Week in Review
Self-serve checkouts at stores are reducing the number of cashiers in the economy. As bar codes and credit cards make it easier to live in a world that isn’t served by people. You can even pay with cash at these self-serve checkouts. And people love them. Why? Shorter lines. You can have 10 or more self-checkout lanes managed by one employee to fix problems and approve alcohol sales. Whereas 10 checkout lanes with cashiers require 10 cashiers. And these days full-time employees are expensive. Especially in low-margin industries. Like retail sales and grocery stores.
So stores don’t like to have a lot of checkout lanes with no lines with some cashiers getting paid for working part of the time. They’d rather have 3 checkout lanes with long lines with 3 cashiers working all of the time. Or one cashier overlooking 10 self-serve checkout lanes. Because fewer people cost less. Making it easier to survive in a world of thin margins. And this concept may soon be coming to a restaurant near you (see Pizza Hut table lets you touch-screen your toppings by Amanda Kooser posted 3/4/2014 on cnet).
Touch-screen tables already exist. Pizza Hut restaurants already exist. Put the two together and you end up with a touch-screen table concept for ordering pizzas using your fingers…
The interactive table idea isn’t far-fetched at all. The technology to make it happen is already available. If this were to be rolled out, however, it would require a pretty hefty investment for the hardware, which would need to be rugged enough to stand up to countless greasy fingerprints, soda spills, and other abuse.
People love their gadgets. There’re apps for everything these days. To make our lives more efficient. To speed things up in our lives. In large part by removing those slow and time-consuming people. This is the brave new world we live in. A world where we even use that technology to communicate with each other. Instead of meeting face-to-face. It is clear we’re addicted to technology. And losing our desire to interface with people.
Which is why it’s sad that costly government regulations (such as Obamacare) and higher taxes are squeezing margins so much for businesses that they prefer to invest in technology instead of hiring people. Because with technology you don’t need to pay for unemployment insurance. Workers’ compensation insurance. Health insurance. Mandated paid-leave. Holidays. Vacation days. Drug testing. Sexual harassment training. Sexual harassment lawsuits. A higher minimum wage. Etc. All of those things our liberal Democrats have burden our businesses with to make it better for employees. But the costs are so great to comply with these regulations and taxes that businesses are now replacing employees with technology wherever they can. Just so they can remain in business.
What’s next? Restaurants where you sit down and select something from your touch-screen table? And a pre-cooked dinner (appetizer, entrée and dessert) is warmed in an automated kitchen? Only to be delivered to your table by an automated conveyance system? Eliminating cooks, waitresses and even food-runners? If you keep raising the cost of employing people this may be our brave new world in our not so distant future. If you doubt this just think of the last time you went to the post office. Did your banking face-to-face with a bank teller. Dropped your film off to be developed into photographs. Used a newspaper to find a movie to see.
Our love of technology, our impatience to wait for anything and the high cost of hiring people (especially low-skilled workers) has taken us far down the road to that people-less future. You can’t stop the march of technology. But you can stop making it so costly to hire people. If we focused on this we wouldn’t have to worry about a people-less future. Something we should think about the next time we enter a voting booth.
Tags: cashier, government regulations, love of technology, low-margin, margins, people, people-less future, regulations, self-serve, self-serve checkouts, taxes, technology, touch-screen, touch-screen table
Week in Review
President Obama’s new message is the horror of income inequality. As his friends on Wall Street and in Hollywood make so much more money than the ‘folks’ do. Of course, if it weren’t for his abysmal economic policies the ‘folks’ would be able to get a better-paying job. Since he’s been president his policies have destroyed some 11,301,000 jobs (see The BLS Employment Situation Summary for December 2013 posted 1/13/2014 on PITHOCRATES). The Affordable Care Act, new taxation, costly regulatory policies and his support for union labor all help to kill jobs. Forcing a lot of people to work a couple of low-paying part-time jobs to pay the bills. While his friends on Wall Street and in Hollywood have never been richer.
The economy wouldn’t as bad as it is if President Obama didn’t attack business so much. And, instead, embraced it. Like Henry Ford (see The Internet Is the Greatest Legal Facilitator of Inequality in Human History by Bill Davidow posted 1/28/2014 on The Atlantic).
In the past, the most efficient businesses created lots of middle class jobs. In 1914, Henry Ford shocked the industrial world by doubling the pay of assembly line workers to $5 a day. Ford wasn’t merely being generous. He helped to create the middle class, by reasoning that a higher paid workforce would be able them to buy more cars and thus would grow his business.
Yes, Henry Ford did want to pay people enough so they could afford to buy his cars. But this did something else. It attracted the best workers to his company. Because of the incentive of the higher pay. And if they were lucky enough to have gotten hired in they busted their butts so they could keep those high-paying jobs. It was a meritocracy. If a worker wasn’t performing they got rid of that worker. And offered that job to another person willing to bust their butt to keep that job.
Of course, the unions changed all of that. The Keynesians will point to Ford to justify their consumption policies (putting more money into consumers’ pockets as the be-all and end-all of their economic policies). And NOT on how attracting the best workers with the best pay helped make Ford the most efficient. Allowing Ford to produce cars at prices working people could afford. Once the unions came in they decreased efficiencies. Slowed down those assembly lines. And raised the cost of cars. So only unionized working people could afford them. While most other working people had to settle on used cars. Unless they had a relative that worked for one of the automotive companies that could give them a car at an automotive worker’s discounted price.
Surprisingly, the much-vilified Walmart probably does more to help middle class families raise their median income than the more productive Amazon. Walmart hires about one employee for every $200,000 in sales, which translates to roughly three times more jobs per dollar of sales than Amazon.
Why do some vilify Wal-Mart? Because like Henry Ford was in the beginning they are nonunion. Helping them not only to hire the best workers but to provide goods at a lower price so those not in a union can afford to buy them. So Wal-Mart helps middle class families in two ways. They help to raise the median family income. And they allow that median family income go further. Perhaps the greatest weapon in the arsenal to fight income inequality. As they help those not in privileged jobs (such as a UAW job or a government job) to live as well as someone in those privileged jobs.
Tags: efficient, Ford, Henry Ford, Hollywood, income inequality, jobs, median family income, middle class, nonunion, union, union labor, Wal-Mart, Wall Street, workers
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.
Tags: August, economic policies, economic recovery, Fed, interest rates, joblessness, jobs, jobs report, labor force, labor force participation rate, stimulus, unemployment rate, Wall Street
Week in Review
Is President Obama the worst president ever? Perhaps. Based on what he has done to the economy. FDR and LBJ caused great damage and destroyed families by putting us on the path President Obama has taken us further down than any other president. Towards European socialism. It’s all there in history. And the economic numbers. How activist governments destroy everything that made capitalist countries great. Thrift. Frugalness. Working hard to save for your future. Which created a strong banking system. Where people deposited their money. Creating investment capital. And bankers practiced sound lending practices. And suffered the consequences of making risky loans. Unlike today. Thanks to Keynesian economics. And a monetary policy that controls and plays with interest rates to create artificial demand that causes great bubbles. And prolonged recessions. Ever since governments took control of interest rates and began printing money to finance the growth of their activist governments they have set countries everywhere on the path to financial ruin. And bankruptcy. As government spending outgrew the ability of taxes to pay for it. And then the debt grew so great they struggled to finance it.
But it doesn’t deter the Keynesians from trying the same failed policies of the past. They continue to intervene into the private sector economy. And when they cause great economic damage they just report bad economic news as good (see Employment Situation Summary by the Bureau of Labor Statistics posted 9/6/2013).
Total nonfarm payroll employment increased by 169,000 in August, and the unemployment rate was little changed at 7.3 percent, the U.S. Bureau of Labor Statistics reported today. Employment rose in retail trade and health care but declined in information.
Sounds good. Things are good. The economy added new jobs. Fans of the Obama administration are trumpeting this as good news. And proof that the Obama economic policies are working. But if you take a close look at the jobs data you find that the economy is horrible. Because of President Obama. And his awful, job-killing economic policies. Such as Obamacare. Greater regulatory policies. And higher taxes. President Obama has advanced (or tried to advance in the case of cap and trade) every policy that he could think of that causes great harm to the economy. Is he doing this on purpose because he hates capitalism? Or is he just another Keynesian who thinks that government is smarter than the people going about their business in the private sector economy? Or both?
The unemployment rate (the official U-3 rate that counts about the fewest of the actual unemployed) has fallen from a high of 10% since he’s been president. But it’s not because he’s creating jobs. It’s because these people just gave up and left the labor force. Because there are no jobs. As the falling labor force participation rate clearly shows.
Ever since President Obama took office the labor force participation rate has steadily declined. Showing a steady trend of destroying jobs. Not creating them. If you want to know exactly how many jobs his policies have destroyed you can get that from the Bureau of Labor Statistics, too. By subtracting the number of people NOT in the labor force when he took office in January 2009 (80,507,000) from the number of people NOT in the labor force from the August Jobs report (90,473,000). And when you subtract 80,507,000 from 90,473,000 you get 9,966,000 jobs that President Obama and his economic policies have destroyed. Just under 10 million people have left the labor force while President Obama has been president. And yet they celebrate the creation of 169,000 jobs in August.
The economy is not good. It’s not improving. It will only improve when we finally abandon the failed Keynesian policies of the past. And get the government out of the private sector economy. The way it was when America became the number one economic power in the world. Before the progressives/liberals transformed the country into what it is today. A dying European social democracy. Where governments tried to give the people everything. Only to bankrupt their countries. And caused their people to riot when they couldn’t borrow enough money to keep giving the people what they had been giving them. Which is usually what happens when you take stuff away from people who have gotten used to having that stuff. Which is why Obamacare is so insidious. And important to the left. Once they make Obamacare a ‘third-rail’ program like Social Security and Medicare they know it will never go away. No matter what economic damage it does. Or how much it destroys the quality of health care.
Tags: activist government, capitalism, capitalist, economy, European Socialism, failed policies of the past, interest rates, jobs, Keynesian, Keynesian economics, labor force participation rate, Obama economic policies, Obamacare, President Obama, private sector, unemployment, unemployment rate
Week in Review
The Dow Jones Industrial Average is at a record high. The unemployment rate fell one tenth of a percentage point in April. Nonfarm payroll employment rose by 165,000 in April. And interest rates are still so low that they are almost negative. Good news for Wall Street. And rich investors (see Revised Wall Street Forecast: We’re All Going to Be Rich by Kyle Stock posted 5/13/2013 on BloombergBusinessweek).
Whether, the country’s 500 biggest companies are collectively worth that much is another question. Goldman says most of its own valuation engines show the market is currently at or above where it should be trading. In other words, eager buyers are keeping it high. Low interest rates are spurring things along, as investors borrow increasingly large sums to place bigger bets.
That’s not to say some people aren’t nervous about the recent gains. “It’s one big carry trade, and all it’s doing is setting us up for a bigger correction,” says Joseph Saluzzi, partner and co-founder of Themis Trading, an institutional brokerage firm that specializes in equities. “Whether it’s going to be a week from now or a year from now, I don’t know; but it’s going to be ugly.”
President Obama has been saying for years now that the economy has turned around and things are getting better. But better for who? Wall Street. Not Main Street. The 1%. Not the 99%. Things are still pretty horrible for the 99%. The unemployment rate may have fallen in April but the labor force participation rate hasn’t budged from March. It’s still at record lows. You have to go all the way back to President Carter’s Seventies to find so many people unable to find full time work. That’s right, even George W. Bush had better economic numbers throughout his presidency. And he suffered through a couple of recessions. And the greatest terrorist attack on American soil. So things aren’t getting better. They’re only getting better for the 1%. Who are borrowing that cheap money the government is printing to make more money. While the general economy languishes in the worst recovery since that following the Great Depression.
And it gets worse. Once the markets correct all of that irrational exuberance the economy is going to crash. Hard. Just as it always does after artificially low interest rates push stock prices into the stratosphere. And “it’s going to be ugly.” As it always is. And the longer they keep those interest rates artificially low the uglier the inevitable correction will be. When the correction comes it will be the 99% that will suffer the most. As they always do. As even more people will be unable to find a full time job. Pushing the labor force participation rate even lower than it ever was in the Seventies. This is what President Obama is doing to the 99%. While he and his 1% friends are living large. And will continue to live large after the crash. Just as Hugo Chavez was able to live large in a country that couldn’t even make enough toilet paper for its people. Because rich people and those in government always do well. No matter what they do to the people.
Tags: 1%, 99%, correction, George W. Bush, interest rates, labor force participation rate, Main Street, President Obama, recession, rich investors, unemployment rate, Wall Street
Week in Review
U.S. high-tech companies have trouble finding qualified applicants to hire. So a lot of them turn to the H-1B visa. To bring in highly skilled foreign workers. Those with science and engineering degrees. And good GPAs. So the H-1B visa is a valuable commodity. As they only allow so many H-1B visas a year. The current limit is 65,000. Making high-tech companies jockey for the limited number of highly-skilled foreign workers allowed into the country.
So despite a high unemployment rate there is a high demand for college graduates with degrees in science and engineering. Which causes a lot of foreign high school graduates to take the SAT exam in hopes of going to an American university. So they can get one of those high-paying tech jobs. And some appear to want that a little more than others (see For the First Time, SAT Test Gets Canceled in an Entire Country by Kayla Webley posted 5/10/2013 on Yahoo! News).
Some 1,500 South Korean students who dream of attending elite American colleges are scrambling after the U.S.-based administrator of the SAT cancelled the scheduled May 4 session of the exam due to allegations of widespread cheating. It’s the first time the SAT test has been called off in an entire country…
Test center managers told the WSJ that the problem is widespread and that official test booklets can be purchased from brokers for about $4,575—a relatively small price to pay for families fighting to gain admittance to Harvard, Stanford and other prestigious American schools no matter the cost…
But South Korea is hardly alone—the high stakes nature of the exam has fueled cheating elsewhere, although on a smaller scale. Of the nearly three million SAT exams taken worldwide each year, at least a few thousand are canceled because of suspected cheating. Several hundred other potential test takers are turned away at the door each year because of questionable identification. In 2011, 20 students in Long Island, New York were charged with cheating on the SAT—five were accused of taking the test for others and 15 were accused of paying them $500 to $3,600 to take the exams.
The College Board and ETS say they expects to be able to offer the SAT in South Korea in June, but in the meantime, and out of fear of additional problems, there have been reports of students flying to Japan and Hong Kong to take the test there in order to get their scores in time to apply for college in the U.S. this summer.
This no doubt greatly disappoints those American high-tech companies. To have such widespread cheating caught like that. “Why?” they probably cried, “did these kids have to get caught?” You see, they want these kids to get into the American universities. For they will take the hard classes and study. Not only to get good grades but to become intimate with the material. Unlike too many American kids entering American Universities (see Only 150 of 3500 U.S. Colleges Are Worth the Investment: Former Secretary of Education by Lauren Lyster posted 5/7/2013 on Yahoo! Finance).
The U.S. is home to some of the greatest colleges and universities in the world. But with the student debt load at more than $1 trillion and youth unemployment elevated, when assessing the value of a college education, that’s only one part of the story.
Former Secretary of Education William Bennett, author of Is College Worth It, sat down with The Daily Ticker on the sidelines of the Milken Institute’s 2013 Global Conference to talk about whether college is worth it.
“We have about 21 million people in higher education, and about half the people who start four year colleges don’t finish,” Bennett tells The Daily Ticker. “Those who do finish, who graduated in 2011 – half were either unemployed or radically underemployed and in debt…”
The problem, Bennett says, is people going to second-tier schools, majoring in less-marketable liberal arts fields, and taking on debt to do so.
And now you see why high-tech companies are so desperate for those H-1B visas. Too many American kids go to college to party. Even choosing their school by where they rank as a party school. All play and no work leads to, of course, about half of those enrolling in a 4-year program failing to graduate. And too many of those who do graduate majored in the liberal arts. Which is of no use to a high-tech company. Leaving them to rely more on the H-1B visa. And kids who can cheat better on their SATs. Because these kids will not only enter and finish a 4-year program. But they will graduate with a degree in science or engineering. For no parents in a foreign country are going to spend that kind of money to get their kid into a 4-year college just so they can have a good time and come back home to live in their basement.
In America some are questioning if college is worth it. While in South Korea they will do just about anything to get into an American University. Because unlike many of their American counterparts they will make going to college well worth it. As they land one of those high-paying jobs high-tech companies are so desperate to fill.
Tags: cheating, engineering, foreign workers, H-1B visa, high-tech companies, SAT, SAT exam, science, South Korea, students
Week in Review
The union workforce in the private sector has shrunk from its peak in the Fifties. Falling from about 30% of all workers belonging to a union down to about 11%. Why? Well, consider the industries they once dominated. Textiles. Steel. Automotive. Ship building. Industries that went from world dominance to being a shell of their former selves. This is why union workforce has fallen so greatly in the private sector. Because the high cost of union labor destroyed these industries.
Those on the left want to bring these jobs back. Despite hating these jobs. Which is why they unionized them. They were dirty, dangerous, monotonous and inhuman. Right out of a Dickens novel. Or the worst of capitalism Karl Marx could rail against. Now that we don’t have them they call these good manufacturing jobs. Not those same jobs they went on strike from in order to get better pay and more humane working conditions. And say it is a crime that someone else is now exploiting their workers doing these jobs Americans should be doing. Only the labor costs and working conditions in these countries are such that they will never come back to America. For as bad as they may be at times they have no problem staffing these factories. As American workers would have done had it not been for the unions forcing these jobs offshore. And the American factories no doubt would have been safer (see Shoppers face tough choices over Bangladesh by Emily Jane Fox posted 5/1/2013 on CNNMoney).
It is hard for American shoppers to avoid buying clothes made in unsafe factories abroad.
That’s because just about all, or 98%, of clothes sold in the U.S. are made overseas, according to the Apparel and Footwear Association. Also, companies don’t tell consumers if any of their suppliers violate safety standards.
The recent spate of deadly accidents in garment factories in Bangladesh has caught international attention. Last week, more than 400 workers were killed when a garment factory building collapsed. The tragedy follows two more factory fires in November that killed and injured more than 100 workers.
A very large portion of U.S. apparel imports comes from Bangladesh. Many companies have been shifting orders there, because labor costs in the country are so low. Bangladesh is on track to surpass China within the next seven years as the largest apparel manufacturer in the world…
Bangladesh has about 4,500 garment factories that make clothes for global retailers…
“Companies don’t want consumers to understand the reality of what’s going on — the labor abuses, the low wages — that make products for the U.S. market,” Nova said. “Customers do care, but they don’t have enough information about where and how products are made to react.”
The United States used to have a booming textile industry. And because of that they had a booming garment industry. But they don’t have either any more. Why? These industries unionized. Labor costs went up. Which raised their selling prices. This, of course, reduced sales volume. For lower-income people could not afford to buy the same amount of clothes they once did at these higher prices. Rich people could. But not lower-income people. The vast majority of the buying public. Unable to make clothing average working Americans could afford U.S. garment manufacturers closed down. Or moved offshore. Killing the U.S. garment industry. As well as the U.S. textile industry.
This is why Bangladesh has about 4,500 garment factories. Because they can make clothing lower-income people can afford.
Customers care? And if they had enough information they would…what? Say, “That’s it. I’m done buying affordable clothing. For now on I will pay for only the clothing that I cannot afford.” Yes, of course that’s what they will say. But they won’t be able to afford to do that.
Buying clothes is a lot like eating meat. We like it. We enjoy it. But we don’t want to think about the slaughterhouse. And so it is with our affordable clothing. We like it. We enjoy being able to send our kids to school in something nice and clean every day. But we don’t want to think about the working conditions in those factories. And trust our retailers that they do everything within their power to make those working conditions meet acceptable standards. When they don’t they will be the first to raise their moral outrage. While no doubt wearing something from those factories. Because like those factory workers there just isn’t a better alternative.
If a country can staff 4,500 garment factories these must be the best jobs available. Or the only ones. Like in China in those export factories. Which attract people from the rural interior regions. Who are trying to escape their chronic hunger. And occasional famine. So while organized labor bemoans the loss of the high pay and generous benefit packages of those manufacturing jobs the people working in these factories are probably living better than they ever have. Despite the occasional collapsed factory. Or factory fire.
Tags: apparel, Bangladesh, garment, garment factory, garment industry, high cost of union labor, jobs, private sector, textile, textile industry, union, union workforce
Week in Review
Going to college is a special time in a young person’s life. For it marks their entry into the true world of partying. Where life on campus is nothing but a party. And these parties are so good that people actually rank colleges by their partying greatness. To help students choose the right school for their partying needs. For no student wants to go to the local community college. And still live at home. I mean, what fun is that?
No. They want to go to another state. Out from underneath the disapproving eyes of their parents. Who are more times than not footing the bill. And no doubt remember what they did while in college. And sigh. But they hope and pray that their kids will take some time from their partying to study. So they can get a good job when they graduate. Which isn’t easy in a bad economy. Especially when, it appears, these kids spend more time partying than hitting the books (see Job Picture Looks Bleak for 2013 College Grads by Mark Koba posted 4/26/2013 on CNBC).
NACE [National Association of Colleges and Employers] said employment areas with the greatest demand for this year’s graduates include business, engineering, computer sciences and accounting.
One reason there may not be so many grads hired is that many employers don’t believe college graduates are trained properly.
A survey of 500 hiring managers by recruitment firm Adecco, found that a majority—66 percent— believe new college graduates are not prepared for the workforce after leaving college. Fifty-eight percent said they were not planning to hire entry level graduates this year, and among those managers hiring, 69 percent said they plan to bring on only one or two candidates.
“Too many students are graduating with a weak background in science and math,” said Mauri Ditzler, president of Monmouth College…
A frequent mistake graduates make that keeps them from getting even an interview is spelling…
This is sad. For you don’t even need to know how to spell to spell well. For there is a button on all word processors and email editors. It’s a remarkable button. If you click on it something magical happens. It checks your spelling. Pity our college graduates aren’t learning this in college. Or that they are just too lazy to click on it.
So what is Mom and Dad getting for all that money they spent sending their kid to college? Which can be anywhere around $165,000 per kid for a 4-year degree out of state. In truth few parents can pony up this kind of money. So students make their way to the financial aid department on campus. And borrow enough to buy a house. In exchange for a degree that their college told them will lead to great riches. And they did that with a straight face.
The reason employers aren’t hiring a lot of college graduates is because of the degrees a lot of them are getting. And they’re not the hard ones. For that would get in the way of all their partying. If you look at the undergraduate degree programs for any college in a warm climate with a good party reputation you will see degrees in academic fields like African-American Studies; American Indian Studies; Anthropology; Art History; Communication; Comparative Literature; French & Francophone Studies; Lesbian, Gay, Bisexual, and Transgender Studies; Musicology; Philosophy; Poetry; Women’s Studies. Etc. A degree costing a student about $165,000 in student loan debt. Require little science and math. And isn’t likely to land you a job interview for someone looking for someone with math and science skills. Which is who a lot of employers want to hire these days.
These colleges are heaping enormous amounts of debt on our kids. For a degree that can never earn the kind of money that can pay back that student loan. And this mounting student loan debt will probably be the last straw that will bankrupt the country. For it already exceeds a trillion dollars. And it grows still. Money that went to these universities and colleges. Providing generous pay and benefit packages. And some very nice perks. Living in the fantasyland of a college campus. Shielded from the real world. Some in higher education are acquiring great wealth at the expense of our children. And the future financial wellbeing of our country. As our kids will struggle to pay off these loans. And when they can’t get a job in their field of study they’ll end up taking a job some place they didn’t need that $165,000 degree to get.
This is a tragedy of epic proportions. Sooner or later government will have to force these colleges to put their money where their mouth is. To make them accountable. Before they bankrupt the country. For anyone paying for college with a student loan they need to enroll only those students who can complete a program with a degree that has true market value. Who can graduate and get a job with a pay level commensurate with their degree. If the number of students who can’t falls below, say, 90%, then the college has to start refunding tuition. For a job poorly done. It’s only fair. For they are the only ones who get paid so well for doing such a terrible job. Giving their graduates degrees with no true market value.
Critics will scream this is not fair. For we will lose the richness of our culture by not having degree programs in all those other fields that don’t have true market value. But a degree with no market value is a worthless degree. And if these worthless degrees are so important to the culture of the country then let the students who want them pay for these degrees with their own money. And have the college charge less for them if they don’t have true market value. For if a degree doesn’t have any market value why in the world are they charging $165,000 for them in the first place?
Tags: 4-year degree, college, college graduates, math, party, science, science and math, student loan, student loan debt, worthless degrees
Week in Review
President Obama promised us that if Congress passed his stimulus bill the unemployment rate wouldn’t rise above 8%. Because million of people would go back to work immediately thanks to all of those shovel-ready jobs. Well, the president signed it into law on February 17, 2009. In October of that year the unemployment rate topped out at 10%. And the president joked that those shovel-ready jobs weren’t as shovel-ready as they thought. Still, they claimed it was a success. And bragged about the millions of jobs they created or saved. All the while the economy remained mired in one of the worst economic recoveries of all time (see Did Obama’s stimulus bill really work? Not even the gov’t knows by Sean Higgins posted 4/15/2013 on The Examiner).
Reason magazine’s Peter Suderman has a lengthy but eye-opening examination of President Obama’s 2009 American Recovery and Reinvestment Act — aka the stimulus bill — and why even after spending $833 million through it the economy continues to suck.
The article is a top-to-bottom dissection that exposes the many layers of folly involved. Several passages stand out but this one in particular is worth noting because it points out the central flaw in reports that argue the stimulus was a success: There is literally no way to measure those claims.
“According to the non-partisan Congressional Budget Office,” says Recovery.gov, the Obama administration’s stimulus website, “the Recovery Act supported as many as 3.5 million jobs across the country.” As the stimulus ran its course over roughly three years, the capital’s top newspapers kept printing similar, supportive-sounding figures from the budget office. “CBO Says Stimulus May Have Added 3.3 Million Jobs,” a Washington Post headline trumpeted in 2010. “CBO: Stimulus Added Up to 3.3 million Jobs,” declared a Politico headline in 2011. Senate Democrats touted the estimates as proof of ARRA’s success. So did the vice president…
The CBO estimated that the stimulus created or saved up to 3.6 million jobs. But CBO Director Douglas Elmendorf has also noted that if the real-world results were different — if the law created 5 million jobs, or if it created none at all — the agency wouldn’t know. At a March 2010 presentation, Elmendorf characterized the CBO’s follow-up reports as “repeating the same exercises we did rather than an independent check.” At the same event, Elmendorf was asked, “If the stimulus bill did not do what it was originally forecast to do, then that would not have been detected by the subsequent analysis?” His response: “That’s right. That’s right.” (Emphasis added.)
You may not be able to measure how many jobs you saved but you sure can measure one thing. The labor force participation rate. The percentage of those who could be working who are actually working. Which shows the true economic picture unlike the official unemployment rate. Which just doesn’t count people if they leave the labor force. Because they can’t find a job. You see, for them to count you in the unemployment rate you have to be looking for work. And if you gave up looking for work after a year or so of not finding work they don’t count you. Which lowers the unemployment rate. Even though more people are unemployed.
So how did the labor force participation rate respond to the stimulus bill? Not good. It suffered its steepest decline the year they passed the stimulus. And continued in the longest and steepest free-fall during the Obama presidency. These numbers show the stimulus was an abject failure. And any talk contrary to this was nothing but wishful thinking. Or outright lies.
Tags: ARRA, CBO, jobs, jobs they created or saved, labor force participation rate, Recovery Act, shovel-ready jobs, stimulus, stimulus bill, unemployment, unemployment rate
Week in Review
While the Obama administration, their economists and those in the mainstream media celebrate job creation month after month the official unemployment rate (U-3) remains at 7.8%. Worse, the better gauge of how awful the economy is, the U-6 unemployment rate, is holding steady at 14.4%. Which says a lot about the horrible economic policies of the Obama administration. But these numbers still seem a little abstract to most. So here is a summary of the current economic climate most people will be able to understand. At least, if they eat at fast food restaurants (see Wendy’s Doubles Down on Dollar Menu by Martha C. White posted 1/3/2013 on Time).
Although it bumped Burger King out of second place by positioning itself as a more upscale fast-food burger chain, now Wendy’s is supersizing its value menu by adding a second tier of under-$2 items in addition to a core group of 99¢ offerings.
The company missed analysts’ earnings expectations last quarter, while rival McDonald’s recovered from an October dip in sales by heavily promoting its dollar menu. (The thousands of McDonald’s stores that stayed open on Thanksgiving helped lift sales too…)
In a conference call last month, president and CEO Emil Brolick told investors, “We have lost some share in the value-menu area,” and said the new menu would help the company reverse that slide…
According to research firm Technomic, Wendy’s took the No. 2 spot from Burger King among fast-food burger brands last year. Helped along by Burger King’s sluggish response to changing tastes among fast-food diners, Wendy’s stole the King’s crown by focusing on higher-end (and higher-priced) items like bigger, more natural-looking patties and specialty sandwiches like an asiago ranch chicken club.
The problem was, it got almost too good at aligning itself with the higher end of the market. “The new menu is intended to better balance Wendy’s overall menu, which had gotten top-heavy through [the addition] of higher-priced sandwiches,” Burger Business observed.
“We do believe that the number of price-value-sensitive customers out there is not insignificant,” Brolick told analysts. He’s right. Bonnie Riggs, a restaurant-industry analyst at research company NPD Group, says fast-food diners, especially those under 35, are abandoning combo meals in favor of the dollar menu to save a few bucks.
Fast food is not only fast it is also inexpensive. So if fast food has to offer lower-priced items to entice people into their restaurants you know the economy is bad. Which it is. Bad. However you want to measure it. This economic recovery is so bad it is as if we’re still in the Great Recession. Why? Because this administration’s policies are not business-friendly. So businesses are not hiring. Or only hiring people part-time to escape some of their expensive anti-business policies. Like Obamacare.
And there is worse to come. Without having to worry about reelection President Obama has no reason to compromise with Republicans. Which means only one thing. Americans will be buying ever more off of these dollar menus. As it is the most they can afford thanks to the horrible economic policies of the Obama administration.
Tags: Burger King, dollar menu, economic policies, fast food, fast food restaurants, McDonald's, Obama administration, unemployment rate, value menu, Wendy’s
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