Better shun the bait, than struggle in the snare.
John Dryden
Laugh Line of the Day
From the latest Adam Smith Institute e-Bulletin:
French PM Francois Hollande is holding talks in Downing Street. (He's probably come to complain that all those rich French folk exiled by his tax hikes are having to queue too long at Heathrow immigration.)It was the crowd: nobody had seen a rich Frenchman since the reign of President François I (Mitterand).
No doubt François II is in Britain to convince PM Cameron of the wisdom of his (spending) "growth strategy". And to negotiate a finder's fee on Britain's newest taxpaying residents.
In the Fourth Year of the Obama Recovery
From the People's Republic of California:
San Bernandino, Stockton, Mammoth Lakes
Coming Soon to a City Near You
Going Nationwide (Sooner Than You Think...)
First, let us remember what former Enron adviser and Nobel Prize-winning economist Paul Krugman and Nobel Prize-winning Barack Obama have to say about the public debt (at least while Dems are in the White House):
Let me quote some salient passages from the LA Times (my edits):
The unexpected vote [to seek Chapter 9 bankruptcy protection] came at the suggestion of the interim city manager, who said the city faces a $46-million deficit and depleted coffers. The city's fiscal crisis has been years in the making, compounded by the nation's crushing recession and exacerbated by escalating pension costs, lucrative labor agreements, Sacramento's raid on redevelopment funds and a city reserve that is tapped out. [A concerned citizen] blasted the city's elected leaders for allowing the financial crisis to grow unabated and wasting millions of tax dollars on transit projects and other non-essential services. Current employee pension obligations, one of the contributors to the city's financial straits, will not be affected [as the city looks to proceed under Chapter 9], officials said.
San Bernardino "is still facing the possibility of insolvency due to a variety of issues including accounting errors, deficit spending, lack of revenue growth and increases in pension and debt costs." City Atty. James Penman said city budget officials had falsified documents presented to the mayor and council for 13 of the last 16 years, masking the city's deficit spending.
Stockton has one of the highest foreclosure rates in the country. Tax collection plummeted and the city struggled to pay its debts. It also sized up its labor contracts and declared them unsustainable. Last month — after a lengthy period of mediation — the Stockton City Council voted to stop bond payments, gut employee health and retirement benefits, and squeak by on a spartan budget.It sounds like San Bernandino really has its act together, doesn't it? Rather than "Draconian cuts" in essential city services, it seeks federal special status bankruptcy. (Prior to chapter 9, creditors could move "to pursue an action of mandamus, and compel the municipality to raise taxes.") But those unsustainable public pensions made by pandering progressive politicians during flush times: you can't touch that. (A good thing about Chapter 9 is that cities can make necessary fixes to collective bargaining.)
Let's get this straight: the city refuses to cut pensions or essential services, but it won't raise taxes to pay its bills.
I wonder: will the courts or the people accept pleas of not guilty by progressive politicians on grounds of economic insanity or ignorance of the laws of economics?
Not only has Obama managed to double George W. Bush's cumulative net deficit in less than half the years, but he also leads Bush 2-1 in municipal bankruptcies over their last 3 years....
| Year | Filings |
|---|---|
| 2006 | 5 |
| 2007 | 6 |
| 2008 | 4 |
| 2009 | 12 |
| 2010 | 6 |
| 2011 | 13 |
| 1st half 2012 | 7 |
| Current | Debt Held by the Public | Intragovernmental Holdings | Total Public Debt Outstanding |
|---|---|---|---|
| 07/10/2012 | 11,072,592,982,308.65 | 4,813,261,773,042.82 | 15,885,854,755,351.47 |
Outsourcer-in-Chief
In case there are any progressive readers/critics out there, I'm about to criticize the embedded RNC ad below, only not in the way you want.
Any familiar reader knows that I regularly invent new xxx-in-Chief monikers for Barack Obama. (I'm sure that there are other conservative critics whom do the same. Still, it's an interesting coincidence the day after I publish this comment, the RNC puts out a relevant ad:
the Obama campaign is trying to suggest that Romney is going to be the Outsourcer-in-Chief.I'm sure that the progressive mainstream media isn't happy with the RNC collage of their news stories. Here again, you have Obama in his self-assured tone, spouting out his delusional sales hype "jobs that can't be outsourced" in pushing for his stimulus legislation
Obama is like a snake oil salesman inventing all sorts of claims about employment that are detached from reality. Businesses and other organizations serve distinct markets with products and services. There are a number of core competencies linked to company revenue, e.g., sales specialists with knowledge of key market clients and prospects, product developers and engineers, billable consultants, restaurant chefs, etc. Let's call them line positions. Then there are staff positions, e.g., back office staffing: accounting, customer support, IT services, etc.
What we normally see in outsourcing is a form of compartmentalization: for example, if I'm heading a chemical products company, I really don't need to know the specifics of IT infrastructure, security policies, PC maintenance, etc.; I may know that having an Internet portal is a way of reaching actual and prospective clients, suppliers, employees, etc., and there are some goals I have for the websites. There are choices at that point: I may decide that I want to directly control staffing functions or I may decide that there are one-stop shop businesses that can not only manage the IT function for me but they have the in-house know how and economies of scale to do it more knowledgeably, better, faster, and cheaper than I can.
And so when companies talk about outsourcing, they are essentially talking about the law of comparative advantage within a business context. I don't really care about the specifics of the vendor staffing (American, Indian, whatever) so long as my expectations are being met and customers and other stakeholders are happy. I explained in yesterday's email my experience with an Apps hosting subsidiary for IBM: American employees maintained peak business hour staffing, and we had a group of Indian DBA's in off-peak hours doing routine lower-skill maintenance like software patching, database refreshes of test/development environments and/or backups.
What I've been attempting to suggest is that outsourcing can be a good thing. I believe that Obama is really talking about offshoring. But, for example, there are a number of reasons as a business I might want to have a presence in India: for one thing, as the middle class there rapidly grows, I see a potential market for my goods and services: that's a good thing.
What I know, and our hapless President doesn't know, is that the free market is the best way to approach our economic problems. Obama's populist argument here is really morally offensive: I've seen some of these anti-Romney ads where the Democrats are specifically citing jobs going to India.
I emailed one of my best friends, a naturalized Indian American on the West Coast, expressing bewilderment at why Indian Americans seem to lean Democrat. He laughed it off, agreeing that GOP policies (except maybe for the GOP's seeming death wish on the immigration issue) are preferable from an Indian perspective. He was curious why I was focused on the issue: I pointed out that the Latino voter base, which based on traditional work ethic, morals, small business perspective, etc., should be a natural constituency for the GOP, not the Dems, but has been turned off by GOP rhetoric on immigrants. I pointed out how the labor unions for decades have fought liberalization of temporary work visas. So, I said, you can see the Obama reelection campaign essentially doing the same polarizing red meat politics oriented at Indians that some misguided conservatives have targeted at Latinos. Why aren't Indian Americans upset about Indians being targeted by Obama ads? Why aren't Latinos cognizant of the Dems' hypocrisy on the issue?
As a free trader, as a classical liberal/libertarian, I want liberalization of immigration across the board--Latinos, Africans, Asians, Europeans, whatever. The fact that Obama in one breath slams Indian workers and in the next panders for the Latino vote shows that he is just as unprincipled as he claims Romney is.
Obama could have spent the last four years trying to make America a better place to do business. The only time I have heard him seriously talk about business tax cuts (beyond a matching payroll tax cut) is AFTER Romney introduced his plan; this is the same old same old empty election eve conversion where he talks a good game, like he talked about increasing American exploration with gas selling $4.50 a gallon, but 2 years later, he only makes about 5% of desired acreage available for bid. Talk is cheap--like all of Obama's 2008 campaign promises. Why should any person take him seriously now, given his poor track record?
Obama's co-opt policies are as weak as Brazilians consider the American concept of coffee; my Brazilian hosts back in 1995 used to laugh at American coffee, calling it "tea coffee", not real coffee (Brazilian coffee is very strong and is served in small cups; I developed a taste for it while I was down there).
A Day in the Life
A prominent financial newsletter company is based in the local Baltimore area; there is an affiliated free markets bookseller/publisher. On today's blog post, he writes into one government-caused problem after another trying to deal with the recent summer storm that caused a break in my publishing over the top of the month.
So he mentions dealing with a fallen tree blocking a house exit and retrieving his chainsaw. No gas, but fortunately he has a federally-regulated gas can:
- he has problems trying to get gas out of the gas can
- when he gets gas into the chainsaw, the chainsaw won't start (effects of ethanol mandate)
- when he obtains ethanol-free "good" gas, the saw starts but eventually sputters to a halt. Diagnosis: ethanol residue in the chainsaw's carburetor
- because of anti-gouging laws, most area service stations ran out of gas early in the crisis
- he wonders if the city is engaging in analysis paralysis, hoping that the President will declare the area an emergency and provide federal funds for the cleanup; city workers were barely seen through the early stages of the crisis in his neighborhood
- even if he had a generator, he can't get the fuel to operate it.
- he has a resident elderly relative and worries about the inability to run the electric-powered oxygen equipment
- he worries about regulated insecticides' ability to work effectively on storm-related water pools on the property, the ability to stockpile medications because of federal restrictions, etc.
I think I saw in the email notification or the webpage a picture of bookshelves filled with volumes of federal regulations--and he said something like there were 5 times that number of displayed volumes before the Age of Obama.
My problems weren't as bad as the author's because I don't have dependents. But the point is that we've gotten so attached to our PC's, our cellphones, etc. A brief summer storm turned that world upside down. I found myself unprepared--I was planning on doing some grocery shopping over the weekend and didn't even have a supply of candles in the home.
Yes, I know about tornadoes, hurricanes, floods, and other acts of God are many times worse. But the point of the author's post was not to complain about the storm's inconveniences: it was to illustrate the unintended consequences of a pervasive federal meddling that impedes our ability to cope with the siutation.
Musical Interlude: My Favorite Groups
The Who, "Behind Blue Eyes". This song is dedicated to my fellow blue-eyed people everywhere. I remember once this beautiful Brazilian woman kept staring at me; she finally blurted out, "Your eyes are so blue!" (The inner songwriter in me silently responded, "Oh, baby, if you only knew...") Funny, though: none of my girlfriends ever referenced my eyes. I do recall fellow Navy officer friends Bill and Sally, whom were dating; one day Sally looked at me and told me, "Ron, did anyone ever tell you that you have bedroom eyes?" Uh, no. Is that a good thing?
