Shirley MacLaine was as Bad a Mother as Joan Crawford according to her Daughter

Posted by PITHOCRATES - February 3rd, 2013

Week in Review

We hear a lot about empowering women.  So they can have careers.  And not just be mothers.  As if that is a bad thing.  We hear how wonderful it is when women return to work after having a baby.  And the importance of childcare so women can have children without it affecting their career.  We hear about how great it is that these women have it all.  Children.  And a career.  But what we don’t hear about is how the children feel about it (see Shirley MacLaine Chose Career Over Me, Daughter Says by GWEN GOWEN posted 2/1/2013 on ABC News).

“Mommie Dearest” is the classic movie about what it was like growing up the daughter of a Hollywood star. The star, Joan Crawford, came to be seen as the epitome of the mother no one would want.

Now the spotlight is on the parenting skills of another Hollywood icon, Shirley MacLaine.

MacLaine’s lookalike daughter, Sachi Parker, talks about her childhood in the book “Lucky Me: My Life With — and Without — My Mom, Shirley MacLaine.” Parker says MacLaine chose being a movie star over being a mother…

“She was very absent,” Parker said. “I was very lonely — very lonely. Definitely. And I still struggle with abandonment issues and loneliness.”

In the book, Parker writes that MacLaine was always happy to see her for about four hours, and then suddenly she became a burden…

When she was two years old, Parker said, MacLaine sent her to Japan to live with her father and MacLaine’s husband, businessman Steve Parker…

MacLaine remained in Los Angeles to make “The Apartment” with co-star Jack Lemmon. Her career came first, as she explained to Barbara Walters in 1990.

“I saw my mother suppress her own creativity. I wasn’t going to let that happen to me. First of all, children pick up on that and they feel guilty about … having been responsible for your not realizing your creativity, so that was not going to happen,” MacLaine said.

If your career is so important why even have children?  If you don’t want to be a mother and find being a mother a bore and a pain why even be a mother?  Why ruin the life of your child because you’re so selfish.  Putting your creativity ahead of your child’s well-being?

Few working mothers are Shirley MacLaine or Joan Crawford bad.  But effort and creativity put into a career is effort and creativity that a child will not have.  Is that fair to the child?  While their mothers have a choice they don’t.  They just have to settle for a part-time mom.  Unlike their mother’s mother.  Who probably had a full-time mom.

If you asked the children they’d probably prefer a full-time mom.  But we don’t ask the children.  Probably because people don’t want to hear their answer.  Sure, they’ll want to hear them say we need to do something about global warming.  That gay people should have the same right to get married as anyone else.  That we need to pay their teachers more.   But when it comes to them wanting a full-time mom then it’s the old children should be seen and not heard.

If you want a career have a career.  If you want children have children.  But if you want to have both think of what the children would want.  And what’s fair to them.  Don’t be a Joan Crawford.  Or a Shirley MacLaine.

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With so many other Venues to Gamble in Gambling Revenue is down in Atlantic City

Posted by PITHOCRATES - February 3rd, 2013

Week in Review

Once upon a time if you wanted to gamble you had to travel to Las Vegas.  Or break the law.  Now there’s gambling everywhere.  There’s horseracing.  Greyhound racing.  They’re building casinos in cities.  And putting them on riverboats.  Native Americans are opening casinos on their reservations.  And there’s gambling on the Internet.  Even the state has gotten into running numbers.  With their lotteries.  Today you can’t turn around without something to gamble on.  Which is putting a crimp into the old gambling venues (see Christie Failing on Atlantic City Revival: Muni Credit by Terrence Dopp & Michelle Kaske posted 1/30/2013 on Bloomberg).

Atlantic City, the seaside casino resort that Governor Chris Christie says is key to New Jersey’s recovery, is floundering after six straight years of declining gambling revenue…

Two years after Christie created a state-controlled casino district to help revive the city, it’s still losing business to neighbors. Pennsylvania, which expanded gambling, passed New Jersey in 2012 to become the second-largest U.S. betting market after Nevada. Casino-tax revenue is 26 percent below Christie’s budget target midway into the fiscal year, and Hurricane Sandy, which shut the city for five days, is only partly to blame…

Atlantic City’s 12 casinos generated $3.05 billion of revenue last year, down from a 2006 peak of $5.2 billion. The decline will continue, even with the new $2.4 billion Revel casino, unless New Jersey adds a source of gambling income, said state Senator Ray Lesniak. The Democrat is urging Christie to sign a bill to let casinos run online wagering operations…

“This is one of the last chances the governor has to provide a lifeline to Atlantic City casinos,” Farrell said in a Jan. 24 report. “Online gaming sites operated by state casino operators will lead to job creation and drive visitation to Atlantic City…”

The governor, who took office in January 2010, gave Revel Entertainment Group LLC a $261 million tax break to help restart construction of Atlantic City’s first new casino in nine years. Gambling revenue from Revel, which opened last year, has been “well below” expectations, S&P said in a November report…

Casinos comprise more than two-thirds of the tax base in Atlantic City, where more than a quarter of its 40,000 people live in poverty. ..

Christie said Revel would be a catalyst for Atlantic City’s transition from day-trip to luxury resort destination. Some lawmakers are now trying to lure back some of those day-trippers with a measure that would exempt casino-bound tourist buses from paying tolls on state highways.

Cities and states all want to add casino gambling as they see it as a cash cow.  Instead of saving for their retirement or their children’s college education gamblers just give their money to casinos.  Who give a share of it to the cities and states.  It works great.  As long as there isn’t a whole lot of competition.  And people from outside of the city or state travel there to gamble.  Because if it’s only locals gambling that just takes money away from other local businesses.  So if you’re not a resort destination you’re never going to realize big tax revenue from gambling.  Which is the problem Atlantic City is having.

Internet gambling?  Yeah, giving people a way to gamble without going to Atlantic City will bring more people to Atlantic City.  Not.  To be a resort destination they need something more than gambling.  For people can do that in Pennsylvania.  Or on the Internet.  They need something else to make them go to Atlantic City.  Like people go to Las Vegas.  For there are other things to do in Vegas.  Because Vegas is a resort destination.

Tax breaks and toll exemptions?  Yet further proof that we are overtaxed.  For it’s always the go-to idea to improve economic activity.  Lowering the cost of doing things.  By lower taxes.  Or cutting fees like tolls.  For the less you nickel and dime people the more likely they’ll come to spend money in your fair city.  The federal government needs to learn this lesson from our cities and states.  You generate economic activity with lower taxes.  Not higher taxes.

Gambling is big money.  But does it really help a city?  Despite the huge tax revenue they bring into Atlantic City the poverty rate is greater than 25%.  So, no, it doesn’t seem to help.  They would probably be better off lowering taxes and fees and making the city more business friendly.  To create jobs.  And give those people a way out of poverty.

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Homeowners are still Suffering in the Housing Market but Speculators are Profiting

Posted by PITHOCRATES - February 3rd, 2013

Week in Review

Housing sales drive the economy.  Because it takes a lot of economic activity to build houses.  And even more for homeowners to furnish their homes.  This is why the government gave us the subprime mortgage crisis and the Great Recession.  They kept interest rates artificially low.  And the Clinton administration forced lenders to lower standards to put as many people into houses as possible.  But, alas, they put a lot of people into homes that couldn’t afford them.  Using subprime mortgages to get them into those homes.  Like the adjustable rate mortgage.  And when interest rates went up so did their mortgage payments.  And they defaulted.  Which kicked off the subprime mortgage crisis.  Giving us the Great Recession.

These low interest rates created a great demand for housing.  Everyone was borrowing money to buy.  Because money was so cheap to borrow.  And with those lower standards borrowing money was never easier.  Especially for investors.  Who bought houses.  Fixed them up.  And put them back on the market.  House flippers.  With all this demand housing prices soared.  Creating a great housing bubble.  Which burst.  As all bubbles do.  And housing prices plummeted.  Leaving people with mortgages greater than the new value of their houses.  Some walked away.  Especially those who put little to nothing down.  Like those house flippers.  And those subprime borrowers.  Flooding the market with more homes.  Putting further pressure on housing prices.

It was a huge mess the government gave us.  The damage was great.  And we’ve been waiting a long time for the housing market to recover.  Housing prices are finally rising.  But not for the right reasons (see Home prices on the rise, but not ownership by Alejandro Lazo posted 1/29/2013 on the Los Angeles Times).

The sharp increase in home prices — particularly in regional markets such as Phoenix and Las Vegas, which had been so decimated by the bust — is raising concern among some economists…

It is those kinds of big increases that could fuel speculation.

“It does concern me a bit,” Zillow.com chief economist Stan Humphries said. “It encourages people to think about housing as a short-term investment, instead of a long-term investment…”

While prices may be rising, homeownership is struggling, an indication that investors are playing a big part in fueling the market’s rebound. The Census Bureau said Tuesday that national homeownership fell 0.6% to 65.4% in the fourth quarter over the same period a year earlier…

The spike in prices is masking the trouble that borrowers with underwater mortgages are facing. In fact, it’s precisely because so many borrowers cannot get out from underneath their upside-down homes that prices are rising so much, economists have said, because those people are simply hanging on and not putting their homes on the market.

People underwater are hanging on because they don’t want to take a huge loss by selling.  When you lose some 25-40% of your home’s value there’s only one way to get it back.  You keep living in it.  For a long time.  For only time can restore a home’s value.  Which a homeowner will lose if he or she sells.

So house prices are coming back up.  But like elsewhere in the economy it’s the rich who are doing well.  Not middle class families.  Those who want to live in their homes.  Furnish their homes.  These people who drive real economic activity.  Not the house flippers who are just trying to profit off the misfortune of others.  Who are picking up houses on the cheap thanks to those lost their homes or sold them at a loss.  And flipping them to make a profit.  These are the people doing well in Obama’s America.  Not middle class families.

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China running low on Factory Workers and Farmers as an Aging Population threatens Future Growth

Posted by PITHOCRATES - February 3rd, 2013

Week in Review

During the Eighties those in America who favored large government incursions into the private market liked to point to Japan.  Whose economy was booming during the Eighties.  Thanks to a lot of government partnering with business.  And low interest rates.  The Japanese were buying up landmark American properties.  Some feared that they would take a controlling interest in the United States.  And those on the Left said that we were fools for not doing what the Japanese were doing.  They still believe this.  Despite what happened in the Nineties in Japan.  It turned out that a lot of that economic growth wasn’t real.  It was a bubble.  And they blew that bubble up so much that it took a decade and more to deflate it.  Japan’s Lost Decade.  Which is closer to two decades.  And counting.

Now China is the new Japan.  Where government partners with business.  And keeps interest rates low.  Once again those on the Left point to this model.  Urging that the U.S. adopt it, too.  So the U.S. can have a strong manufacturing sector.  And a booming export market.  But there’s more to the economy than exports (see UPDATE 3-China to speed up rural land reform, ensure food supply by David Stanway and Kevin Yao posted 1/31/2013 on Reuters).

The central government said in its “number one document” for 2013, focusing on modernising agriculture, it would grant more subsidies to large-scale landholders, family farms and rural cooperatives as it tries to provide more incentives to bring economies of scale to the fragmented countryside…

It listed grain security and farm product supply as top priorities, with China seeking to boost production as it urbanises and industrialises. The relocation to the cities of more than 200 million migrant workers has slashed the rural workforce and boosted food demand, leading to a growing dependence on imports.

So the Chinese traded food for exports.  To get cheap workers to fill their export factories they just pulled people from agriculture.  Leading to food shortages that they have to make up with food imports.  A country no stranger to food shortages.  Or trying to bring economies of scale to agriculture.  The last time they tried it was during the Great Leap Forward.  With forced collectivization of their farms.  Which was such a failure that tens of millions starved to death in the famine this forced collectivization caused.  But famine is not the only way to cause a population decline (see China’s looming worker shortage threatens economy by AFP posted 1/30/2013 on France 24).

China’s demographic timebomb is ticking much louder with the first fall in its labour pool for decades, analysts say, highlighting the risk that the country grows old before it grows rich.

The abundant supply of cheap workers in the world’s most populous nation has created unprecedented cost efficiencies that underpinned its blistering economic expansion over the past 35 years, propelling the global economy forward.

But now the inexorable consequences of the one-child policy imposed in the late 1970s are beginning to appear, and threaten to impact its future growth.

China’s working-age population, defined as 15-59, fell 3.45 million last year, official data showed earlier this month — the first decline since 1963, after tens of millions died in a famine caused by the Great Leap Forward…

“The population is aging so fast that we are running short of time to deal with it,” said Li Jun, also of CASS, adding the family planning policy had exacerbated the problem…

An ageing population not only means fewer people available to employ and higher labour costs, but investment — a key driver of China’s growth — will be harder to maintain as families spend their savings on health care, she said…

At the same time…the country was woefully underprepared to meet the burden of caring for the elderly…

By around 2060, every three Chinese workers will have to support two people above 60, compared with a ratio of five to one now…

Analysts said the medical services are increasingly expensive and hard to access, while the country’s flagship public pension plans are crippled by problems including insolvency risks, difficulties in expanding coverage and mismanagement.

Over a billion people in China and it’s not enough.  They’re short of both factory workers and farmers.  Because of an aging population.  The problem all advanced economies have.  Only China is having it before they are even an advanced economy.  And their problems of trying to take care of their aging population are going to make the problem of saving Social Security and Medicare seem like child’s play.  Because of that one-child policy.

In the advanced economies parents are having barely enough children to replace them.  While China’s one-child policy guarantees a shrinking population.  Which means fewer mouths to feed.  But it will also mean fewer people to farm their land and to work in their factories.  Just as more people leave the workforce.  Which means the future isn’t looking very good for China.  Who may soon experience their own Lost Decade.  A lesson for the U.S.  That having government partner with business and low interest rates does not make a sound economy.  It only creates bubbles.  Not real sustained economic activity.  Which all can come crashing down when overwhelmed by the crushing weight of an aging population.

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Nations race to Devalue their Currencies to Boost Exports and Destroy Retirement Savings

Posted by PITHOCRATES - February 3rd, 2013

Week in Review

If you ever traveled to a foreign country you know what you had to do before buying foreign goods.  You had to exchange your currency first.  That’s why they have currency exchanges at border crossings and airports.  So people can convert their currency to the local currency.  So they can buy stuff.  And when traveling people liked to go to areas that have a weaker currency.  Because a stronger currency can get more of a weaker currency in exchange.  Allowing your own currency to buy a lot more in that foreign country.  And it’s the same for buying exported goods from another country.

The weaker a country’s currency the more of it people can get in exchange for their currency.  Allowing importers to buy a lot more of those exported goods.  Which helps the export economy of that nation with a weak currency.  In fact having a weak currency is such an easy way to boost your exports that countries purposely make their currencies weaker.  As they race each other to see who can devalue their currency more.  And gain the biggest trade advantage (see Dollar Thrives in Age of Competitive Devaluations by A. Gary Shilling posted 1/28/2013 on Bloomberg).

In periods of prolonged economic pain — notably the 2007-2009 global recession and the ensuing subpar recovery — international cooperation gives way to an every-nation-for-itself attitude. This manifests itself in protectionist measures, specifically competitive devaluations that are seen as a way to spur exports and to retard imports.

Trouble is, if all nations devalue their currencies at the same time, foreign trade is disrupted and economic growth is depressed…

Decreasing the value of a currency is much easier than supporting it. When a country wants to depress its own currency, it can create and sell unlimited quantities. In contrast, if it wants to support its own money, it needs to sell the limited quantities of other currencies it holds, or borrow from other central banks…

Easy central-bank policy, especially quantitative easing, may not be intended to depress a currency, though it has that effect by hyping the supply of liquidity. Also, low interest rates discourage foreign investors from buying those currencies. [Japanese] Prime Minister Shinzo Abe has accused the U.S. and the euro area of using low rates to weaken their currencies.

“Central banks around the world are printing money, supporting their economies and increasing exports,” Abe said recently. “America is the prime example. If it goes on like this, the yen will inevitably strengthen. It’s vital to resist this.”

So a cheap and devalued currency really helps an export economy.  But there is a downside to that.  In some of these touristy areas with a really weak currency it is not uncommon for some people to offer to sell you things for American dollars.  Or British pounds.  Or Eurozone euros.  Why?  Because their currency is so week it loses its purchasing power at an alarming rate.  So fast that they don’t want to hold onto any of it.  Preferring to hold onto a stronger foreign currency.  Because it holds its value better than their own currency.

When a nation prints money it puts more of them into circulation.  Which makes each one worth less.  And when you devalue your currency it takes more of it to buy the things it once did.  So prices rise.  This is the flipside to inflation.  Higher prices.  And what does a devalued currency and rising prices do to a retiree?  It lowers their quality of life.  Because the money they’ve saved for retirement becomes worth less just as prices are rising.  Causing their retirement savings to run out much sooner than they planned.  They may live 15 years after retirement while their savings may only last for 5 or 6 of those years.

Printing money to devalue a currency to expand exports hurts those who have lived most responsibly.  Those who have saved for their retirement.  Making them ever more dependent on meager state pensions.  Or welfare.  And when that’s not enough to cover their expenses they have no choice but to go without.  We see this in health care.  Where those soaring costs have an inflationary component.  With the government squeezing doctors on Medicare reimbursements doctors are refusing some life-saving treatment for seniors.  Because the government won’t reimburse the doctors and hospitals for these treatments.  Or doctors will simply not take any new Medicare patients.  As they are unable to provide medical services for free.  And with their savings gone seniors will have no choice but to go without medical care.

The United States, Britain, Europe, Japan—they are all struggling to provide for their seniors.  As China will, too.  And a big part of their problem is their inflationary monetary policies.  Coupled with an aging population.  The Keynesians in these nations have long discouraged their people from saving.  For Keynesians see private savings as leaks in the economy.  They prefer people to spend their money instead of saving it.  Trusting in state pensions and state-provided health care to provide for these people in their retirement.  Which is why the United States, Britain, Europe and Japan are struggling to provide for their seniors in retirement.  A direct consequence of printing too much money.  And not letting people take care of their own retirement and health care.

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