New Zealand, Denmark, Hong Kong, Singapore and Canada are the top 5 Countries for Business

Posted by PITHOCRATES - November 17th, 2012

Week in Review

Once upon a time the United States was the place to be if you wanted to go into business.  It was once so business-friendly in the United States that they overtook one of the world’s greatest empires.  The British Empire.  And caused great concern and consternation in Europe with their growing economic prowess.  As American became the world’s greatest economic power.

But those days are gone now.  When George W. Bush was president the US was still the best place in the world to run a business.  But in President Obama’s first year in office we slipped to the number two spot.  In 2010 we fell to number 10.  And in 2012 we slid even further to number 12.  And with President Obama winning a second term things aren’t likely to improve.  For President Obama is clearly not as good as George W. Bush.  Who kept America the number one place to do business in the world (see New Zealand Tops Our List Of The Best Countries For Business by Kurt Badenhausen posted 11/14/2012 on Forbes).

The U.S. continues to lose ground against other nations in Forbes’ annual look at the Best Countries for Business. The U.S. placed second in 2009, but it has been in a steady decline since. This year it ranks 12th, down from No. 10 last year. The U.S. trails fellow G-8 countries Canada (No. 5), United Kingdom (No. 10) and Australia (No. 11).

Corporate taxes continue to put a damper on American businesses…

It is not just the rate that hinders the U.S., but also the complexity of the tax code. The typical small or medium-size business requires 175 hours a year to comply with U.S. tax laws, according to the World Bank. Overall the U.S. ranks 55th out of the 141 countries we examined in terms of its tax regime. The world’s biggest economy at $15.1 trillion, it also scores poorly when it comes to trade freedom and monetary freedom.

New Zealand ranks first on our list of the Best Countries for Business, up from No. 2 last year, thanks to a transparent and stable business climate that encourages entrepreneurship. New Zealand is the smallest economy in our top 10 at $162 billion, but it ranks first in four of the 11 metrics we examined, including personal freedom and investor protection, as well as a lack of red tape and corruption…

We determined the Best Countries for Business by grading 141 nations on 11 different factors: property rights, innovation, taxes, technology, corruption, freedom (personal, trade and monetary), red tape, investor protection and stock market performance…

Ranking second on our list is Denmark, on the strength of its technology, trade freedom and property rights…

Hong Kong ranks third. Its economy, highly dependent on international trade and finance, remains one of the most vibrant in the world. Credit one of the world’s lowest tax burdens and a high level of monetary freedom…

Singapore comes in at No. 4, ranking in the top 20 in all but one of the 11 metrics we measured…

Canada slid from the top of the rankings in 2011 to No. 5 this year, losing ground on innovation and technology… However Canada remains among the best countries in the world when it comes to trade freedom, investor protection and the ease of starting a new business.

Congratulations New Zealand, Denmark, Hong Kong, Singapore and Canada.  You are the 5 best in the world.  Perhaps one day the US can emulate the great things you are doing.  For we have lost our way.  Let’s hope that you don’t, too.

If there was any further proof that we need to reform our tax code this is it.  Tax compliance costs are sucking capital out of our businesses.  And hindering economic growth.  As evidenced by one of the worst economic recoveries of all time.  There’s a reason for this.  It’s the tax code.  And costly regulatory compliance costs.  Which does not encourage entrepreneurship.  But kills it.  For with today’s red tape you need an army of tax accountants and tax lawyers to start up a business.  Which doesn’t exactly encourage someone with a great idea to spend their life’s savings to go into business.

With another 4 years of pushing America down the list expect one of the worst economic recoveries of all time become even worse.  For this is not a climate to create jobs.  Expect continued high levels of unemployment.  And a worsening of the economy.  For we ain’t seen anything yet.  As President Obama told Russian president Medvedev, “This is my last election. After my election, I have more flexibility.”  Which means he’ll be able to do what he really wants to do in the next four yours.  Which means the first four years were as good as it’s going to get.  And it probably won’t get that good again.

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Wind Power Expansion Reliant on Market Forces now so there probably won’t be Much More of It

Posted by PITHOCRATES - November 17th, 2012

Week in Review

The wind power market is slowing down.  Not that there was ever a wind power market.  The only way wind power has grown has been with massive taxpayer subsidies.  But as economies wallow in stagnant economic growth those subsidies are starting to dry up.  And with it the expansion of wind power in nations across the world (see Wind Power Market to Slow on EU, U.S., China Hurdles, Lobby Says by Alex Morales posted 11/14/2012 on Bloomberg).

Wind farm growth is set to slow as limits on capacity in China’s grid, falling carbon prices in Europe and a lack of direction in U.S. government policy hamper demand in major markets, the Global Wind Energy Council said.

Turbine capacity of 586,729 megawatts will be installed by 2020, from 237,699 megawatts in 2011, the Brussels-based lobby said today in an e-mailed report co-authored by environmental campaigner Greenpeace. They see annual investment of 45 billion euros ($57 billion) in 2020, down from 50 billion euros in 2011. The figure is equivalent to annual capacity growth of less than 11 percent, down from 28 percent for the 15 years through 2011…

Chinese growth in the past few years has outstripped the ability of the country’s power grid to absorb new generating capacity. In the U.S., the industry has been hobbled by the government’s failure to extend a tax credit that expires at the end of this year, and in Europe carbon prices this year have reached all-time lows, reducing the incentive to cut emissions.

The report took as its central scenario a “new policies” pathway outlined by the Paris-based International Energy Agency. Using that scenario, Greenpeace and GWEC said installations in China, slowing because of constraints in the power grid, will climb more than 180 percent to 179,498 megawatts in 2020.

Wind capacity in the 27-nation European Union will rise 120 percent to 207,246 megawatts, and North America will gain 130 percent to 121,238 megawatts. African installations will surge fivefold to 5,372 megawatts, Latin America almost triple, and Indian installations double, according to the scenario.

Let’s look at some of these numbers.  And note the units.  Annual investment in wind power is falling to $57 billion a year.  For what?  To bring installed wind turbine capacity up to 586,729 megawatts worldwide.  That’s a lot of money for not a lot of power.  As a percentage of total installed capacity that comes to about 11% for North America, 25% for China and 27% of the EU.  Sounds like it will make a difference.  And it will.  But not in a good way.

The power wind power is replacing is basically coal-fired power plants.  Which are on all of the time.  Having capacity factors reaching and exceeding 90%.  Meaning that over a given period of time 90% or more of that installed capacity will be on line producing useable electric power.  Why?  Because coal will burn all of the time.  Something wind can’t do.  Blow all of the time.  And when it blows it doesn’t always blow at the right wind speed.  Which is why the capacity factor for wind power is much lower.  About 25%.  So if you convert the wind power to equivalent coal power the installed wind turbine capacities fall.  From 121,238 megawatts in North America to about 30.3 megawatts (or about 2.7% of the total installed capacity).  From 179,498 megawatts in China to about 44.8 megawatts (or about 6.2% of total installed capacity).  And from 207,246 megawatts to about 51.8 megawatts in the EU (or about 6.8% of the total installed capacity).  Which is a lot less power for the investment.

This is why wind power is not economically viable.  And can only exist with taxpayer subsidies.  And adding a tax to the more reliable and more plentiful power sources.  Such as coal.  As in carbon prices coal-fired power plants have to pay.  A cost that they add to our electric bills.  And why are carbon prices falling in Europe?  Because the economy is so poor that there is a low demand for electric power.  In part due to the EU’s green policies that hinder economic growth.  By raising the cost of doing business.

So what will green energy do for us?  It will raise the cost of our electric power.  And make that electric power less reliable.  Making rolling blackouts a common occurrence.  Even though we’re paying more for electric power.  That is what green energy will do for us.

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Cost Pressures in the NHS Delay Ambulances at Hospitals turning Police Cars into Ambulances

Posted by PITHOCRATES - November 17th, 2012

Week in Review

Britain’s NHS has long been struggling to reduce wait times.  Something that is a consequence of service rationing.  When you don’t have the budget to treat all patients at the same time you make some patients wait until the patients ahead of them have been treated.  The more patients and/or the fewer health care services available the longer the wait time.  And this waiting is even extending beyond the hospital (see North Wales Police ‘take calls for busy ambulances’ posted 11/13/2012 on BBC News Wales).

North Wales Police are being called to help people who need paramedics because ambulances are often too busy, according to rank-and-file officers.

North Wales Police Federation chairman Brian Robinson said officers were doing so regularly and sometimes did not know if or when ambulances would come…

Mr Robinson, whose organisation represents lower ranking police officers, told the BBC it was not just that officers were left waiting for ambulances to arrive but were actually dispatched to accidents on occasion because there were not any ambulances to send.

“They are tied up at the hospitals and we are the only people that can actually help…

“We will do our best, as we always will in these circumstances, but what my worry is that out of misguided desire to do the best for people, officers could face discipline procedures or even worse, facing an investigation into a death in police custody.”

Apparently it’s taking so long for hospital staff to become available to unload and process the patients from these ambulances that they’re preventing these ambulances from returning to service.  This is the cost of national health care.  Longer wait times.  Even for ambulances.  Forcing the police to step up and provide ambulance duty.  Until, that is, someone sues them for a wrongful death.  All because they tried to save a life instead of just letting someone die.

Yet another illustration of what we have to look forward to under Obamacare.  Or whatever Obamacare becomes.  Longer wait times.  In the hospitals.  And when waiting for an ambulance.  For if it’s happening in the nation that holds their national health care dear it will happen anywhere.  Even in the United States.  Where things will probably be worse.  As the US has 5 times the population.  And no doubt will have 5 times the patients.  As well as 5 times the wait times.

You see, the problem is that free health care is not free.  It’s just a different and less efficient way of paying for it.  Which is what leads to service rationing.  And those longer wait times.  The poorer efficiency.  Which is always what you get whenever you increase the bureaucracy of anything.  And that’s exactly what Obamacare will do to the US health care system.  Make it as efficient and enjoyable as waiting to renew your driver’s license.  Only you’ll be waiting longer.  And be more frightened and/or sick.

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The UK is Holding off on Selling EU Carbon Permits as the EU is Holding off Taxing other Countries for their Spending

Posted by PITHOCRATES - November 17th, 2012

Week in Review

The Eurozone is wallowing in a sovereign debt crisis that just won’t end.  Caused by spending obligations made during good economic times.  On the assumption that those good economic times would last forever.  But they created a lot of that economic activity with expansionary monetary policy.  Keeping interest rates artificially low.  By expanding the money supply.  Encouraging consumers and businesses to borrow and spend.  Which they did.  Leaving them with massive amounts of debt.  And inflation.  Which they fought the only way you can fight inflation.  By raising interest rates.  And contracting the money supply.  Or, in other words, with a recession.  Which reduces tax revenues.  Forcing governments to borrow more to pay for these ever expanding spending obligations.  Which led to rising borrowing costs.  And debt crises.  Leaving these Eurozone countries starving for cash.

Enter the Emissions Trading Scheme.  Making high energy uses buy permits to exhaust carbon.  Ostensibly to reduce global warming.  But really just a massive wealth transfer from the private sector to the public sector.  To help those countries with debt crises to pay for their ever expanding spending obligations without having to govern responsibly.  So they can continue to pander and buy votes and advance their liberal agendas.  But there has been some push back.  In particular from other nations flying into the European Union (EU) airspace who don’t want to subsidize the irresponsible governing of the EU countries.  Because of possible retaliation (like China threatening to cancel their Airbus orders for new airplanes) the European Commission is delaying the implementation of their airline emissions law (see Britain says it may review carbon permit auctions for airlines by Nina Chestney posted 11/12/2012 on Reuters).

The UK government will review its forthcoming auctions of European Union carbon permits for the aviation sector when it gets more details from the European Commission about its plan to delay the bloc’s airline emissions law, a minister said.

The UK plans to hold two auctions of around 3.5 million EU carbon permits for the aviation sector on November 26 and December 10…

The EU Commission said on Monday it will conditionally put on hold its rule that all airlines must pay for their carbon emissions for flights to and from EU airports.

Why is the UK reviewing their auction of carbon permits?  Because these permits are basically new taxes for the airlines.  That the airlines will pass on to their passengers.  Raising the cost of flying.  Which, in turn, will make some people forgo flying.  Hurting the airline industry.  Further exasperating a weak economy.

Of course those in the Eurozone rioting against austerity would love to see the EU go ahead with taxing other nations for flying into their airspace.  Because they don’t like austerity.  And would love to pass on their costs to other nations’ taxpayers.  Something other nations’ taxpayers are none too keen on.  So it’s a mess.  And the Emissions Trading Scheme only compounds the problem.  As it does nothing to address the source of the problem.  Excessive spending obligations that these nations cannot afford.

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Baby Boom causes new Short-Term Cost Pressures for NHS but offers Long-Term Hope

Posted by PITHOCRATES - November 17th, 2012

Week in Review

Now that President Obama won reelection and the Democrats retained the Senate Obamacare is here to stay.  Unless something happens in the 2014 midterm elections that turns Congress over to the Republicans with supermajorities that will allow them other ways to defund or otherwise shutdown Obamacare.  Or the states stand together on their end and refuse to implement Obamacare.  But unless these things happen Obamacare is here to stay.  Perhaps one day evolving into a full blown national health care system.  Which they designed it to do.  By putting in requirements that encourage employers to drop health care.  Opening the door for the government to step in to save the day from the health care crisis they created.

So what will life be like under Obamacare?  Start following what’s happening in the British National Health Service (NHS).  And you’ll get an idea of what national health care is like (see New baby boom to put ‘enormous’ strain on NHS by Stephen Adams posted 11/12/2012 on The Telegraph).

In the first three months of this year alone, 4,600 more babies were born than during the same period last year, according to official figures

Midwives are warning that the trend is continuing and will swell births to more than 700,000 in England this year – the first time that level has been reached since 1971.

Birth rates have been on the rise for a decade, due principally to immigration, with the number growing by about 12,000 a year…

Professor Cathy Warwick, chief executive of the Royal College of Midwives, said the increase was putting “enormous” strain on the NHS…

Before David Cameron came to power, he promised another 3,000 midwives across the NHS, but to date only an extra 900 have been employed.

The RCM is arguing another 5,000 are needed across England, to keep pace with the rising number of births…

A recent RCM poll of more than 2,000 midwives found nine in 10 did not feel they could give women all the care and support they needed.

A lack of midwives has been cited as one reason for the high proportion of caesareans in Britain, with mothers sometimes opting for surgery to avoid repeating a traumatic first birth.

The NHS is struggling to slash its budget.  For before this current baby boom birthrates had been falling after the establishment of the NHS.  Shrinking the tax base.  And the funding for the NHS.  At a time when people were living longer thanks to advances in health care.  So the NHS finds itself chronically underfunded thanks to that shrinking tax base.  And overburdened by more elderly people living longer after retirement consuming a lot of health care resources.  Which is why the NHS relies on midwives to deliver babies.  Often in the mother’s home.  To relieve the hospital of an enormous expense of handling something so mundane and routine as delivering a baby.  Midwives are a way to cut costs.  Without sacrificing quality health care.  As most births proceed without any complications.  When there are complications they take the mother to a hospital.

Midwives help the NHS spread their limited resources over as many people as possible.  Much like the quasi death panel Liverpool Care Pathway.  By encouraging people to let their loved dies instead of trying to prolong their lives with costly health care resources.  Of course, the NHS is currently revising their constitution to make sure those decisions are based on the patient’s best interests and not the hospital’s bottom line.

And speaking of bottom lines there is nothing like a baby boom to solve a government-funded organization’s chronic underfunding.  Because babies become taxpayers.  When they join the workforce.  And if they sustain this baby boom long enough it may bring the age of the British population down.  By having more people entering the workforce than leaving it.  Provided there are jobs for them when they are ready to enter the workforce.  So a rising population growth rate can’t fix all of their problems alone.  They also need a business-friendly environment that will create jobs to employ these new taxpayers.

Of course you know what will happen then.  After the baby boom creates a tax revenue boom the government will make more spending obligations it won’t be able to meet once their population ages again.  And they will be right back where they started from.  Only the spending obligations will be greater the next time around.  And here lies the problem.  It’s the spending that is the problem.  Always has been.  And always will be.  If governments stopped spending themselves into these kinds of messes they wouldn’t have these problems to begin with.  And the Americans have just given themselves a spending obligation that will create the mother of all messes.  Obamacare.  And whatever it will evolve into.  For the US has about 5 times the population of the UK.  So its cost pressures will probably be 5 times what the NHS is feeling.  Or more.  So the Americans can expect midwives to replace the maternity wards their mothers gave birth in.  And a Liverpool Care Pathway quasi death panel.  Why?  Because if the British couldn’t avoid these things than it isn’t likely the Americans will with 5 times the cost pressures.

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