Chinese Women outperforming American Women in the Corporate World

Posted by PITHOCRATES - August 28th, 2011

Women are Thriving in Emerging Markets because things don’t Cost that Much

Corporations are the big bad in today’s world.  Everyone hates them.  They’re evil inhuman pariahs sucking the marrow of humanity.  They should be punished.  Taxed to the hilt and then taxed some more.  Those filthy, rotten, greedy corporations.  You just can’t say anything good about them.  Never.  Except, of course, when women climb the corporate ladder (see The daughter also rises posted 8/27/2011 on The Economist).

The emerging world is home to many businesswomen like Ms Zhang. Seven of the 14 women identified on Forbes magazine’s list of self-made billionaires are Chinese. Many firms in emerging markets do a better job of promoting women than their Western rivals, some surveys suggest. In China, 32% of senior managers are female, compared with 23% in America and 19% in Britain. In India, 11% of chief executives of large companies are female, compared with 3% of Fortune 500 bosses in America and 3% of FTSE 100 bosses in Britain. Turkey and Brazil come third and joint fourth (behind Finland and Norway) in the World Economic Forum’s ranking of countries by the proportion of CEOs who are women. In Brazil, 11% of chief executives and 30% of senior executives are women.

I wonder if these women are the ones Mitt Romney was referring to when he said corporations are people.  Or are these women just soulless scum of the earth, too?

Funny.  Corporations are evil.  But women climbing the corporate ladder is good.  Even though they’re climbing the ladder of evil.  As if there was something good about being in high places in these evil inhuman pariahs.  Perhaps people think that women will do away with the profit motive in business once they’re in charge.  Instead paying everything they earn beyond the cost of sales as income taxes.  They could.  But they will fall off of that ladder pretty darn quick if they do.

So why China?  Why is it there that feminism is flourishing?  Where women can bring home the bacon?  And fry it in the pan?  Is it because of the one-child policy giving them more time to work in a corporation?  Is it a greater drive due to all of the girls aborted because parents wanted their one child to be a son?  Or is child care just cheaper in China?

Living in emerging markets offers many advantages for female professionals. Most obviously, there are plenty of cheap hands to cook and take care of children.

So in other words women are thriving in emerging markets because things don’t cost that much.  Child care.  Parent care (it’s the daughters who take care of aging parents in China).  There’s a lesson here.  If you want a smoking hot economy with opportunity for everyone, don’t make it so expensive to live there.  And that’s what high taxes and costly regulatory compliance costs do. 

Democrats feel our Pain and want to do Everything they can do to Help Us

A lot of women vote Democrat.  For they feel that Democrats care about women’s issues.  Unlike the out of touch old white men in the Republican Party who just care about profits.  Everything is just too logical with them.  They don’t feel.  Democrats feel.  They feel our pain.  And want to do everything they can do to help us.  Give us that which we crave.  Love.  Understanding.  And a job.  So you’d think they hit the mother lode with Obama.  The media loved him.  But it’s been almost three years and he hasn’t really done anything substantial to help us in the here and now (see Obama’s Enablers by Fred Barnes posted 8/28/2011 from the 9/5/2011 issue of the weekly Standard).

It’s counterintuitive, but Obama has been hurt by the media’s leniency. Both his presidency and reelection prospects have suffered. He’s grown lazy and complacent. The media have encouraged him to believe his speeches are irresistible political catnip, though they aren’t. His overreliance on words hasn’t helped.

The kind of media pressure that can cause a president to sharpen his game, act with urgency, or take bolder steps—that has never been applied to Obama. If it had, I suspect he’d be a more effective, disciplined, energetic, and popular president today. Ronald Reagan is a good role model in this regard. When the media attacked him over gaffes in the 1980 campaign, “Reagan responded like all competitive men by working to improve himself,” says Reagan historian Craig Shirley. “Experience taught him to be better and try harder.” He took this lesson into the White House…

Absent pushing and prodding by the press, the Obama presidency has atrophied. His speeches are defensive and repetitive and filled with excuses. He passes the buck. With persistently high unemployment and a weak economy, Obama recently declared, in effect, “I have a plan. See you after my vacation.” The press doesn’t goad him to lead.

Three years.  Almost.  And we still have high unemployment.  And a weak economy.  Despite all those speeches about focusing on jobs.  With a laser-like focus.  Instead we get higher taxes.  And more costly regulations.  Nothing like those women in China have to deal with.

“Private sector job growth is good,” he said in Alpha, Illinois. In reality, it’s bad and getting worse. “The economy is now growing again,” he said. Barely. Obama said trade deals and patent reform would promote hiring, if only Congress would approve them. But it’s the president who has delayed the trade treaties, and both houses of Congress have passed patent reform measures.

The media routinely give Obama a pass on such stuff. On the tour, Obama insisted, as he has many times before, that he saved the nation from a “Great Depression.” So far as I know, the press has never challenged this dubious claim. But it is belied by the fact the recession came to an official end in June 2009, months before Obama’s policies could have played more than a minimal role.

This reminds me of an episode of Scrubs.  The Janitor was making some ridiculous claims.  So Carla asked the janitor if he is familiar with the term ‘delusions of grandeur’.  He replied, “I believe I coined that term.”

If you can’t Raise Revenue via Income Taxes because of a Bad Economy, go after Wealth

So what if anything is the Obama administration doing to address the problems of this nation?  Well, for one, they’re doing a pretty good job of transferring wealth from the private sector to the public sector (see Banks seeking relief from regulators as deposits swell by Bradley Keoun, Dakin Campbell and Dawn Kopecki posted 8/26/2011 on The Washington Post).

Deposits are flooding into the biggest U.S. banks as customers seek shelter from Europe’s debt crisis and falling stock prices. That forces lenders to raise capital for a growing balance sheet and saddles them with the higher deposit insurance payments. With short-term interest rates so low, it’s hard for financial firms to reinvest the new money profitably…

The extra deposits are problematic because they’re subject to withdrawal, so banks have to park the money in low-yielding short-term investments, Litan said. With few other choices available, banks have stashed their excess deposits at the Fed, which means the cash gets counted as assets.

Do you have a 401(k)?  If so, how did you pick your funds?  Well, if you’re young you probably leaned towards high-yield risky growth funds.  If you’re close to retirement, you probably leaned towards low-yield ‘safe’ income preservation funds.  Young people can ride a few boom and bust cycles and not lose money in the long run.  When you’re close to retirement you can’t.  So you park that money where it’s safe.  Knowing it will be there when you need to withdraw it.

In a volatile world, people and corporations with money act like people who are close to retirement.  They will sacrifice yield to keep their money safe.  Even pay a small fee.  For they don’t want to see their wealth disappear in a crashing stock market.  Or a collapsing bond market.

Now Keynesians attack this ‘hoarding’ of money.  This is the reason why there is no demand.  Which is keeping the economy weak.  Because no one is taking any chances with their money.  So what is a government to do?  Get rich.

If the FDIC agreed to forgive some fees, it would have to give up some of the extra premiums that it’s counting upon to rebuild the Deposit Insurance Fund, which covers customers for $250,000 per account in the event of a failure. That makes the agency unlikely to grant a waiver, one of the people said, adding that the existence of the insurance is one of the reasons banks are able to attract the deposits.

The FDIC’s fund, which fell into a deficit of almost $21 billion after a wave of bank failures, turned positive during the second quarter for the first time in two years, the agency reported this week. On April 1, the FDIC changed its formula for assessing premiums, increasing the cost for most large banks and adding to their deposit expenses.

Yes.  They saw all that money and said I’ll take some of that.  They increased their FDIC fees.  Which is ridiculous because the money is just sitting in the bank.  As if there was no such thing as fractional reserve banking.  Which is the very reason why they created FDIC.  In case banks loaned out too much money when faced with a lot of depositors demanding their money back.  At the same time. 

FDIC was a way to prevent a bank run.  If you know your money is insured even if a bank is going under, you won’t run to the bank to get your money.  But with virtually 100% of these deposits held in reserve, everyone could run to the bank and demand their money back.  And the bank could repay every depositor. 

So why raise the FDIC fee?  Why not?  If you can’t raise revenue via income taxes because of a bad economy, go after wealth.  Especially if it’s just sitting there.  For all intents and purposes, the FDIC fee on funds that a bank does not lend out is little more than a wealth tax.

A Growing Public Sector Oppresses Women whereas Capitalism Unleashes their Potential 

So women are climbing the corporate ladder in emerging countries.  While the world’s number one economy sputters and spits along.  Despite nearly three years of applying a laser-like focus on job creation.  Which in Washington-speak means writing more job-killing regulations.  And thinking of creative new ways to transfer wealth from the private sector to the public sector.

So what’s the big difference between the U.S. and these emerging markets?  Legacy costs.  The U.S. was once an emerging country.  But now it’s a Big Government social democracy like in Europe.  China doesn’t have long established entitlements growing greater than the government can ever hope to fund.  And it doesn’t have an established environmentalist movement choking the life out of free enterprise.  China doesn’t have these.  And their economy is booming.  And women are shattering the glass ceiling.

The lesson is a simple one.  A growing public sector oppresses women.  Whereas capitalism unleashes their potential.  And that is the lesson of the booming emerging markets.

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Reaganomics beats Keynesian Stimulus Spending every Time

Posted by PITHOCRATES - July 6th, 2011

Obama’s Policies Failing because they’re too Ronald Reagan

So President Obama is a supply-sider.  Just like Ronald Reagan.  Who’s a thunk it?  Funny, he doesn’t appear to govern like Ronald Reagan.  In fact, I believe Obama has said that we can’t go back to the failed policies of the past.  I’m pretty sure that meant Reaganomics.  But I could be wrong.  Because apparently the faltering economy is faltering because of supply-side economics (see The final nail in the supply side coffin by Andrew Leonard posted 7/6/2011 on Salon).

Ever since Ronald Reagan first attempted to make supply-side economics a reality and proceeded to inaugurate an era of persistent government deficits and growing income inequality, it has become harder and harder to make the trickle-down argument with a straight face. But we’ve never seen anything quite like the disaster that’s playing out right now.

Those persistent government deficits of Ronald Reagan?  They were about $200 billion.  The deficits under the Obama administration have been in excess of $1,300 billion (or $1.3 trillion).  The current projection for 2012 is $1,600 billion (or $1.6 trillion).  So the Obama deficits are over 5.5 times the Reagan deficits.  Or an increase of approximately 550%.  So deficits are worse under Obama.  Far worse.

As far as income inequality, the gap has grown consistently from Richard Nixon through Barack Obama (see The United States of income inequality by Andrew Leonard posed 9/28/2010 on Salon).  That included the 4 years of Jimmy Carter, the 8 years of Bill Clinton and about a year of Barack Obama.  Three Democrat administrations.  So the gap between the rich and poor is greater under Obama.  Far greater.

During the six quarters since the recession technically ended in the second quarter of 2009, real national income in the U.S. increased by $528 billion. But the vast majority of that income was captured as profit by corporations that failed to pass on their happy fortunes to their workers.

First of all, that’s now how business works.  They are not in business to produce wealth for their employees.  They pay employees to help them create wealth.  And they pay them whatever it takes to keep their employees from quitting to find a higher paying job.  If you think that’s wrong let me ask you something.  When you choose a store to shop at, do you pick the one with the highest prices so that store can pay their employees more?

What makes this “recovery” so different? Perhaps the simplest answer is that labor has been broken as a force that can put pressure on management, so there’s little incentive for employers to turn profits into wage hikes or new jobs. Instead, employers are squeezing more out of the workers that they’ve got, and investing in equipment upgrades and new technology instead of human assets — labor productivity has risen sharply since the end of the recession.

GM and Chrysler did not break labor.  Labor broke them.  Those generous UAW contracts saddled these companies with legacy costs that left them uncompetitive.  And insolvent.  The auto bailout screwed the bond holders and rewarded labor.  By giving them seats on the board of directors and stock to fund their underfunded pension funds.  This is why employers prefer investments in productivity.  They’re less political.  And are less likely to come back and bite you in the ass.

Globalization also plays a potent role — and not just as a source of cheap labor to undermine the bargaining power of American workers. The Journal notes that many companies “are benefiting from demand from emerging markets, where they are deriving an increasing share of their sales.” Job creation is probably following the sources of new demand. If the Chinese and Brazilians and Indians are the ones buying American goods and services, then it makes sense to staff up overseas. But with American consumers still shellshocked by the economic crash and dutifully obsessed with paying down their debts while trying to hold on to their homes, domestic demand is hardly a force to be catered to.

Interestingly, the emerging markets noted are making great strides toward free market capitalism.  Countries that are moving towards supply-side economics.  While the U.S. moves away from it.  Those emerging economies are doing well.  The U.S. is not.  It would appear, then, that a move towards supply-side economics is a move in the right direction.  And yet the pundits on the left continue to belittle the success of Reaganomics.  So you be the judge.  Let’s summarize Reaganomics as follows:

1.  Reduce Growth of Government spending.
2.  Reduce Income Tax and Capital Gains Tax.
3.  Reduce Government regulation.
4.  Control the money supply to reduce inflation.

Which president would you say followed these policies more?  Ronald Reagan?  Or Barack Obama?  The one who did would be the supply-sider.  And the one who didn’t would not.

The answer is clear.  President Obama is neither a conservative nor a student of the Austrian School of Economics (i.e., supply-side).  He’s a Keynesian.  His policies are Keynesians.  And Keynesians spend.  As demonstrated by his massive stimulus spending.  That failed to stimulate.   This economic train-wreck in the U.S. is a lesson in Keynesian economics.  Not supply-side economics. 

Keynesian Stimulus Spending is Wasted Money

Let’s take a closer look at Keynesian economics.  The theory that government can spend the economy into prosperity.  By looking at the Obama’s 2009 Stimulus.  One part of which was to expand broadband Internet into rural areas (see How Effective Was The 2009 Stimulus Program? by Nick Schulz posted 7/5/2011 on Forbes).

In an important and eye-opening new paper, Jeffrey Eisenach and Kevin Caves of Navigant Economics, a consulting firm, recently examined ARRA’s subsidization of rural broadband. The ARRA stimulus funds for broadband constitute “the largest Federal subsidies ever provided for broadband construction in the U.S.” An explicit goal of the program was to extend broadband access to homes currently without it.

Eisenach and Caves looked at three areas that received stimulus funds, in the form of loans and direct grants, to expand broadband access in Southwestern Montana, Northwestern Kansas, and Northeastern Minnesota. The median household income in these areas is between $40,100 and $50,900.  The median home prices are between $94,400 and $189,000.

So how much did it cost per unserved household to get them broadband access?  A whopping $349,234, or many multiples of household income, and significantly more than the cost of a home itself.

That’s a lot of money.  It would have been cheaper to buy these people a satellite Internet connection at their homes.  I’m not sure what it would cost, but I’m guessing it wouldn’t have cost more than their house.   

Sadly, it’s actually worse than that. Take the Montana project. The area is not in any meaningful sense unserved or even underserved. As many as seven broadband providers, including wireless, operate in the area. Only 1.5% of all households in the region had no wireline access. And if you include 3G wireless, there were only seven households in the Montana region that could be considered without access. So the cost of extending access in the Montana case comes to about $7 million for each additional household served.

Back in the 1980s there was an uproar over wasteful Pentagon spending. The Air Force spent $7,622 on a coffee maker and the Navy spent $640 per toilet seat. That’s extremely wasteful, but at least the Pentagon arguably needed coffee makers and toilet seats. The seven households in Montana for whom taxpayers just spent $7 million each to extend broadband access probably don’t even want it.

It just goes to show you that government can’t do anything well.  From buying coffee makers to buying toilet seats to providing broadband Internet access.  It just seems like they spend a whole lot more money than necessary.  Pulling more money out of the private economy.  And saddling the American people with more debt.  And for what?  What exactly did that stimulus do?  Not much.  Except make some broad Internet contractors very wealthy.  Which they no doubt are if they’re charging $7 million per installation.

This is Keynesian economics.  Wasteful government spending.  And a jobless economic recovery.  Which is only a recovery by the greatest stretch of the imagination.

Barbara Boxer Lies about Clinton Economy and Budget Surplus

And yet they still argue for more of the same.  In fact, they even go further.  They rewrite history.  And say that Bill Clinton’s tax hikes stimulated the economy and produced budget surpluses (see Barbara Boxer’s blatant rewriting of history by Glenn Kessler posted 7/1/2011 on The Washington Post).

“I think we ought to go back to the people and the party that was the only party and the only people to balance the budget in 40 years. I hate to break it to my Republican friends, but that is the Democratic Party. We are the ones who did it. We did it when Bill Clinton came into office. We did it after hard work. We did it after painful cuts. We did it with smart investments.”

— Sen. Barbara Boxer (D-Calif.), June 29, 2011

‘Investments’ is code for ‘tax hikes’.  As important as they are they still have to lie about them.  You’d think if tax hikes did everything she said they did that they wouldn’t lie.  They’d call them what they are.  Tax hikes.  And not investments.

Actually, neither Bill Clinton nor the Democrats meant to balance the budget in his 1993 budget deal.  Because before the 1994 midterm elections, he was still a liberal Democrat.  Don’t forget, they were still working on HillaryCare (the plan to nationalize U.S. health care) in 1993.

But here’s the important point: the Clinton plan was never intended to achieve a balanced budget. After the bill’s passage, the Congressional Budget Office estimated that the deficit would decline modestly — from $290 billion in 1992 to $200 billion in 1998. In the phrase of the era, there were still “deficits as far as the eye could see.”

He was still a big time Keynesian at this point.  And Keynesians spend money.  That’s why his projected deficits were as big as the Reagan deficits.  But then came the 1994 midterm elections.

Fast forward to 1995. The Democrats lost control of the House and the Senate, largely because of bruising budget battle. Clinton’s fiscal year 1996 budget again proposes $200 billion deficits every year for the next five years. So, again, the target in 1998 (when surpluses later emerged) was a deficit of $196 billion.

But Republicans immediately set the goal of achieving a balanced budget within seven years. After resisting for a few months, Clinton shocked many fellow Democrats by announcing that he, too, would embrace the idea of a balanced budget.

As The Washington Post editorial page put it at the time, Republicans had forced Clinton’s hand: “Mr. Clinton’s new position on the budget is much better than the old one. He should have taken it six months ago. The Republicans have driven him to say that he too wants, if not to balance the budget, at least to get the deficit into the neutral zone.”

The 1994 midterm elections were a huge vote of no confidence.  Which was a problem with the presidential election only 2 years away.  Enter Dick Morris.  Who pulled Clinton to the center.  Away from Big Government Keynesian spending.  Of course he had little choice with the Republicans in charge of both houses of Congress.  And then something happened.  He fell ass-backwards into some very opportune economic developments.

…the government ended up with a gusher of revenue that had little to do with Clinton’s 1993 budget deal:  capital-gains taxes from the run-up in the stock market, as well as taxes paid on stock options earned by technology executives. 

Clinton, in essence, was lucky to become president just as a revolution in computer and information technologies was unleashed.

From 1992 to 1997, CBO estimated, revenue increased at an annual average of 7.7 percent in nominal terms, or about 2.4 percentage points faster than the growth of the gross domestic product, the broadest measure of the economy. CBO Deputy Director James L. Blum in 1998 attributed only 1 percentage point of that extra tax revenue to the 1993 budget deal. The rest, he said, came from capital gains.

This is a very important point.  Where did that tax revenue come from that produced those surpluses?  Well, 1% came from the Clinton 1993 budget deal.  About 99% came from luck.  And the good luck just kept coming.

There were other factors as well, such as lower than expected health costs that reduced an expected drain on the budget. Clinton’s predecessor also had kicked in motion a huge decline in defense spending (which Clinton accelerated) and also had overseen a painful restructuring of the banking industry. Even a potential shock, such as the Asian financial crisis in 1997, brought the silver lining of lower oil prices that bolstered the U.S. economy.

The stars must have really aligned during the Clinton administration.  Because a lot of things well out of his control happened, giving him an extraordinary economy.  He truly fell ass-backwards into good times.  Which is why the Fact Checker basically calls Barbara Boxer a liar. 

Boxer literally wipes away any Republican contribution to the process — and also claims credit for creating 23 million jobs while ignoring broad historical changes in the U.S. economy that had little to do with inside-the-Beltway sausage-making. This is more than just spin; it is a rewriting of history that borders on the absurd.

Absurd indeed.  So is she lying?  Or is she just stupid?  It has to be one or the other.  As it must be for all of the other Democrats repeating this lie.

Stimulus Spending doesn’t Stimulate

Reagan’s supply-side policies posted some great economic numbers.  Keynesians point to the Clinton years as vindication for their policies.  But his economy had a lot more to do with the Republicans in Congress and dumb luck.  Barack Obama has outspent all Keynesian presidents to date and has the worst economy since the Great Depression

Even though the Great Recession has officially ended, they’re calling the recovery a jobless recovery.   Which should be comforting to those who are still unemployed.  The question is, of course, where are the jobs?  If government stimulus spending creates jobs, where are the jobs?

You can’t find them because they’re not there.  Because stimulus spending doesn’t stimulate.  It just makes a few people rich (like broadband Internet contractors in Montana).  Tax cuts stimulate.  And reducing government regulation stimulates.  Every time it’s tried.  In other words, supply-side economics stimulates.  Every time it’s tried.  And Keynesian economics fails every time it’s tried.  Including its latest failure under Barack Obama.

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