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“Experts” still surprised at economy…John Galt was not

Ed F Bias — Fri, 05 Feb 2010 16:14:12 +0000

Yesterday…Yahoo!: “unexpected jump in the number of Americans filing for unemployment benefits”

Today…LA Times: The unemployment rate unexpectedly fell…At the same time, however, employers cut 20,000 jobs, more than the 5,000 economists expected…

From 50 years go…Atlas Shrugged [paper back page 1063] as spoken by John Galt.

“Only when men discovered that nature was a firm, predictable absolute were they able to rely on their knowledge, to choose their course, to plan their future and, slowly, to rise from the cave. Now you have placed modern industry, with its immense complexity of scientific precision, back into the power of unknowable demons-the unpredictable power of the arbitrary whims of hidden, ugly little bureaucrats. A farmer will not invest the effort of one summer if he’s unable to calculate his chances of a harvest. But you expect industrial giants-who plan in terms of decades, invest in terms of generations and undertake ninety-nine-year contracts-to continue to function and produce, not knowing what random caprice in the skull of what random official will descend upon them at what moment to demolish the whole of their effort. Drifters and physical laborers live and plan by the range of a day. The better the mind, the longer the range. A man whose vision extends to a shanty, might continue to build on your quicksands, to grab a fast profit and run. A man who envisions skyscrapers, will not. Nor will he give ten years of unswerving devotion to the task of inventing a new product, when he knows the gangs of entrenched mediocrity are juggling the laws against him, to tie him, restrict him and force him to fail, but should he fight them and struggle and succeed, they will seize his rewards and his invention.”

50 years ago Ayn knew it. Today the “experts” can’t seem to figure out such a simple concept. Or is it more likely that they know it and use such stories to keep you confused and in the dark? Are they they experts or are they trying to convince you that they are the experts?

Median income (a reprise)

Ed F Bias — Thu, 28 Jan 2010 21:44:54 +0000

I have talked about the shaky statistics that make up the income gap and median income. I just ran across an interview with Thomas Sowell regarding his new book; Intellectuals and Society; that ads even more clarity to the point (in part 2).

Part 1 | Part 2 | part 3 | part 4 | part 5

His point is that following the pattern of the group gives a false impression of the movement of individuals. If median income goes down the goal is to convince you that people are losing money. But in point of fact, if you follow a single individual you will find that they have moved up into higher brackets. It is statistically more likely for someone in the top 5% to drop down then it is for someone to move up. Income of that level simply cannot be maintained consistently.

This generally supports my argument that newer and less skilled workers are entering the work force and bring down the averages. The supporting facts the single individuals move up the brackets (until the top) only ads additional strength.

I believe that Glenn Beck hits on this point in his new book Arguing with Idiots, as well.

Note: Part 3 is great as well and hits on one of my favorite points. The intellectual superiority complex.

Obama’ … Just words. Just speeches.

Ed F Bias — Fri, 01 May 2009 20:19:33 +0000

Obama does such a great job of saying on thing and doing another. In blaming others for every ill . But is was he himself that said “Just words.. Just Speeches”. That actions are what matters.

He says he does not want the government to own banks or car companies. But his actions go beyond ownership, to management. He calls for the firing of the CEO of GM, refuses to let banks pay back their debts (unless he likes what they are doing) and forces a buyout of Chrysler. These are not the actions of someone that “does not want to be” in this role.

My mother once commented on an interview I had for my new boss. He had mentioned that he “did not like to be a micro-manager” but could “as needed” and felt that if was needed at “this time”. She told me at the time “WATCH OUT! If you can it is because ‘you will’… If you believe it is not the way to manage in your core you will always find another way. She was right, I dealt with micro-management, constant questioning of decisions and the continued misdirection of projects.

If Precident Obama truly felt government should not be in these role, he would be working to get them out, he woudl be working to create scenarios to limit government control or offer incentives for others to assist. None of that is occurring and is discouraged. These are not the actions of a President that does not want this control. These are the actions of a President that wants, desires and designs to gather and maintain this control.

Mr. Obama speaks as though he was dropped into Washington from Illinois and has no knowledge of such things. He seems to have forgotten he was a U.S. Senator. He voted for and approved the actions over the past two years that have lead to this problem. The budget deficits he “inherited” were the budgets he passed!!! The TARP and stimulus he fully supported.

This IS HIS ECONOMY. This is what he wants and the way in which he governs. His actions show this. Crisis shows the metal of a man (Biden say that?) and this man is crumbling.

A Letter from the Boss (Reprise – Reality Check)

Ed F Bias — Mon, 27 Apr 2009 22:05:02 +0000

A “Letter from the Boss” was floating around the Internet right after the election. In general it says “Obama’s poilicies are increasing my expenses, you voted for him, I am laying you off.” Good political fodder for consevatives and liberals alike.

It has now been 100 days and the DOW hovers just over 8000. Layoffs continue. President Obama’s stated budget will dwarf all deficits ever recorded. So what is a company to do as profits drop? Many liberals will joke about the “layoff the Obama voter” threads floating around. But they miss a very important point. Their ridicule assumes this is invalid because you should conduct layoffs based on performance. Or that 50+% of people voted for him so how can you lay off “all Obaam voters”.

Both argument are half-truths. 50+% of the people that voted voted for President Obama. But that is 50% of 50% of the registered population. But if that 25% of the poluation that voted for Mr. Obama their is a large polulation of those on the government roles. So when you get to the coporate worker begin considered for layoff the chance of hitting an Obama voter (figuratively) is likley closer to 12-15%. A perfectly acceptable layoff percentage.

Secone, your best performers may (and should) be your highest paid employees and managers of departments. Getting rid of those has severe impact on top end capabilty but also quickly reduces costs. Though you can’t get rid of all you top performers you are likely to see thinning through the managment ranks to create the largest cost reductions.

Since the larger cost is in the volume of people a the mid and lower levels, you are also likely to trim at the lower levels. In here, again, it is not solely about performance. It is about potential. You have already removed some top level people from the company, who will fill those slots in the coming months/years? How do you assess those younger, less seasoned employees? Should you choose people that believe corporations are evil, that their job and health care is an entitlement or people that believe their skills are their barter for employment and continued growth is the only path to continued success? Who has a greater potential to help the organization through these tough times?

I used to buy the line that politics is politics and life and work are separate. I now believe that this is a philosophy put forth by Liberals to protect themselves in the workplace. I sounds nice and it “keeps politics out of the workplace.” But it does not and can not. Political philosphy comes from your background, your ethics and your personal beliefs. Your work ethic is a part of it. You cannot easily separate the two.

You don’t have to look at a bumper to figure out who is who. You see this is the truth behind the viral nature of the thread. The truth that the detractors try to mask in their outrage. On this point the detractors are correct, despite themselves. You can usually simply layoff the employees that do not pull their weight, that take liberities with their vacation and sick time, that continually want a raise in pay without a raise in responsibility, that complain about the benefits package (including the free lunch). If you do this you will hit 80% Obama voters.

100 days now what?

Ed F Bias — Tue, 21 Apr 2009 16:16:33 +0000

It has now been 100 days and the DOW hovers just over 8000. Layoffs continue. President Obama’s stated budget will dwarf all deficits ever recorded. There is no hope in stopping in in Congress and they are likley to add more of their own projects to it. At that is just the downpayment as we move to insuring everyone on the taxpayers dime. Community activist groups have already been paid off. Unions will be paid off for their support and the secret ballot will be removed. Banks continue to be managed from Washington Politicians. GM has spend 13+Billion in taxpayers money (those same taxpeyers that did not want to buy their cars… retribution) and is still likely to go bankrupt. Chysler is likley to fail. The government (the taxpayers) will be covering the health care of the unions, the warantees and possibly the loans and through government control. Corporations are under attack via proposed tax rate increases and sneek attacks through CAP and Trade.

Where has this country gone? Sadly, I am glad Ronald Reagan is not around to see this. I continue to search for other ways outside this blog to make a difference. Venting provides some relief.

Government’s reponse to job losses… give me more!

Ed F Bias — Thu, 09 Apr 2009 03:16:00 +0000

The economy continues to contract and people continue to lose their jobs. It is also important to remember that companies are reporting losses and people that work on commission, though employed are suffering huge losses in income. All of this means less taxable income to all levels of government. So that would mean less revenue and deep cuts in government programs.

Well not so fast. That is unless you raise sales taxes on everything! You see government is not allowed to do with less. They just have to find another place to take it. So if you aren’t making any money, you still have to buy food. I am sure they will also raise taxes on those that have the fortune to be employed and on any company that dares have any success during the recession.

I appreciate the catch 22, they have services they have guaranteed to people and projects that they “need” to do. And we are just not giving them as much money. How dare we! But just like I have done, projects need to be put on hold, spending needs to be taken way back. So just like the rest of us 8.5% of all government spending should be dropped immediately.

The government cannot grow when the economy is shrinking, it is simple unsustainable. And the economy will adjust to compensate for the higher burden by shrinking once more. Lessons on how to turn a recession into a depression. The only way out is to shrink government spending until the economy recovers and to stimulate the economy to recover faster.

That does not mean giving money to failing companies or paying workers to do nothing or to make up new projects to fund just to keep people busy. To me stimulus means accelerating the natural recovery and failures in the current economy. The only way to do that is to take less money from the people and corporations so that they can help themselves and their corporations effect change. It is basic economics and more and more of us are working through it each day.

We will get there, I am sure; maybe not until after the new depression. It may take that much to get people to remember; government does not create, its abilities to distribute are governed by us, doing works in our best interests to move this country forward. There will be many dark days ahead but the American people, the individual, will once again have our day in the sun.

Just when you thought it couldn’t get worse…

Ed F Bias — Fri, 03 Apr 2009 03:05:00 +0000

I think we were all coming to grips with the “Socialist” Obama. Washington is now running the banks, running the auto companies, dictating salaries and planning to move into other sectors should the need arise. Some were convinced that these actions were necessary to stabilize the economy. Others believe that the economy is a convenience to enact these policies planned from the outset. Whichever, the cause and whichever the effect, we have adjusted to the current realities and Republicans and much of the public are gearing up for a fight.

Well, it just got worse. A whole lot worse at the G20 summit. I am digging for the expect text … which of source the media can’t seem to find time to publish. But I have found this from Bloomberg.

The leaders agreed on principles for financial market regulation, including expanded controls on hedge funds and derivatives trading, and tax havens, as well as rules on compensation and bonuses. They also pledged additional financing for the International Monetary Fund and other institutions.

Didi that just say we agreed to take our draconian actions, our socializing of the US economy and blend it with the G20 and the world. Are those “on world currency” folks actually not wackos? We now have the G20; of which we were 50%+ of the GDP and 1/20 of the votes; in charge of our economic policies and executive compensation?

So the big question is what does “on principles” mean? Is it that generally we agree to work together (as we have been) to solve these issues? Well, if it said that then why say anything? We have been doing that! So saying something would seem to indicate a shift. No? A shift to a more Socialist agreement on principals (dare I say controls), is most likely the case.

It could be far worse with a G20 panel appointed to set forth controls, restrictions and fines for non-compliance to the new world order. A board consisting of predominately or completely non-US members, that combined control less then half the world’s money supply, now given the reigns to manipulate our markets to their advantage.

So what does “on principles” mean? Does anyone in the media do any investigation anymore or just regurgitate talking points? YO MEDIA…A LITTLE HELP! The text would be of huge value here. I will find it an update accordingly.

What could you do with $9,000 dollars a year for three years?

Ed F Bias — Fri, 20 Mar 2009 03:41:00 +0000

+$1.15T being injected into the Financial market. Washington has now put in $9T to “fix” the economy. This is 89,000+ per household in the US. I am trying to find the statistics but I would think we could have just paid up the mortgages on everyone at risk for far less. But like many of these plans that too would have been rewarding failure by taking from the shrinking majority that pay taxes. So what to do.

I would expect that most people do not have a mortgage over $1500 a month. I looked it up. Based on all homes the number is $927. Yeah… always forget when you live in a big city or suburb. This number is also lowered by folks that have $0 cost for housing (paid off home mortgage). There is a number for homes less than four years old ($1,371). If you remove the 112,000 of these folks that have no mortgage the average rises to $1,392. These numbers are from 2007. So a gut check of $1500 a month works.

So for a cost of 9,000 a household the US government could have covered 6 months of payments on the average house for every person in the country. For nearly 44% of homeowners this would cover 100% of their housing costs. [Because of this cost discrepancy this would actually cost less than the price tag]. Allow this exemption for 5 years at a total of 45,000 per family. That would be about $4.5T.

Wouldn’t this have stopped the rash of foreclosures? That would have stabilized the securities market at created a floor on the price of securities. This would have, in turn, stabilized the banks. It would have also [not sure I like this] allowed people to buy houses off of the open market knowing that the first 5 years of mortgage was covered. This would have stabalized housing prices. With a bit of diligence to manage the out years, this could be constrained so that it does not simply defer the problems. For those without a “mortgage crisis” [93% of all homeowners] this would have created spendable income that would likely be used to pay off debt and/or buy things [stimulus].

In summary, for half of the current cost this could have been solved. I would have been content with 3 years (or 1/3 the cost). If some are worried about non-homeowners being left out, don’t fret. I set you up. These numbers include housing costs by households, which includes renters. I checked and there are actually less households (105mill) then homeowners (123mill – owners of multiple homes). Since we don’t want to reward on both homes, we can assume it will cost even less. So for three years every household would get $9,000…. Question..wouldn’t this in effect be an “across-the-board tax cut” [ewwww... I know those are evil]. And this one would be far bigger then the Bush tax cuts. It is important to note that some suggested this (and for only 2009) and were lambasted for not having a Government-centric solution.
..and so we spend.

The economy continues to worsen and the costs to taxpayers keeps rising. Once again proof that “government experts” spend more time reading books and talking to each other about how much smarter they are then the rest of us; no time living life like the rest of us. They look at macro-economic issues and forget that those numbers are driven by the hard work of every American, every day. They all need a new line of work. One that actually produces something for the country. I believe that will help the economy. We have a chance in 2010 to help that along.

"Barack Obama is the smartest President"?

Ed F Bias — Fri, 06 Mar 2009 00:00:00 +0000

Have you heard it before? We have all heard how “dumb” George Bush is/was. I think it is about time to reveal that there is a big difference between book-smart and street-smart; Obama being the former and in no way the latter. The media being much of the former as well, has little to no respect for the latter. I guess, for the sake of honesty, I would be the reverse. I respect more what people have done and how the interact with people then I do what their grades were and where they went to school.

Obama can’t find the door.
1. Might have seen this one. Yes that is a window. Dear Sir, Please note that there are no hinges or a handle. I am sure you have seen this one (again and again). But note it has handles and hinges and is simply locked. Even when it is covered, Bush must be mentioned and bashed. Mr. Obama simply “hasn’t gotten acquainted” with his surroundings. That was not an excuse for Mr. Bush who was in CHINA. The Bush gaff was often labelled “Bush has no Exit Strategy”; including by the network news (see below). Is also became a top ten list on Letterman.

In the opening tease at 7:00am, co-host Charlie Gibson announced over video of Bush trying to open the locked doors: “No way out. President Bush tries the wrong door on his trip to Asia and has fun for the cameras. But the big question now: Does he have an exit strategy for Iraq?”

Not the same “oops, ha ha” coverage Obama got is it?

Gifts for our UK “friends”.
2. Anyone can make a silly honest mistake…but it take a special person to insult a respected ally. Have you heard about the gift exchange between President Obama and Gordon Brown (UK Prime Minister)? Probably not. This article covered it but missed one of the gifts given to our President; The framed commission from the ship that was used to make his desk. How thoughtful and personal. And from the US 25 pack of DVDs. I hope they were not Region 1 (US) encoded. I am sure their were personalized by making sure they were Region 2. Like school on the weekend… no class.

Obama the stock advisor.
3. The confidence his policies give the stock market has been pretty obvious. Maybe one of those books he reads should have include the definition of P/E Ratio (Price to Earnings). Of course, his definition may explain a lot of his policies. I am so glad we have someone so smart now running our economy. No sense in leaving it in the hands of those Bankers and Finance folks. By the way Price to Earnings only matters when there are Earnings! Otherwise, it is called speculation .. a practice that helped us all so much in the Internet boom.

More brilliance to come, I am sure.

Well played, Mr. Obama

Ed F Bias — Wed, 04 Mar 2009 04:17:00 +0000

Many is the media are “confused” by the seeming contradictions in the ever expanding spending coming from Washington and the statements about the desire to “balance the budget”. Since most of them are devoid of 5th grade math skills they can’t make the connections that most of the rest of us can make…”this just does not balance out”. But I believe that it does balance out and very quickly. I believe the President is honest is his desires to get the budget deficit cut in half by the end of his first term and that this is in no way a conflict with the current spending or his budget.

The goal is not to try and pay for this or to worry about revenue at this point. The goal is to establish government dependence and control. I believe that President Obama is playing this perfectly. He is spending out of control because the public is demanding that they “do something”. True, this spending will have little impact on stimulating the economy. It will however create entire agencies and government dependence among those that will now survive based on the bailouts. Many believe that this is overplaying their hand. I think not. This is their hand. What will happen to the public economy is obvious to almost everyone and the public outcry shows this as well. But many believe that he is misjudging the economy or the American people. I believe this is exactly the intent.

As these policies and the next budget are passed (there is little chance enough Democrats will change sides to stop it) massive spending will hit many sectors of the economy. Government funding will push out private equity. Dependence will be created. More bailouts, Healthcare takeovers, locking up the energy industry will all limit the economy and limit tax revenue. But Mr. Obama has stated he wants to balance the budget and soon. Unlike many that see this in opposition to his current spending and budget, I take him at his word. Revenues will not go up. Unemployment will not go down. But this increasing crisis is exactly what is needed for the next phase of the project.

That is the “need” to tax everyone at a very high level to balance the budget. Many look at the budget as written and say that this must occur anyway. They are correct and believe that it will therefore be stopped early on. But with a complicit media, no 5th grade math, and a struggling economy, it will pass. Once you lock out private investment, once agencies are established, once your industry, your health care and your energy are a service of the Federal Government; could you (would you) “deny” yourself those services as they are transitioned back to a free market? Not enough will, a new recession and risk will be avoided by the American voters; and under a tax load of greater than 50%; the control is established.

This level of control cannot be undertaking directly. You already see the concern building based on the individual policies today. But Obama has learned from the mistakes of socialized health care that gave us the Republican Revolution in 2000. You cannot get these changes passed in a good economy and in the light of day. He is ensuring that our dependence and need are sufficient so that we have little choice.

Well played Mr. Obama.