Things that make no sense to me:
1. Cuts in public sector jobs as demanded by GOP and GOP complaining about high unemployment rate.
2. Lowering retirement age in Europe when people are living longer healthier lives.
3. Fewer teachers when we want to improve education.
4. Fewer cops when we want to reduce crime.
5. Fewer talented immigrants allowed into US when they enhance our country . Quotas should be based on education rather than nationality; by all means let the better educated ones in.
6. Illegal immigrantes taking jobs from their own fellow legal immigrants , yet they support them. While quite selfless, it still seems illogical.
7. State and local employees with better union rights than federal employees. Except for teachers, police and fire, it makes no sense to have state and local employees have more collective bargaining rights than federal workers.
8. Why can't government issue anyone who wants one a free picture ID.
9. Euro without a fiscal union.
10. China without democracy; how long will that last.
11. Islamic separation of state and religion.
12. Hunger in midst of plenty.
13. Lack of universal health care.
14. Fear of nuclear power. How many have died? Very few, none at Fukushima.
15. Terrorist treated as criminals rather than war enemies. Why aren't they enemy combatants?
16. Gold as a valuable medium of exchange. Why is it so valuable?
17. Why not spend for infrastructure ? The companies and workers are private sector not government.
18. Germans who retire at 67 , bailing out Greeks who get to retire at 60.
19. Media that can't separate lies from facts. Being balanced is no excuse for not identifying lies and half-truths.
20. Democrats who want more jobs but are anti-business.
21. Asking banks to make more loans and then criticizing banks for making more loans.
23. US Open golf where they make the course much tougher for the tournament, but reduce par to 70 from 72 or 71.
Eric
Tuesday, June 26, 2012
Monday, June 11, 2012
Income gap action plan update
After the Scott Walker recall debacle -- if you're going to attack a "king", you'd better kill him-- I went back and pulled out my action plan to actually narrow the growing gap between the haves and have nots ( different from the 1% v.99%) in our country.
I'm pleased to report that shareholder actions have picked up, at least in a very public way, and pressure is growing to rein in out sized executive compensation. While I can't take all of the credit for this , I can only assume people are reading my blog!
As to strengthening unions and thus raising middle class compensation, last night was a real set back, and ill-advised, for the reasons I set forth below regarding public employee unions, as opposed to private sector unions.
The failure to recall Govenor Walker ( people don't like recalls for anything less than malfeasance) really set the whole union movement back. I guess it's remarkable they did as well as they did, but who cares if you lose.
Again I believe that private sector unions must be divorced from public sector.The state and local public employee unions should operate the same way as federal workers unions do.
Doesn't anyone see the irony of pubic employees working for Obama having no greater rights than public employees working for Scott Walker?
We need stronger private sector unions, but being associated with the public sector, where the tax payers are the owners, only makes it harder. Within the public sector we have to look at teachers , police and firemen differently from other government employees. Those three categories of government workers are more vital than the others who are more akin to federal employees who have very limited collective bargaining rights.
A reformed private sector union movement, which works with management to both increase profits and increase worker compensation and benefits, is needed to strengthen the middle class and narrow the income gap that threatens the very stability of our country.
Eric
I'm pleased to report that shareholder actions have picked up, at least in a very public way, and pressure is growing to rein in out sized executive compensation. While I can't take all of the credit for this , I can only assume people are reading my blog!
As to strengthening unions and thus raising middle class compensation, last night was a real set back, and ill-advised, for the reasons I set forth below regarding public employee unions, as opposed to private sector unions.
The failure to recall Govenor Walker ( people don't like recalls for anything less than malfeasance) really set the whole union movement back. I guess it's remarkable they did as well as they did, but who cares if you lose.
Again I believe that private sector unions must be divorced from public sector.The state and local public employee unions should operate the same way as federal workers unions do.
Doesn't anyone see the irony of pubic employees working for Obama having no greater rights than public employees working for Scott Walker?
We need stronger private sector unions, but being associated with the public sector, where the tax payers are the owners, only makes it harder. Within the public sector we have to look at teachers , police and firemen differently from other government employees. Those three categories of government workers are more vital than the others who are more akin to federal employees who have very limited collective bargaining rights.
A reformed private sector union movement, which works with management to both increase profits and increase worker compensation and benefits, is needed to strengthen the middle class and narrow the income gap that threatens the very stability of our country.
Eric
Tuesday, May 8, 2012
Words and Meanings- European Style
Words and Meaning - European Style
Following on from my last post, where I explored the different meanings of the same words used by Democrats and Republicans, it is interesting to see how those same words are used by Europeans of the Left and the Right.
1. Growth, as opposed to austerity-- Who doesn't want growth. Even those who are pushing austerity also would like growth. However the Left and the Right differ as to how to accomplish growth.
While the Left today talks about wanting growth , one of way to achieve growth is to cut taxes. However , to Europeans, especially on the Left, that is an anathema.
Another way to stimulate growth is to reduce government regulation and bureaucracy , but the Europeans don't believe in that either.
No, the only thing Leftist Europeans would do to stimulate growth is to increase government spending.
But where would they get the money to spend?
If they try to borrower, who would lend, and at what price? The debt in many countries is already very high and many countries have to pay really high rates of interest. Spain and Italy are hovering around 6%, while the US ( which also has too much debt) is under 2%.
If they raise taxes to increase spending doesn't that just retard growth?
Frankly, I'm at a loss to understand what Europeans mean by adopting a growth strategy, particulary within the Euro zone.
2. Tax Reform -- In Europe they don't talk much about that, other than to raise taxes. However, as I mentioned earlier, I've always thought that raising taxes is not good for growth.
I guess one thing they can do is to get people to actually pay the taxes they owe, which isn't so easy in places like Greece.
3. Debt Reduction-- You'd think that would be a big one; and it is for the Right in Europe. However, the Left just wants to leave it for another day and , in fact , wants to do more spending that will actually increase debt further.
What to do now that the Left is in ascendancy? I have no idea , especially given the constraints of the Euro zone; but that's a whole other issue.
So once again everyone in Europe is for the same "words" however , just like in the US , they have different "meanings", depending on ones politics.
Eric
Following on from my last post, where I explored the different meanings of the same words used by Democrats and Republicans, it is interesting to see how those same words are used by Europeans of the Left and the Right.
1. Growth, as opposed to austerity-- Who doesn't want growth. Even those who are pushing austerity also would like growth. However the Left and the Right differ as to how to accomplish growth.
While the Left today talks about wanting growth , one of way to achieve growth is to cut taxes. However , to Europeans, especially on the Left, that is an anathema.
Another way to stimulate growth is to reduce government regulation and bureaucracy , but the Europeans don't believe in that either.
No, the only thing Leftist Europeans would do to stimulate growth is to increase government spending.
But where would they get the money to spend?
If they try to borrower, who would lend, and at what price? The debt in many countries is already very high and many countries have to pay really high rates of interest. Spain and Italy are hovering around 6%, while the US ( which also has too much debt) is under 2%.
If they raise taxes to increase spending doesn't that just retard growth?
Frankly, I'm at a loss to understand what Europeans mean by adopting a growth strategy, particulary within the Euro zone.
2. Tax Reform -- In Europe they don't talk much about that, other than to raise taxes. However, as I mentioned earlier, I've always thought that raising taxes is not good for growth.
I guess one thing they can do is to get people to actually pay the taxes they owe, which isn't so easy in places like Greece.
3. Debt Reduction-- You'd think that would be a big one; and it is for the Right in Europe. However, the Left just wants to leave it for another day and , in fact , wants to do more spending that will actually increase debt further.
What to do now that the Left is in ascendancy? I have no idea , especially given the constraints of the Euro zone; but that's a whole other issue.
So once again everyone in Europe is for the same "words" however , just like in the US , they have different "meanings", depending on ones politics.
Eric
Monday, April 30, 2012
Words and Meanings
Words that don't mean the same thing.
1 . Tax Reform--
To Democrats it means higher taxes, especially for the rich.
For Republicans it means lower taxes for everybody, but since the rich pay most of the taxes, any lowering mostly help them.
Both agree on fewer "loopholes", neither agree which loopholes should be eliminated.
2. Economic Growth-- Everyone is in favor, however for :
Dems it means more government spending.
GOP it means lower taxes and less regulation.
3. Cutting the debt and deficit-- Everyone wants to do that ( at least eventually), however for:
Dems it means raising taxes and cutting some spending , mainly military,
GOP it means cutting spending and that's it.
So isn't the solution to pick a bi-partisan group of experts, both in and out of the government, to come up with the best comprehensive solution?
Oh wait, we already did that. It's called Simpson Bowles.
And guess what, both parties rejected it, even the President who set it up in the first place.
I guess we'll just keep on using the same words that simply have different meaning depending on who's using them.
Of course the one word almost no one wants to use, irrespective of it meaning, is compromise.
Eric
1 . Tax Reform--
To Democrats it means higher taxes, especially for the rich.
For Republicans it means lower taxes for everybody, but since the rich pay most of the taxes, any lowering mostly help them.
Both agree on fewer "loopholes", neither agree which loopholes should be eliminated.
2. Economic Growth-- Everyone is in favor, however for :
Dems it means more government spending.
GOP it means lower taxes and less regulation.
3. Cutting the debt and deficit-- Everyone wants to do that ( at least eventually), however for:
Dems it means raising taxes and cutting some spending , mainly military,
GOP it means cutting spending and that's it.
So isn't the solution to pick a bi-partisan group of experts, both in and out of the government, to come up with the best comprehensive solution?
Oh wait, we already did that. It's called Simpson Bowles.
And guess what, both parties rejected it, even the President who set it up in the first place.
I guess we'll just keep on using the same words that simply have different meaning depending on who's using them.
Of course the one word almost no one wants to use, irrespective of it meaning, is compromise.
Eric
Monday, April 23, 2012
Financial observations
While I have already covered some of the topics, this is a recap of some unconventional wisdom observations on issues not often commented on in the media of any political stripe.
According to CNN, over 60% of Americans either directly or indirectly own stocks traded on Wall St. Think of all those 401(k)s , mutual funds , union and other pension funds, 521 college plans,insurance annuities and policies , and other retirement and investment funds. In addition some of the biggest players on Wall St are employee benefits or union funds-- like Teachers, Calpers,Nysters and so on.
Therefore to a significant degree a strong Wall St actually benefits Main St.
Lots of ordinary people benefit from Wall St and I think they are the same people who pay all the taxes , because ( also according to CNN) 47% of Americans pay no federal income taxes ( none of those who pay nothing are the "rich" thanks to AMT).
That's why most tax cuts benefit the rich, since it's so difficult to cut lower income earners taxes. However we do actually pay some people who pay no federal income tax.
So when you talk about federal taxpayers bailing out Wall St what does that really mean? Are we to a large degree bailing out ourselves? And just who are those "taxpayers " anyway? Certainly not the ones who pay no federal income taxes.
Also what kind of country are we if our "shared responsibility" as citizens at the federal level is only participated in by 53% of our citizens.
How is it we venerate Joe Six Pack , who pays very little, if any, taxes and treat people who pay taxes in six or seven figure amounts like they were the scum of the earth, if not outright evil. Just once I'd like to hear a politician say "thank you" to those who pay most of the taxes.
Also why is the " blue collar " guy so venerated. I'd rather have the 24/7 hard charging white collar executive or professional who works 100 + hours a week instead of the union guy who stops working when the whistle blows unless he gets paid overtime. When his union contract says he doesn't have to do something, he won't do it even if it is for the good of his company and as such his job.
What does being a a "lunch bucket " guy mean anyway and why is it such a good thing? Don't get me wrong , I'm not knocking the union guy ( I actually think unions saved capitalism in the early part of the last century), I just don't understand why he is such symbol of what's right and good in America.
We have this bias against successful people, even though most of us would like to be one of them. Maybe that's it.
While I too believe, and have written numerous times, that executive compensation, not tied directly to performance, has gotten way out of control, why is no one complaining about professional athletes, entertainers, media stars and the like.
What does it say when a weak hitting second basemen can make millions of dollars a year or when there was a guy sitting on the Bulls bench last year who has never, and will never, play a minute in a game for the Bulls, yet made in excess of $8 million dollars that year and the year before?
Don't tell me that tax payer money isn't involved. Think of all those stadiums and other taxpayer funded amenities (tax breaks, infrastructure, police, etc.) that are lavished on many sports franchises.
And what about movie stars? They can get paid more for one movie than a Goldman Sachs CEO makes in a year.
While we're at it, what about all those TV and radio news people and commentators who lambaste greedy Wall St execs and bankers and who themselves make well into 7 figures. What societal benefits have they given us that merits their high compensation? Yet they complain about the compensation of bankers and other high paid execs.
As I've written before, my purpose in doing these posting is to point out certain anomalies and inconsistencies in what we hear and read everyday form our politicians and media from both the left and the right.
Eric
According to CNN, over 60% of Americans either directly or indirectly own stocks traded on Wall St. Think of all those 401(k)s , mutual funds , union and other pension funds, 521 college plans,insurance annuities and policies , and other retirement and investment funds. In addition some of the biggest players on Wall St are employee benefits or union funds-- like Teachers, Calpers,Nysters and so on.
Therefore to a significant degree a strong Wall St actually benefits Main St.
Lots of ordinary people benefit from Wall St and I think they are the same people who pay all the taxes , because ( also according to CNN) 47% of Americans pay no federal income taxes ( none of those who pay nothing are the "rich" thanks to AMT).
That's why most tax cuts benefit the rich, since it's so difficult to cut lower income earners taxes. However we do actually pay some people who pay no federal income tax.
So when you talk about federal taxpayers bailing out Wall St what does that really mean? Are we to a large degree bailing out ourselves? And just who are those "taxpayers " anyway? Certainly not the ones who pay no federal income taxes.
Also what kind of country are we if our "shared responsibility" as citizens at the federal level is only participated in by 53% of our citizens.
How is it we venerate Joe Six Pack , who pays very little, if any, taxes and treat people who pay taxes in six or seven figure amounts like they were the scum of the earth, if not outright evil. Just once I'd like to hear a politician say "thank you" to those who pay most of the taxes.
Also why is the " blue collar " guy so venerated. I'd rather have the 24/7 hard charging white collar executive or professional who works 100 + hours a week instead of the union guy who stops working when the whistle blows unless he gets paid overtime. When his union contract says he doesn't have to do something, he won't do it even if it is for the good of his company and as such his job.
What does being a a "lunch bucket " guy mean anyway and why is it such a good thing? Don't get me wrong , I'm not knocking the union guy ( I actually think unions saved capitalism in the early part of the last century), I just don't understand why he is such symbol of what's right and good in America.
We have this bias against successful people, even though most of us would like to be one of them. Maybe that's it.
While I too believe, and have written numerous times, that executive compensation, not tied directly to performance, has gotten way out of control, why is no one complaining about professional athletes, entertainers, media stars and the like.
What does it say when a weak hitting second basemen can make millions of dollars a year or when there was a guy sitting on the Bulls bench last year who has never, and will never, play a minute in a game for the Bulls, yet made in excess of $8 million dollars that year and the year before?
Don't tell me that tax payer money isn't involved. Think of all those stadiums and other taxpayer funded amenities (tax breaks, infrastructure, police, etc.) that are lavished on many sports franchises.
And what about movie stars? They can get paid more for one movie than a Goldman Sachs CEO makes in a year.
While we're at it, what about all those TV and radio news people and commentators who lambaste greedy Wall St execs and bankers and who themselves make well into 7 figures. What societal benefits have they given us that merits their high compensation? Yet they complain about the compensation of bankers and other high paid execs.
As I've written before, my purpose in doing these posting is to point out certain anomalies and inconsistencies in what we hear and read everyday form our politicians and media from both the left and the right.
Eric
Monday, April 9, 2012
Great Expectations?
We constantly hear about market disappointments arising from not meeting (or the opposite exceeding) the expectations of analysts or other experts. The recent example of the addition of 120,000 new jobs not meeting expectations of experts has given rise to a sharp market decline today.
Maybe the problem is not the number of jobs created, but rather the skill and accuracy of the estimators. If the estimations had been for 120,000 new jobs would the market have reacted any differently?
The same observation is applicable to those company earning reports that either meet, exceed or are below analysts' estimates.
It seems to me that a major problem is how good the estimator analysts are at their jobs.
If analysts started doing a better job of estimating, how would the markets react to that?
Eric
Maybe the problem is not the number of jobs created, but rather the skill and accuracy of the estimators. If the estimations had been for 120,000 new jobs would the market have reacted any differently?
The same observation is applicable to those company earning reports that either meet, exceed or are below analysts' estimates.
It seems to me that a major problem is how good the estimator analysts are at their jobs.
If analysts started doing a better job of estimating, how would the markets react to that?
Eric
Friday, March 9, 2012
The Value of Statistics?
Use of statistics can prove almost anything you want. Just take your political position and you can find, or create, statistics to support your view.
1. According to World Bank economist Branko Milanovic as reported in a recent story by CNN, 48% of the World's 1% Are Americans. According to his study anyone in the US who makes at least $34,000 a year (after taxes) is in the global income 1%, even after adjusting for local cost of living in the various countries around the world.
Wow, how can that be? However, this comes from a respected economist at the World Bank. The subtext of this article was that when Occupy Wall St. folks are complaining about the 1%, on a global basis, chances are most are complaining about themselves!
2. Another recent example, on the other end of the spectrum, is a recent New York Times article about US falling behind in economic mobility versus other advanced countries. They use all sorts of statistics and it sounded bad.
Then I read further in the article and I saw an explanation for the apparent lack of mobility ( buried at the end of the NYT story) and why those statistics may be misleading. European incomes are so compressed. The example given was that a Danish family could move up from the 10th percentile to the 90th percentile with a $45,000 increase in income, whereas an American family would need a $93,000 increase in income to make the same move. It raises the question of whether you'd rather be in the US making $90,000 more, even if that didn't put you into the 90th percentile here, or be in Denmark making only $46,000 more, but now be in the 90th percentile there.
The results were seemingly less upward mobility in the US and more in Denmark. But what does that really mean if those more upwardly mobile Danes aren't actually making more money. By the way all these numbers were adjusted for local cost of living.
I've lost faith in statistics because it's hard to get an unbiased analysis. In my recent research a line that I read struck me -- if opportunities in the US are so bad, why do so many people still want to come here rather than to Finland, Norway, Denmark and Canada who are ranked as the best for income mobility?
3. In addition, comparing the US to Denmark in all events is really like comparing apples and oranges. Our country is very large and very diverse, while Denmark is small and homogeneous. Are there any other "apples" to compare with our "apple"?
That's the problem with most of these US versus other advanced countries comparisons. The US is large and very diverse. Northern Europe and Japan are smaller and much more homogeneous, with many fewer immigrants.
This is true for lots of other country comparison like education that make little sense but are used over and over. The United States of America ( all 350 Million of us) is ranked behind Singapore, Shanghai (that's right a city not a country) Finland, Denmark , Hong Kong, South Korea and the like on various educational testing results.
Give me a break.
What do all of those countries have in common? Small and not diverse, with few immigrants. That's like just including just Minnesota, Iowa or Oregon, or just suburban DC ,Chicago or NY.
The truly large countries, China, India, Russia, Brazil, Indonesia (even France and Germany) rarely, if ever, are on the comparison list stories.
It also amazes me that if our education is so poor why are such a high percentage of the top world universities American? They can't all be foreign students.
Also we have so many more colleges and universities than other countries because we don't shut out student who haven't passed a national entry test, as so many other countries do. It may cost more, but many more American have the opportunity to go to college.
I guess my problem with the use of statistic was summed up by Mark Twain who said, "There are 3 kinds of lies-- lies, damn lies and statistics".
Eric
1. According to World Bank economist Branko Milanovic as reported in a recent story by CNN, 48% of the World's 1% Are Americans. According to his study anyone in the US who makes at least $34,000 a year (after taxes) is in the global income 1%, even after adjusting for local cost of living in the various countries around the world.
Wow, how can that be? However, this comes from a respected economist at the World Bank. The subtext of this article was that when Occupy Wall St. folks are complaining about the 1%, on a global basis, chances are most are complaining about themselves!
2. Another recent example, on the other end of the spectrum, is a recent New York Times article about US falling behind in economic mobility versus other advanced countries. They use all sorts of statistics and it sounded bad.
Then I read further in the article and I saw an explanation for the apparent lack of mobility ( buried at the end of the NYT story) and why those statistics may be misleading. European incomes are so compressed. The example given was that a Danish family could move up from the 10th percentile to the 90th percentile with a $45,000 increase in income, whereas an American family would need a $93,000 increase in income to make the same move. It raises the question of whether you'd rather be in the US making $90,000 more, even if that didn't put you into the 90th percentile here, or be in Denmark making only $46,000 more, but now be in the 90th percentile there.
The results were seemingly less upward mobility in the US and more in Denmark. But what does that really mean if those more upwardly mobile Danes aren't actually making more money. By the way all these numbers were adjusted for local cost of living.
I've lost faith in statistics because it's hard to get an unbiased analysis. In my recent research a line that I read struck me -- if opportunities in the US are so bad, why do so many people still want to come here rather than to Finland, Norway, Denmark and Canada who are ranked as the best for income mobility?
3. In addition, comparing the US to Denmark in all events is really like comparing apples and oranges. Our country is very large and very diverse, while Denmark is small and homogeneous. Are there any other "apples" to compare with our "apple"?
That's the problem with most of these US versus other advanced countries comparisons. The US is large and very diverse. Northern Europe and Japan are smaller and much more homogeneous, with many fewer immigrants.
This is true for lots of other country comparison like education that make little sense but are used over and over. The United States of America ( all 350 Million of us) is ranked behind Singapore, Shanghai (that's right a city not a country) Finland, Denmark , Hong Kong, South Korea and the like on various educational testing results.
Give me a break.
What do all of those countries have in common? Small and not diverse, with few immigrants. That's like just including just Minnesota, Iowa or Oregon, or just suburban DC ,Chicago or NY.
The truly large countries, China, India, Russia, Brazil, Indonesia (even France and Germany) rarely, if ever, are on the comparison list stories.
It also amazes me that if our education is so poor why are such a high percentage of the top world universities American? They can't all be foreign students.
Also we have so many more colleges and universities than other countries because we don't shut out student who haven't passed a national entry test, as so many other countries do. It may cost more, but many more American have the opportunity to go to college.
I guess my problem with the use of statistic was summed up by Mark Twain who said, "There are 3 kinds of lies-- lies, damn lies and statistics".
Eric
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