Friday, June 10, 2011
There's a video to watch at the link. I think it is worth your while. Business regulations, and to some extent the later environmental regulations, are likely to smother growth in the US. The US still has high growth potential, although not in government. The US government is now far too much of the economy.
Fisher's point about where the jobs are being added is important also. Economies with a high proportion of natural resource production in the mix have done much better than average in the recent economy agony. We want to be one of those economies; the EPA does not want us to be one of those economies.
In 15 years most elderly people will be poor - there is no way around that. So cutting retirement benefits will not help us much, because cutting retirement benefits for most persons will simply require more welfare spending.
The battle for a viable future for the average citizen is just beginning!
Update: I'd like most economic reports better if they acted like this. Monthly Treasury Receipts for May are in
As always, page 6. The HI wage receipts show almost exactly the same pattern as April - a 2.9% increase, but flat on self-employment. What you are looking at is the differential between large company growth and small company growth. The overall increase is more, but that is because in April a higher percentage of the mix comes from self.
I am pleased with this because we are not seeing nominal decelerations yet. While we stay out of that bracket, a drop in fuel prices could do a lot to inject oomph into the economy. Afterwards it will probably be too late.
Here is May 2010 for comparison. Regular wages grew from 13,641 to 14,043, but self-employment was flat at 268 both years. In April 2011 regular wages were 14,500 (DO NOT COMPARE MONTH TO MONTH) and in April 2010 regular wages were 14,067. That is a 3% increase.
The best fit is a slight YoY loss, which would be very consistent with the employment reports. (April was too early to show much.) March seemed to have started the decline for most of the world; it shows up by the April reports, and it is proceeding, but slowly. There was a big step down in April from March (should not have been much related to Japanese supply problems). I was very happy for almost 18 hours when I got the March figures, but it only lasted until CF showed up to harass me back into reality land.
In March, 2011 wages was 14,455 compared to 2010's 13,601 - about 6.3% YoY. However March did show a drop in self-employed HI tax receipts.
Let's see - CPI is now tracking over 3%, so in point of fact April and May show losses of real wage income. This is why I wrote a few posts ago that we were condemned to a downturn. Most workers aren't seeing these increases, and CPI is much higher for low-to-mid income earners, so in point of fact we have entered a downward spiral.
If I have the time, which I probably won't, I'll try to put up some stuff about seasonal flux of wages.
In 15 years, I WILL BE ELDERLY.
I sure hope anti-depressants are cheap in 15 years, Soma will be the only thing keeping me alive. Although keeping the elderly alive is probably not in the government's plans.
If we continue to devalue our currency and push up the price of oil, then we can all make out like bandits investing in stocks!
Corporate Profits vs. Dollar Index
"If we can get this dollar index down to 1, then this chart shows we will have $588,000 in real annual pre-tax corporate profits per capita."
So what if oil is $7,000 per barrel (70x more expensive)! What's the worst that could happen? ;)
I was also gratified to hear Fisher say he believed tort reform was a major factor in the Texas growth story. Yesss!!
If only Obama and company would listen to Fisher and others who bring the same message.
In 15 years, I'll be 93, Lord willing. I know my money will last that long if we can get some economic growth going and normalize the investment playing field. Right now we don't know if it's going to be inflation or deflation or a new currency. Makes it very hard to invest wisely. In fact, what I have been doing for the last two years, day trading, is nothing more than an attempt to stay on the right side of the wave, as it sloshes back and forth between irrational exuberance and total loss of confidence.
We will have to have a showdown over the regulations in this country at some point, or resign ourselves to being serfs.
No one really means to do this, but yet, collectively, we have done it. And now we are all just running in circles trying to pretend it is not happening.
We probably will have to rethink a lot of things!
enough to compete with China, we cannot cut regulations
enough to compete with China. Would it help ? Yes.
Is there a danger of regulatory capture ? Most certainly.
I get the feeling that some of the commenters here
think that they haven't benefitted from any government
regulations or laws.
by barge as in the past. Eisenhower's highway program
sped it up. Clean air and water have important economic
But shipping is not the only activity that was done on the river. I'm not disagreeing with the idea that some regulation is necessary. Do we really need to mandate CFL lightbulbs or is that just governmental intrusion into our lives. (You can add those low flush toilets in there too.)
I will direct your attention to the CPSIA law, which mandates zero lead content in items intended to be used by children. This law is a grade-A example of how regulation works these days. I can dredge up other examples in other industries, but this one is easily communicated and affects anybody with kids or grandkids. I apologize for the length of this post.
In possibly the worst case of regulatory capture ever, only a few large toy companies (primarily Hasbro and Mattel) were consulted as to the testing standards which would achieve this.
So, according to law, examples of all items sold in the U.S. for use by children must be destructively tested for lead (including all colors, styles, and sizes). They must also meet strict batch-labeling requirements. This works just fine if you're going to make zillions of plastic parts in only a few different varieties (like Mattel and Hasbro do). If you are a small company that serves a niche market with a wide variety of products, each at low volume, it's simply impossible. You are now out of business.
Not to mention that it's impossible to guarantee 0% lead in ANY metal part. It's always going to be there in trace quantities. So, you've got to apply to the government for a waiver, like the bicycle and ATV companies had to. Guess who gets waivers? Not the little guy.
Now, here's the stupid part: the destructive testing is both completely unnecessary and utterly useless. It's useless because you only have to test one example of each product. But the actual problems caused by lead content in toys was in toys from unscrupulous Chinese manufacturers that switched the materials in the toys after making a production sample for approval. CPSIA won't catch that.
It's unnecessary because there are devices available (in both hand-held and larger batch-processing formats) called XRF testers that can non-destructively detect lead in an object using X-rays. HUD uses them to test for lead paint in houses. With these, you can check as much of your product as you like, without destroying inventory. I don't really think any law was necesarry anyway, since manufacturers are legally liable for harm done by their products. But requiring some sort of XRF testing might have actually accomplished the stated goals of the CPSIA law.
But that wouldn't benefit Mattel, would it?
And THAT is what people are talking about when they say we need less regulation.
are manufactured by third world countries with third
world standards, you get much more regulation here.
You are right, the larger the corporation, the easier
it is to push regulations which will harm your competitors. my point is that we need a comprehensive trade and tax policies overhaul
first and foremost.
think that they haven't benefitted from any government
regulations or laws.
I get the feeling Spork doesn't understand the concept of "dosage".
We've all benefited from a healthy dose of laws and regulations. But more isn't necessarily better - the dosage has become unhealthy. And if we haven't overdosed yet that doesn't mean we aren't displaying the signs and habits of addiction.
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