Monday, February 27, 2017

Iran In; US Out at Oscars

Giving the Oscar award to the wrong aspirant was a fitting tribute to a collection of wealthy, pampered, out of touch, multi-millionaire Hollywood types bent on an evening devoted to attacks on freedom and liberty and extolling the virtues of Iran and other totalitarian, thuggish, regimes.  The evening celebrated an Iranian statement condemning the US, while decrying any effort to celebrate anything American.  As is typical of Hollywood, freedom and individual liberty are so passe.  What is in is: forced compliance with the mores of Hollywood -- mainly drug use, infidelity, anti-semitism, intolerance of others and an obvious hatred of anything American.

In Iran, most of the movies celebrated last night at the Oscars would not pass the Iranian censors.  Maybe these wealthy, jet-setting, limousine-loving, Hollywood-types should move to Iran and see what life is like when freedom is quashed and the kind of nonsense rhetoric that Hollywood-types love is the law of the land.

Sunday, February 26, 2017

Trump and the Press

I read the Washington Post and the NY Times every morning.  These two newspapers have been among the press targets of the Trump Administration in recent weeks.  Is Trump being unfair, or, as some leftist pundits suggest, un-American?

How probable is it that every single thing that the Trump Administration or the Trump family does is wrong, done with bad intentions, and exhibit incompetence?  Every single thing? 

Well, if you read the Post and/or the Times that's what you get.  On no occasion has the Trump Administration or the Trump family done anything competent, fair, or in the interest of the American people, if you believe the Post and the Times.  Does anyone really believe that?  Is that the outcome you would expect of a fair-minded press?

The Post and the Times have become the embodiment of a daily far-left political tract.  The goal of both newspapers is to demonize the Trump Administration and the Trump family.  There is no effort to be truthful.  Stories are often simply made up out of no facts and then followed up as if, once invented out of whole cloth, they sport a life of their own. 

The "Russian" story is perhaps the best example.  There has never been a scintilla of evidence that anyone in the Trump camp has any relationship of substance with Russia, other than normal and legitimate business interests.  Yet, the Post and the Times have created Russia as the newly found American enemy. 

Those same rags view Iran and other major sponsors of terrorism as our friends. 

Russia, in no way, threatens America.  Were it not for Obama's incompetence, Russia would not now threaten the middle East or eastern Europe. Russia is a paper tiger with nowhere near the strength of modern-day Iran and nowhere near the threat to America that is represented by Obama-Post-Times' friend, Iran..

The Post and Times are political rags.  They are not newspaper in the traditional sense of that term.  They make no effort to present news, but instead are primarily focused on advancing the political agenda of the far left.

Trump is right.  The mainstream media is an untruthful and unfair.  The Post and Times are untruthful and unfair and do not provide their readers with news.  Instead they simply present political diatribes, mostly untruthful, on a daily basis.

Saturday, February 25, 2017

The Lament of a Harvard "Economist"

Today's NY Times has an article written by Harvard Professor Sendhil Mullainathan lamenting the fact the Council of Economic Advisors is no longer represented in the cabinet.  The Trump Administration has booted the CEA down a notch.  This disturbs Mullainathan because he thinks the economics profession needs to be represented at the cabinet level.

It is easy to see why "academic economics" is accorded so little respect in the world of practical people these days, leading to this cabinet rebuff.

Every small child can tell you that if a price goes up, you will buy less of the product.  No surprise here.  But, what do academic economists have to say when asked if minimum wage increases lead to employers hiring less labor?  At least half of these academics say that increasing the minimum wage either has no effect on hiring or actually increases hiring!

Is it any wonder that this type of nonsense loses credibility in the real world.  But, that is the state of modern "academic economics."  It is mostly political and mostly nonsense.

President Trump did the right thing in excluding these absurdities from the cabinet.

Friday, February 24, 2017

Not Since 1973

The US economy posted the lowest initial jobless claims number since 1973.  This doesn't mean that much, since there are no specific Trump policy enactments that could have done anything yet.  But, the atmosphere has definitely changed since Trump was elected and a new spirit of business optimism may have been a factor.  No one really knows.

The big debate will be whether economic growth can be increased above and beyond the 3 percent level.  Many, mostly Keynesian, economists don't think so.  But, other economists disagree.  Do free markets matter?  That really is the penultimate issue.

The attitude since the inauguration of the first George Bush has been that free markets really don't matter and government intrusion is irrelevant to the performance of the economy.  That view is about to be put to the test.

Forecasts of economic disaster and stock market collapses that were routinely made prior to the Brexit vote and prior to Trump's election proved to be among the worst forecasts in history.  Those who thought that the government was the route to prosperity predicted that free markets would torpedo economic growth.  Folks with that view do not have history on their side.

The state of academic macroeconomics is so pitiful that is unlikely that economists have much to say about economic performance any longer.  Witness Bernancke's soothing statements in 2008 just prior to the collapse of the economy.  Yellen's forecasts have been no better.  Economists can't seem to be able to out-do a straight-edge in predicting the future of the economy.  That doesn't keep them from trying.  Mostly they simply put forward their political views based upon not much economic science.

But, the economy is beginning to feel pretty good.  Potential repeal of Obamacare, rollback of excessive regulation of the financial sector and the energy industry, lower and simplified taxes all point to a potential rebirth of the historically powerful American economic engine.

Sunday, February 19, 2017

The Ground Is Shifting

There is a new energy in the American economy.  It hasn't shown up in the statistical data, yet, but it can be felt by those in the private sector.  The bureaucratic left, of course, can't sense it.  But, the average American worker and/or businessman can feel a new, fresh breeze in the air.

The negativity of the news media and the political antics of the anti-Trump factions (both within the Democratic Party and within a small, disgruntled section of the Republican Party) cannot overshadow the strengthening of economic activity that seems to be taking place.

The current administration constantly praises business success and has brought into key positions folks that have been successful in the business world.  These things are game changers.

No doubt, those who hide in the bureaucracy or carp from their protected havens in academia are terrified by the idea that free speech and economic freedom now have supporters at the highest level of government.  The Obama holdovers in government will continue to leak top secret information to their pals in the news media, but, in time, even they will be neutered by the strong winds of freedom that are sweeping the country.

Hatred, ad-hominem attacks and the silencing of free expression have been the hallmark of those controlling the bureaucracy and the academic community for nearly a generation.  These folks are now starting to lose their hold. They are fighting back with personal attacks, violence, whatever it takes.  They feel that only they have the right to speak and hold opinions.  Their contempt for average Americans is everywhere on display.

But, there is change on the way.  Free expression and free markets have their defenders and they now have the upper hand at the White House.  No wonder the opposition is going ballistic.

Saturday, February 18, 2017

Breaking Up the Family?

In a nation of laws, if someone breaks the law, presumably they should be prosecuted and the full force of the law should be applied.  What if incarcerating someone, who has clearly broken the law, would mean a hardship for their family?  Would that be an excuse for not enforcing the law?

Maybe that should be the new defense for those accused of a crime -- "I have a family.  You can't break up my family."  That seems to be a growing battle cry for those who prefer to pick and choose which laws to enforce and which not to enforce.  Taken at face value, this would mean a free pass for any lawbreaker with a family.

A country with "selective" law enforcement is, by definition, a lawless country.  If you don't like the laws, change them.  But, don't ignore the ones that you don't agree with, using the flimsy excuse that the lawbreaker has a family.

Thursday, February 16, 2017

Fed Chair is Not Independent

The Federal Reserve is supposed to be an independent agency.  But, it is not.

Yesterday, Janet Yellen, the current Fed Chairman, was openly partisan in describing her total opposition to rolling back the oppressive Dodd-Frank regulatory regime.  Her views are not much different than her political compatriot Elizabeth Warren.  None of this, of course, had anything at all to do with monetary policy.

The Fed is supposed to be about fighting inflation, but that isn't what the Fed does these days.  The Fed should be replaced by a simple monetary rule which would make the Fed truly independent and far less destabilizing on the American economy.

Monday, February 13, 2017

Flouting the Rules at the EU

The European Union, a union that is mostly known for not paying it bills, has a rule that all member nations must keep their deficits below 3 percent of GDP.  How's that rule doing?

Like most laws in the EU, the 3 percent rule is mostly violated.  France, according to today's Financial Times, last had a fiscal deficit that obeyed the rule in 2007 and is expected to violate the rule this year as well as next.

Does anyone care?

No, no one cares.

So, what is the point of having rules if they are observed mainly in the breach, while Angela Merkel winks and nods her tacit approval.

There is simply no reason for the 3 percent rule.  No one really pays any attention to it and sovereign debt is racing to the moon in the European Union.  Meanwhile the bailout artists are readying their bailouts.  This will only end with the dissolution of the European Union.

There is no reason for the coming EU breakup and the collapse of the Eurozone.  Simply let countries go bankrupt without bailouts.  That way, countries who behave badly will pay the price and learn from their mistakes. 

The insanity of the current EU rules is a typical outcome of the arrogance of elitist European politicians who lack the most basic sense of honor and truthfulness.  Compared to these Euro politicians, the Trump Administration looks like a pillar of virtue.

Saturday, February 11, 2017

Mandating Worker Benefits -- The European Experience

A recent article in the NY Times entitled "Feeling Pressure All The Time on Europe's Treadmill of Temporary Work," February 9, 2017, spells out in detail what happens when generous worker benefits are encoded in law.

Higher minimum wages, expanded family leave benefits, guaranteed health care, mandated flexible hours and work locations, and various job security mandates all sound great to voters.  That is, until reality sets in.

As the article notes: "...more than half of all new jobs created in the European Union since 2010 have been through temporary contracts."  The article goes on: "Under European labor laws, permanent workers are usually more difficult to lay off and require more costly benefit packages, making temporary contracts appealing for all manner of industries, from low-wage warehouse workers to professional white collar jobs.  For those stuck in this employment netherworld, life is a cycle of constant job searches.  Young people talk of delaying marriage and families indefinitely."

This is just simple economics.  If you mandate costs on employers for permanent employees, employers will provide fewer jobs for permanent employees. No big surprise here.

Hence massive job insecurity and hopelessness for the vast majority of young folks looking for work in the European Union.  Elizabeth Warren and Chuck Schumer would like to bring this insecurity and hopelessness to America's shores.

If you want employers to hire workers and raise their pay, then government needs to butt out so that it is financially attractive to employers to provide good paying jobs for workers.  Drafting punitive laws on employers simply makes businesses reluctant to make permanent hires.  That's the lesson to be learned from the well-documented European Union experience.

Monday, February 6, 2017

Big Business Fat Cats Oppose Trump

Did you check out the Super Bowl ads?  One big business after another stumbled over themselves to show their opposition to the Trump Administration.  Think of the largest businesses in America -- Facebook, Amazon, Google, Apple, etc.  Where do they line up?

The rich, the powerful, and the elite are solidly in the anti-Trump camp.  None of these groups have much truck with free market capitalism as they move around comfortably in their limousines, yachts and jets.

Look at the opposition to the Betsy DeVos nomination as education secretary -- the rich fat cats, the teachers' union.  These folks get to send their kids to private schools, yet they trumpet their personal support for public schools -- from a distance, of course.  Heaven forbid that poor children have the same opportunity as the rich.  DeVos represents giving the poor a fair shake in the educational system.  Naturally, the elites oppose this.

But the average American, not moving from one mansion to another, sees the Trump Administration as a blessing, designed to promote free markets and free people and a quality education for everyone -- not just the rich and powerful.

Friday, February 3, 2017

Taking the Axe to Dodd-Frank

The Dodd-Frank legislation that crushed America's financial institutions and was probably the number one cause of the pitiful economic recovery after 2009 is now the target of the new Trump Administration.

Average Americans have borne the brunt of the oppressive new regulations that accompanied Dodd-Frank.  Dodd-Frank is probably the number one reason that income inequality has grown over the past eight years.

But, relief -- at last -- is on the way.

President Trump signaled today that the oppressive Dodd-Frank regulatory regime is about to be rolled back.  Once again, Trump shows a strong predilection to support free markets and to oppose big government intrusions into the markets. 

Three cheers for President Trump!

Thursday, February 2, 2017

Deregulation -- At Last!

No matter what your politics, at one time or another, everyone has come up against the regulatory state.  Some regulations, of course, are essential for any society.  The question is: how much regulation do you need?  Why?  Because almost every type of regulation reduces individual freedom and very likely reduces economic output as well.  There are costs.

So, what are the benefits?  The European Union forbids anyone in the EU under the age of 8 to blow up a balloon.  What are the benefits of this regulation?

So often, regulations are made by folks that have no experience in the real world, but are regulation careerists.  Their incentives are such that they believe more regulations are always better than fewer regulations.  Costs are often irrelevant to the regulators, because they don't bear any of the costs.  At least, that's what they seem to think.

Absent regulations, the American per capita income might be $ 200,000 per year.  Who knows?  That might also mean polluted air and water and mayhem in many facets of ordinary life. Where is the tradeoff?

For the past several decades, the view of the regulators has been that the economic costs of the regulations are irrelevant.  In fact, some -- Elizabeth Warren comes to mind -- seem to feel that regulation should actually be designed to be punitive, striking at the "bad guys."  Warren seems to think lowered income for the average American is a small price to pay if she can punish folks she doesn't like.

So, regulation has come to be used as a political weapon to punish your enemies.  Dodd-Frank is the poster child for this regulatory regime.  Dodd-Frank crushed the commercial banking system with regulations and the Obama's attorney general imposed arbitrary fines on the banking system and transferred many of the cash proceeds to political allies.  The result: the slowest economic recovery in American history.  Who paid?  You paid!  And, the average American suffered.  But Senator Dodd and Congressman Frank (and Elizabeth Warren) prospered.

Now, under Trump, we have a chance to roll back regulations that serve no other purpose than to punish one's political enemies.  Three cheers!