Thursday, October 25, 2012
My former students out there will tell you that one of my favorite economists of all time is the French genius, Frederic Bastiat. Bastiat's most famous work, The Law provides a brilliant insight into the moral case for peace between all people. The opposite of peace is a world of plunder.
Please take 3 minutes of your life to watch this Youtube lesson with your kids, your friends, coworkers, members of your congregation or gang and anyone else you can think of that might be helped with some basic instruction on the foundations of freedom.
Wednesday, October 24, 2012
Today's headline in The Wall Street Journal reads, "Weak Earnings Spark Selloff".
Of particularly dire news is the report that the fourth quarter of 2012 is projected to have even weaker earnings for major corporations around the world and greater layoffs - on top of the planned layoffs mentioned in the WSJ today.
It is time for people to wake up and realize that President Obama is in over his head and has been since he had the thought of running for president.
Don't get me wrong. I know he is a smart guy. I believe he thinks he is doing what he needs to do to live up to his 2012 slogan, FORWARD.
The problem is that forward in this case means moving into another four years of economic malaise, with even deeper problems than we have been battling since 2009 when the last recession "officially" ended.
In 2013 we will see one of the largest tax increases in our history - if Mr. Obama is re-elected.
In 2013 we will see Obamacare cemented as policy with massive new taxes, fines and regulations imposed on businesses and individuals - if he is re-elected.
In 2013 we will see certainty replace uncertainty and a large spike in layoffs. Businesses are now sitting on whatever cash they have waiting to see if a former businessman or former community organizer/professor will take the oath of office in January 2013. If it is the current president, businesses who currently have some hope that the much-reported 'fiscal cliff' will be avoided, will know that there is no stopping the Keynesian, anti-capitalism philosophy that has dominated the White House since 2009. Once the fog of uncertainty is lifted and businesses clearly see that they cannot be saved by quantitative easing, cannot be saved by European debt management, cannot be saved by a slowing Chinese economy, cannot be saved by wind farms, electric cars, tax hikes on 1,200 rich families, 55% estate taxes, 30% Buffet Rule capital gains taxes, higher taxes on dividends, forced health care purchases and more.....they will then make rational choices about what to do next.
That choice will be to avoid as much risk as possible. That means not spending money to expand, not spending money to hire and not spending money to keep the workers that are currently on the bubble.
If you are an undecided voter you better pay close attention to the facts. President Obama cannot repeal the laws of supply and demand. He cannot spend his way, tax his way, regulate his way and preach his way to a brighter future for America.
We have 13 more days to decide if we are going to keep moving towards France and Greece or begin the process of turning our economic Titanic around.
Thursday, October 11, 2012
About half-way through the debate I asked my lovely wife to get the boys ready for bed. They all walked from our game room across the yard to the house and were fighting like cats and dogs before anyone even brushed their teeth for bed.
My oldest son could not get the remote to work to quickly check the Yankees-Orioles score. My youngest son had taken the batteries out of the remote in order to put them in a video game consule. Older son gets mad at younger son. Younger son now mad at older son. Mom is now mad at both and all three are fussing. Then.....in a moment of singular clarity they all simultaneously realized why they were stressed, angry and fighting.
It is because Vice-President Joe Biden is a complete jerk. There, I said it and would love to say it to his face and to all of the Chicago-area political advisors who told Biden, "Look man, the President got exposed for ineffective president that he is in the last debate, so you need to go out there and jump on that kid from Wisconsin like a pit-bull on a piece of meat."
And he did.
It is really tough to say who "won" this debate, isn't it? I mean, Biden showed that he is much more experienced in this political venue than Ryan. Ryan seemed like a young college student getting yelled at and humiliated by an crotchety old professor over his midterm exam performance.
Biden, if you did not know much about anything related to economics and foreign policy, seemed to know more than Ryan and was more convincing in getting his points across. Ryan was more polite, respectful and genial when trying to explain his sides views.
Yet, unless the world of Youtube, Facebook, American Idol and reality television means nothing, one could argue that in our "Do you like this person" superficial society, Ryan was the clear winner. First, of course, he is younger and more handsome. I don't care about that but other people (97.3% of Americans, probably) do.
Second, he was a gentlemen and never took the bait Biden kept throwing in front of him to fight back like a rude person would.
Third, Biden could not have been more impolite with his mocking, interrupting, laughing and snide remarks to Ryan and the moderator.
If personal appeal means anything, I can see many undecided voters thinking, "Man, Ryan seems kind of young but he could grow into the job over time. Biden......Really? I want this rude dude sitting down at the table negotiating nuclear weapons or trade with China? What is he going to call them? Will they understand what a mocking smile means?"
Heck, in some cultures his behavior would probably start a war.
It did in my house. But at least my sons went to bed knowing a little bit more about what Mr. Obama is like. After all, Obama picked Biden.
I would like to interrupt this election season - and my normal blogging topics to throw my hat into the ring to be the next skipper of my beloved Boston Red Sox. This is not a joke. I really believe Sox management should hire me without interviewing anyone else for the job.
First, this season the Red Sox finished in last place with something like 60 or so wins. It was their worst performance since 1965.
This from a team that fired their manager, Terry Francona the year before.
In case you missed it, Francona managed the team to its first World Series championship in 86 years! For crying out loud, that means World War I was ending as the Red Sox last won anything. In 2004 Francona found his team down three games to zero to the Yankees in the American League Championship Series. In game three the Yankees scored 19 runs! It looked like the Sox were done, but no.
Miraculously, Boston won the next four games in a row, two of which came in New York and went on to win four more in a row vs. St. Louis.
I have been a Boston fan since 1978. Rick, "The Rooster" Burleson was my favorite player. I cried, literally, when Boston lost in 1986 (Bob Stanley's fault). That means I waited 36 years to see my team win it all. That is nothing compared to how long others waited or how much they suffered.
Then, as if one title was not enough, Francona led Boston to another World Series championship in 2007!
O.K., forgive me for hyperbole here, but if you manage two Red Sox teams to World Series titles, you not only are named manager of the team for life but you get to be emperor of the city of Boston as well.
For this, four years later, the geniuses who run the Red Sox fired Francona after his teams underperformed in the playoffs or narrowly missed them.
This year, Bobby Valentine - who is by many accounts, shall we say, difficult to play for, was hired to lead Boston. He did. Right into last place with a July player mutiny to boot.
Now the Red Sox need a new leader, which brings me to why they should give me the job.
First, as I mentioned, I have a long history of devotion to the Sox.
Second, I know the game of baseball. I played college and semi-pro baseball and managed a semi-pro team made up largely of former professional (including major leaguers) baseball players to two championship series.
When I started managing my sons we had teams appear in three championship games out of four seasons and last year my team....wait for it.....THE RED SOX won the Winter Garden Little League Championship.
So, that is six seasons of playing for the title - in both mens and kids baseball.
Are you listening, Red Sox management?
Then there is this. Valencia has a sabbatical program which would allow me to leave for a year with no pay, so I am available.
When it comes to compensation, I would take the helm of the Red Sox for half of whatever anyone else would do it for, a huge savings there.
As for entertainment value, imagine a five foot six and three-quarters inch economics professor arguing with umpires. My wife claims that my sarcastic facial expressions alone would be worth t.v. ratings gold.
Finally, and this is the best part - if I am hired and Boston finishes in last place that would mean that I was no worse than Bobby Valentine, but would be cheaper, funnier to watch and worth millions of Twitter and Facebook rants by people who want to kill Red Sox management for hiring some Little League manager from Central Florida. You can't buy that kind of publicity.
It is up to you, Boston.....make the case for me to run our team.
It can't get any worse than it is....
Sunday, October 7, 2012
President Obama hailed this milestone in his presidency to claim that the American economy is finally growing as a result of his policies that saved us from Great Depression II, starvation, locusts and famine.
Mr. President, with all due respect, we are no where near where we could have been at this point because of your failed economic theories.
To wit - you told us in 2009 that if your stimulus bill passed we would see strong economic growth and unemployment in the 5-6% range by now. You borrowed $862,000,000,000 from China and other sources, spent the money on wind-energy companies, corporate subsidies, municipalities (for teachers and firefighters) and other Keynesian-inspired projects. You told us that without this spending, if the government did nothing, unemployment would remain above 8%.
Nine months after your bill passed the unemployment rate was still 9.8%. Three years and six months after your bill passed the unemployment rate was still above 8%. That means if we had not spent the money, according to your projections, we would have ended up exactly where we are now, but without the massive debt my children and their children's children will be forced to pay for.
You told us that 'Cash for Clunkers' would be a huge boost to the economy. Look at the analysis of this program. All it did was encourage people to purchase cars earlier than they would have otherwise, while reducing the supply of functional used cars, which caused used car prices to rise for poorer people whom you claim to care about.
As a result of the lack of transparency created by Obamacare and your carbon-tax plans, businesses are refusing to hire new workers while they sort out how much they will owe in fines, taxes or rising health care premiums in the years to come. Meanwhile, I have had my premiums increase by over $200 per month because your health law added burdensome regulations to insurance companies. That is $200 less I have to spend in the economy you claim to be saving.
Since you took office, over 75,000 pages of new regulations have been added to the Federal Register. Regulations now cost American families over $10,000 per year in higher prices - more than we pay in taxes.
You are telling us that in 2013 our income, dividend, capital gains and estate taxes will all rise.
Mr. President, to show joy that one month before the election our unemployment rate is now below 8%, while failing to mention that the underemployment rate is nearly 18% (when counting people who have simply left the labor force because they can't find a job, or who are sweeping the floors at a Burger King 17 hours per week because they cannot find a full-time job), is pathetic.
Last week, The Wall Street Journal ran an article that shows most economists expect another recession next year as a result of your tax plans.
Enjoy your 7.8% unemployment rate while you can, Mr. President, because it may be a long time before you see it that low again.
Wednesday, October 3, 2012
I just finished watching the first debate on economic issues between President Obama and Mitt Romney.
If this had been a heavyweight prize fight it would have looked somewhat like the Buster Douglas - Mike Tyson fight from long ago.
In short, Mitt Romney knocked out Barack Obama.
For those of you who are new to my blog I must first let you know that I am a registered Libertarian and rarely vote for Republicans who are running for president.
You should also know that I have been sharply critical of Mitt Romney in public speeches, lectures to my students and on this blog. He is no Ronald Reagan. He has flaws in his persepective on health care, energy and trade with China.
Yet, tonight he illustrated why President Obama's presidency was a wonderfully impossible fulfillment of what America could be if we looked at a man without race in mind but ended up a dismal failure by any measure.
Mr. Romney was masterful in pointing out what should be painfully obvious to any American who has even an inkling of common sense. That is that under President Obama we have seen the economy remain stagnant, government debt explode and the promise of achieving the American Dream die for millions of young people.
Mr. Romney clearly illustrated that he understands the fundamental principles that create economic growth - leaving people and their wallets largely alone so they can chart the course of their own lives - while government largely remains on the sidelines.
He was not perfect and as I said, I have some serious concerns about some of his economics. But...I have been an economist for 24 years now. In those 24 years I have watched as George H.W. Bush and George W. Bush took us on a path that violated the principles of free markets and limited government. I have watch President Obama make things even worse by arrogantly claiming that business people - of which I am one - did not create our businesses and that "Obamacare" (a phrase he loves) must be imposed on unwillingly emancipated adult human beings.
Mitt Romney gave a performance tonight that reminded me of what I felt when I watched the Reagan-Carter debates in 1980. I was only a kid then but I knew Reagan was on to something. So is Mitt Romney, if he can keep it up.