeans believe warming could drive them back to the stone age. They may be right, just not the way they envision it. Their misplaced faith in global warming – not warming itself – could result in much of Europe reverting to a Neolithic lifestyle.
European Union law mandates an 80% cut in CO2 emissions by 2050. In Britain, many industries face a 140% increase in energy costs by 2020. Planned offshore wind farms will cost Britons $10,000 per person. France and Germany with massive shale resources ban exploration. Germany has half the photovoltaic capacity on the planet even though a top German utility executive compares this to growing pineapples in Alaska. Europe is destroying the foundation of its prosperity because of obeisance to a dead religion – not to mention that it also is going bankrupt from unsustainable debt and social programs. Zoroastrianism may be a better choice.
Climate Religion, Zoroastrianism and Polar Bears
The climate religion is dead. The IPCC report should be the final nail in its coffin. Yet I suspect many of its acolytes will continue to cling to it much like modern day Zoroastrians. The same pantheon of gods (IPCC) that giveth, now taketh away. There is no significant man made global warming and there never was! To the very limited extent (1 degree Celsius between now and 2100) solar caused warming may exist, it is a boon to the human race.
Much or all of what adherents to the warmist religion ever believed is wrong about, inter alia, CO2 emissions, ethanol subsidies, rising sea levels, biofuels, melting ice caps, ocean temperatures, hurricanes, green energy, fossil fuels and polar bears whose record numbers continue to proliferate. Please don’t forget the polar bears!