What Glass?

Lately when people ask me if I’m a glass half-empty of a glass half-full kind of a guy they get the rather snarky, What Glass?

UK Telegraph: Older people blighted by pessimism and fear for the future are more likely to live longer, according to scientists.

A study, into 40,000 adults across ten years, has found those with low expectations for a “satisfying future” actually led healthier lives.

In contrast, people who were “overly optimistic” about the days ahead had a greater risk of disability or death within ten years.

The extraordinary research, published by the American Psychological Association, will not doubt prove comfort to anyone with a tendency to grumpiness.

Frieder R. Lang, lead author of the study from the University of Erlangen-Nuremberg in Germany, said: “Our findings revealed that being overly optimistic in predicting a better future was associated with a greater risk of disability and death within the following decade.

“Pessimism about the future may encourage people to live more carefully, taking health and safety precautions.”

The research, based on data collected between 1993 and 2003, asked 40,000 respondents to rate how satisfied they believed they would be in five years time.

They were interviewed again five years later, and their satisfaction levels compared with their own predictions.

Those who overestimated how happy they would be were found to have a 9.5 per cent increase in reporting disabilities, and a ten per cent high risk of death.

Older people, who tended to have a “darker outlook” on the future, were shown to be the most accurate in their predictions, with optimistic youngsters overestimating their success.

“Unexpectedly, we also found that stable and good health and income were associated with expecting a greater decline compared with those in poor health or with low incomes,” said Dr Lang.

“Moreover, we found that higher income was related to a greater risk of disability.

“We argue, though, that the outcomes of optimistic, accurate or pessimistic forecasts may depend on age and available resources.

“These findings shed new light on how our perspectives can either help or hinder us in taking actions that can help improve our chances of a long healthy life.”

Of those interviewed, 43 percent of the oldest group were found to have underestimated their future life satisfaction, 25 percent had predicted accurately and 32 percent had overestimated, according to the study

Research published last year by the Office for National Statistics found most people are now living six years longer than current life expectancy projections, with no sign of an upper age limit.

Previous studies have suggested that “unrealistic optimism” about the future can help people feel better while facing inevitable negative outcomes, such as terminal disease.

VINDICATION!  Science says so… 🙂

Political Cartoons by Glenn McCoy

Political Cartoons by Chuck Asay

Political Cartoons by Jerry Holbert

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You’re all Flocked!

Political Cartoons by Gary Varvel

“You know, the one thing about being president is, after four years, you get pretty humble. You’d think maybe you wouldn’t but actually you become more humble–you realize what you don’t know,” Obama said. 

“You realize all the mistakes you made. But you also realize you can’t do things by yourself.

Says President Fiat, and President Regulations-Will-still-get-me-what-I-want.

I guess he didn’t build that! 🙂

That’s not how our system works. You’ve got to have the help and the goodwill of Congress, and what that means is you’ve got to make sure that constituents of members of Congress are putting some pressure on them, making sure they’re doing the right thing.”

Translation: Pressure the Republicans into caving in yet again to my will and what I want.

This President never actually says what he really means. Don’t Do as I do, Do as I say…Just Translated.

Thomas Sowell: John Stuart Mill’s classic essay “On Liberty” gives reasons why some people should not be taking over other people’s decisions about their own lives. But Professor Cass Sunstein of Harvard has given reasons to the contrary. He cites research showing “that people make a lot of mistakes, and that those mistakes can prove extremely damaging.”

Professor Sunstein is undoubtedly correct that “people make a lot of mistakes.” Most of us can look back over our own lives and see many mistakes, including some that were very damaging.

What Cass Sunstein does not tell us is what sort of creatures, other than people, are going to override our mistaken decisions for us. That is the key flaw in the theory and agenda of the left.

Implicit in the wide range of efforts on the left to get government to take over more of our decisions for us is the assumption that there is some superior class of people who are either wiser or nobler than the rest of us.

And they, the Left, are the superior class, they just don’t want to tell you to your face that they think you’re a moron for not trusting that they know better than you on everything.  Because, it’s simple: Vote For me, The Other Guy’s an Asshole!
Yes, we all make mistakes. But do governments not make bigger and more catastrophic mistakes?

ObamaCare anyone? Community Re-Investment Act Anyone??

Think about the First World War, from which nations on both sides ended up worse off than before, after an unprecedented carnage that killed substantial fractions of whole younger generations and left millions starving amid the rubble of war.

Think about the Holocaust, and about other government slaughters of even more millions of innocent men, women and children under Communist governments in the Soviet Union and China.

Even in the United States, government policies in the 1930s led to crops being plowed under, thousands of little pigs being slaughtered and buried, and milk being poured down sewers, at a time when many Americans were suffering from hunger and diseases caused by malnutrition.

The Great Depression of the 1930s, in which millions of people were plunged into poverty in even the most prosperous nations, was needlessly prolonged by government policies now recognized in retrospect as foolish and irresponsible.

One of the key differences between mistakes that we make in our own lives and mistakes made by governments is that bad consequences force us to correct our own mistakes. But government officials cannot admit to making a mistake without jeopardizing their whole careers.

Can you imagine a President of the United States saying to the mothers of America, “I am sorry your sons were killed in a war I never should have gotten us into”?

No, But the Left constantly raves about Bush and Iraq to the point of foaming at the mouth and veins popping…

What is even more relevant to Professor Sunstein’s desire to have our betters tell us how to live our lives, is that so many oppressive and even catastrophic government policies were cheered on by the intelligentsia.
Back in the 1930s, for example, totalitarianism was considered to be “the wave of the future” by much of the intelligentsia, not only in the totalitarian countries themselves but in democratic nations as well.

The Soviet Union was being praised to the skies by such literary luminaries as George Bernard Shaw in Britain and Edmund Wilson in America, while literally millions of people were being systematically starved to death by Stalin and masses of others were being shipped off to slave labor camps.

Even Hitler and Mussolini had their supporters or apologists among intellectuals in the Western democracies, including at one time Lincoln Steffens and W.E.B. Du Bois.

An even larger array of the intellectual elite in the 1930s opposed the efforts of Western democracies to respond to Hitler’s massive military buildup with offsetting military defense buildups to deter Hitler or to defend themselves if deterrence failed.

“Disarmament” was the mantra of the day among the intelligentsia, often garnished with the suggestion that the Western democracies should “set an example” for other nations — as if Nazi Germany or imperial Japan was likely to follow their example.

Too many among today’s intellectual elite see themselves as our shepherds and us as their sheep. Tragically, too many of us are apparently willing to be sheep, in exchange for being taken care of, being relieved of the burdens of adult responsibility and being supplied with “free” stuff paid for by others.

free stuff

Michael Ramirez Cartoon

 You can fool all the people some of the time, and some of the people all the time, but you cannot fool all the people all the time.

Political Cartoons by Glenn McCoy

 

Fail Fail Again

If at first you don’t succeed, Try, try again…

Concerned that foreclosed subprime borrowers won’t qualify for another home for years, housing-rights groups want banks to offer them “dignity mortgages.” Here we go again.

This is the left’s latest scheme to make amends for its disastrous experiment to socialize mortgages for people who could not afford homes before the crisis and should never have been approved in the first place.

But it won’t end any better, especially for the inner-city minorities whose credit the left’s already ruined.

Housing activists’ new bright idea is approving home loans for people who have rebuilt their finances since losing their job and their homes during the crisis, but who still have bad credit.

Though required to make a down payment, inner-city housing groups could front them the money.

This new type of loan they’re pitching to bank regulators would come with a higher rate to cover the higher risk.

But it would be capped so that deadbeat borrowers would pay only up to 1.25 percentage points above creditworthy borrowers.

So if, for example, a customer with sterling credit and 20% down payments got a 3.5% fixed rate, the risky applicant would get OK’d for 4.75%.

Reset Clause

But if he made timely payments for five years, the rate would drop to 3.5%, and the extra money paid in interest would be used to reduce the mortgage balance.

Only, the borrower doesn’t always have to pay. If he loses his job or his spouse, a “reset clause” lets him suspend payments temporarily.

But here’s the real kicker: Fannie Mae and Freddie Mac eventually would be required to take the loans off banks’ hands.

That’s right, those same failed government wards that epically collapsed and brought down the entire mortgage industry with them after taking on too much subprime risk before the crisis.

The so-called dignity mortgage is the brainchild of Greenlining Institute’s Bob Gnaizda and Operation Hope’s John Bryant, who worry low-income blacks and Latinos are being denied credit in the wake of record subprime defaults.

They cite recent Fed lending data that show just 4% of all home loans were made to African-Americans, who make up 13% of the population, and 6% to Latinos, who represent 16%.

Ignoring credit-score data explaining the shortfalls, they charge that banks are “redlining” minorities again.

Redistributionists At Work

Both groups have redistributionist agendas. Greenlining is a Berkeley, Calif.-based anti-redlining group that before the crisis shook down banks for subprime mortgages for minorities with bad credit.

Recently, it argued for expanding the Community Reinvestment Act — a prime suspect in the lending debacle — to correct racial “inequities” in everything from stock ownership to business contracts to employment.

Bryant, meanwhile, is a major Obama supporter.

As IBD first reported, his inner-city group is a one of the recipients of millions in payola extorted from banks by Attorney General Eric Holder during his witch hunt over “lending discrimination.”

“You get your dignity back,” Bryant told foreclosed borrowers, “a chance to reset your life without being called a bum or your credit ruined.”

Don’t fret, he and Gnaizda tell worried bankers, they’ll make sure this new class of superdeadbeat applicant gets financial counseling.

This time, they promise needy borrowers will pay their bills, and in exchange for their altruism, lenders will get CRA credit from regulators.

Where have we heard this story?

Dignity mortgages are just repackaged subprime loans promoted by the same radical groups that trapped minorities in them the last time.

Thanks, but no thanks. We don’t need a sequel to this financial horror show.

But just like the original, it won’t be there fault in 10 years or so when it all crashes again.
It’s never there fault. They aren’t held accountable. So they will continue bang their head against that wall until they win.
IF they just try hard enough, long enough and have the best of intentions they will succeed! 😦
Thus, they never learn there lesson.
And we pay the price.

Political Cartoons by Bob Gorrell

Galling

Retailers are preparing for a triple whammy as the restoration of the payroll tax, surging gas prices, and stagnant employment and wages take a bite out of consumers’ disposable income, leaving them with less cash to spend on clothing, groceries, and eating out.

But the world is going to end if their is a 3% cut in the increase in spending! OMG! The Sky is Falling! 🙂

As a result, more than three years after the recession officially ended, American consumers might be preparing to downshift again, if only slightly, with low-income consumers hit the hardest. Sensing consumer trepidation, retailers are scrambling to adjust.

Retailers, restaurants, and consumer goods companies like Wal-Mart are lowering sales forecasts and adjusting marketing campaigns ahead of expectations that consumers will slash spending, the Wall Street Journal reports.

But Government wants to Spend Even More!

In a survey released Thursday, the National Retail Federation (NRF) said some 46 percent of consumers plan to spend less as a result of the payroll tax increase. One-third said they will reduce dining out and one-quarter will spend less on “little luxuries,” like manicures and trips to coffee shops.

“A smaller paycheck due to the fiscal cliff deal early last month, higher gas prices, low consumer confidence and ongoing uncertainty about our nation’s fiscal health is negatively impacting consumers and businesses across the country,” Matthew Shay, president and CEO of the NRF, said in a statement.

And that’s all the Republican’s Fault! (or Bush’s)… 🙂

Originally enacted in December 2010 to help taxpayers weather the recession and to spur economic activity, the payroll tax cut expired Jan. 1 of this year. The restoration of the tax effectively raised the rate from 4.2 percent in 2012 to 6.2 percent in 2013, shaving 2 percent from consumers’ take-home pay.

Can you say Bait and Switch to bribe the stupid to vote for the Democrats…

That means Americans making $50,000 a year will pay $83 more in taxes each month, almost $1,000 more each year. Those making $75,000 will pay $125 more each month, or $1,500 more each year. As retailers see it, that’s $1,500 less a consumer has to spend on groceries, household goods, and dining out.

Multiply that by 153.6 million people in the labor force and retailers start to panic. According to an estimate by Citigroup, the expiration of the payroll tax cut will move $110 billion out of consumers’ pockets.

So Democrats can spend it on paying off their Apparatchiks, looking like they “care” and blaming it all on “rich” people and Republicans.

And the Republicans don’t do anything about it! Which is also very galling.

For high-end consumers, the payroll tax may not change a thing, and for many middle-income consumers, it will likely result in only a subtle shift. But the impact is most likely to be felt among low-income consumers and the businesses they tend to frequent, like Wal-Mart.

“It’s a big deal,” says Morgan Housley, a macroeconomic analyst with Motley Fool, an online financial education website. “The biggest impact is on lower-income households since the payroll tax is regressive, only applying to the first $113,000 of income. Wealthier households don’t feel the same pinch because the tax doesn’t hit all of their income. Lower-income households also spend a larger share of their income than wealthier consumers.… Low-income families are in one of the toughest spots they’ve been in since 2009.” (CSMonitor)

But remember, ask a liberal about it and they’ll give you the political answer of, “well it’s that same as it was 3 years ago” before the cut so it’s not an increase.

Tell that to their pocketbooks. They play games with you but you can’t hold them accountable for it. Your the Mouse and they are the Cat. So, you’re just a Cat toy…

Oh, and it’s the Republican’s/Bush Fault!! Can’t for get that one.

And Republican just want to throw grandma out on the street to eat trash and dog food!

The dishonesty of it all is so galling.

Speaking of Galling…

Who says intransigence doesn’t pay? After driving Hostess out of business by refusing to negotiate, union bakers have been rewarded by the White House with Trade Adjustment Assistance. It’s all the foreigners’ fault.

Politics: Who says intransigence doesn’t pay? After driving Hostess out of business by refusing to negotiate, the White House has decided to reward the union bakers with Trade Adjustment Assistence, blaming foreigners. What a sweet deal.

Last November, Hostess Brands went into liquidation, throwing 18,500 employees out of their jobs. The baking giant had been through two restructurings, but the company remained unprofitable.

All the same, most workers at the bread and pastry maker, famous for its Twinkies and Ho Hos snack cakes, were willing to tighten their belts until good times returned.

They included hard-line unions, such as the Teamsters, not known for making concessions.

But there was one exception: the AFL-CIO-affiliated Bakery, Confectionery, Tobacco Workers & Grain Millers International (BCTGM).

It refused to deal, taking the entire company, including fellow workers, down with it.

Turns out the union knew exactly what it was doing.

This week, the Labor Department decided to shower Hostess workers with Trade Adjustment Assistance, a multibillion-dollar pork barrel program that was beefed up as a bone to Democrats, who were blocking passage of three free-trade treaties in Congress in 2012.

Politically Correct “obstructionism” and being a Party Apparatchik pays! $$$$

TAA is a lavish program doled out by the Labor Department for laid-off workers who’ve lost their jobs due to “global trade.”

Aka, Apparatchik pay offs.

It provides worker retraining due to the supposed evils of free trade — plus moving expenses, baby-sitting expenses and as much as two years of unemployment pay. If a worker ends up making less than his union salary afterward, Uncle Sam spots the worker for 50% of the supposed lost wages in a “free” subsidy.

What’s more, “virtually anybody can qualify,” said TAA certifying officer Elliott Kushner in an interview with the Wall Street Journal.

As long as you’re an Apparatchik.

Kushner was the one who signed off on shoveling the pork to Hostess. (IBD)

So Liberal “obstructionism” that brings down a whole Business is rewarded.

It pays to be a Union “obstructionist” and make everyone lose their job.

Just because they are Apparatchiks of the Party!

So be of The Body, or be screwed.

Do what we say when we say it or else!

In Hostess’ case, labor costs were almost certainly a factor. The Labor Department says the average wage for bakers nationally is $11 an hour.

The unionized Hostess bakers were pulling in as much as twice that amount, which, together with pensions, was what made the company uncompetitive.

Imports weren’t the problem.

But it’s so much easier to blame foreigners, even if no significant foreign goods can be found.

This shows how something like the TAA can turn into a perverse incentive, encouraging all workers to make no concessions in tough times, even if it means saving their company.

The BCTGM union’s intransigence was directly responsible for the liquidation of Hostess Brands.

Yet the same union is being rewarded with premium unemployment packages that encourage its members to go on the dole — and to blame foreigners for it.

Undoubtedly, more examples of this perverse incentive will take down more companies, an unintended consequence of a boondoggle that sounds good on paper.

It’s not good. It’s a reward for those who refuse to negotiate, and a sop to the manipulative unions that are most adept at gaming the system.

This doesn’t create value. It’s corruption. (IBD)

But since it’s Liberal Union Corruption, that’s ok. 🙂
Political Cartoons by Chuck Asay

Michael Ramirez Cartoon

Political Cartoons by Henry Payne

 Political Cartoons by Bob Gorrell

Political Cartoons by Glenn Foden

 Political Cartoons by Lisa Benson

 

Sprinkles

Inflation-adjusted per capita federal spending went up $822.90 from fiscal 2008 to fiscal 2012, according to official data from the U.S. Treasury and the Census Bureau.

Real federal spending also increased $2437.64 per household between 2008 and 2012.

In constant 2012 dollars, the federal government spent $3,176,376,470,000 in 2008 and $3,538,446,000,000 in 2012, according to the U.S. Treasury. (The 2008 spending number was adjusted to 2012 dollars using the Bureau of Labor Statistics inflation calculator.)

On April 1, 2008 (the midpoint in the federal fiscal year which ends on Sept. 30), there were 303,381,938 people in the United States, according to the U.S. Census Bureau, and on April 1, 2012 there were 313,336,712.

The $3,176,376,470,000 that the federal government spent in fiscal 2008 equaled $10,469.89 for each of the 303,381,938 people who lived in the United States that year. The $3,538,446,000,000 the federal government spent in fiscal 2012 equaled $11,292.79 for each of the 313,336,712 people who lived in the United States that year.

Thus from fiscal 2008 to fiscal 2012 inflation-adjusted federal spending per person increased by $822.90.

That means that over the past four years, the federal government has increased its spending on average by about another $206 each year for every man, woman and child in the country.

But that’s Bush’s Fault!!

Alternatively, it’s the “obstructionist” Republicans fault for not letting the Democrats do what they “needed to do”.

There were 111,115,000 households in the country in April 2008 (the midpoint in the fiscal year) and 114,055,000 households in April 2012. The $3,176,376,470,000 the federal government spent in fiscal 2008 equaled $28,586.39 per household. The $3,538,446,000,000 the federal government spent in fiscal 2012 equaled $31,024.03 per household. Thus from fiscal 2008 to fiscal 2012 inflation-adjusted federal spending per household increased by $2437.64.

That means that over the past four years, the federal government has increased its spending on average by about another $609.41 each year for every household in the country.

In order to cut real federal spending in fiscal 2013 back to the level it was at in fiscal 2008, the federal government would need to cut actual spending this year to a level that is $362,069,530,000 below what it was last year.

But all we get is OMG! THE SKY IS A FALLING!  THE WORLD IS COMING TO AN END!

Over a cut in the Increase in Spending….

So Doomed!

 

Not Helpful

My first job paid $4.35/ hr. I was a “detailer” for Avis Rental Cars. That’s a fancy word for Window Washer.

That’s what I did all day.

After 18 months of that I decided to go back to College and get a degree.Which I did.

Then after college, got my first job in a Call Center. At 5.35/hr. But then I started moving up.

You don’t move up from a Window Washer. And at least one guy I worked with at that job wasn’t looking to move up from it.

It was slow. It was hard. It wasn’t glamorous or profitable. But eventually I made enough to buy this house. But it was hardly overnight. And I’m hardly set for life. I still have to perform or else.

You wanna know what the punch line to this is?

Adjusted for inflation that $4.35/hr would now be $8.82 because of inflation caused by the government and other entities.

So Obama wants to raise the minimum wage to be effectively the same as that was all those years ago.

So it’s about the politics of “caring” not about the actual problem – inflation. Especially inflation from devaluing the currency because of all the spending and borrowing.

WASHINGTON (MarketWatch) — The unemployment rate for teens is at 23%, and the rate for unskilled workers is at 12%. Why does President Obama propose raising the minimum wage to $9 per hour and indexing it for inflation, as he stated in his State of the Union Address?

Obama and his advisors seem to believe that if the minimum wage were raised and then indexed, all workers would retain their jobs. But this is not the case.

Between 2007 and 2009, the federal hourly minimum wage rose to $7.25 in three steps from the $5.15 rate that had prevailed for a decade. If the wage were raised to $9 and then indexed for inflation, it would rise every year.

It sounds compassionate to alleviate poverty by mandating that employers raise wages, but employers often replace low-skill workers with machines. Think self-checkout machines in supermarkets, or computerized call centers.

Or, try a thought experiment — would you have your job if the minimum wage were $50 an hour? Probably not.

At its current level, the minimum wage disproportionately affects teens and low-skill workers, many of whom qualify only for entry-level slots.

University of California (Irvine) economists David Neumark and J.M. Ian Salas, together with Federal Reserve Board economist William Wascher, have written extensively on the effects of the minimum wage on employment. In a National Bureau of Economic Research paper published in January, they conclude that “minimum wages pose a tradeoff of higher wages for some against job losses for others.”

They specifically mention that a higher minimum wage results in more unemployment for teens and low-skill workers.

Why is it that some studies, such as those by Obama’s Council of Economic Advisers chairman Alan Krueger, have found that increases in the minimum wage do not affect employment in the restaurant industry?

Two reasons, according to Neumark and his coauthors. First, many restaurant workers are paid above minimum wage. Second, a higher minimum wage can encourage employers to substitute more-skilled employees for less-skilled employees, so that total unemployment in that industry does not decline substantially.

Minimum wage workers are overwhelmingly young and work part-time. See the Labor Department’s Characteristics of Minimum Wage Workers.

Two-thirds of minimum wage earners worked part-time in 2011, the latest year available. Only 3% of hourly wage earners earn minimum wage or less.

Workers under the age of 25 made up about half of the 3.8 million workers who earned at or below the minimum wage in 2011. Employed teenagers are seven times more likely to be among the minimum wage earners than workers older than 25.

Another 11 million workers earned between $7.26 and $8.99. Some will be in danger of losing their jobs if the minimum wage is increased.

In his State of the Union Address, Obama said that a full-time minimum-wage worker makes $14,500 a year. That’s 1.3 million workers, in a labor force of 156 million, about eight-tenths of 1%. But this understates actual income, because it does not include transfer payments.

As Michael Saltsman of the Employment Policies Institute has shown, the Earned Income Tax Credit adds to the minimum wage. Read Michael Saltsman.

Then you also add in your Obama Phone, Your Obama Internet….

In addition to the EITC, the value of the Supplemental Nutritional Assistance Program, formerly food stamps, has risen over the past 20 years, increasing the resources of low-income workers. (See chart.)

In 1992, the hourly minimum wage was $4.25. For a family with one parent and two children, the value of the earned income tax credit was 69 cents, and the value of food stamps was just over a dollar, for total income of $5.96 an hour. (Other possible benefits include housing and Medicaid, depending on the state.)

Fast forward to 2012. The minimum wage was $7.25 an hour. For the same family, the EITC rose to $2.62, and the food stamps program added $1.67, for a total of $11.54. Assuming 2,000 hours of work annually, and including the EITC, the family makes not $14,500, but $19,736. This family also qualified for food stamps, bringing the total family income to $23,072.

Unlike increases in the minimum wage, these government transfers do not discourage employers from hiring.

The minimum wage of $7.25 an hour, plus the mandatory employer’s share of social security, unemployment insurance, and workers’ compensation taxes, brings the hourly employer cost to $8, even without benefits. Raising the hourly minimum wage to $9 will bring the cost to employers to about $10.

And in 2014, employers with more than 49 workers who do not offer the right kind of health insurance will have to pay a penalty of $2,000 per worker per year, further increasing costs and discouraging hiring. Many are already cutting back or reducing workers’ hours, because no penalty is owed on those working less than 30 hours weekly.

Unemployment rates for teens and low-skill workers rose faster than others in the recession. The adult unemployment rate stood at 7.3% in January 2012. That’s over 3 percentage points higher than the 3.8% rate in December 2007, five years earlier, at the start of the recession. But the January 2012 unemployment rate for teens was about 6 percentage points higher than December 2007, at 23%.

Employers now only employ workers who can produce $8 an hour or more of goods or services. Under Obama’s proposal, they would employ only those who could produce $10 an hour, an amount that would rise every year. The government can mandate steadily rising minimum wages, but not steadily rising teen skills and productivity.

As minimum wages rise, employers change technologies or hire more skilled workers.

Forbidding employment of those whose skills aren’t worth $10 an hour prevents workers getting their foot on the bottom of the career ladder. Obama is essentially proposing to take away the right to work for low-skill workers.

Most American employers have to pay more than minimum wage just to attract and hold the workers they need. Almost 140 million workers now earn above minimum wage, not because of federal or state law, but because that is the only way that firms can attract and keep employees with skills.

Instead of more money for youth employment, why not expand the federal minimum wage exception for teens? Under federal law, employers are allowed to pay teens $4.25 an hour for 90 consecutive calendar days, or until their 20th birthday, at which point the wage has to revert to $7.25 an hour.

The law is not simple. Employers have to show that teen workers don’t displace others. If the state minimum laws don’t specifically include the teen exception, then teens have to be paid the regular minimum — and the large states, such as California and New York, don’t mention teens. Ninety calendar days might cover a summer job, but if teens want to continue the job during the school year, employers have to pay them the standard wage.

Youth unemployment is a serious social problem in some European countries, such as France (27%), Spain (55%), and Italy (37%). These governments have taken every possible step to discourage the young from working short of criminalizing work: wages are regulated to be high, and it is costly to hire a new worker and even more costly to let one go. In these countries, young people have a much harder time getting started up the career ladder than their American counterparts.

America does not want to go down this road. Working at an early age teaches useful skills, transferable to future jobs, such as getting to work on time, staying the whole day, and putting up with unpleasant colleagues.

Increasing the hourly minimum wage to $9 and indexing it for inflation is bad news for teens and low-skill workers who deserve a better opportunity, and it is bad news for America where we cannot afford to further cripple our economy. (Market Watch)

But because he “cares” he will make your boss fire you because he can’t afford you any longer and that is your Boss’s fault because he’s just a greedy capitalist pig.

But at least now you have 2 years+ of unemployment, Food Stamps, you could move back in with your parents, Your Obama Phone and Internet so Life is good… 🙂

Rich Detour 590 LI 2

Lincoln Comp 590 cdn

Food For The Sowell VI

People on both sides of tax issues often speak of such things as a “$300 billion tax increase” or a “$500 billion tax decrease.”

That is fine if they are looking back at something that has already happened. But it can be sheer nonsense if they are talking about a proposed increase or decrease in the tax rate.

The government can only raise or lower the tax rate. Whether the actual tax revenues that the government will collect as a result will go up or down is a matter of prophecy. And these prophecies have been far too wrong far too often to base national policies on them.

When Congress was considering raising the capital gains tax rate from 20% to 28% in 1986, the Congressional Budget Office advised Congress that this would increase the revenue received from that tax.

But the Congressional Budget Office was wrong, not simply about the amount of the tax revenue increase, but about the fact that the capital gains tax revenue actually fell.

There was nothing unique about this example of tax rates and tax revenues moving in opposite directions from each other — and also in opposite directions from the predictions of the Congressional Budget Office.

Reductions of the capital gains tax rates in 1978, 1997 and 2003 all led to increased revenues from that tax.

The Congressional Budget Office is by no means the only government agency whose prophecies have been grossly unreliable. Anyone who looks at the history of the Federal Reserve System will find many painful examples of wrong prophecies that led to policies with bad consequences for the whole economy.

In a worldwide context, during the 20th-century economic central planning by governments — prophecy at the grandest level — led to so many bad consequences, in countries around the world, that even most socialist and communist governments abandoned central planning by the end of that century.

The failures of governmental prophecies in so many different contexts cannot be blamed on stupidity.

Most of the people who made these prophecies were far more educated than the average person, had far more information at their fingertips and probably had higher IQs as well.

Their intellectual superiority to others may well have given them the confidence to venture into areas where no human being has what it takes to make prophecies that lead to policies overriding the plans and actions of millions of other human beings.

As John Stuart Mill said, back in the 19th century, “even if a government were superior in intelligence and knowledge to any single individual in the nation, it must be inferior to all the individuals of the nation taken together.”

People competing with each other, and being forced to make mutual accommodations with each other in the marketplace, are operating in a trial-and-error process.

Human beings are going to make errors in any kind of economic or political system. The question is: Which kind of system punishes errors more quickly, and more effectively, in terms of forcing errors to be corrected?

A market economy with many competitors has incentives and constraints that are the opposite of those in a government monopoly.

Anyone familiar with the economic history of businesses knows that their mistakes have been common and large. But red ink on the bottom line lets them know that they are going to have to shape up or shut down.

Government agencies face no such constraint.

The Federal Reserve can keep making the same mistakes in the next hundred years that it made in its first hundred years. Or it can make new and bigger mistakes.

Nor is the Federal Reserve unique. The same thing applies to the Congressional Budget Office and to government agencies on down to the local DMV.

Elected politicians not only can keep making the same mistakes. They have every incentive to deny that they made a mistake in the first place, since such an admission can end their careers.

That is why these prophets can lead to our losses.

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A nation’s choice between spending on military defense and spending on civilian goods has often been posed as “guns versus butter.”

But understanding the choices of many nations’ political leaders might be helped by examining the contrast between their runaway spending on pensions while skimping on military defense.

Huge pensions for retired government workers can be found from small municipalities to national governments on both sides of the Atlantic.

There is a reason. For elected officials, pensions are virtually the ideal thing to spend money on, politically speaking.

Many kinds of spending of the taxpayers’ money win votes from the recipients. But raising taxes to pay for this spending loses votes from the taxpayers. Pensions offer a way out of this dilemma for politicians.

Creating pensions that offer generous retirement benefits wins votes in the present by promising spending in the future.

Promises cost nothing in the short run — and elections are held in the short run, long before the pensions are due.

By contrast, private insurance companies that sell annuities are forced by law to set aside enough assets to cover the cost of the annuities they have promised to pay.

But nobody can force the government to do that — and most governments do not.

FDR’s Cuts

This means that it is only a matter of time before pensions are due to be paid and there is not enough money set aside to pay for them.

This applies to Social Security and other government pensions here, as well as to all sorts of pensions in other countries overseas.

Eventually, the truth will come out that there is just not enough money in the till to pay what retirees were promised. But eventually can be a long time.

A politician can win quite a few elections between now and eventually — and be living in comfortable retirement by the time it is somebody else’s problem to cope with the impossibility of paying retirees the pensions they were promised.

Inflating the currency and paying pensions in dollars that won’t buy as much is just one of the ways for the government to seem to be keeping its promises, while in fact welshing on the deal.

The politics of military spending are just the opposite of the politics of pensions.

In the short run, politicians can always cut military spending without any immediate harm being visible, however catastrophic the consequences may turn out to be down the road.

Despite the huge increase in government spending on domestic programs during Franklin D. Roosevelt’s administration in the 1930s, FDR cut back on military spending.

Throwing Duds

On the eve of the Second World War, the U.S. had the 16th largest army in the world, right behind Portugal.

Even this small military force was so inadequately supplied with equipment that its training was skimped.

American soldiers went on maneuvers using trucks with “tank” painted on their sides, since there were not enough real tanks to go around.

American warplanes were not updated to match the latest warplanes of Nazi Germany or Imperial Japan.

After World War II broke out, American soldiers stationed in the Philippines were fighting for their lives using rifles left over from the Spanish-American War, decades earlier.

The hand grenades they threw at the Japanese invaders were so old that they often failed to explode.

At the battle of Midway, of 82 Americans who flew into combat in obsolete torpedo planes, only 12 returned alive.

In Europe, our best tanks were never as good as the Germans’ best tanks, which destroyed several times as many American tanks as the Germans lost in tank battles.

Fortunately, the quality of American warplanes eventually caught up with and surpassed the best that the Germans and Japanese had.

But a lot of American pilots lost their lives needlessly in outdated planes before that happened.

These were among the many prices paid for skimping on military spending in the years leading up to World War II.

But, politically, the path of least resistance is to cut military spending in the short run and let the long run take care of itself.

In a nuclear age, we may not have time to recover from our short-sighted policies, as we did in World War II.

Political Cartoons by Gary Varvel

Political Cartoons by Henry Payne


Michael Ramirez Cartoon