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.

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College Degrees that are too Cool for School and Unwanted by Employers in a High-tech Economy

Posted by PITHOCRATES - December 8th, 2013

Week in Review

The American left is hammering millennials.  The young people.  Teenagers to thirty-somethings.  A strong demographic for the American left.  But they are just beating them up.  The latest being the punishing blows of the Affordable Care Act (i.e., Obamacare).  Which transfers the cost of the old and sick to them.  By forcing them to buy costly health insurance policies that they can’t afford.  Because the millennials are suffering the highest unemployment rates in the worst economic recovery since that following the Great Depression.

The economic policies of the Obama administration have forced over ten million people out of the labor force since Obama became president.  With this destruction of jobs the millennials graduating with a college degree can’t find a job.  At least not one using their degree.  That they financed with a large student loan.  And ended up working someplace that doesn’t require that costly degree.  Making far less than they expected when they took on all that student loan debt.  Leaving them struggling to repay that debt.

And if that wasn’t bad enough they encouraged them to go to college.  To get a college degree so they can make the big bucks after graduation.  They even took over the student loan program to make it easier to give these kids college loans.  The problem is that a lot of them did go to college.  But they got degrees like these (see College Majors That are Too Cool for School posted 12/8/2013 on Fact University).

Comic Book Art, Adventure Education, Cannabis Cultivation, Bowling Industry Management, Motorsports Science and Engineering, Winemaking, Folklore and Mythology, Comedy: Writing and Performance, Diving Business and Technology, Beatles Historian, Theme Park Engineer, Puppetry, Popular Culture, Entertainment Engineering & Design and Sexuality.

Is it any wonder the millennials are suffering some of the highest unemployment?  And why businesses have to use the visa program to get foreign college graduates to fill their science and engineering needs?

Our colleges and universities are giving our kids worthless degrees in a high-tech economy.  And it’s these degrees that the Democrats have been floating the idea of forgiving that student loan debt for.  After getting that money to their friends in higher education so they can mold their students into future Democrat voters.  And giving these kids 4 years of partying while working on degrees that are just too cool for school.  Guaranteeing a Democrat vote from each of them.  Until they grow up and experience the real world.

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FT186: “Liberals are so bad at economics because they had no one in their lives to undo the bad education they got.” —Old Pithy

Posted by PITHOCRATES - September 6th, 2013

Fundamental Truth

Minimum-Wage Workers in Fast-Food and at Wal-Mart want a Living Wage for their Minimum-Wage Jobs

Wal-Mart workers are now demanding a living wage.  (Or people hired to protest the company the left loves to attack.)  Awhile back it was the fast-food workers demanding a doubling of the minimum wage.  So they could have a living wage.  Because they can’t raise their families with a minimum wage job.  So they want a pay rate beyond the pay rate of a minimum wage job.

So how much is earning $15/hour?  Well, if you work full-time and get the usual (2 weeks of vacation and holiday pay) that comes to 2080 (40 hours/week X 52 weeks/year) payroll hours a year.  At $15/hour that comes to $31,200 annually.  Which is the ‘living wage’ the fast-food workers want.  And no wonder.  According to the Bureau of Labor Statistics (see May 2012 National Occupational Employment and Wage Estimates) here are some other jobs that pay around $31,200 annually with what they do as noted by the Bureau of Labor Statistics:

Medical Assistants (Perform administrative and certain clinical duties under the direction of a physician. Administrative duties may include scheduling appointments, maintaining medical records, billing, and coding information for insurance purposes. Clinical duties may include taking and recording vital signs and medical histories, preparing patients for examination, drawing blood, and administering medications as directed by physician).  Medical Equipment Preparers (Prepare, sterilize, install, or clean laboratory or healthcare equipment. May perform routine laboratory tasks and operate or inspect equipment).  Ophthalmic Laboratory Technicians (Cut, grind, and polish eyeglasses, contact lenses, or other precision optical elements. Assemble and mount lenses into frames or process other optical elements. Includes precision lens polishers or grinders, centerer-edgers, and lens mounters).  Pesticide Handlers, Sprayers, and Applicators, Vegetation (Mix or apply pesticides, herbicides, fungicides, or insecticides through sprays, dusts, vapors, soil incorporation, or chemical application on trees, shrubs, lawns, or botanical crops. Usually requires specific training and State or Federal certification).  Pharmacy Technicians (Prepare medications under the direction of a pharmacist. May measure, mix, count out, label, and record amounts and dosages of medications according to prescription orders).  Phlebotomists (Draw blood for tests, transfusions, donations, or research. May explain the procedure to patients and assist in the recovery of patients with adverse reactions).  And Substitute Teachers (Teach students in a public or private school when the regular teacher is unavailable).

Some have worked Two or More Fast-Food/Retail Jobs so they could get the Education and Skills for a Higher-Paying Job

These are not entry-level jobs.  You just can’t walk in when you’re still a high school student, fill out an application and expect to get hired in any of these jobs.  They all take training/education beyond high school.  And require a license or certification.  Which requires an investment of time and money to get.  Usually including night school at the least.  And more often at least 2 years of college.  None of which is required for a minimum wage job.

So it’s no wonder people with minimum wage jobs want a pay rate that is beyond their skill-set.  Who wouldn’t?  Wouldn’t you want to get that higher pay without putting in that schooling?  That investment of time and money?  Things you probably can’t even do if you’re raising a family on a minimum wage job.  Or two.  But does that mean we should just pay these people more?  Would that be fair to the Medical Assistants, Medical Equipment Preparers, Ophthalmic Laboratory Technicians, Pesticide Handlers, Sprayers, and Applicators, Vegetation, Pharmacy Technicians, Phlebotomists and Substitute Teachers?

No.  It wouldn’t be fair to them.  For they would have made great sacrifices in their life to get those better paying jobs.  Because that is how you get a better-paying job.  In fact, some may have worked two or more fast-food/retail (such as Wal-Mart) jobs so they could get the education and skills these jobs required.  A lot of people working in fast-food/retail today may be doing the same thing.  For fast-food and retail offer two great things that allow these people to acquire these skills.  They will hire people without any skills (i.e., entry-level workers).  And fast-food and retail have many working schedules available.  Allowing single-parents to work when they have other arrangements for their children (school, daycare, parents, etc.).

The Hippies of the Sixties became Professors and then Moved on to Write the Curriculum

Instead of protesting fast-food and Wal-Mart we should be happy that at least someone in this horrible economy is actually hiring people when so few others are.  As President Obama’s economic policies have made such an anti-business environment.  The economy is so bad that just this past month another 516,000 have left the labor force (see Table A-1. Employment status of the civilian population by sex and age).  Which is the only reason why the unemployment rate fell.  Because of discouraged workers who couldn’t find a job just quit looking for a job.  But the government puts a positive spin on this by lauding the 169,000 new jobs the economy created.  Saying it’s further proof that President Obama’s economic policies are working.  Despite 516,000 who quit looking for jobs that are just not there.

If people are unhappy with their low-paying jobs in fast-food and retail they should be more upset about this economic destruction being waged by the Obama administration.  Which is the reason why fast-food and retail are the only businesses hiring today.  But there is no outrage.  Why?  Because most don’t understand economics.  And there is a reason why most people don’t.  It’s because of our education system.  Which the left has taken over.  Who write a curriculum that teaches students that capitalism and profits are unfair and bad while government and income redistribution so the rich pay their fair share is good.  And just.

A professor at Michigan State is the latest professor to illustrate the indoctrination of our young going on at our public schools and colleges.  Parents had to deal with their kids coming home from high school to hear how they were killing the polar bears because they drive cars.  But when these kids go to college this is the kind of stuff they encounter on a daily basis.  And he’s not the worst offender.  The worst offenders are those who don’t say outrageous things.  But who do it more subtly.  A smile, a smirk, a condescending remark—things that tell a young impressionable mind out from under their parents’ control for the first time that their parents were wrong.  Unless their parents were liberal.  They will believe almost anything these professors say.  Because they are very smart and must know far more than their parents.  And they treat these kids like adults.  And there is nothing that high school/college kids want more.  To be grown up.  It’s why they smoke cigarettes.  And have sex.  Because that’s what grownups do.

So is it any wonder that people have a poor understanding of economics?  Ever since the hippies of the Sixties couldn’t change the country from the outside they became professors to change it from the inside.  And then moved on to write the curriculum.  These people who hated capitalism.  And admired communism.  Which is why so many of them lived in communes in the Sixties.  These are the people writing the curriculum for our children.  Making sure our education system creates like-minded people.  To keep them voting Democrat until wisdom and experience opens their eyes.  And undoes the bad education they got.  This is why people think that it’s fair to pay minimum wage workers the same as Medical Assistants, Medical Equipment Preparers, Ophthalmic Laboratory Technicians, Pesticide Handlers, Sprayers, and Applicators, Vegetation, Pharmacy Technicians, Phlebotomists and Substitute Teachers.  Just to see how pervasive this indoctrination of our children is—and why people keep voting for those who keep trying the failed economic policies of the past—we should put a webcam in every classroom and lecture hall.  So parents—and the rest of America—can see the liberal dogma being fed to the young.  Making them think, and vote, the way they do.  Then we’ll know whether these are isolated incidences.  Or that it is in fact pervasive.  Explaining why so many people today have no understanding of economics.  That minimum-wage jobs are entry-level jobs.  And that if you want to raise a family you probably shouldn’t be voting Democrat.  Whose policies are making the only available jobs in this horrible economy those entry-level jobs.

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Labor Force Participation Rate

Posted by PITHOCRATES - March 11th, 2013

Economics 101

The Official U-3 Unemployment Rate doesn’t count Everyone who can’t find a Full-Time Job

The unemployment rate fell in February 2012.  Yet more people are out of the workforce than they were in January.  Odd.  For the two seem to contradict each other.  For how can the workforce shrink when the unemployment rate falls.  Easy.  It just depends on who you count.  The federal government has a few ways to count unemployed people.  Specifically, they have six ways.

U-1  Persons unemployed 15 weeks or longer, as a percent of the civilian labor force.

U-2  Job losers and persons who completed temporary jobs, as a percent of the civilian labor force.

U-3  Total unemployed, as a percent of the civilian labor force (official unemployment rate).

U-4  Total unemployed plus discouraged workers, as a percent of the civilian labor force plus discouraged workers.

U-5  Total unemployed, plus discouraged workers, plus all other persons marginally attached to the labor force, as a percent of the civilian labor force plus all persons marginally attached to the labor force.

U-6  Total unemployed, plus all persons marginally attached to the labor force, plus total employed part time for economic reasons, as a percent of the civilian labor force plus all persons marginally attached to the labor force.

As you can see they count more people at each of the six levels.  And the official U-3 unemployment rate doesn’t count a lot of people.  By the time you add in discouraged workers, the marginally attached and those working part-time because they can’t find a full-time job the unemployment rate increases.  With the U-6 number giving a truer picture of the employment picture.  Which currently stands at 14.3%.  And is a long way from the official 7.7%.  So even though the news reports are celebrating that the economy is improving because the unemployment rate fell from 7.9% to 7.7%, the U-6 unemployment rate stands at 14.3%.  Down from 14.4% in January 2012.  Which is pretty bad.  And little to celebrate about.

The U-6 Unemployment Rate counts all of the People who can’t find a Full-Time Job

To better understand these numbers we need to understand exactly who the people are that they are counting.  Who are the people that could be working.  Who are the people working.  And who are the people not working.  Which is all defined at Civilian Noninstitutional Population and Associated Rate and Ratio Measures for Model-Based Areas.  And summarized here:

The civilian noninstitutional population consists of persons 16 years of age and older residing in the 50 States and the District of Columbia who are not inmates of institutions (for example, penal and mental facilities and homes for the aged) and who are not on active duty in the Armed Forces.

Employment consists of all persons who, during the reference week (the calendar week including the twelfth day of the month), (a) did any work at all (at least 1 hour) as paid employees, worked in their own business or profession or on their own farm, or worked 15 hours or more as unpaid workers in an enterprise operated by a member of the family, or (b) were not working but had jobs or businesses from which they were temporarily absent because of vacation, illness, bad weather, childcare problems, maternity or paternity leave, labor-management dispute, job training, or other family or personal reasons, whether or not they were paid for the time off or were seeking other jobs.

Unemployment consists of all persons who had no employment during the reference week, were available for work, except for temporary illness, and had made specific efforts to find employment some time during the 4-week period ending with the reference week. Persons who were waiting to be recalled to a job from which they had been laid off need not have been looking for work to be classified as unemployed.

The civilian labor force consists of all persons classified as employed or unemployed as described above.

The labor force participation rate represents the proportion of the civilian noninstitutional population that is in the labor force.

The unemployment rate is the number of unemployed as a percent of the civilian labor force.

The civilian labor force, then, equals the total of employed and unemployed people.  But note who they count as unemployed.  Only people who were looking for work during a 4-week period.  And those on a layoff subject to recall.  (Who didn’t have to look for work during that 4-week period.)  Which excludes everyone who gave up looking for work not subject to recall who can’t find a job.  People who are living on their savings, their credit cards, their spouse’s income, their retirement nest egg or even moving back in with their parents.  Or are working a part-time job or two because they can’t find a full-time job.  The U-6 rate counts all of these people.  Which is why it’s almost twice the official unemployment rate.  And why it’s a much better indicator of the employment picture.

The most Accurate Read of the Employment Picture is the Labor Force Participation Rate

So you now can see how the official unemployment rate can fall even though fewer people are working.  They calculate the unemployment rate by dividing unemployment by the civilian labor force.  And the smaller unemployment is the smaller the unemployment rate is.  Which it is when you don’t count all of the people who can’t find a job.  Which brings us to the labor force participation rate.  Which they calculate by dividing the civilian labor force (the employed plus the unemployed) by the civilian noninstitutional population (the total of the civilian population that could be working).  Which, like the U-6 unemployment rate, provides a truer picture of the employment picture.

The U-3 and U-6 unemployment rates improved in February.  Showing an improving employment picture.  While the labor force participation rate fell from 63.6% to 63.5%.  Which means those not in the labor force increased.  Going from 89,008,000 to 89,304,000.  An increase of 296,000 people who disappeared from the labor force.  Which is greater than the 227,000 new jobs created.  So even though the unemployment rate fell there was a net loss in jobs.  Which means the economy got worse.  Not better.

Mark Twain said facts don’t lie but liars figure.  And this is what he meant.  The employment picture is not improving.  But the government reports the 227,000 new jobs and the falling unemployment rate as signs of an improving economy.  But the most accurate read of the employment picture, the labor force participation rate, shows the economy is getting worse.  As everyone who is struggling in the private sector already knows.  So someone is lying.  And it isn’t the facts.  It is those who want to hide the damage the government’s policies are doing to the economy.  So they can keep trying the same failed policies of the past.  Keynesian economic policies.  Favoring more government intervention into the private economy.  While dragging out the worst economic recovery since the Great Depression.  Another period of failed Keynesian economic policies.  For Keynesian policies are anti-business policies.  But pro-government growth policies.  Which is why liars figure.  And the labor force participation rate falls.

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Useless College Degrees leave Graduates with Massive Debt and Unmarketable Skills

Posted by PITHOCRATES - December 16th, 2012

Week in Review

The Left wants to provide free college education for everyone.  They’ve even taken over the student loan program.  And talk about making more funding available to states to help kids afford the one thing that grows more costly than health care.   And kids are going to college in record numbers.  And when many of these kids graduate they can’t find a job.  Why?  Because they’re getting useless degrees for that massive student loan debt the government encouraged them to borrow.  Degrees requiring little math or science (see Don’t Bother Earning These Five Degrees by Terence Loose posted 12/13/2012 on Yahoo! Education).

Unwanted Degree #1 – Architecture

Unwanted Degree #2 – Philosophy or Religious Studies

Unwanted Degree #3 – Anthropology or Archeology

Unwanted Degree #4 – Area Ethnic or Civilization Studies

Unwanted Degrees #5 – Information Systems

Architecture does require some math.  And it’s not that easy.  But it’s on the list because of the government’s massive real estate bubble that exploded into the subprime mortgage crisis.  The whole construction industry being in the toilet because of the government’s pressure to qualify the unqualified for mortgages.

Every other unwanted degree on the list is a worthless degree.  None of them have any market value in a high-tech economy.  Not one of them will build a better iPad.  A better smartphone battery.  Or find a new miracle drug that will help ease the cost of our aging population.  So why do kids get degrees in these fields?  Because their workloads are lighter than in degree programs that require math and science.  Leaving more time for having fun the first time these kids are out from under their parent’s supervision.

The Left wants to help these kids with degrees that won’t get them a job.  By forgiving their debt.  Which is probably the worst thing that we can do.  The colleges who gave them these degrees should refund their tuition for selling them a defective product.  The American people shouldn’t pick up the tab just so college professors and administrators can earn large salaries and generous benefits.  Especially when they are teaching our kids an anti-capitalist curriculum.  Which is primarily responsible for the anti-business climate in this country today.  Giving us our high unemployment rates in the first place.

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FT141: “Liberals are absolutely sure they’re right and you’re wrong even though they can’t explain why.” —Old Pithy

Posted by PITHOCRATES - October 26th, 2012

Fundamental Truth

Jobs are Everything in an Economy

In the movie Apollo 13 starring Tom Hanks it was a smart electrical engineer that saved the astronauts.  Who explained that nothing they did would save the astronauts unless they figured out how to make the limited remaining power last until reentry.  He said power was everything.  And if it ran out before reentry the astronauts wouldn’t make it back alive.  So heeding the advice of the smart electrical engineer they shut off all power to save what they had for reentry.  Which meant they had no heat.  And had to do some course corrections without the computer, requiring some complicated flying skills.  Because they listened to the smart electrical engineer they had just enough power left to make it to reentry.  And the astronauts made it back home alive.

An economy is similar in a way.  For it, too, has something that is everything.  And without it nothing else matters.  Jobs.  Jobs are everything in an economy.  For they are the only way we can afford things.  A house.  A car.  Food for our families.  The heating bill.  Fuel for our vehicles.  Electronic devices.  Our wireless/cable bills.  Coffee at Starbucks.  Clothing.  Shoes.  Pet food.  Etc.  None of these would be possible without a job.  And a paycheck.  Even our government benefits.  Paid for with taxes.  Deducted from our paychecks.  Without people working none of these things would be possible.  Because jobs are everything.

Money is not everything.  We use money to make it easier to trade our skills with others to get the things we want.  The more our skills are in demand by others the more we can trade them for other things.  Which is why doctors have more things than high school kids working an entry level job.  For there are a lot high school kids with entry-level job skills.  But not so many people with doctor skills.  So we pay doctors more.  And high school kids less.  Because doctors have more valuable skills than high school kids.  And therefore can trade those skills for a lot of other things.  So it’s not the money that matters.  It’s the skills that they can trade for money that matters.  Provided there is a job for them to fill.  Once again coming back to jobs.  Which are everything.

Birth Control and Abortion are the Pressing Social Issues that keep College Students Awake at Night with Worry

If the government printed money and paid everyone in the nation the equivalent of a doctor’s earnings it would not be the same thing.  Because if everyone was paid the same no matter their skill level no one would go through the costs and hard work to become a doctor.  Because working harder to acquire those skills wouldn’t provide them anything more than they can get for doing nothing.  Giving people money for skills they don’t have diminishes the values of those skills.  So people won’t work hard to get those skills.  With less skillful people in the workplace there will be fewer people to provide the goods and services we want to buy.  Leaving a lot of empty store shelves.  And high prices because the things you want will be very hard to find.

This is why high school kids go to college.  Take on a lot of student loan debt.  To get the skills that will let them get the kind of jobs that will let them earn a lot of money.  Granted, a lot of kids go to college for the fun.  First time away from home.  Binge drinking.  Casual sex.  Drugs.  But they’re also there for the big payday a college education is supposed to give you.  However, if the jobs aren’t there neither is that big paycheck.  But that student loan debt is.  Who’s to blame for the lack of jobs?  In part these college kids.  Who typically vote Democrat.  The party that favors social justice, access to birth control and abortion, gay marriage, the decriminalization of marijuana, and other pressing social issues that apparently keep college students awake at night with worry.  So the Democrats pursue these issues to get the youth vote.  Instead of making a favorable climate for business.  So they can grow and create the jobs these college students want and are going to college for.

The problem is that these kids don’t understand the fundamentals of economics.  They don’t understand business.  Or the affect of taxes and regulatory compliance costs on a business’ bottom line.  And they don’t seem to understand that they are not the only ones who want to make money.  So do business owners.  And if the tax burden and cost of regulatory compliance reduce the bottom line it makes it more difficult to meet payroll.  And pay their other bills.  So they will not grow their business.  They will not create jobs.  They will not offer pay raises and bonuses.  And may even lay off people.  When they do these things college kids call these business owners greedy.  While their desire for a high-paying job does not make them greedy.  Funny how subjective greed can be.

Liberals are Deep Critical Thinkers though they think about few things other than a Woman’s Reproductive Parts

In the current election cycle the Democrats don’t have a good record to run on.  The current economic recovery, if we can call it a recovery, is about the worst on record.  The biggest drag on the economy?  Jobs.  There are fewer of them today than when President Obama took office.  And his policies haven’t help.  Especially Obamacare.  Which has caused business owners to slam the brakes on hiring.  As they have no idea of the final total cost impact of Obamacare.  So having destroyed job creation, the Democrats have turned to other tactics.  Fear and loathing of Republican candidates.  Such as the so-called war on women.  Where the Democrats are warning women that if the Republicans win the upcoming 2012 election women will lose their birth control, their access to abortion, their cancer screening, their freedom.  Life for women under the Republicans, the Democrats say, will be little different than living under the Taliban.

Of course, this isn’t true.  For it didn’t happen under the 20 years of Republican rule of George W. Bush, George H. W. Bush and Ronald Reagan.  But it doesn’t stop the Democrats or their celebrity endorsers from warning about the horrible things that will happen to women should the Republicans win.  And they speak with such certain authority.  For they know everything.  At least, that’s what they think.  It would be interesting, though, to ask them a few questions.  So they can demonstrate their mastery of things economic.  By explaining the stages of production.  Why stimulus spending raises prices.  To explain the business cycle.  How recessions correct prices by wringing inflation out of them.  How keeping interest rates artificially low creates asset bubbles.  Like housing bubbles.  And how bubbles create recessions when they burst.  To explain what is Say’s Law.  To name an economic school besides the Keynesian school.  To explain the Keynesian school of economics.  The number of taxes a business must calculate and pay with every payroll.  How excessive government borrowing diverts investment capital from the job-creating private sector.  Or how the growth in government spending cannot increase greater than the population growth rate.

As they don’t teach any of this in today’s public schools and most universities they probably won’t be able to explain any of these things.  Yet liberals are absolutely sure they’re right and you’re wrong.  Even though they can’t explain why.  For they are smarter.  Brighter.  More progressive.  Enlightened.  And deep critical thinkers.  Though they think about few things other than a woman’s reproductive parts.  Even when the real unemployment rate (the U-6 number that counts everyone that can’t find a full-time job) currently stands at 14.7%.  Which is serious.  As jobs are everything.  And sometimes you can’t have everything you want.  Sometimes you must sacrifice.  And put in place policies that are business friendly.  Cutting back on the social spending.  At least until businesses start creating jobs again.  And the working tax base can once again support that social spending.

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Unemployment

Posted by PITHOCRATES - October 1st, 2012

Economics 101

When Prices Rise Businesses Increase Output and when Prices Fall they Decrease Output

No one likes losing their job.  Even if you hate your job.  In fact, that’s why so many people stay in jobs they don’t like.  Because it’s easier than finding a new job that provides decent pay and benefits.  Sure, there are some aggressive go-getters out there who advance themselves up the earnings ladder by making career moves.  But most people prefer a steady paycheck that meets their needs.  At least, meets their needs with only a modicum of complaining.

But resigned to our places of employment as we may be change happens.  And we lose our jobs.  For a variety of reasons.  Mostly through the ebb and flow of the free market economy.  The normal business cycle.  The boom-bust cycles of the economy.  On the boom side prices rise as people are buying a lot of things.  High prices translate into business profits.  So businesses increase output to sell at those high prices.  And other businesses enter the market.  Adding jobs to the economy.  Retailers increase their orders at their wholesale suppliers.  Who increase their factory orders.  And the factories increase their orders with their suppliers.  Adding a lot of jobs to the economy.  And lowering the unemployment rate.

But eventually too many businesses flood the market with their goods and services.  Supplying more than the people can buy.  So stuff sits on shelves longer.  Retailers reduce their orders at their wholesale suppliers.  So inventories grow at the wholesalers.  So they cut their factory orders.  Leaving the factories with excess production.  So they cut back and reduce their orders with their suppliers.  As everyone cuts back on their business operations they lay off workers.  Removing jobs from the economy.  And increasing the unemployment rate.

When Capitalism destroys some Back-Breaking and Unpleasant Jobs it creates New and Better Jobs

The business cycle is normal.  And necessary.  By using prices in the market place it constantly adjusts supply to demand.  Making sure we efficiently use capital (raw materials, factories, equipment, etc.).  And human resources (labor, research, engineering, etc.).  When we under-utilize capital and human resources prices tend to rise (demand increases).  Encouraging an increase in supply.  The boom time.  When we over-utilize capital and human resources prices tend to fall (demand falls).  Encouraging a decrease in supply.  The bust time.  Or recession.  The business cycle maintains the optimum amount of economic activity automatically.  If we let this process operate automatically.  Yes, there will be recessions.  But they will typically be short in duration.  The less prices rise during the boom the shorter the duration.  The higher prices rise during a boom the longer the duration.  But one thing for certain is that prices have to fall to correct to actual demand.  And that only happens with a recession.

There are other contributors to unemployment besides the normal business cycle.  Like structural unemployment.  Such as when technology changes and makes old jobs obsolete.  A lot of ditch diggers lost their jobs when we developed mechanized excavating equipment.  People in the whale oil business lost their jobs when John D. Rockefeller brought kerosene to the market.  The Pony Express riders lost their jobs with the advent of the telegraph.  The telephone put telegraph operators out of work.  Cell phones put people in the phone booth industry out of a job.  And destroyed a lot of jobs in the pager industry.  The personal computer put a lot of secretaries and typists out of work.  The DVD destroyed jobs in the VCR industry (and those little video cassette rewinding machines).  When they found asbestos caused lung cancer it destroyed the asbestos industry.  The Internet is putting the printed newspapers out of business.  Digital cameras destroyed jobs in the instant camera business (e.g., Polaroid).  And email and texting is causing the U.S. Postal Service to go bankrupt.

There are always unemployed people.  Thanks to the normal business cycle.  Structural unemployment.  Even to changes in consumer preferences that puts some businesses out of business.  (Wearing legwarmers was a fashion trend that sold well in the Eighties but disappeared by the Nineties.)  So there are always people losing their jobs.  But that’s normal.  And necessary.  For all of those new technologies and new consumer preferences create new industries.  And new jobs.  Jobs they staff from the unemployed.  So while free market capitalism destroys some jobs it creates new ones.  Jobs that are often better than the ones destroyed.  Such as back-breaking and unpleasant manual labor jobs replaced by less back-breaking and less unpleasant jobs.  Such as the ditch diggers being replace by a machine and an operator.  And all those workers who build, transport, fuel and maintain those machines.

Some of our Worst Recessions have happened since the Keynesians set out to make Recessions a thing of the Past

Then there’s a worse kind of unemployment.  The kind government causes.  In part with their policies that are not business-friendly.  That increase the cost of business.  Which reduces the number of jobs they can create.  Such as increasing taxes and tariffs.  And mandatory employee costs.  Such as Social Security, Medicare, unemployment taxes, health insurance, etc.  As well as corporate income taxes.  Regulatory compliance costs.  And a minimum wage.  Which discourages hiring unskilled workers.  As well as increases pay levels for those earning above the minimum wage.  Who expect a much higher pay than minimum wage because of their education and/or experience.

So these policies depress the job market.  Because they increase the cost of business.  Then they compound their anti-business policies with bad monetary policy.  Keynesian economists don’t like capitalism.  Or the private sector.  Because of the business cycle.  Keynesians say they can get rid of the business cycle.  By doing what the private sector won’t do.  Hire people during times of recession.  Keynesians encourage the government to run deficits during recessions so they can spend money.  Creating government jobs.  And by creating government projects (e.g., building roads and bridges) for the private sector.  Creating jobs that the private sector won’t.  They even push interest rates below where the market would have them.  By expanding the money supply.  To encourage business to borrow money to expand their businesses for a consumer demand that isn’t there.  And they encourage consumers to buy big ticket items like houses and cars.  To further go into debt to stimulate economic activity.

The problem with these Keynesian policies is that they interfere with the automatic price mechanism to match supply to demand.  So when prices tell suppliers to reduce output these policies encourage them to increase output.  So while they may actually stimulate some economic activity it is not real economic activity.  Not driven by real demand.  Prices will continue to rise as if the boom is continuing.  The inflation created by that expansion of the money supply will even increase prices further still.  Which means when the correction happens those prices have a lot farther to fall.  Making the recession longer.  And more painful.  So the Keynesians not only failed to remove the bust-side of the business cycle.  They made the bust-side last longer than it normally would have had there been no government intervention.  Which is why some of our worst recessions have happened since the Keynesians set out to make recessions a thing of the past.

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Student Loan Debt is Rising while Household Incomes are Falling

Posted by PITHOCRATES - September 30th, 2012

Week in Review

Universities are doing well.  They rarely suffer during a recession.  Because one thing government does during a recession is encourage people to go back to college.  And get a new education.  So there is always money flowing into our houses of higher education.  But the people getting these degrees aren’t making out as well (see Number of U.S. households with student debt surges by Tiffany Hsu posted 9/28/2012 on the Los Angeles Times).

The share of American households with student debt has more than doubled in the last two decades, soaring to a record 19% in 2010 from 9% in 1989, according to a Pew Research Center analysis of government data…

In addition, overall household incomes continue their decade-long slide, according to the government. The median annual income slipped 1.5% last year to $50,054 compared with 2010. That’s 8.1% below the income level in 2007 and 8.9% less than the median in 1999.

More people are going to college.  Yet household incomes fell this last decade.  What can we conclude about this?  A couple of things.  A college education is not a guarantee to higher wages.  For it matters what that degree is in.  A degree in math or science will probably get you a high paying job.  A degree in philosophy or women’s studies is not likely to get you a high paying job.  If it can get you a job at all.  So a lot of universities are encouraging kids to go into debt to get a degree that will bring money into the university.  But it will probably not get them a job.

Another thing to take away from this is that even college students apparently want to earn a lot of money.  Despite the fact they typically vote for Democrats.  Who attack those who earn a lot of money.  So these newly degreed kids should not be surprised that their costly degrees are not bringing them higher earnings.  Because their political party makes it difficult for businesses to do well so they can hire new employees.  And provide high earnings and generous benefits.  Because high taxes and costly regulatory policies increases the cost of business.  Reducing what businesses can spend on employees.

If newly degreed kids out of college want high paying jobs (and want to more easily repay their student loans) they would be better off voting Republican.  Something to think about with the 2012 elections around the corner.  And kids going to college should consider getting a degree that has market value.  Even if these degrees are harder than degrees in philosophy or women’s studies.

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The Drought and Methanol Mandates decimate Corn Crops and High Quality Prime Cuts of Beef

Posted by PITHOCRATES - August 26th, 2012

Week in Review

Restaurants are one of the greatest job creators.  Because there are so many of them.  And if they open for breakfast, lunch and dinner that’s a lot of food servers, chefs, cooks, barkeeps busboys, dish washers, supervisors and managers.  Running a restaurant is hard.  It’s the number one business that fails.  Because margins can be thin.  And the amount of competition great.  But the people who mortgage their homes to open up a restaurant put a lot of people through college.  Gave single parents flexible hours to work around their kids schedules.  And let some people just do what they love.  Work with people.  Create great food.  And provide exceptional service.

This recession has been hard on restaurant owners.  As eating out is one of the first expenses a family cuts in their family budget.  Now things are going to get even harder (see Peter Luger Steak Prices May Soar as Drought Culls Herds by Peter S. Green and Esmé E. Deprez posted 8/21/2012 on Bloomberg).

The worst Midwest drought since 1956 has scorched crops and sent the price of corn, the main ingredient in livestock feed, up 62.8 percent since mid-June. Ranchers are culling herds to avoid feed costs, flooding the market with cheap supplies of beef.

There’s a parallel decline in the quantity of animals that yield the highest-quality prime cuts, which require months of extra feeding. The shift will be felt in steakhouse menus down the road.

So prices will go up and the quality of the meat will go down.  Which raise the prices on their menus.  And drive patrons away.  Because they, too, are facing higher costs in their lives.  And they can’t afford to pay more for less.

The drought prompted President Barack Obama to help farmers with $170 million in government meat purchases.

“We’ve got a lot of freezers,” Obama told a campaign rally in Council Bluffs, Iowa, on Aug. 13. The government is also considering cuts to ethanol mandates after livestock producers complained that too much grain is being diverted to make fuel.

“We’ve got a lot of freezers.”  The government has trillion dollar deficits in all four years of Obama’s presidency and he’s still spending money that he doesn’t have.  Which isn’t very smart.  And will do little.  For how is buying this meat going to solve the problem everyone is having in the food industry?  The high price of feed corn?

Why not just do the easy thing?  The thing that doesn’t increase the debt?  Don’t consider cutting methanol mandates.  Do it.  Cut them all.  Eliminate every last one.  Let gasoline be gasoline.  And food be food.  If we don’t divert 40% of the corn crop to the methanol industry that will nearly double the corn crop.  Now that would make an impact that would go a long way in lowering food prices for every American.  From eggs to chicken to milk to cheese to hamburger to prime cut steaks.  Lower prices for everyone.  And more economic activity.  From the extra money households don’t have to spend on groceries.  So they can go out during the week for dinner and a movie.  Helping all those restaurants.  And all the people who work in them.

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FT120: “Give a man a fish and he can eat for a day; give him a job and he can have an obesity problem.” -Old Pithy

Posted by PITHOCRATES - June 1st, 2012

Fundamental Truth

In Warfare Starvation and Famine are the most Potent of Weapons

Starvation and famine has plagued mankind since the dawn of time.  It was the driving force in evolution.  Those who took control of their food supply lived.  Those who didn’t disappeared from the evolutionary path.  Like Neanderthal.  And those who came before him.  Our earliest civilizations massed their populations to farm.  And the masses lived in cities.  Setting down roots and saying goodbye to their hunting and gathering ways.  In the Wei River valley.  In the Indus River valley.  The valleys of the Euphrates and Tigris.  In the Nile River valley.  Where modern life took root.  Produced our first food surpluses.  And gave birth to urban life.  And the middle class.

The rise of the middle class allowed civilization to flourish.  For every person that didn’t have to produce food could do something else.  Build better tools.  Create a better government.  Create art.  In general, think about other things.  Those other things that made humans different.  By giving us a more interesting life.  And more sophisticated ways to express ourselves.

But this growth was a double-edged sword.  For large urban populations that made life more enjoyable was also a great threat to the food supply.  A cool and wet summer could destroy crops.  Poor food storage could spoil the food surplus.  A war could see an enemy purposely destroy your crops and your food surplus.  Causing famine.  Where half or your city population could easily die before the next harvest.  Or more.  Especially if the famine resulted from an act of war.   As an act of genocide.  To clear people off land that others want to use for their own food needs.  Which was Hitler’s plan in Russia.  To take the food from the Ukraine.  Kill the indigenous population.  And replace them with Nazis.  Thus creating more living space for the Third Reich.  Or Lebensraum.    Because in warfare starvation and famine are the most potent of weapons.

History has shown that the most Food-Abundant Countries are the most Capitalistic

England led the way in agricultural advances.  Increasing crop yields such that small tracts of land could support greater populations.  As well as produce such huge food surpluses that they had food to export.  As the British Empire spread across the globe so did their advanced agricultural ways.  During the 19th century starvation and famine were becoming rarer in the technologically advanced West.  The 19th century Irish Potato Famine reduced Ireland’s population by up to 25%.  A tragedy of epic proportions.  But it was an exception to the rule.  For food was growing so abundant in the advanced Western World that rarely did people go hungry.  Or feared famine.  And when mechanization and chemistry hit the farm our crop yields exploded.

During the Twentieth Century the Western World produced so much food that food prices plummeted.  Causing the Great Depression.  There was so much food available that farmers couldn’t sell their food at a high enough price to service the debt that they incurred mechanizing their farms.  But not everyone was producing bumper crops in the Twentieth Century.  Both the Soviet Union and the People’s Republic of China set records for death by famine.  As they shunned the ways of the West.  And the state took over their agricultural sectors.  States that were so inept at good farming practices and things economic that crop yields plummeted.  North Korea to this day can’t even grow enough food for her own people.  And has recurring famines.  Because they hold on to the communist ways of Stalin and Mao.  While the Russians and the Chinese have long abandoned them. 

History has shown that the most food-abundant countries are the most capitalistic.  Countries whose agricultural sectors use the latest in technology.  And/or have a rich and vibrant economy that can buy all the food they need if they can’t produce their own.  Like Hong Kong.  Basically a rock off the Chinese mainland.  It has little arable land.  Few natural resources.  But what it does have is low taxation and free trade.  And laissez-faire capitalism.  The Chinese lost Hong Kong to the British Empire (who have since given it back).  And the British used laissez-faire capitalism to make Hong Kong the gem it is today.  Where people are free and in want of little.  And in this island nation that can’t grow enough food to feed their population famine is unheard of.  Why?  Because they have the wealth to trade for all the food they desire.  In fact, while Mao gave the people in the People’s Republic of China famine Hong Kong were doing just fine.  Because they were wealthy and could trade for what they needed.  And they had the Royal Navy protecting her.

In America our Food Supplies are so Abundant and so Cheap that Poor People are becoming Obese

Poverty is the biggest killer.  Famine is prevalent in poor countries.  Like Haiti.  North Korea.  And sub-Saharan Africa.  People suffer in these countries unlike they do in the West.  Despite the amount of aid the West pours into them.  And it’s not because Western nations were blessed with natural resources.  Hong Kong doesn’t have anything other than laissez-faire capitalism.  Protected by the Rule of Law and minimal government interference into the private sector economy.  The very things that are missing from Haiti, North Korea and sub-Saharan Africa.  Where corruption rules supreme.  There is little regard for human rights.  Or property rights.  And no one can protect their people from the abuses of government.  Or from warring neighbors.  Like the Royal Navy protected Hong Kong.  And pretty much the rest of the world during the 19th century.  Just like America’s military might made the world safe for capitalism in the Twentieth Century.

Third world nations are not a victim of first world nations.  They are a victim of themselves.  Where corrupt rulers collect Western aid and live well while their people suffer.  Especially the nations that eschew capitalism.  And embrace socialism.  Like the Soviet Union did.  Like the People’s Republic of China did (the current Chinese regime is enjoying economic growth by allowing some capitalism into their still communist country).  And like North Korea still does.  These socialist utopias were a living hell for their people.  Where they live in fear of their government.  And of famine.

Meanwhile in the Western capitalist nations what do they suffer from?  Especially the poor people in America?  Obesity.  In New York they’re passing laws restricting the size of sugary beverages because they are dangerous to your health.  While they pass out free condoms and birth control as sex is far less risky behavior than a delicious carbonated beverage.  Apparently.  Yes, in America our food supplies are so abundant and so cheap that poor people are becoming obese.  Because capitalism has made those food supplies abundant and cheap.  And capitalism gave people jobs where they could afford to buy so much food that they can give themselves an obesity problem.  A problem they just don’t have in Haiti, North Korea or sub-Saharan Africa.  Because they can’t grow enough food.  Or earn enough money to buy enough food.  For they don’t have an environment conducive to creating jobs.  Which is why these nations are still impoverished and/or suffering famine despite all the aid the West gives them.  Food aid will run out.  And then they’ll just be starving once again.  If they have jobs, though, they’ll be able to buy food whenever they’re hungry.  Because it’s like that old saying.  Give a man a fish and he can eat for a day; give him a job and he can have an obesity problem.

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