Week in Review
Since President Obama came out in favor of same-sex marriage he received a boon in campaign donations. Especially from those connected to Hollywood. So there is a lot of money in California. But apparently that Hollywood money isn’t making it to the state’s coffers (see California budget hole deepens to $16 billion: governor by Tiziana Barghini posted 5/12/2012 on Reuters).
California is facing a much deeper budget deficit than expected due to weak tax revenues and slow progress in cutting budgets, Governor Jerry Brown said on Saturday.
Brown said the shortfall for the fiscal year ending on June 30 now stood at $16 billion, up from a previous estimate of $9.2 billion made in January…
The state is still recovering from the 2008-2009 financial crisis that induced the worst recession since the 1930s. In April, California’s tax revenues came in $2.44 billion below the state’s estimate, largely due to weaker-than-expected revenue from personal income taxes…
California is expected to raise $7 billion in new revenue if voters approve a ballot measure in November that would increase the state tax rate on earnings above $250,000 and the state sales tax.
So the deficit will be $16 billion instead of the projected $9.2 billion. That’s only a mistake of 74% or so. By government standards that’s pretty good. It’d get you fired in the private sector. But not in the government. Where they treat gross mismanagement and incompetence of government bureaucrats in the usual way. By raising our taxes.
Interesting. The solution they want the voters to approve will take more money out of the private sector economy. Leaving people with less money to spend in the private sector. Meaning businesses will have to cut back to reduce their output to match this decrease in demand. And businesses do this by laying off workers. Which will further decrease the collected tax revenue from personal income taxes. The very problem they cite for their budget deficit woes.
This logic reminds me of an episode of The Three Stooges. Where they were in a rowboat. They accidentally drilled a hole in the bottom of the boat. Water began to leak into the boat. To get rid of this water one of them, I think Curly, drilled a second hole in the bottom of the boat. When asked why he did this he said to let the water drain out. Of course that didn’t happen. Instead, water leaked into the boat through two holes. Sinking it quicker.
I need to tell my mother that I used something I learned from watching The Three Stooges when I wish her a happy Mother’s Day. To let her know that all that time she said I ‘wasted in front of that television set’ was not time wasted after all. She’ll be happy to hear that. And enjoy her Mother’s Day. Of course it’ll help that she doesn’t live in California. For no amount of sunshine and perfect weather can make up for the hell of the tax bomb coming in The Golden State. (Unless you live in Hollywood, of course.) Which is a microcosm of the tax bomb coming to the United States. Which will be ugly. And painful.
Gee. I’d sure hate to be in our shoes.
Tags: budget deficit, California, deficit, economy, Hollywood, personal income taxes, private sector, tax bomb, tax revenue, taxes, The Three Stooges
Week in Review
Yet another example of the cost pressures on a national health care system. And the ill affect those cost pressures have on their patients (see Patients ‘treated in corridors’, claims Royal College of Nursing by Nick Triggle posted 5/12/2012 on BBC News Health).
Patients are being left stranded on trolleys for hours and forced to have treatment in corridors due in part to the loss of hospital beds, nurses say…
The RCN said that was putting patients at risk by potentially leaving them without access to essential equipment such as oxygen supplies and heart monitoring equipment as well as compromising their privacy and dignity.
Other problems highlighted included ambulances being forced to queue outside A&E units and patients being put in unsuitable wards.
The RCN said the crisis was being caused by a combination of staff shortages, the long-standing drive to reduce the number of beds in hospitals and the rise in A&E admissions…
Mike Farrar, chief executive of the NHS Confederation, which represents hospitals, said the problems identified should not be happening.
But he added hospitals were facing a struggle because of “growing financial pressure and significant structural upheaval”.
In other words the cost of Britain’s national health care is growing so great that they are cutting costs and rationing care. To treat as many people as possible with their limited resources. Which can be expected in a country with an aging population that is living longer.
It took the National Health Service (NHS) awhile to get here. Obamacare is starting with these dire statistics. So there will even be more cost cutting and rationing under Obamacare. Which will try to treat far more people with their limited resources. Which begs the question whose bright idea was Obamacare? And couldn’t they see the problems the NHS has been having these past few decades?
Tags: beds, Britain, cost pressures, cutting costs, hospitals, limited resources, National health care, NHS, Obamacare, patients, rationing care
Week in Review
This is the end. Beautiful friend. This is the end. My only friend, the end. Of our elaborate plans, the end. Of everything that stands, the end. No safety or surprise, the end. I’ll never look into your eyes…again.
Of course, Jim Morrison wasn’t writing about the Euro when he wrote The End. And the Doors didn’t sing much about public finance. But whenever a love affair ends it is painful. Whether it be with your significant other. Or a common currency that was going to change the economic order of the world. Especially when foolishly rushing in mistaking desire for love. The warning signs were there. The lying. And the cheating. Fudging their numbers to meet the requirements of the Maastricht Treaty. But what love can ever last when based on a lie (see Fitch Warns Euro Zone of Downgrades If Greeks Exit by Reuters posted 5/11/2012 on CNBC)?
Credit rating agency Fitch put the whole of the euro zone on notice on Friday that were Greece to leave the currency bloc as a result of its current crisis, the remaining countries could find their sovereign ratings at risk…
It said those countries were France, Italy, Spain, Cyprus Ireland, Portugal, Slovenia and Belgium…
The leaders of Greece’s once-dominant political parties were making a last push on Friday to avert a new election, which a poll showed would give victory to a radical leftist and doom an EU bailout — its second — agreed in March.
The majority of Greeks want to stay in the euro zone but voted last Sunday for parties that reject the severe terms of a bailout negotiated with foreign lenders.
European leaders say Greece will be ejected from the common currency [EUR=X 1.2914 — UNCH (0) ] if it turns its back on the package of tax hikes and wage cuts.
Well, then, goodbye Euro.
You can’t stay in the Euro if you need a Euro bailout but reject the terms of that bailout. For if you’re in need of a bailout you really can’t dictate the terms of that bailout. That usually falls to the party who has the financial wherewithal to bail you out. And that’s not Greece. So sad considering so much of Western Civilization came from Athens.
So what will it take to learn that an ever expanding welfare state does not work? How many more nations must fall? All of Europe? Will that be enough for the United States to learn the folly of their current economic policies? Probably not. They will follow Europe. Who will follow Greece. Buying votes with welfare spending. Until they cross the point of no return. Where the people will reject austerity. And responsible governing. Because their government taught them to. Always assuming that the day of reckoning will come in some other generation. Not in the current one. But the day of reckoning has arrived. Greece cannot borrow enough money to meet their spending requirements. For when a government spends more than they can borrow it’s time to cut your spending. They fudged their debt and deficit numbers to join the Euro. And their numbers have only grown worse ever since. And no amount of Keynesian math or class warfare can change that.
Tags: austerity, bailout, common currency, Euro, Euro bailout, Europe, Eurozone, Fitch, Greece, welfare state
Week in Review
The Japanese aren’t having enough babies. They have an aging population, a declining birthrate and a debt that will probably hit 250% of GDP. Meaning they owe more than twice the sum total that their nation produces in economic activity. You add that all together and it paints a very bleak future for Japan (see Lack of babies could mean the extinction of the Japanese people by David Piper posted 5/11/2012 on FOX News).
Japan has a problem, a lack of children, and it seems likely there will be even fewer in the future…
Government projections show the birth rate will hit just 1.35 children per woman within 50 years, well below the replacement rate…
The question everybody asks is why is there a lack of children..?
One reason is the cost. Japan is an extremely expensive country and getting a child through college can wipe out a family’s finances…
More than 20 percent of Japan’s people are aged 65 or over, one of the highest proportions of elderly in the world.
Japan’s graying population is a real problem for the country’s leaders as they need to ensure the dwindling numbers of workers can pay for all the care needed for the growing army of pensioners.
They give other possible explanations for the falling birthrate. From a preference to technology over human companionship to low libidos. But that last thing about the growing army of pensioners must be weighing heavily on the minds of the young. Fewer people paying for a growing army of pensioners can mean only one thing. Each individual is going to have to pay more in taxes to pay for these pensioners. And Japan being one of the most advanced nations in the world it’s a fair assumption that they are familiar with math. When the young today use math and crunch these numbers they can see only one result. They will not be able to afford to raise a family if they will be parenting this army of pensioners.
Birth rates are important. The only way you can pay for an expanding welfare state is with an increasing birthrate. Adding more workers each generation to the workforce. Always increasing the number of young taxpayers. So the young can grow at a greater rate than the pensioners. Only then will Japan NOT be an extremely expensive country to live in. And the young may once again consider raising a family.
Tags: aging population, babies, birthrate, children, declining birthrate, growing army of pensioners, Japan, Japanese, pensioners, taxes, taxpayers
Week in Review
They’re working out the bugs of electric cars. Figuring out a way to charge their drivers for their electricity. And to monitor you. So they can balance these new loads on the electric grid. And figure out how to direct advertising at you. Like the advertising you see at the gas pump. Only without collecting information on you. Especially if you pay with cash (see Electric car drivers left hanging in charger wars by Eric Evarts posted 5/11/2012 on Consumer Reports).
Naturally, charging networks install electric car chargers in people’s homes and in public places, such as parking lots and airports. For public chargers, they provide an RFID (Radio Frequency Identification) key tag to customers to activate the charger and authenticate payment. Some charging network providers say it’s important to them to collect authentication information even if they’re providing free charging, because it helps them track where future chargers should go, what kind of electric car you have, and how to manage loads on the power grid.
Perhaps the most important reason for charging networks is to collect and aggregate payments. Unlike buying gas, when you charge up an electric car, the cost amounts to just a few dollars. Charging our Nissan Leaf test car at our test track in Connecticut, for example, cost less than $4.50. And that figure is a worst-case scenario. (Our area has among the highest electric rates in the continental United States, and that cost is based a completely drained battery, which ideally should never happen.)
At the modest energy costs for recharging, credit-card processing fees take a significant bite out of providers’ profit margins. Companies are exploring more creative approaches to ensure profitability, such as aggregating payments from different tenants in an apartment garage. This business model may evolve over time.
Charge people for plugging in? Collecting information? Wasn’t just simply buying gas with cash simpler? Do we really need another place for people to hack into our private lives?
Guess that electricity isn’t free. Still, $4.50 a charge isn’t so bad. It may get you about 100 miles. Probably less if you use the heat or headlights. If you only charge once a day seven days a week that comes to about $31.50 a week. Of course, if you have to recharge at work to make it back home and maybe drive a little further on the weekend to a nice restaurant or too see a movie that can easily take you to two charges a day. Taking you to $63 a week. It adds up, doesn’t it? And how many miles would $63 in gasoline buy you in a week? Well, if gas is at $3.75 a gallon and your car gets about 24 miles per gallon that comes to about 57.6 miles per day for one week (63/3.75*24/7). Which is about one hour’s driving time on the expressway going 60 miles an hour. Without worrying about using your heat or headlights. With one fill up during those 7 days. A bit more convenient.
But what about those charges away from home? Let’s say you take your electric car on vacation. At the end of a long day’s driving you pull into a motel. Plug your car in. Go into your room. And turn the AC on to cool off. Take a good look at that air conditioner/heater poking through the wall of your room. Or imagine looking at one. Your typical unit plugs into a 20 amp circuit at 240V. If the motel installs a 30A, 240V fast charge battery charger to get your car charged up for the next leg of your trip in 4 to 5 hours (instead of the 10-12 hours of a 120V charger), that charger will draw more power than the room air conditioner. And to provide for all of those electric cars in the future the motel will have to more than DOUBLE their electrical service to meet this additional demand. As electric utilities will have to do everywhere if EVERYONE uses an electric car. A burden our aging electric grids just can’t handle. Not with a lot of rolling brownouts and blackouts. Not without building new electric generation and distribution grids. And the last time I looked that wasn’t cheap. Not to mention all of those carbon emissions they’ll throw up into the atmosphere. Because neither wind power nor solar power will be able to double our electric generation. That will have to come from our good old reliable fossil fuels.
Of course this is a silly example. For no one will be able to drive a long day in an electric car. Unless there’s a fast charge station every 100 miles or so. And people don’t mind waiting 4-6 hours for that fast charge at each of those fast charge stations. Or subscribe to some battery leasing program that can change your battery every 100 miles or so. As long as there is a battery changing facility every 100 miles or so. Or you can carry a spare battery or two. But all of that weight will reduce your driving distance.
Before we go ‘all in’ with these cars of the future we really should be looking at the big picture. For that big picture will ultimately have a very large price tag. For a world that won’t be as good as the one it replaced.
Tags: advertising, air conditioner, battery, battery charger, car chargers, charging networks, collect information, electric car chargers, electric cars, electric grid, electric utilities, electricity, fast charge, power grid, radio frequency monitoring, recharging
Week in Review
It could be the end of an era. And of happy childhood memories for future generations of children. Who may not know the joy of a delicious Twinkies snack cake. Otherwise known as childhood nirvana. The best part of taking your lunch to school. The best part of coming home from school. Soon to be no more. All gone. Instead, sadness. And weeping (see Hostess Sends Layoff Notices to All Workers by Jacqueline Palank posted 5/7/2012 on The Wall Street Journal).
Hostess Brands Inc. on Friday sent out letters notifying its more-than 18,000 workers that they could be laid off in the next two months.
The maker of Twinkies and Wonder Bread on Friday mailed out WARN Act notices to all of its employees, a Hostess spokeswoman confirmed to Bankruptcy Beat Monday. The federal WARN Act requires companies to give employees 60 days notice before closing a facility or ordering mass layoffs. However, sending the notices doesn’t mean a company is definitely going to lay off the recipients.
“The conditional WARN notices were sent to alert employees that a sale or wind down of the company is possible in the future. There are no immediate actions being taken,” spokeswoman Anita-Marie Laurie said Monday in an emailed statement. “Our goal is to emerge from bankruptcy as a growing company with a strong future—one that continues to provide good jobs with competitive wages and benefits.”
Hostess’s future remains uncertain, largely dependent upon the outcome of negotiations with its two big unions over the fate of their labor agreements as well as upon its search for new capital…
Together, the Teamsters and BCTGM represent 14,101 of Hostess’s 18,400 active workers.
Grownups. Once again spoiling children’s happiness. Do your homework. Take your bath. Make your bed. Clean your room. And now this. The greed of grownups. Threatening a childhood institution.
Where’s the government bailout? Like GM. And Chrysler. Oh, wait a minute. These snack foods aren’t vegetables. They’re delicious. The very opposite of vegetables. Which is why kids like them. But, alas, they’re not ‘healthy’. Like a stick of celery. Yum. And with this administration’s ‘war on fatties’ I guess we can say goodbye to these 18,400 workers. Perhaps they can get some government retraining for a new career. Something more healthy. And wholesome. Like picking vegetables. That we can force feed to our kids.
And soon our children will go to bed. Dreaming of a happier time. When they looked with joy at the Twinkies Mother put in their lunch bag. Others will dream of the stories they heard about those magical times that they never knew. And children everywhere will try to fall asleep curled up in the fetal position. In a pool of their own tears. Because the mean grownups took away their Twinkies.
Tags: Bankruptcy, childhood, happy childhood, Hostess, kids, snack foods, Twinkies, unions