Saturday, May 5, 2012

Foie Gras in every pot, and other tales from Mother Goose

Mitt Romney has a plan for America. He's going to create a half million jobs a month. No President since FDR has ever created jobs on that scale. Mitt isn't proposing going back to FDR's policies, his plan is to put the Bush policies on steroids. Bush averaged 66,000 new jobs a month prior to the collapse that wiped out every job created in those eight years.

Mitt's plan is to cut government jobs and spending, which means losing millions more jobs. Cut taxes on the rich in half, which will mean even less government spending on frills like Medicare and Social Security, eliminating even more jobs that those seniors' spending creates. Seniors that actually have money will know they must live on those savings, and they won't be buying the expensive cat food anymore, still more jobs lost. This sort of frugal-ism will kill seniors who avoid spending as well as those who actually run out of money.  Romney will deregulate corporations still further and get rid of those annoying unions. You can guess how that will affect jobs. It will be so bad, it won't even be good for China.

They're getting down to the point where even tea-baggers should be able to see through this, but they're told constantly that black is white. Not to mention constantly scaring them about the black man in the White House. Did you hear? He killed an elderly man in Abbottabad.

Friday, May 4, 2012

Blue good, Red bad

The number of new jobs created in April totaled only 118,000 which is down from the previous month, but the February and March numbers were revised upward by 19,000 and 34,000 respectively. The good news is that we were doing better than we thought, but that makes April even more disappointing.

The bright spots are that average hourly pay was up a penny and the average work week remained unchanged at 34.5 hours. Manufacturing workers are at more than fulltime with an average of 3.4 hours of overtime per week. This sector also added jobs indicating there is a recovery in manufacturing. The new jobs in this area appear auto industry related, and Chrysler has announced that it will forgo its usual summer shut down at many of its plants. This will be a significant boost for any areas that have parts suppliers as well as assembly plants.

The first quarter GDP numbers are out and while conservatives trumpeted that growth was down from 3% in the 4th quarter to only 2.2%, they didn’t mention that they were to blame. (these numbers are subject to revision, and may turn out to be closer to 3% given the continued increase in people working)  The positive growth in GDP came from increased personal consumption, exports (gasoline being a big contributor), growing inventory and residential investment. The GDP increase was drawn down by reduced Federal government spending, reduced non-residential investment as well as cuts in state and local government spending. Increased imports were also counted as a negative. Ironically as the economy picks up, Walmart imports more crap thus driving the GDP down.

In short the economy is growing at a respectable rate despite the Republican efforts to impose austerity in the states they control. The growth is almost exclusively in the Blue states. If we didn’t have the conservatives dragging the economy down, we would be growing a sustained rate not seen since before Reagan.

If you think I’m painting a rosy picture, I’m not. In fact we are in deep trouble. America has great potential, we’ve had fantastic productivity gains in the last 30 years, but almost all of the wealth produced by the gains has gone to the fraction of one percent at the top. These super rich aren’t shy about using this massive wealth to get their way. The debate over whether the crack down on Occupy protestors comes from Washington or is just local is moot. The billionaires control government at all levels to some degree, and can exert crippling pressure on anyone who opposes them. With decades of propaganda behind them, many officials even think they are doing the right thing, they don‘t remember “before Reagan“.

Then there are the banks, they’re in every bit as bad shape as they were four years ago, if not worse. The Dodd-Frank Act was supposed to deal with this problem, but again the Republicans are withholding funding and using their influence to keep regulators from doing anything meaningful.

Austerity imposed by bankers and the IMF in Europe is dragging that continent into a Great Depression. Spain, the 4th largest economy, is now at 20% unemployment and going into free-fall. Germany continues to do well since they are at the top of the food chain, as are the democratic-socialist countries that stayed out of the Euro-zone. Iceland that was the first country to collapse under the weight of the crooked bankers has simply flipped them all off, and they are recovering nicely. Ireland, that bailed out the bankers, has been touted as a success, but the actual numbers show it to be on the edge of a cliff.

There is some movement politically in Europe to crack down on the bankers, since they have the example of countries nearby to learn from. Americans have had it drilled into them for decades to not pay attention to Europe and will need to learn on their own before it’s too late.

Monday, April 30, 2012

The Colonel can sell cheaper if the chickens also pay the bills

One of Mitt Romney’s favorite lies these days is to label Barrack Obama as the enemy of small business. Obama’s response is to point to a long list of small business friendly executive orders. In fact he’s the first President since FDR to show them any real sympathy, but none of the things he’s been able to do really makes much of a difference at this point.

Traditionally small businessmen have always voted Republican since they tended to either believe the nonsense Republicans told them, or they foolishly believed that someday they’d be the kind of big business that Republicans actually favor. It’s not like they’re a big voting block anymore, the last 30 years of Republican policies have gotten rid of almost all of them.

Romney likes to point to Staples and Sports Authority as businesses that he started that have created lots of jobs. Both companies were created in the mid-1980s after Reagan de-criminalized the practices that had been forbidden since the 1880s anti-trust laws were put into place. Neither of these companies created a single net job but simply overwhelmed and destroyed thousands of small businesses across the country. Actual employment is almost certainly less, wages definitely are.

Right wingers will blithely tell you that Big Box Stores are good for the masses because they are more efficient. “They have economies of scale and can sell good cheaper making life better for all Americans“. For a long time many Democrats would tell you the same thing. It seems like simple common sense, they would even sight this as real progress and equate the destroyed small business with the buggy whip maker.

This is the way a Big Box Store actually works, and by the way, these are exactly the same problems the liberal colonists had with the British East India Company (BEIC), the Big Box Store (BBS) of the 1770s.

One big savings comes from the control of labor costs, the BEIC would use slaves. There is one short coming to this, slaves must be fed, clothed, given medical care, housing and such, because if one dies you have to buy a new one, and they weren’t cheap. The modern BBS doesn’t need to concern itself with such things, the employee is paid a third of what it costs to live, and the Medicaid will cover the healthcare. New slaves (I mean associates) line up at the door to be put in chains (I mean brought onto the team) in more than sufficient numbers to replace those who die from malnutrition and lack of healthcare.

The next big cost saver is to not pay any significant taxes. Playing one local government off against another to get tax breaks, free property and infrastructure improvements, for example. Bribing politicians to get favorable treatment isn’t limited to Walmart in Mexico.

Off shoring profits works good to avoid taxes as well. Just create a PO box sized company in the Cayman Islands to do the importing from China, then resell the product into the US at a huge markup to keep the profits out China and out of the US to avoid trillions in taxes. The money can then show up later as “foreign” investment in the US further benefiting the same “trans-national” corporation.

The BEIC had itself exempted from all taxation in 1770 and got a refund of all the taxes it had ever paid. Oddly enough this is also the modern Republican tax policy toward massive corporations.

Then there is the myth of low prices. The big advantage that the BBS has is that it can come into a town and sell goods cheaper than its competitors pay for them wholesale. This only lasts until competition is eliminated of course, but to make sure this always happens they dictate the wholesale price suppliers sell to “small” buyers. They do this simply by demanding that they always get the lowest wholesale price as they have “economy of scale“. Wholesalers can’t actually cut wholesale prices no matter how much you buy, but they can raise the price they charge to the small buyers. Same effect without violating the laws of physics. What did you think, it was a miracle?

Consumers think they are getting a bargain, because the BBS is cheaper than the little guy who is in reality subsidizing the low prices of the BBS. He’s also still paying taxes while the BBS doesn’t. This is why the tea baggers go to Staples to buy the materials for their misspelled signs, and not to the store owned by their neighbor. Not that they have a choice anymore, he‘s a door greeter now.