An Airbus A380 hits 2 Light Poles at LAX while carrying Fewer Passengers than a Smaller Boeing 777 can Carry

Posted by PITHOCRATES - April 17th, 2014

Week in Review

The Boeing 747 ruled the long-haul routes for decades.  Because of its range.  And its size.  With it being able to carry so many passengers the cost per passenger fell.  Allowing it to offer ticket prices at prices people could afford while still making airlines a decent profit.  Airbus took on the Boeing 747.  And produced the mammoth A380.  A double-decker aircraft that can carry around 555 in three classes.  But this plane is big.  With a wingspan greater than the 747.  Not to mention special boarding requirements to load and unload its two decks.  But this extra large size couldn’t board at any run-of-the-mill 747 gate.  It needed a wider parking place.  Double-decker boarding gates.  As well as wider taxiways (see Korean Air A380 Hits 2 Light Poles At LA Airport by Tami Abdollah, AP, posted 4/17/2014 on Time).

A Korean Air A380 superjumbo jet hit two light poles while taxiing to its gate at a remote end of Los Angeles International Airport with hundreds of passengers aboard.

Airline spokeswoman Penny Pfaelzer says the flight arrived from Seoul Wednesday afternoon with 384 people aboard. She says an airport operations vehicle guided the jet onto a taxiway that wasn’t wide enough…

The A380 is the world’s largest commercial airliner, carrying passengers in a double-deck configuration. It has a wingspan of nearly 262 feet.

The search for Malaysian Airlines Flight 370 is important.  Because Malaysian Airlines Flight 370 was a Boeing 777.  One of the most popular long-range, wide-body aircraft flying today.  So if there is a mechanical defect every airline flying that plane would want to know.

Because of the cost of fuel airlines prefer 2-engine jets over 4-engine jets.  Which is why they like the 777 so much.  The 777-300ER can take 386 passengers in three classes 9,128 miles.  On only 2 engines.  Whereas the Airbus A380 can take 555 passengers in three classes 9,755 miles.  But on 4 engines.  Burning close to twice the fuel a 777 burns.  So the A380 can out fly the 777.  But at much higher fuel costs.  And with greater restrictions.  As the 777 can fit most any gate and taxiway at any airport.  Unlike the A380.  So is that extra passenger capacity worth it?  It is.  As long as you can fill the seats.  In this case, though, the A380 flew the approximately 6,000 miles from South Korea to Los Angeles with only 384 people aboard.  Something the Boeing 777-300ER could have done on half the engines.  And about half the fuel cost.

This is why the Boeing 777 is one of the most popular long-range, wide-body aircraft flying today.  Because it allows airlines to offer tickets at prices the people can afford while allowing the airlines a handsome profit.  And it has an incredible safety record.  Unless Malaysian Flight 370 changes that.  Which is why it is so important to find that plane and determine what happen.  As there are so many of these flying today.

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Rent Control reduces the Amount of Affordable Housing

Posted by PITHOCRATES - April 15th, 2014

Week in Review

Living in New York City is expensive.  High taxes.  And high property values.  But people want to live in the city.  And will pay very high rents to do so.  Which landlords can charge because there are people willing to pay them.  It’s the basic law of supply and demand.  It’s the same reason why beachfront property is so expensive.  There’s so little of it and so many people want to live there.  So the property goes to the highest bidder.  Which is why some of the richest movie and television stars own the best of these properties.  Because they are willing to pay the highest price.

Of course that’s all right for the rich.  But what about the poor and middle class?  Who can’t afford to live like rich movie and television stars?  Well, there has long been a cry for affordable housing for the less affluent.  And price controls.  To keep rents affordable for those of more modest means.  There have been various forms of rent control in New York City.  To make housing more available to the less affluent.  Which actually reduced the number of apartments available to them.  How, you may ask.  Well, when it comes to rent there are two parties.  A buyer and a seller.  We know why buyers are buying.  They want a place to live.  But why do sellers want to rent out apartments?  To make a profit.  And because rent control made it more difficult to make a profit landlords went elsewhere to make a profit.  Thus reducing the number of rental units available.

New York City still has rent-controlled apartments.  And people desperately want to live in them because rent everywhere else (at market prices) is so expensive.  So there are often battles between rent-control tenants and landlords who want to rent at market prices.  Like this (see Brooklyn landlords illegally harassed, targeted rent-stabilized tenants: suit by Erik Badia, Ginger Adams Otis posted 4/15/2014 on the Daily News).

The landlords targeted longstanding black tenants who lived in rent-stabilized apartments, the suit contends.

The plaintiffs pay anywhere from $600 to $1,400 a month for 52 three-bedroom units in the three buildings, according to the lawsuit…

The group claims the landlords, who bought the buildings in 2009, have neglected to do repairs in black-occupied units…

Approximately 15 new tenants have moved in since then, paying market rents as a high as $2,500, the plaintiffs claim…

Pilgrim, who pays a stabilized $950 rent for his apartment, said he has talked to new tenants who had told him they are paying more than double that rate…

“How can you go from paying $687 a month to $2,500 a month? They’re also taking advantage of these young kids,” Bell said.

The tenant sees the landlord as being greedy.  While the landlord sees that apartment being rented 72.5% below what it could be renting for.  If the roles were reversed the tenant would probably do the same thing.  Because people want to make money.  And people want to be rich.  That’s why they buy lotto tickets.  And try to make it in movies and television.  To be rich and famous.  They don’t buy properties to see how little money they can make with them.  They buy them to see how much money they can make with them.  Movie stars would never put their mansions up for sale at 72.5% below what other rich people would pay for them.  Just as a middle class homeowner would never sell her home for 72.5% below what someone would pay for it.

The law of supply and demand bring buyers and sellers together at a price they both agree on.  Making both parties happy.  When laws interfere with market prices (such as rent control) both parties are seldom happy.  Buyers tend to be happier.  But because sellers are so unhappy they stop selling.  Thus reducing the number of apartments available to rent.  Which is why rent control doesn’t work.  It actually reduces the amount of affordable housing.  So that only a very lucky few can enjoy life in a rent-control apartment.

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The Keynesian Abenomics is Raising Prices in Japan

Posted by PITHOCRATES - April 14th, 2014

Week in Review

Money is a temporary storage of value.  We created money to make trade easier.  We once bartered.  We looked for people to trade with.  But trying to find someone with something you wanted (say, a bottle of wine) that wanted what you had (say olive oil) could take a lot of time.  Time that could be better spent making wine or olive oil.  So the longer it took to search to find someone to trade with the more it cost in lost wine and olive oil production.  Which is why we call this looking for people to trade goods with ‘search costs’.

Money changed that.  Winemakers could sell their wine for money.  And take that money to the supermarket and buy olive oil.  And the olive oil maker could do likewise.  Greatly increasing the efficiency of the market.  There is a very important point here.  Money facilitated trade between people who created value.  Creating something of value is key.  Because if people were just given money without producing anything of value they couldn’t trade that money for anything.  For if people didn’t create things of value to buy what good was that money?

Today, thanks to Keynesian economics, governments everywhere believe they can create economic activity with money.  And use their monetary powers to try and manipulate things in the economy to favor them.  And one of their favorite things to do is to devalue their money.  Make it worth less.  So governments that borrow a lot of money can repay that money later with devalued money.  Money that is worth less.  So they are in effect paying back less than they borrowed.  And governments love doing that.  Of course, people who loan money are none too keen with this.  Because they are getting less back than they loaned out originally.  And there is another reason why governments love to devalue their money.  Especially if they have a large export economy.

Before anyone can buy from another country they have to exchange their money first.  And the more money they get in exchange the more they can buy from the exporting country.  This is the same reason why you can enjoy a five-star vacation in a tropical resort in some foreign country for about $25.  I’m exaggerating here but the point is that if you vacation in a country with a very devalued currency your money will buy a lot there.  But the problem with making your exports cheap by devaluing your currency is that it has a down side.  For a country to buy imports they, too, first have to exchange their currency.  And when they exchange it for a much stronger currency it takes a lot more of it to buy those imports.  Which is why when you devalue your currency you raise prices.  Because it takes more of a devalued currency to buy things that a stronger currency can buy.  Something the good people in Japan are currently experiencing under Abenomics (see Japan Risks Public Souring on Abenomics as Prices Surge by Toru Fujioka and Masahiro Hidaka posted 4/14/2014 on Bloomberg).

Prime Minister Shinzo Abe’s bid to vault Japan out of 15 years of deflation risks losing public support by spurring too much inflation too quickly as companies add extra price increases to this month’s sales-tax bump.

Businesses from Suntory Beverage and Food Ltd. to beef bowl chain Yoshinoya Holdings Co. have raised costs more than the 3 percentage point levy increase. This month’s inflation rate could be 3.5 percent, the fastest since 1982, according to Yoshiki Shinke, the most accurate forecaster of Japan’s economy for two years running in data compiled by Bloomberg…

“Households are already seeing their real incomes eroding and it will get worse with faster inflation,” said Taro Saito, director of economic research at NLI Research Institute, who says he’s seen prices of Chinese food and coffee rising more than the sales levy. “Consumer spending will weaken and a rebound in the economy will lack strength, putting Abe in a difficult position…”

Abe’s attack on deflation — spearheaded by unprecedented easing by the central bank — has helped weaken the yen by 23 percent against the dollar over the past year and a half, boosting the cost of imported goods and energy for Japanese companies.

Japan is an island nation with few raw materials.  They have to import a lot.  Including much of their energy.  Especially since shutting down their nuclear reactors.  Japan has a lot of manufacturing.  But that manufacturing needs raw materials.  And energy.  Which are more costly with a devalued yen.  Increasing their costs.  Which they, of course, have to pay for when they sell their products.  So their higher costs increase the prices their customers pay.  Leaving the people of Japan with less money to buy their other household goods that are also rising in price.  Which is why economies with high rates of inflation go into recession.  As the recession will correct those high prices.  With, of course, deflation.

Keynesians all think they can manipulate the market place to their favor by playing with monetary policy.  But they are losing sight of a fundamental concept in a free market economy.  Money doesn’t have value.  It only holds value temporarily.  It’s the things the factories produce that have value.  And whenever you make it more difficult (i.e., raise their costs by devaluing the currency) for them to create value they will create less value.  And the economy as a whole will suffer.

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A Large Majority of People polled want Tax Reform to make Tax Code Simpler and Fairer

Posted by PITHOCRATES - April 14th, 2014

Week in Review

People fear the IRS.  (Oh, by the way, happy tax day.)  The IRS targeting of conservative groups to silence the opposition has been chilling to say the least.  But the tax code is so convoluted that it takes an army of accountants and tax lawyers to comply.  Easy for the big corporations.  But a nightmare for small business.  For complying is costly.  And tax audits are about as enjoyable as a colonoscopy the hard way.  Without anesthetic.  Creating a great disincentive for people to become small business owners.  Which hurts us all.  For small businesses are the number one job creator in the country.

So a simpler and friendlier tax code would go a long way to create economic growth.  And an IRS less like the Gestapo or KGB would make a lot of small business owners sleep easier at night.  And encourage more people to take the plunge and start a small business.  A majority of people polled in a NAM poll agree.  And believe the time for serious tax reform is now (see New NAM Poll Says Voters Want Candidates Who Support a Simpler Tax Code posted 4/14/2014 on National Association of Manufacturers).

•Over 76 percent of voters will be more likely to favor a candidate who supports comprehensive tax reform.

•Nearly 73 percent of respondents support comprehensive reform to make the tax code simpler and fairer, even if their personal tax burden remains the same.

•An overwhelming majority, 85 percent, believe it is important that Congress and the President put aside partisanship to enact comprehensive tax reform.

We know why the Democrats don’t want to reform the tax code.  For having that power did wonders to silence the opposition during the 2012 presidential campaign.  Allowing President Obama to win reelection with 4 dead Americans in Benghazi.  And having the worst economic recovery since that following the Great Depression.  So when their only campaign strategy is to attack and intimidate the opposition because their policies have failed it comes in handy to have a political force at your disposal to put the fear of God into your opponents.  Especially when you can place that political force above the law.  Which it apparently is based on no one being punished for said targeting of conservative groups.

But the people may be tiring of the same failed Democrat policies.  It’s been over 5 years and the economy is still horrible.  Some 10 million people have left the labor force since President Obama took office.  If you add these people to those the BLS counts as unemployed the unemployment rate (at the end of February) would be 13.7%.  Not 6.7% as officially reported.  So there is a lot of dissatisfaction out there.  At least among those who want a job.  And those who do and are paying ever more taxes with nothing to show for it.  So they may vote for the candidate promising tax reform this fall.  Even if it means voting Republican.  As the oppressive IRS is now forever tied to the Democrat Party thanks to their targeting of conservative groups.

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Women and Men in the Exact Same Jobs are earning the Exact Same Income

Posted by PITHOCRATES - April 13th, 2014

Week in Review

The Democrats are running out of ways to buy votes.  Which they desperately need as more people suffer the ravages of Obamacare.  Who will be entering the voting booth angry this fall.  Looking for someone to blame for taking away the health insurance and doctors they liked and wanted to keep.  And being that Obamacare was passed on purely partisan lines (no Republicans voted for it) the Democrats are sweating bullets as the midterm elections approach.  So they turn to an oldie but goldie.  The pay gap lie (see What pay gap? Young women out-earn men in cities, GOP pundit claims posted 4/8/2014 on PolitiFact).

We watched the debate play out between conservative pundit Sabrina Schaeffer and liberal pundit Elizabeth Plank on MSNBC’s The Reid Report, and again later between former White House adviser Anita Dunn and conservative pundit Genevieve Wood on CNN’s The Lead with Jake Tapper.

“If you compare women to men in the same job with similar background, similar experiences that they bring to the table, the wage gap all but disappears,” Wood said. “Women have made great strides. Instead of celebrating that, this is a political year, the White House wants to portray this war on women…”

PolitiFact has given you the nuts and bolts about the 77 cents statistic — you can read the two most important works in this area here and here. Basically, there is a wage gap, but it tends to disappear when you compare women and men in the exact same jobs who have the same levels of experience and education.

Well, there it is.  Equal pay for equal work.  When men and women have the same education, experience and skills doing the same job there is no pay gap.  Case closed.  In fact, single women without children are actually earning more than single men.  Which is the key to this argument.  For a woman’s earnings fall with interruptions in her career as she takes time off to have children.  Or works reduced hours to care for her children.  This is where the pay gap comes in.  When you compare apples and oranges.  Comparing women who take time off or cut back their working hours or take lower paying jobs that allow her to spend more time with her children to men who don’t.  Because they’re single.  Or are married and have a wife who takes time off to spend more time with their children.

In fact, women are making great strides.  At the expense of men (see Is the Gender Pay Gap Closing or Has Progress Stalled? by Josh Zumbrun posted 4/11/2014 on The Wall Street Journal).

“There’s no question that one of the things that ‘77 cents’ doesn’t emphasize is that there’s been enormous gains,” said Harvard University economist Claudia Goldin.

Looking at the data above shows three clear trends that have emerged since the 1970s:

1) The spread between the sexes narrowed between 1970 and 2000. It has made little progress since.

2) Men have made no income gains in over four decades. Adjusted for inflation, men earn less today than they did in 1972.

3) Women continued to make gains until the recession began. Whatever forces slowed the income growth of men from 1970 to 2000 did not halt the income growth of women.

Simple economics.  Supply and demand.  Men were making more and more every year.  Until the Sexual Revolution.  When women began to flood the labor market.  With more labor available the cost of labor fell.  So as women gained education and experience the supply of educated and experienced workers grew.  Allowing employers to pay less for these now more plentiful educated and experienced workers.  Which is why as women enjoyed income gains men saw their income decline when adjusted for inflation.  Simple economics.  Supply and demand.

A long time ago in high school chemistry I remember my lab partner did not complete a homework assignment that was part 1 of a 2-part grade.  There was a homework part.  And a lab part.  Being a nice person I asked the teacher if we could share the grade on the homework part (which I had received an ‘A’ on.  Or a 4.0).  The teacher was more than generous.  He said, “Sure.  A 4.0 divided by 2 equals a 2.0 for each.”  Or, a ‘C’ for each.  Suffice it to say my lab partner did not get a 2.0 on the homework that went undone.

This is why men are earning less.  Because women have entered the workforce.  The revenue businesses use to pay their employees didn’t increase like the number of educated and experienced workers did.  So the amount of available revenue for pay and benefits was shared by more people.  Each getting less than a man did before the Sexual Revolution (when adjusted for inflation).  So instead of a single paycheck supporting a family these days it now takes two paychecks.  Because men are making less today since women have lowered the price of labor.  By increasing the supply of labor.  Not because they are paid less.  But because there are so many workers for so few jobs that businesses don’t have to pay as much as they once did to hire people.  Which is more to blame for pressure on wages than any pay gap.

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A Fed President says there is no Inflation while the Price of the Big Mac says Otherwise

Posted by PITHOCRATES - April 13th, 2014

Week in Review

Inflation is bad according to Rep. Chris Van Hollen.  And, therefore, we need baseline budgeting (taking last years’ spending and automatically adding more to it to arrive at the budget for the following year) to overcome the corrosive effect of inflation on government spending.  And he illustrated this by showing how inflation has increased the price of a Big Mac over the years (see Members of Congress debate budget with Big Macs by Eric Pfeiffer posted 4/8/2014 on Yahoo! News).

On Tuesday, two members of Congress got into a detailed discussion over inflation, with Rep. Chris Van Hollen using pictures of hamburgers  to argue that inflation estimates are necessary to undercut future budgets.

Holding up a chart that showed the average cost of a McDonald’s Big Mac in 2004 ($2.71) compared with its cost today ($4.62), Maryland Democrat Van Hollen argued that not adjusting budget numbers for inflation equates to a net cut.

But while arguing that we need baseline budgeting to counter rampant inflation we have someone whose job is to keep inflation from rearing its ugly head in the economy saying quite another thing (see Fed’s Evans ‘exasperated’ by inflation warnings by Greg Robb posted 4/9/2014 on MarketWatch).

Many people who argue that inflation is just around the corner have been repeating the same warning for the past five years, said Charles Evans, the president of the Chicago Federal Reserve Bank, on Wednesday. “I confess that I am somewhat exasperated by these repeated warnings given our current environment of very low inflation,” Evan said in a speech at an economic policy conference in Washington D.C. Evans said he still sees the economic environment pointing to below-target inflation “for several years.” Evans debunked current arguments that inflation is just over the horizon. He said that there is “substantial room” for stronger wage growth without inflation pressures building and added the Fed’s large balance sheet is not a “classic warning sign” of inflation. Commodity prices also seem to be an unlikely propellent of inflation at the moment, he said.

So while Rep. Chris Van Hollen is wringing his hands over the rampant inflation everywhere that we can only counter with baseline budgeting the president of the Chicago Federal Reserve Bank gets exasperated by people like Rep. Chris Van Hollen.  Because there is no inflation that he can see.  And it’s his job to find inflation.  So he can stop it.  So who’s right?  They can’t both be right.  Of course, the price of the Big Mac has gone up through the years.  But there is only one problem with Rep. Chris Van Hollen presentation in Congress (see the Yahoo! News article linked to previously).

Regardless of which side of the debate you fall on, there was one falsehood on display at the House committee hearing on Tuesday. As The Washington Post noted, those hamburgers used in Van Hollen’s charts weren’t actually Big Macs.

That’s right.  With all the resources our representatives have at their disposal they could not even take the time to get a picture of the right hamburger.  Perhaps because the only beef our representatives eat is the tenderloin and wouldn’t be caught dead ‘slumming’ it at a McDonald’s.  Food the vast majority of Americans find delicious.  But then again, we’re not a bunch of pompous, arrogant, condescending prima donnas like our representatives, are we?

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France discourages Job Creation with a Short Workweek, Confiscatory Tax Rates and Banning Emails after 6 PM

Posted by PITHOCRATES - April 12th, 2014

Week in Review

For socialism to work you need businesses to provide jobs.  Because without people working the government can’t have confiscatory tax rates to fund a massive socialist state.  You’ve got to have jobs.  Which confiscatory tax rates tend to discourage.  For business and rich investors don’t want to pay confiscatory tax rates.  François Hollande ran on a socialist platform in France.  Promising to raise taxes to bring down the deficit.  Which he did.  Raise taxes.  But it didn’t lower an unemployment rate stubbornly staying above 10%.

High taxes and a poor economy caused the socialists to lose elections.  So Hollande is putting together a tax-cutting package.  To reverse their electoral losses.  You’d think the socialists would have learned their lessons that the people want jobs.  And to have jobs you need a business-friendly environment.  Which something like this is not going to help (see France bans work e-mail after 6 p.m. by John Johnson, Newser, posted 4/11/2014 on USA Today).

France already has a 35-hour work week, and a new rule is designed to make sure that it doesn’t start shading toward 40 hours because of work-related e-mail.

The Guardian reports that the rule forbids workers from checking their phones or computers for work stuff after 6 p.m., and it forbids employers from pressuring them to do so.

The move apparently doesn’t affect all workers in France, but it does cover about 1 million workers in the tech industry — including French employees of Google and Facebook…

At Fox Business, a U.S. labor expert finds it hard to believe the IT industry can manage such a draconian shut-off time.

“There’s always something going wrong off the clock — when a computer goes down, it doesn’t go down between 8 a.m. and 5 p.m.”

It’s yet another thing to discourage business.  Things happen after hours.  Can you imagine a business wanting to open themselves to that kind of liability?  Having someone in the company send out an email without checking the clock first?  Or someone working late into the evening to catch up on a project.  Sending out a bunch of emails so people could read them first thing in the morning.  If someone else is working late do they read this email?  Perhaps this person was waiting for this email and would like to address it that evening to reduce his or her workload the following day.  Would this worker have been pressured into reading the email knowing his or her boss would have appreciated the extra effort?

There’s a reason why General Motors (GM) went bankrupt.  Well, there are a few of them.  But one of them was costly workplace rules.  Such as only allowing an electrician to change a light bulb at a work station.  Even if the person at that workstation could have changed that bulb in a couple of minutes.  Instead of waiting an hour or so for skilled trades to come around to unscrew the burnt out lamp and screw in a new lamp.

These little workplace rules add up.  And though seemingly harmless when you look at them one at a time in the aggregate they increase the cost of business.  A lot.  Just ask GM.  Something businesses look at when they are considering the location of a new factory.  Whether to expand production at an existing factory.  Or whether to shut down a factory and move production out of the country to a more business-friendly environment.  Thus killing job creation.  Jobs the socialists need for people to have so they can pay confiscatory taxes on their earnings.

A business unfriendly environment will never lower the unemployment rate.  As the socialists in France have proven.  And left-leaning governments everywhere have proven.  Confiscatory tax rates do not attract businesses.  Or rich investors.  They discourage them.  And encourage them to take their money and invest it elsewhere.  And create jobs elsewhere.  In another country that is a little kinder to business.  And job creation.

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Minimum Wage Jobs are allowing Teenagers to afford Smartphones and Tablets

Posted by PITHOCRATES - April 12th, 2014

Week in Review

There’s a lot of talk about raising the minimum wage on the left.  As they are running out of ways to buy votes.  And they feel they can buy a lot by paying unskilled and inexperienced workers closer to what people with a college education make.  But minimum wage jobs are entry level jobs.  They’re the first rung on the career ladder.  The left loves to point to grown adults trying to raise their families on a minimum wage. As sad as that is the minimum wage isn’t supposed to raise families.  It can supplement a family’s income by allowing a parent to work part-time while the kids are at school.  But this is extra money.  To help cover some other expenses.  Like these (see More than 60% of U.S. teens have their own iPhone and iPad, prefer Apple products to the competition: study by AFP RELAXNEWS posted 4/9/2014 on the Daily News).

Over 60 percent of teenagers already own an iPhone and excitement is growing over the much-rumored launch of an ‘iWatch…’

… teens with an average age of 16.4 years and reveals that gadgets and electronics currently account for just 8 percent of their spending, with games systems and games accounting for a further 7 percent.

And of that small percentage, Apple products appear to account for the largest outlay. Not only do 61 percent of teens say that they own an iPhone (up from 55% in Spring 2013), 67 percent say they’re planning to purchase an iPhone within the next six months. And it’s a similar story with tablets. Piper Jaffray says that 60 percent of US teens currently own a tablet and of that group, 66 percent are using an iPad. When asked, 66 percent of non-tablet-owning teens have earmarked an iPad as a future purchase…

Over recent years, branded headphones have exploded in popularity and 56 percent of teens are planning to purchase a set over the next six months.

According to the BLS, approximately 2.5% of all workers earn at or below the minimum wage (people who get tips can be paid less than the minimum wage as their tips plus their wages takes them over the minimum wage).  And about a third of these workers are teenagers.   Yet over half of these teenagers can afford costly smartphones and tablets.  And the very expensive monthly cellular charges that make them work.  Also, over half of all teenagers are going to buy an expensive set of headphones.  Which can only mean one of 3 things.  The minimum wage is sufficient to buy all of these things.  They have a parent working a second (and perhaps, a minimum wage) job to help their kids pay for these.  Or 60% of all teenagers have rich parents.  Is it worth raising the cost of small business owners (who will hire fewer people when people are more costly) so about a third of all minimum wage workers can more easily afford their toys?

As far as single parents struggling to raise their family on a minimum wage, is it right to diminish the value of a higher education by paying unskilled and inexperienced workers more?  Will people still put in the extra work to get an education or training and delay having fun (our young people, not those who find themselves by circumstances beyond their control working a minimum wage job due to a divorce, death in the family, etc.) to earn the skills necessary for a higher paying job when they can get nearly the same amount by taking the easy way?  People say they hate these jobs.  Will paying them more so they have no incentive ever to leave these jobs make them hate them any less?  Or will they be locked into these miserable jobs for the rest of their miserable lives?  A lot of people take pay cuts to leave jobs they hate.  So getting paid more for a job they hate isn’t going to make them hate that job any less.

Raising the minimum wage is not going to change anything.  Other than reduce the amount of jobs available for the unskilled and inexperienced.  No.  The best way to help people earn more is to create more jobs.  For when the economy is creating jobs there will be fewer people available to fill them.  Which will cause employers to bid up wages so workers choose their jobs out of the many that are available.  But when the economy is so bad that only minimum wage, entry level jobs are available there will be few people moving up the career ladder.

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Free Market Forces punish Lululemon for selling See-Through Yoga Pants

Posted by PITHOCRATES - April 6th, 2014

Week in Review

When women go out in public they usually put on clothes.  They may be more comfortable walking around in their underwear.  But they don’t.  For most women are modest that way.  They don’t want people to see their underwear.  Clothes manufacturers understand this.  Which is why they manufacture clothes.  To hide what women wear underneath.  This is why women hold their skirts down on windy days.  So they don’t blow up and show what’s underneath.  Pants are a great alternative to this.  As they can’t blow up.  No matter how windy it is.  But pants aren’t without their risks, apparently (see Lululemon prevails in lawsuits over yoga pants recall by Reuters posted 4/4/2014 on The Globe and Mail).

A lawsuit accusing Lululemon Athletica Inc of defrauding shareholders by hiding defects in its yoga pants that led to a costly recall should be dismissed, a U.S. judge has concluded…

The case arose after shoppers found that their yoga pants containing the company’s proprietary Luon fabric were too sheer. That culminated in a March 2013 recall and a loss of roughly $2-billion of market value.

Selling see-through yoga pants to women who are buying yoga pants to hide what they’re wearing underneath is not a good business model.  And once they realize that they are see-through they aren’t going to wear them anymore.  Worse, they’re not going to buy them anymore.  Which is about the worst thing that can happen to a business that was selling those yoga pants.  Throw in a recall and the financial damage is devastating.  Which is why this was probably an accident and not a coordinated plan.  For it’s inconceivable that anyone would think that women would never notice that the world could see their underwear while they wore these yoga pants.  Even if no one ever said anything to these women the odds are that another woman who owned Lululemon yoga pants would see how see-through they were.  And check herself out in a mirror to see how see-through her own yoga pants were.

Now, do we need federal regulators to inspect the transparency of yoga pants?  No.  We don’t.  All we need are free market forces.  Because no business wants to go through what Lululemon is going through.  For there are no cost-saving short-cuts in the world that can offset that kind of financial damage.  We may be stuck with Obamacare as the government is forcing us by law to buy it.  No matter how bad it is.  But there is no law forcing women to buy Lululemon’s yoga pants.  So the only way they can sell yoga pants is by pleasing the women who buy them.  And exposing their underwear in public unbeknownst to them is probably not the best way to accomplish that.

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The EPA is Poisoning People while Fracking is making People’s lives Better

Posted by PITHOCRATES - April 5th, 2014

Week in Review

There have been a lot of movies showing how fracking is polluting our groundwater.  Giving people cancer.  Causing fire to blow out of people’s water faucets.  Makers of movies appear on The Daily Show and The Colbert Report talking about how horrible and dangerous fracking is.  So the evils of fracking are all around us.  But, strangely, these dangers are conspicuous by their absence in one area.  Actual news stories.

We hear about how global warming is getting worse.  We hear example after example of how Republicans hate the poor and women and want to take away health insurance from everyone.  We are bombarded with news about how the rich aren’t paying their fair share and how Republicans are trying to buy elections.  But we don’t see reporters filming fire shooting out of a water faucet.  And we don’t see the CDC in fracking areas responding to soaring cancer rates.  Or fracking fields being turned into superfund cleanup sites.

It’s odd because when Malaysian Airways Flight 370 went missing 4 weeks ago CNN covered the missing airplane 24/7.  Even though they had nothing to report.  They just brought in experts (and a physic) and theorized about what might have happened.  The other news channels covered the non-news with nearly the same fervor as CNN.  So you would think that if fracking was causing fire to shoot out of water faucets and was giving everyone cancer they would be covering that 24/7.  For most of these news channels are liberal.  And liberals hate fracking.  But they don’t go to North Dakota to report the abject misery fracking has brought them.  Probably because they don’t want to show the economic boom going on in North Dakota.  Where people are going to for jobs.  Where the unemployment rate there (2.6% as of February 2014) is the lowest in the nation.  Perhaps that’s why they don’t report the abject misery fracking is causing in North Dakota.  Because there is none.

So if the media isn’t in North Dakota is the government?  Is the EPA documenting the abject misery fracking is causing the good people of North Dakota?  No.  Instead, they’re purposely trying to give people cancer (see What’s more dangerous to your health than fracking? The EPA, apparently by Ashe Schow posted 4/2/2014 on the Washington Examiner).

An EPA inspector general’s report found that the agency did obtain approval to conduct five “human research studies” exposing “81 human study subjects to” toxic pollutants including diesel exhaust…

So the EPA asked people to expose themselves to dangerous pollutants — some at levels 50 times greater than what is safe — but didn’t tell them about the dangers.

Why would the EPA, which supposedly cares so much about the public’s health, do this, especially to people who already had health problems?

To justify more regulations and funding, of course.

They are desperately trying to kill people by exposing them to something they can later call a toxic pollutant.  So they can “justify more regulations and funding.”  And they will tell the people they kill, “Fear not, you shall not have died in vain.  Your horrible death will bring about the greatest kind of good there is.  It will enable us to expand the size of the federal government.  Allowing it to reach further into your lives.  Well, not yours per se because you’ll be dead.  Thanks to us.  But other people will know the joy of having the federal government intruding further into their private lives.  Until one day there are no more private lives.”

This is what the federal government thinks is good.  Not a 2.6% unemployment rate.  Like they have in North Dakota.  Thanks to fracking.  Which the people living there don’t seem to mind.  As the people moving there don’t seem to mind.  Interestingly, the blue states with higher concentrations of liberals aren’t enjoying such economic prosperity.   The unemployment rate in New York is 6.8%.  In Illinois it’s 8.7%.  And in California it’s 8%.  So they’re doing something right in North Dakota.  And something very wrong in New York, Illinois and California.  Perhaps committing too many resources on liberal policies.  Instead of creating an economic climate that will give people the thing they want most.  A job.

www.PITHOCRATES.com

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