Wal-Mart Haters can’t get Wal-Mart Workers or Shoppers to Hate Wal-Mart

Posted by PITHOCRATES - September 8th, 2013

Week in Review

The political left hates Wal-Mart.  And just loves to hate them.  Because they use nonunion labor.  Unions are constantly trying to organize Wal-Mart stores.  They picket and protest but the people don’t rise up in solidarity.  Why?  Because the people love Wal-Mart.  Where their ever shrinking paychecks can buy more than at any other store.  They love these stores.  And their employees do, too.  At least based on this phony protest (see Walmart on Thursday protests: ‘The UFCW threw a party and nobody showed up’ by SEAN HIGGINS posted 9/6/2013 on the Washington Examiner).

Walmart issued the following statement this afternoon in response to protest events orchestrated by the United Food and Commercial Workers Union-backed group OUR Walmart on Thursday:

Once again, it looks like the UFCW threw a party and nobody showed up. Despite promises of ‘thousands of workers’ protesting this week, the union failed to deliver more than a smattering of paid protesters at their 15 orchestrated events. At most, 50 of the participants actually work for Walmart, put another way, that’s less than one-tenth of one percent of our 1.3 million associates…

A Washington Examiner look at news reports of the protests in the 11 cities that held them (OUR Walmart had promised 15 cities) found that Few of the protesters were actual employees of the nonunion retail giant.

If Wal-Mart was so bad the people still would not have showed up to protest.  Why?  Because if it was that bad working at Wal-Mart no one would work at Wal-Mart.  But the Wal-Mart haters will say that is only because these Wal-Mart jobs are the best jobs available.  And the supporters of Wal-Mart will say, “Exactly.”

If Wal-Mart is such an evil place to work then the simplest solution would be for another business to open up and offer better pay and benefits to attract the Wal-Mart workers over to their store.  But that’s not happening.  Because these Wal-Mart haters won’t put their money where their mouth is and open up a store that offers better pay and benefits.  But the Wal-Mart haters will say that’s not fair because they can’t do what Wal-Mart can do.  And the supporters of Wal-Mart will say, “Exactly.”  Which is why people love shopping at Wal-Mart.

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The August Jobs Report, Stuck between a Lie and a Hard Place

Posted by PITHOCRATES - September 8th, 2013

Week in Review

The left has been lauding the good economic news jobs report after jobs report.  Always talking about all those new jobs created.  And the falling unemployment rate.  While not talking at all about the falling labor force participation rate.  For good reason.  For while new jobs and a falling unemployment rate are good people leaving the labor force is not.  And, sadly, the only thing making the jobs report look good is that people are simply disappearing from the labor force (see 169K New Jobs Last Month, 7.3% Unemployment: Conflicting Signals For The Fed by Abram Brown posted 9/6/2013 on Forbes).

Unemployment continues to fall, with joblessness reaching a 4-and-a-half-year low in August at 7.3%. Troublingly, the drop in unemployment comes from fewer people looking for jobs rather than a robust economy adding workers to open positions. The number of Americans participating in the labor market is at the lower [sic]point since August 1978.

Going forward, the Fed will need to decide how much stock to put in the unemployment number. It threatens to continue to fall while job creation stays meager–setting up a situation when the Fed could reduce its stimulus at a time when the recovery still isn’t firmly rooted. “People were not supposed to be dropping from the labor force this year,” says FTN Financial’s Chris Low. “While the Fed wrestles with this quandary, we’ll wait to see if it really meant what it said about the quality of improvement in the unemployment rate…At the Fed, there is a tendency to fall back on the unemployment rate as the best gauge of labor market health.” And he warns, “Markets will be unsettled.”

So what is a lying government to do?  After all of those years, and all those jobs reports, trumpeting the success of their economic policies based on the fall in the official unemployment rate, what do they say about the Fed who may raise interest rates because the official unemployment rate says the economy has recovered while the labor force participation rate says it’s still in the toilet?  When the only economic activity has been their friends on Wall Street taking the money the Fed was making and investing it?  Making money with money?  But making no jobs?  That’s something a Democrat administration is not supposed to do.  Helping rich people at the expense of the middle class.  So what is a lying government to do?

Tell the truth and admit that their economic policies have all failed?  To keep that cheap money tap open for their friends on Wall Street?  Or lie?  And say their economic policies have been successful?  And offer no rationale to keep the easy money tap open?  And let them close that tap?  Killing the only economic recovery?  That was enjoyed only by their friends on Wall Street?  Thus exposing the lie that their economic policies created any kind of economic recovery?

Quite the quandary for the Obama administration.

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Colleges sell Kids Unmarketable Degrees, making them Unemployable and Deep in Debt

Posted by PITHOCRATES - September 8th, 2013

Week in Review

The economy is horrible.  Youth unemployment is soaring.  As is student loan debt.  Which is a big problem when you can’t get a job in a horrible economy.  Or the only job you can get you could have gotten without that costly degree.  And your student loan payment consumes a quarter of your income.  This is not the American dream these kids went to college for.  So why is it so bad for college graduates today?  And why are we looking at a student loan crisis?  Democrats.  In particular, liberal Democrats (see A quarter of recent college graduates lack jobs by John Carney posted 9/6/2013 on CNBC).

At the turn of the century, recent college graduates had an average debt of $15,100. Last year the average debt of graduates was $27,253. This increase in the debt burden has not been matched by economic gains for college graduates. According to the Consumer Finance Protection Bureau, 10 percent of recent graduates of four-year colleges have monthly student loan payments that exceed of 25% of their income. The Bureau of Labor Statistics, which only recently began looking specifically at the employment situation of people in their first few years out of college, says that as of 2011 25.5 percent of recent college graduates were jobless. (Unfortunately, more recent data about recent grads isn’t yet available.)

Seven million borrowers are in default on private or federal loans, according to the CFPB. An additional 8.9 million have deferred payments or have their loans in forbearance. These aren’t signs of a healthy contingent of borrowers.

At the turn of the century more college graduates had jobs and carried less student loan debt.  Back then there were no gender studies.  No minority studies.  No information systems.  People were getting degrees that the jobs of the day demanded.  And because they did they got hired out of college.  Into good jobs.  That allowed them to repay their student loans.  And helped make America the number one economic power in the world.  Today people with degrees that have no market value end up as baristas at Starbucks.  Which they could have done without going $27,253 into debt.

But it’s not their fault.  Colleges told them about the great wealth that awaited them with their degrees in women studies, minority studies, information systems, sociology, French literature, philosophy, etc.,  even though our high-tech economy was demanding people with math and science degrees.  Which is why we have to hand out visas to get foreigners with those degrees to work at US companies.  Because our liberal colleges are getting rich selling ‘easy’ degrees to kids more interested in having a good time while at college.  Which is easier to do when you don’t have a lot of math and science courses weighing you down.

This is why college graduates can’t get jobs and are drowning in debt.  The left’s incessant attacks on capitalism pushed these kids away from the corporate world into more noble pursuits.  By getting degrees that have no market value.  But show that they are not money-grubbing capitalists.  Though they do tend to complain that their degrees (and student loan debt) didn’t bring them the riches the colleges promised them.

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The NHS shows Obamacare will lead to a Fall in Efficiency and Quality in our Health Care

Posted by PITHOCRATES - September 8th, 2013

Week in Review

The holy grail for the left is national health care.  They were hoping that Obamacare would be their holy grail.  But there were Democrats who worried about their reelection chances if they voted against the will of their constituents.  So they took out the public option.  The thing that made Obamacare national health care.  Instead having to settle for Plan B.  Destroy the private health insurance industry.  Leaving only the government as the lone provider of health insurance.  And then, voilà, national health care.  And then the left will get their holy grail.  And our health care will become like that in the NHS (see John Neill: Why does this man think he can cure the NHS? by Margareta Pagano  posted 9/7/2013 on The Independent).

John Neill has a challenge for Health Secretary Jeremy Hunt: “Give me the NHS and I will prove that we can change the culture – improve the quality of care for patients, inspire the employees, innovate, reduce waiting times, improve nursing and increase the output of the doctors, and reduce costs.”

So this is national health care?  It doesn’t sound that good.  In fact, it sounds pretty bad.  Something we can look forward to under Obamacare.  And whatever it evolves into after it destroys the private health insurance industry.  “If you like your insurance plan you can keep it.  If you like your doctor you can keep your doctor.”  None of that turned out to be true.  Worse, Obamacare is raising the cost of health insurance.  So hello national health care.  And poor quality, uninspired employees, a lack of innovation, longer waiting times, poorer nursing, doctors doing less and higher costs.

What’s more, he will do it for free. Mr Neill is chairman and chief executive of Unipart, one of the UK’s biggest private companies with clients including Jaguar, Asos, Vodafone, BMW and Sky…

So where’s the catch, Mr Neill? “There isn’t one. But what I know is that there is a moral and economic imperative for the health service to become massively more efficient. And I really mean this – we could change the culture – and for free. Sadly, it’s the mythology that holds the NHS back from changing. It’s too political, and politicised…

Nor does he see any problems between comparing the health service with making cars: “I’m going to be frank with you, and this will upset a lot of people in healthcare, but if we ran our factories with the same level of defects as those in an average hospital then we’d be out of business in 24 hours. And, we would go bust if we ran the factories only five days a week, as many hospitals are doing…”

His greater worry is that the government is not doing enough to improve productivity: “Growth comes from competitiveness, and that comes from productivity. That’s going to be tough for the UK as nearly half the economy is in the public sector. What are government ministers doing about it?”

So, in national health care, everyone gets free health care.  As long it is during business hours.  Which means if you suffer a heart attack or are seriously hurt in a car accident on the weekend you better hope your accident/emergency room is not one of the many closed on the weekend.  Or else you may be forced to postpone your heart attack or car accident.  Of course if you could do that you could probably avoid them in the first place.  But you can’t.  Which means you’ll be in for a long drive.  Or a long wait until your hospital opens on Monday for business.

This is why you don’t want government taking over more of the private sector.  Because when they do the things they take over become political and politicized.  And suffer in efficiency and quality.  As things are wont to do when government takes them over.  As demonstrated by the NHS.  Providing a clarion call to anyone who will listen.  It’s as if the British are warning us.  Don’t do what we did, they tell us.  Learn from our mistake, they say.  But will the Americans heed their warning?  Not as long as the Democrats are in control.  For they don’t care how horrible health care becomes.  As long as they get national health care.  Their holy grail.  So they can politicize it.  Create a mythology.  And use it to increase their political power.

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Free Trade, the Corn Laws and The Economist

Posted by PITHOCRATES - September 8th, 2013

Week in Review

Today the political left attacks capitalism as being unfair.  And mean.  Whereas they laud government intervention into the free market.  To level the playing field.  And to redistribute income.  To help those who can’t be as successful as others.  They support unions.  And oppose free trade.  Because free trade lowers prices for consumers.  By breaking up monopolies.  And giving them choice.  Free trade is an essential element of capitalism.  But the fight to make people’s lives better with free trade wasn’t easy.  As people who got rich with government-protected high prices opposed free trade (see Why did The Economist favour free trade? by C.R. posted 9/6/2013 on The Economist).

IN NINETEENTH century Europe and America, debates over whether tariffs or free trade produced the most economic growth dominated the political scene. Up until the early 1840s, protection appeared to be winning the argument. In Britain, high tariffs were imposed on agricultural imports in 1819, by legislation known as the Corn Laws. The ideas of Friedrich List, a German economist who argued that tariffs boosted industrial development through the protection of infant industries, were gaining ground, particularly in the United States. One Pennsylvanian legislator even joked in 1833 that the dictionary definition of man should be changed to “an animal that makes tariff speeches” so frequently were they heard.

Against this atmosphere, James Wilson founded The Economist in 1843 to campaign for free trade. His first target was to repeal the Corns Laws in Britain. He argued:

They are, in fact, laws passed by the seller to compel the buyer to give him more for his article than it is worth. They are laws enacted by the noble shopkeepers who rule us, to compel the nation to deal at their shop alone.”

The UAW got very generous contracts with the Big Three during the Fifties and the Sixties.  Raising the price of cars.  Which wasn’t a problem when they were the only ones making cars.  But then came the imports.  Which told the people how much more they were paying than these articles were worth.  And started buying the imports.  As they did those generous pay and benefit packages became more difficult to pay.  So the Big Three lobbied for tariffs on those less costly imports.  And got them.  Raising the price of the imports.  Forcing Americans to deal with the Big Three alone.  And buy their more costly cars.

More people bought cars than made them, though.  And the people who made the cars were better paid than most Americans.  So these tariffs forced poorer people to spend more on a car leaving them less for their families.  So richer people could have more.  This is what tariffs do.  They allow fewer people to have more.  While more people have to do with less.  So fewer buy more.  While more buy less.  Because there are more people who buy cars than make them these tariffs, then, reduce economic activity.  And because the Big Three didn’t have to figure out how to give more for less to their customers they didn’t.  Giving their customers ‘rust buckets’ in the Seventies.  Something else that tariffs do.  Lead to inferior goods.  Because if the government forces people to buy from you then the quality of what you sell doesn’t matter.

Wilson believed that protectionism caused “war among the material interests of the world”, in other words, war between nations and classes. A high tariff regime was no longer economically “productive”; Britain was stuck in an economic depression in the early 1840s. In contrast, free trade produced “abundance and employment”. It was appropriate for Britain’s economy where “a large proportion of the population and property depended on commerce and industry alone”. On the other hand, List’s ideas about protection were dismissed as unnecessary “swaddling clothes” for a mature economy, such as Britain’s.

The Economist’s early views on free trade were strongly influenced by the classical economists Adam Smith and David Ricardo, as Ruth Dudley Edwards, a historian, has pointed out. Wilson, like Smith, realised that trade was a two way exchange. Countries needed to “increase imports to increase exports” to boost economic growth. Consumers, Smith argued in the Wealth of Nations, should buy products from where they were cheapest. All protection did was create monopolies, which were “a great enemy to good management”. Ricardo took Smith’s ideas further, arguing that all countries benefit from free trade by producing what they were best at relative to other countries.

That’s what the Big Three wanted.  A monopoly on cars sold in America.  And there is only one way to get one.  The government has to create them.  Hence the Big Three’s request for tariff protection.

David Ricardo’s comparative advantage said nations should make what they can make best and trade for those things they can’t.  For example, if two countries can both make one thing but one can do so at lower costs they can make more of them for the same costs.  Giving them a larger surplus to trade for other things.  While the other nation will consume more resources to build the same quantity leaving less to make the other things they need.  While having fewer things available for export.  So if you try to make things you can’t make efficiently you end up consuming more resources to have less.  Whereas the nation that makes only what it can make best ends up consuming fewer resources that are then available to make other things.  And they have more things to trade.  Leading to a higher standard of living.  And if their trading partners do likewise they, too, experience a higher standard of living.

Free trade leads to greater economic activity.  Which made Britain wealthy.  Allowing them to extend their empire for another 70 years or so.  Despite the warnings of the rich landowners who said repealing the Corn Laws would cause harm.  Instead, repealing the Corn Laws led to greater economic activity.  And less costly food. Allowing people to feed their families more easily.  The only harm suffered was to the profits of the big landowners.  Who lost their monopoly.  And could no longer charge more than their food was worth.

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