Thursday, September 30, 2010

Sign, sign, everywhere a sign

So, New York City will have to change all of its street signs to accommodate a new federal regulation.

Street names will change from all capital letters to a combination of upper and lower case on roads across the country thanks to the pricey federal regulation, officials said Wednesday.

By 2018, MADISON AVE. will become Madison Ave. and will be printed in a font called Clearview, the city Department of Transportation says.

The Federal Highway Administration says the switch will improve safety because drivers identify the words more quickly when they're displayed that way - and can sooner return their eyes to the road.

Really, who comes up with this stuff -- and why? Judging by the twenty-somethings I work with, all lower-case letters would be in order -- almost none of them capitalize anything. And in textese, couldn't they just leave out most of the vowels? mdsn av

Yeah, that's the ticket.

Wednesday, September 29, 2010

New York Is Not An Island

I wonder if New York State, after it forces the Indians to charge cigarette taxes, will go after Massachusetts?

Empire State businesses are losing the battle on the border.

Since New York raised its cigarette tax to a nation-high $4.35 per pack on July 1, sales at Thruway Beverage III in New Lebanon are down by about 40 percent, according to manager Brian Driscoll.

"You've got to be [wondering] if we're even going to be around in the next couple of months if it keeps up like this," Driscoll said. "I mean, we're really slow right now."

At West End Package and Variety in nearby Pittsfield, Mass., sales are up -- not coincidentally -- by about 40 percent.

"We love New York's taxes," owner Kelly Healey said. "We have seen a dramatic increase in the people that are coming in."

By driving to Massachusetts or Vermont -- where the cigarette tax is $2.51 and $2.24, respectively -- smokers can save about $20 per carton.

Maybe New York's convenience store lobby, which has fought hard to collect taxes from the Senecas and Oneidas (instead of fighting Albany), will go after neighboring states, too.

Time, After All, *Is* Money

An interesting article on how waiting times serve as a substitute for prices in the "free" Canadian health care system.

Given the current structure of the Canadian healthcare system, the long patient wait times are here to stay. Those that believe the problem could be solved by increasing the supply of health services ignore the large demand effect of a reduction in wait times. Others, who believe that waiting is an unavoidable fact of life, ignore the fact that the long wait times are an artifact of the "priceless," politically administered supply system.

The Canadians could, without a horrible expenditure, increase staffing in their legendarily-overcrowded emergency rooms. But, according to the author, that would just increase the crowds. Read the whole thing.

Saturday, September 25, 2010

No Such Thing As A "Free Local Lunch"

Virginia Postrel properly -- and gently -- chides the locavores.

The locavore ideal is a world without trade, not only beyond national borders but even from the next state: no Florida oranges in Colorado or California grapes in New Mexico, no Vidalia onions in New York or summer spinach in Georgia.

Fully realized, that ideal would eliminate one of the great culinary advances of the past half century. Unripe peaches notwithstanding, today's supermarket produce departments are modern marvels. American grocery shoppers have choices that would have been unimaginable only a few decades ago. When I was growing up in the 1960s and 1970s, the only way to get fresh spinach or leaf lettuce was to plant a garden. Avocados were an exotic treat, asparagus came in a can, and pomegranates existed only in books.

Now my neighborhood supermarket sells five types of lettuce, plus spinach, endive, escarole, radicchio, frisée, rapini, three kinds of chard, mustard greens, dandelion greens and kale. That's not including all the cabbages—or, of course, the prewashed salads in a bag that have particularly boosted fresh-spinach purchases. In this ordinary produce department, you can buy not only avocados, asparagus and pomegranates, but everything from purple baby cauliflowers to spiky kiwano melons that look like some kind of scary deep-sea creature. Need portobello mushrooms, Japanese eggplant or organic ginger at 2 a.m.? The store is open 24/7.

There's no question but what eating fresh, local produce at harvest time provides taste and texture that commercial food rarely equals. But, of course, the rest of the year -- unless you live in Florida or California -- the dining alternatives will be reduced to canned tomatoes, potatoes from the root cellar and the odd serving of venison steak your neighbor brought over.

The militant locavores (who all seem to live in Mediterranean climates, oddly enough) never mention that. But, please, read the whole thing and please do check out the comments.

John Kerry Just Can't Shut Up

John F. Kerry, the eternal know-nothing elitist, opens his yap once again.

A testy U.S. Sen. John F. Kerry yesterday blamed clueless voters with short attention spans for the uphill battle beleaguered Democrats are facing against Republicans across the nation.

“We have an electorate that doesn’t always pay that much attention to what’s going on so people are influenced by a simple slogan rather than the facts or the truth or what’s happening,” Kerry told reporters after touring the Boston Medical Center yesterday.

This is the same man who, just a couple months ago, was stunned to find out that people were furious that he docked his $7 million foreign-made yacht in another state to dodge Massachusetts luxury taxes. Taxes, of course, are for the little people.

And now Kerry's in a snit because those same little people are too stupid and uninformed to realize what he and the rest of the noblesse are really doing for us. He symbolizes what government in this country has become -- an exclusive club dedicated to the proposition that they know better.

That's not how it was meant to be, of course. Government in America was designed to serve the people, to do what we want. If we want, for example, to drive cars and fly on trips of longer distances, the government should direct our taxes at better roads and a modern flight-control system. Not spend billions on trains.

If we like our health insurance, but want to be sure that the poor are taken care of, then our representatives in government should leave ours alone and fix theirs. And, by the same token, if we think our taxes are high enough, thank you very much, it is not government's place to raise them anyway and tell us it had no choice. It did.

Abraham Lincoln termed it as government of the people, by the people and for the people. John Kerry disagrees.

Thursday, September 23, 2010

Effect And Cause

Glenn Reynolds makes an excellent point:

The government decides to try to increase the middle class by subsidizing things that middle class people have: If middle-class people go to college and own homes, then surely if more people go to college and own homes, we’ll have more middle-class people. But homeownership and college aren’t causes of middle-class status, they’re markers for possessing the kinds of traits — self-discipline, the ability to defer gratification, etc. — that let you enter, and stay, in the middle class.

For too many in government, cause and effect have been confused. As mentioned above, a house and an education supposedly make one middle class; spending billions to make a city attractive is believed to improve its economy and -- worst of all at the moment -- increasing consumer spending is said to increase production. They are all exactly backward and they are causing us to go broke.

[UPDATE:] Thought of one more: spending creates prosperity.

Wednesday, September 22, 2010

"Those Who Can't Do, Teach"


Minnesota's Exports Up! Should We Care?

Mark Perry highlights the good news that Minnesota's exports were up 19% in the second quarter. It's not mentioned whether these were exports to foreign countries or to other states (though I assume the former), but would it matter anyway?

Why do we think that selling goods abroad is so wonderful?

When you think about it, every sale is an export. I export my labor to my employer in the city and then import all manner of consumer goods from groceries at the store up the street to the TV that I bought from a company that makes them in China. Some of the food I buy locally came from Mexico and some of the parts in my Chinese television were made in the U.S..

I paid no attention to any of it at the time of purchase. Now, President Obama has issued a five-year plan to double American exports. If he even had the power to accomplish it, I'd still have to ask, so what?

Sunday, September 19, 2010

The Myth Of Recycling

Jeff Jacoby:

“On balance, recycling programs lower our wealth.’’ Now whose idea of exciting is that?

If recycling made economic sense, we'd all do it voluntarily. And if it doesn't make economic sense -- it doesn't -- then it's a signal that it's wasteful to recycle. Tell that to your favorite liberal and make his head hurt.

Friday, September 17, 2010

Just Sayin'

Mises Would Be Proud

Methinks there's an Austrian (of the economist type) at National Review.

The problem with the business cycle under this analysis, you’ll notice, is not the bust — it’s the boom. That’s when the bad investment decisions are made, largely because political influence in the markets (housing policy, tax breaks, artificially cheap money and other interest-rate subsidies, risk subsidies, etc.) distorts economic calculation.

Which brings us back to the entitlements. It’s easy to say: Well, we’ll just raise the retirement age, or cut benefits, or means-test them, or raise taxes on the wealthy who receive them (which amounts to means-testing, but Democrats like that version better). And, yes, that probably is what we will do, eventually. But that does not get us out of the economic pickle: People have been making decisions for years and years — decisions about saving, investing, consuming, working, and retiring — based at least in some part on what are almost certainly faulty assumptions about what sort of Social Security, Medicare, and other benefits they will receive when they retire. When those disappear, a lot of consumption is going to have to be forgone — and a lot of capital dedicated to producing those goods and services for consumption will be massively devalued. Businesses will have to retrench, probably in a way that is more disruptive and more expensive than the housing-bubble recession necessitated.

This is the boom. The bust is going to be a nightmare.

Yes, I'm quite sure of it.

Housing "Bamboozle"?

Mark McHugh runs the numbers on home ownership and finds it a horrible investment.

Without question, the best way to make people love you politically is to throw Tootsie rolls into the crowd. In lieu of sugary treats, making an impassioned plea for education is a close second. No one wants to see their kid grow up to be a potato head, right?

Today we’ll be exploring the mathematics behind the US housing market over the last thirty years to determine how smart we really want our kids to be. If you can successfully complete (or at least understand) the accompanying quiz you’ll have a more thorough understanding of economic realities than every Ivy League professor (including Nobel Laureates) active in government and mainstream media.

It is a good read and worth the time.

And it does show pretty well, I think, that a house should not be considered an investment. A house is a consumer good like a car or a refrigerator. It deteriorates over time and if you do make a profit selling it, consider yourself lucky.

By the same token, housing should not be thought of as a manufacturing industry that spins off capital creating future economic growth. Buying a house consumes capital; a strong housing market is therefore a result of a prosperous economy -- not a cause.

The government's policy of encouraging Americans to buy homes as an investment is demonstrably false; and the government's efforts to spur the economy by encouraging Americans to buy homes is destined to fail. The Keynesians who dominate Washington are complicit in the first part -- unfortunately for all of us, they don't have a clue about the second.

Sunday, September 12, 2010

Has The Media Lost Its Mind?

The Maine Sunday Telegram's front page article and photo for September 11 was about the local observance of the end of Ramadan. To the paper's great surprise, its readers were unhappy. The editor apologized today.

Many saw Saturday's front-page story and photo regarding the local observance of the end of Ramadan as offensive, particularly on the day, Sept. 11, when our nation and the world were paying tribute to those who died in the 9/11 terrorist attacks nine years ago.

We have acknowledged that we erred by at least not offering balance to the story and its prominent position on the front page.

What you are reading today was the planned coverage of the 9/11 events. We believed that the day after the anniversary would be the appropriate occasion to provide extensive news coverage of the events and observances conducted locally and elsewhere.

In hindsight, it is clear that we should have handled this differently and with greater sensitivity toward the painful memories stirred by the anniversary of 9/11.

Gee, I wonder if they observe Pearl Harbor Day on the 8th or Christmas on December 26th. I mean, could you possibly find a better example of the cultural and intellectual gulf between the mainstream (or, in this case, Mainestream) media and the people they expect to buy their product?

Saturday, September 11, 2010

67,000 Jobs -- No Big Whoop

The government estimated that 67,000 net new private sector jobs were created in August -- a truly dismal number. The administration, of course, has attempted to put a good spin on it by pointing out that, at least, things are headed in the right direction. And, indeed, they're not lying.

But it's important to note that of those new jobs, 17,000 were temporary and 28,000 were in health care. Of the temporary jobs, enough said -- employers aren't ready to hire permanent employees; and health care expansion is hardly an indicator of incipient economic growth.

Job growth in the medical sector is often touted as one of the ongoing bright spots in the economy and an industry which is only likely to grow. But it's important to remember that health care doesn't create wealth, it consumes it. An expanding health sector is either the result of a growing economy or expanding government regulation and mandates. Absent the former, the latter must be the cause.

Now, there was some good news in mining (9000 net jobs created) and construction (19,000 though 10,000 of those were a result of a strike's having been resolved). Overall, though, the numbers are dismal. Good news, certainly, for those who found work, but pretty thin gruel if you're looking for signs of real economic growth.

Wednesday, September 8, 2010

"Green" Jobs Headed Overseas

Free trade is generally (and incorrectly) blamed for the off-shoring of American manufacturing, but it is increased business costs due to government regulations that drive most of it away. Here's a perfect example.

The last major GE factory making ordinary incandescent light bulbs in the United States is closing this month, marking a small, sad exit for a product and company that can trace their roots to Thomas Alva Edison's innovations in the 1870s.

The remaining 200 workers at the plant here will lose their jobs.

"Now what're we going to do?" said Toby Savolainen, 49, who like many others worked for decades at the factory, making bulbs now deemed wasteful.

The eco-ninnies like to pretend that, by strangling American industry in the name of climate protection, they're creating a "green" economy which will generate untold numbers of new "green" jobs. Well, this plant closing exposes the reality.

Now, several other light bulb plants have already been closed across the country. So the result of their foolishness in banning incandescent light is thousands more unemployed and plants, formerly worth hundreds of millions of dollars, now reduced to the value of their shells. All of this in the middle of a jobs recession.

With the expected tax hikes, energy price increases due to CO2 controls and health care cost rises, even General Electric (one of Obama's big green supporters) realized that it was too expensive to build a new plant in the U.S.; so what "green" jobs that do come out of this disastrous legislation will be located in Asia.

Congress knows what it's done and refuses to lift a hand to correct its mistake(s). Yet some people still wonder why there's such an anti-incumbent sentiment about in the land.

When Your Tax Dollars Are Used Against You

Piping Mad: Fair People at the Mercy of a Government Gone Fowl from Kevin Hicks on Vimeo.

People are part of the ecology, too.

Monday, September 6, 2010

Capitalism -- It's Not Just For Rich People, You Know

The magic of capital.

The meaning of the word "capitalism" has become distorted and the concept demonized. Capital, thanks in no small part to Karl Marx and his half-wit followers, has become (erroneously) synonymous with great sums of money, controlled by greedy white men, which serve only to exploit honest "working families".

But capital is nothing more than the raw materials and tools that help man produce goods more cheaply and more efficiently than he could by himself. For example, man once had to wade into streams and catch fish with his bare hands. But with the invention of the pole, string and hook; he was able to increase his production while decreasing his effort. He was employing capital.

In this case, subsistence farmers in Africa are saving part of their annual produce and investing in a foot-operated pump which will irrigate much larger plots of land than the old method of carrying buckets. They are employing capital to lengthen the production process making it more productive and profitable. They are capitalists.

That's a good thing.

The Fruits of Radical Environmentalism

Decades after environmentalists destroyed the logging industry of rural Oregon, the spotted owl population is still dropping.

Twenty years after northern spotted owls were protected under the Endangered Species Act, their numbers continue to decline, and scientists aren't certain whether the birds will survive even though logging was banned on much of the old-growth forest in the Pacific Northwest where they live in order to save them.

The owl remains an iconic symbol in a region where once loggers in steel-spiked, high-topped caulk boots felled 200-year-old or even older trees and loaded them on trucks that compression-braked down twisty mountain roads to mills redolent with the smell of fresh sawdust and smoke from burning timber scraps.

Regionwide, the owl populations are dropping 2.9 percent a year. In Washington state, they're declining at 6 to 7 percent a year.

Tens of thousands of people were put out of work and dozens if not hundreds of rural communities were devastated by the logging ban. Families have been uprooted and separated -- all for an environmental theory that was obviously wrong. This is one of the consequences of adhering to the so-called precautionary principle.

Fortunately, the realization is slowly dawning that people are part of the ecosystem, too.

Giving With One Hand -- Taking With The Other

President Obama has finally decided on the details of his business stimulus program.

The business proposal - what one aide called a key part of a limited economic package - would increase and permanently extend research and development tax credits for businesses, rewarding companies that develop new technologies domestically and preserve American jobs.

It would be paid for by closing other corporate tax loopholes, said the official, speaking on condition of anonymity because the policy has not yet been unveiled.

He just cannot bring himself to propose a net reduction in taxes. And let's remember that tax "loopholes" are exceptions to tax regulations that were placed in the code expressly to support desired economic goals. So, he will lower taxes on one business activity he approves of and raise taxes on others he doesn't. Net effect -- zero or less.

[UPDATE:] Later today, further details were forthcoming. Obama also wants $50 billion for infrastructure improvement.

President Obama Monday called for an upfront investment of $50 billion to improve roads, railways and runways as part of a larger six-year strategy to update the nation’s aging infrastructure.

Obama announced the strategy at the Milwaukee Laborfest in Wisconsin hosted by the AFL-CIO and Milwaukee Area Labor Council and was joined by Labor Secretary Hilda Solis and Transportation Secretary Ray LaHood.

The president wants Congress to approve this first-year $50 billion “as soon as possible” and pay for it by scaling back oil and gas industry tax incentives, a senior administration official said.

He's true to form if nothing else. He just can't bear to propose a net tax break, so, of course, the infrastructure work must be "paid for" by increasing someone else's taxes. Hey, why not make the evil oil industry pay for it? Nobody likes them.

This isn't a jobs-creation bill, it's -- at best -- a jobs transfer scheme. Cut employment in the wealth-creating energy sector to increase employment in the unionized-wealth-consuming construction industry.

If the union thugs he spoke in front of were capable of rational thought, they'd see this jobs-killing proposal for what it is. After all, there are a lot of good union jobs in Big Oil, though not so many in Milwaukee where he spoke.

And so it goes.

Saturday, September 4, 2010

Why A Payroll Tax Holiday Won't Work

Much is being made of the president's proposal to pass a payroll tax holiday to spur hiring, and I will say that it's not a bad political move. After all, it won't cost much and the Democrats are praying that Republicans will fight it so they can paint them as opposed to tax cuts.

But all tax cuts are not created equal. The GOP probably should oppose it -- or at least condition their support on also extending all the Bush income tax cuts.

You see, businesses do not make long-term expansion plans based on temporary circumstances and the payroll tax cut will certainly be temporary. It might well result in the hiring of a few people, but -- like Cash-for-Clunkers and the house tax credit -- most of them would have been brought on anyway and any additional hires will probably just be pulled forward from future hiring (resulting in an "unexpected" drop later on).

Mr. Obama forgets (actually he probably never knew) that businesses don't exist to create jobs. Jobs are a cost even with a 6.2% tax break. What they need are incentives to grow and to produce more; and only tax cuts on profits and capital will accomplish that. The president doesn't care for those words "profits" and "capital".

But this is all theory, of course. The real-world reason why it probably won't work is that WE'VE ALREADY HAD A PAYROLL TAX HOLIDAY IN EFFECT ALL YEAR!!!

In March, the President signed into law the “Hiring Incentives to Restore Employment Act of 2010” (the 2010 HIRE Act), the centerpiece of which is a payroll tax holiday and up-to-$1,000 tax credit for businesses that hire unemployed workers. Here’s an overview of these new hiring incentives and some new details that carry important guidance on these new payroll tax breaks.

To help stimulate the hiring of workers by the private sector, the new law exempts any private-sector employer that hires a worker who had been unemployed for at least 60 days from having to pay the employer’s 6.2% share of the Social Security payroll tax on that employee for the remainder of 2010. A company could save a maximum of $6,621 if it hired an unemployed worker and paid that worker at least $106,800—the maximum amount of wages subject to Social Security taxes—by the end of the year. As an additional incentive, for any qualifying worker hired under this initiative that the employer keeps on payroll for a continuous 52 weeks, the employer is eligible for an additional non-refundable tax credit of up to $1,000 after the 52-week threshold is reached, to be taken on their 2011 tax return. In order to be eligible, the employee’s pay in the second 26-week period must be at least 80% of the pay in the first 26-week period.

Yes, you probably didn't know about it because no one talks about it because no one's hiring. This idea does follow the Left's modus operandi, though. If a big government program doesn't work, just do it again -- bigger.

Thursday, September 2, 2010

It's Official: Obama Has No Economic Clothes

Christina Romer admitted it at her farewell-to-DC speech at the National Press Club.

She had no idea how bad the economic collapse would be. She still doesn’t understand exactly why it was so bad. The response to the collapse was inadequate. And she doesn’t have much of an idea about how to fix things.

She doesn't know how to fix things, so she's returning to private life as an economics professor. Students will probably line up to attend her classes -- even though she still doesn't have a clue about how to end a recession. Having served in a failed White House has become a sought-after credential, evidently. How pitiful.

She's not questioning her basic assumptions, though.

No wonder most Americans think the effort failed. But Romer argued, a bit too defensively, against the majority perception. “As the Council of Economic Advisers has documented in a series of reports to Congress, there is widespread agreement that the act is broadly on track,” she declared. Further, she argued, “I will never regret trying to put analysis and quantitative estimates behind our policy recommendations.”

Now, this is undoubtedly a very intelligent woman; and she illustrates perfectly, I think, how low mainstream economics, under the sway of John Maynard Keynes, has fallen. Economic principles can not be quantified.

Oh sure, you can come up with illustrations, for example, of supply and demand or comparative advantage. But no economist claims to be able to predict the price at which supply and demand will converge at a given time for a specific item. Oh no, too easy to be proven wrong.

But the same economists have no compunction about making solemn pronouncements about the number of jobs that will be created by x billion dollars of government spending. And they predict with seeming abandon how much economic activity will be generated by each of those dollars spent according to the famous Keynesian multipliers.

It's all so much academic masturbation and our government is rife with it. We knew that Obama was ignorant of economics, but we had a right to expect that the supposedly best and brightest minds he surrounded himself with knew, at least, a little bit. It's obvious now that they don't and Ms. Romer has admitted it.

The economic activity of 300 million Americans cannot be predicted and it cannot be manipulated like a corporate spreadsheet by wise, all-knowing government bureaucrats. All the government can do is get itself out of the way of people trying to earn a living.

But that's something that this gang cannot bring itself to do. After all, they no doubt think, what would be the point of having all that power if you can't order people around? We're seeing the results of that with each successive jobs report.

[UPDATE:] It’s time to return the history of economic thought to the college curriculum.

This situation is deplorable. The history of economic thought constitutes an essential part of the broader liberal education of economists.

Studying the history of thought provides, by the reading of original texts and secondary material, a means of engaging the greatest minds on issues of great significance: a fellow historian nicely described this aspect of a typical course as “sitting on a log with Adam Smith.” What are the causes of “the wealth of nations”? Does the labor theory of value make sense? Is the business cycle inevitable? In most of their classes, economics students do not get to debate such “big questions,” and neither do they learn what some of the best minds in their discipline have had to say about them. The whole point of a history of economic thought class is to do so.

[…] Students who learn about economics without the benefit of a history of thought course are inclined to assume that what they learn from their textbooks is settled fact. They do not see that the development of ideas always involves argumentation and criticism, something that usually disappears in textbook treatments of issues.

You have to wonder if Christina Romer has even read Adam Smith. Hard as it is to believe, economics majors often aren't required to. Those who don't know history are destined to ... well, you know.