"We have nothing to fear but fear itself." -- Franklin D. Roosevelt
"What, me worry?" -- Alfred E. Neuman
"We have met the enemy, and he is us." -- Pogo
"Let's get together and feel all right." -- Bob Marley
It's called Black Friday because this is the time of year when retailers hope and expect that holiday sales will put their year-end accounting books in the black -- that is, show a profit.
Whether that happens this year won't be known for another few weeks, until the books are closed for the year. Meanwhile, there are larger issues to consider, specifically whether the economy as a whole -- both national and world -- will accelerate its upward trend.
Yes, there have been signs of hope, but there have also been signs that the recovery is slowing.
U.S. Gross Domestic Product, for example, is expected to show a growth pace of just 1.7 percent in the final three months of the year, down from 2.2 percent in the third quarter. GDP growth in Canada is also slowing, to a rate of just 1.7 percent for the year, compared to 2.2 percent in 2012. And the economy in Mexico is operating "well below capacity," according to a report from the International Monetary Fund. GDP growth in America's southern neighbor is likely to slow to 1.2 percent for the year, down from 3.6 percent last year. And while economic fundamentals in Mexico are "very strong," the IMF said, there are "downside risks" from "unsettled external conditions."
In Europe, the unemployment rate is still above 12 percent, and twice that in the more beleaguered members of the European Union.
Statistics Canada, the official government agency, reported that the unemployment rate nationally is holding at 6.9 percent. That's lower than the U.S. rate of 7.3 percent and the 7.6 percent in Britain. In Germany, one of the few European countries still prospering, the unemployment rate in November was unchanged at 6.5 percent. And in Mexico, the rate dropped to 5.01 percent in October, from 5.29 percent in September.
So things may be looking almost good in Mexico, but outside influences may deflect progress.
So should Americans worry? It's true that the U.S. economy, as measured by GDP, the total value of all goods and services produced in America, at $16 trillion is four times as much as the economies of Canada and Mexico combined.
But bigger doesn't always mean better. And if the U.S. giant stumbles, it can knock down its northern and southern neighbors. Moreover, if production in America loses export markets in Europe, that can exacerbate conditions here.
The reverse also applies. If Americans cut back on import purchases, European as well as Canadian and Mexican economies will suffer.
No nation can shut its borders to outside business partners. That's been tried before, most notably during the Great Depression, when the Smoot-Hawley tariff act closed America to foreign sellers in an effort to shore up troubled domestic producers.
It led to a world disaster, as other nations retaliated with high import taxes on American goods.
Saturday, November 30, 2013
Tuesday, November 26, 2013
Housing Barometer
The crystal ball is cloudy.
As confidence goes, so goes the economy.
You can't buy a house if you don't have a job.
Some say the housing market is a barometer for the overall economy. If so, consider these numbers:
Building permits issued for single family homes are flat, as are housing starts, according to the Census Bureau, which tracks such things. Housing starts for privately owned homes were also flat, the bureau said.
And sales of existing homes dropped in October, as rising mortgage rates dragged the sales momentum.
Meanwhile, the median age of first marriages for men is 29, and for women 26. In 1970, it was 23 for men and 21 for women. It follows, then, that if folks wait longer to marry, they wait longer to invest in a home. And 76 percent of parents with children under 18 are married, according to a Census Bureau report. Only 8 percent cohabit, the survey said. So much for marriage as a disappearing institution.
On top of all this, consumer confidence continued to fall. The Conference Board reported Tuesday that its Consumer Confidence Index, which decreased sharply in October, declined again in November.
As for expectations, the board said its survey showed yet another drop in November. Some 12.7 percent of those surveyed anticipated more jobs in the months ahead, down from 16 percent.
In August, construction began on 883,000 houses, down 0.9 percent from July.
For the month of October, builders took out a total of 1 million permits for housing units, up 6.2 percent from the month before and up 14 percent from a year ago. That's good for the industry overall, but permits for single family homes in October were at a rate of 620,000, barely above the September figure of 615,000, according to Census data.
Separately, the National Association of Realtors reported that contracts for sales of existing homes dipped by 0.6 percent in October, following a 4.6 percent drop in September. Moreover, contracts to buy existing homes were down five months in a row in October, a low for the year.
Mortgage rates, meanwhile, are up, meaning hopeful buyers must shell out more in monthly payments. The average rate for a 30-year loan is now about 4.4 percent, nearly a full point above last year, according to industry surveys. And the Mortgage Bankers Association reported loan applications were down 2.3 percent last week from the week before.
Combine all this with job figures, and it does not yield a rosy picture for the future. Unemployment nationwide is still high -- 7.3 percent in October, roughly where it's been since summer, according to official government statistics. Moreover, the number of people out of work has changed little -- 11.3 million.
Likewise, the number of long-term unemployed people, those working part-time because they can't find full-time work, and the number of discouraged workers -- all those numbers have changed little from a year ago, the Bureau of Labor Statistics said.
As confidence goes, so goes the economy.
You can't buy a house if you don't have a job.
Some say the housing market is a barometer for the overall economy. If so, consider these numbers:
Building permits issued for single family homes are flat, as are housing starts, according to the Census Bureau, which tracks such things. Housing starts for privately owned homes were also flat, the bureau said.
And sales of existing homes dropped in October, as rising mortgage rates dragged the sales momentum.
Meanwhile, the median age of first marriages for men is 29, and for women 26. In 1970, it was 23 for men and 21 for women. It follows, then, that if folks wait longer to marry, they wait longer to invest in a home. And 76 percent of parents with children under 18 are married, according to a Census Bureau report. Only 8 percent cohabit, the survey said. So much for marriage as a disappearing institution.
On top of all this, consumer confidence continued to fall. The Conference Board reported Tuesday that its Consumer Confidence Index, which decreased sharply in October, declined again in November.
As for expectations, the board said its survey showed yet another drop in November. Some 12.7 percent of those surveyed anticipated more jobs in the months ahead, down from 16 percent.
In August, construction began on 883,000 houses, down 0.9 percent from July.
For the month of October, builders took out a total of 1 million permits for housing units, up 6.2 percent from the month before and up 14 percent from a year ago. That's good for the industry overall, but permits for single family homes in October were at a rate of 620,000, barely above the September figure of 615,000, according to Census data.
Separately, the National Association of Realtors reported that contracts for sales of existing homes dipped by 0.6 percent in October, following a 4.6 percent drop in September. Moreover, contracts to buy existing homes were down five months in a row in October, a low for the year.
Mortgage rates, meanwhile, are up, meaning hopeful buyers must shell out more in monthly payments. The average rate for a 30-year loan is now about 4.4 percent, nearly a full point above last year, according to industry surveys. And the Mortgage Bankers Association reported loan applications were down 2.3 percent last week from the week before.
Combine all this with job figures, and it does not yield a rosy picture for the future. Unemployment nationwide is still high -- 7.3 percent in October, roughly where it's been since summer, according to official government statistics. Moreover, the number of people out of work has changed little -- 11.3 million.
Likewise, the number of long-term unemployed people, those working part-time because they can't find full-time work, and the number of discouraged workers -- all those numbers have changed little from a year ago, the Bureau of Labor Statistics said.
Saturday, November 23, 2013
FEMA Fever 2
Sent a copy of the FEMA Fever posting to our local Congressman, asking for comment. Here's part of his reply:
"Thank you for contacting your Congressional office. Understanding your ideas and concerns is important to me, as it helps me to better represent you and the Eighth District of Pennsylvania.
"In the meantime, I encourage you to take my short online survey at http://fitzpatrick.house.gov/survey and let me know what issues are important to you."
Sincerely,
Mike Fitzpatrick
Member of Congress
Funny, it seems I just did that, with comments and questions on an issue of importance.
Anyway, here's the reply to Mr. Fitzpatrick:
Thanks for your computer-generated non-response response. The point, however, is to get your reaction to the idea that 96 percent of the FEMA proposed funding will go to salaries and expenses, as well as the large amount of money going to repair church-related structures. The bill, HR 3300, was proposed by your Pennsylvania Republican colleague, Bill Shuster of the 9th District, in the Altoona area.
What's going on?
"Thank you for contacting your Congressional office. Understanding your ideas and concerns is important to me, as it helps me to better represent you and the Eighth District of Pennsylvania.
"In the meantime, I encourage you to take my short online survey at http://fitzpatrick.house.gov/survey and let me know what issues are important to you."
Sincerely,
Mike Fitzpatrick
Member of Congress
Funny, it seems I just did that, with comments and questions on an issue of importance.
Anyway, here's the reply to Mr. Fitzpatrick:
Thanks for your computer-generated non-response response. The point, however, is to get your reaction to the idea that 96 percent of the FEMA proposed funding will go to salaries and expenses, as well as the large amount of money going to repair church-related structures. The bill, HR 3300, was proposed by your Pennsylvania Republican colleague, Bill Shuster of the 9th District, in the Altoona area.
What's going on?
Wednesday, November 20, 2013
FEMA Fever
Nice work if you can get it.
Consider these numbers: The House of Representatives wants to give $3.1 billion to the Federal Emergency Management Agency (FEMA) over the next four years, with an estimated $2.9 billion going to salaries and expenses, according to an analysis from the Congressional Budget Office.
Elementary arithmetic puts that at almost 96 percent.
The rest of the money would go to urban search and rescue operations, assistance grants, and "grants to repair structures primarily used for religious purposes."
More basic arithmetic: Of the $110 million for search and rescue operations, that's less than 3 percent. Some $6 million for assistance grants (whatever they are) comes to about 0.2 percent. And another $82 million (about 2 percent) would help repair religious structures.
All numbers are rounded, and the percentages don't add up to exactly 100, but given FEMA's past performance record, how come almost all the money is budgeted for salaries and expenses, and help for the needy is near zero?
Certainly search and rescue operations are essential, but that segment would get only about 3 percent of the four-year budget estimate. And $110 million divided by four equals $27 million a year. How far will that go in helping victims of Midwest tornadoes? And $6 million in assistance grants over four years means less than $1 million a year.
As for $82 million to religious-related structure repairs, that's another issue. One wonders why that segment would get more than 10 times as much help as would go to help people generally. In fairness, it must be said that many of these structures do provide shelter in time of disaster. But so do schools, which are built and maintained by local governments and private, non-sectarian education organizations. There is no mention of aid for these groups in the CBO analysis.
And for all the noise among Republicans and conservatives, who dominate the House, calling for spending cuts, eliminating what they call waste, and reducing staff, why is 96 percent of the proposed FEMA budget going to salaries and expenses? Is this justified, remembering FEMA's performance record?
For those who want a source to confirm all the above, go to the CBO web site and check out the report on H.R. 3300, FEMA Reauthorization Act of 2013, as called for by the House Committee on Transportation and Infrastructure. The CBO cost estimate was posted by CBO November 19.
Consider these numbers: The House of Representatives wants to give $3.1 billion to the Federal Emergency Management Agency (FEMA) over the next four years, with an estimated $2.9 billion going to salaries and expenses, according to an analysis from the Congressional Budget Office.
Elementary arithmetic puts that at almost 96 percent.
The rest of the money would go to urban search and rescue operations, assistance grants, and "grants to repair structures primarily used for religious purposes."
More basic arithmetic: Of the $110 million for search and rescue operations, that's less than 3 percent. Some $6 million for assistance grants (whatever they are) comes to about 0.2 percent. And another $82 million (about 2 percent) would help repair religious structures.
All numbers are rounded, and the percentages don't add up to exactly 100, but given FEMA's past performance record, how come almost all the money is budgeted for salaries and expenses, and help for the needy is near zero?
Certainly search and rescue operations are essential, but that segment would get only about 3 percent of the four-year budget estimate. And $110 million divided by four equals $27 million a year. How far will that go in helping victims of Midwest tornadoes? And $6 million in assistance grants over four years means less than $1 million a year.
As for $82 million to religious-related structure repairs, that's another issue. One wonders why that segment would get more than 10 times as much help as would go to help people generally. In fairness, it must be said that many of these structures do provide shelter in time of disaster. But so do schools, which are built and maintained by local governments and private, non-sectarian education organizations. There is no mention of aid for these groups in the CBO analysis.
And for all the noise among Republicans and conservatives, who dominate the House, calling for spending cuts, eliminating what they call waste, and reducing staff, why is 96 percent of the proposed FEMA budget going to salaries and expenses? Is this justified, remembering FEMA's performance record?
For those who want a source to confirm all the above, go to the CBO web site and check out the report on H.R. 3300, FEMA Reauthorization Act of 2013, as called for by the House Committee on Transportation and Infrastructure. The CBO cost estimate was posted by CBO November 19.
Tuesday, November 19, 2013
Sound Bytes
"Since brevity is the soul of wit ... I will be brief." -- Shakespeare
We all treasure one-liners, zingers, sound bytes and Henny Youngman jokes (who?) and the digital generation has grown up with texting and Tweets, with its limit of 140 characters.
But for all the brevity, few tap into the soul of wit.
In the Great American Fallacy, bigger equals better, and longer is perceived as more important. Those in the public eye try to master the art of the sound byte, calculating that a wordiness of 20 seconds or less will get them national media exposure.
For all that, however, sound byte news clips often have little real meaning.
If you sound like you know what you're talking about, people will assume you do.
Bluster and bloviation are no substitute for the Three C's: Clear, concise and complete.
Shakespeare, like many good writers, created what are now known as sound bytes. But unlike many in this digital age, he wrote for meaning. Sound and fury, he pointed out, often signify nothing, and are merely tales told by idiots.
Some few know that a few well chosen words can have more impact than a lengthy bombast.
Today being the 150th anniversary of President Abraham Lincoln's Gettysburg Address, it is "altogether fitting and proper," in his phrase, that we consider examples of historic and meaningful sound bytes.
Lincoln was not the featured speaker at Gettysburg on 19 November 1863. That role went to one of the best known orators in the country at the time, Edward Everett. Going to hear long speeches by famous people was major source of entertainment at the time. Everett, for example, spoke for some two hours, and he was followed by President Lincoln, who took less than five minutes to deliver his remarks totalling 272 words. Yet those 272 words are remembered and cherished today, while Everett's oration is a footnote in history books.
Great speakers of the 20th Century include Winston Churchill, Franklin D. Roosevelt, John F. Kennedy and Rev. Dr. Martin Luther King Jr. Consider these phrases: "Their finest hour" (Churchill); "A date which will live in infamy" (Roosevelt); "Ask not what your country can do for you" (Kennedy); "I have a dream") King.
They all, like great poets, knew the power of words, and they knew that distilling power into palatable bites made for a long life in memory.
We all treasure one-liners, zingers, sound bytes and Henny Youngman jokes (who?) and the digital generation has grown up with texting and Tweets, with its limit of 140 characters.
But for all the brevity, few tap into the soul of wit.
In the Great American Fallacy, bigger equals better, and longer is perceived as more important. Those in the public eye try to master the art of the sound byte, calculating that a wordiness of 20 seconds or less will get them national media exposure.
For all that, however, sound byte news clips often have little real meaning.
If you sound like you know what you're talking about, people will assume you do.
Bluster and bloviation are no substitute for the Three C's: Clear, concise and complete.
Shakespeare, like many good writers, created what are now known as sound bytes. But unlike many in this digital age, he wrote for meaning. Sound and fury, he pointed out, often signify nothing, and are merely tales told by idiots.
Some few know that a few well chosen words can have more impact than a lengthy bombast.
Today being the 150th anniversary of President Abraham Lincoln's Gettysburg Address, it is "altogether fitting and proper," in his phrase, that we consider examples of historic and meaningful sound bytes.
Lincoln was not the featured speaker at Gettysburg on 19 November 1863. That role went to one of the best known orators in the country at the time, Edward Everett. Going to hear long speeches by famous people was major source of entertainment at the time. Everett, for example, spoke for some two hours, and he was followed by President Lincoln, who took less than five minutes to deliver his remarks totalling 272 words. Yet those 272 words are remembered and cherished today, while Everett's oration is a footnote in history books.
Great speakers of the 20th Century include Winston Churchill, Franklin D. Roosevelt, John F. Kennedy and Rev. Dr. Martin Luther King Jr. Consider these phrases: "Their finest hour" (Churchill); "A date which will live in infamy" (Roosevelt); "Ask not what your country can do for you" (Kennedy); "I have a dream") King.
They all, like great poets, knew the power of words, and they knew that distilling power into palatable bites made for a long life in memory.
Monday, November 18, 2013
Goldilocks Inflation
Prices rise to absorb the amount of money available. Ask any tourist.
Inflation is bad, right? When prices rise, that's a bad thing, right? And when prices fall (deflation) that's a good thing, right?
Well, maybe.
When prices rise too far, too fast, that's called runaway inflation, and that can break many family and national budgets.
When prices plummet during serious deflation, that's a symptom of economic depression, and nobody wants that.
So which is it? When inflation slows down and shows signs of going negative -- to deflation status -- it could mean an economy is heading for trouble. On the whole, then, it's probably better to have a little inflation, to show that the economy is healthy and growing, but not so fast as to put some folks in the poorhouse.
In other words, not too slow or not too fast, but just right -- a Goldilocks inflation.
But how slow is too slow, and how fast is too fast, and how much is just right? As the king said, "Is a puzzlement."
In America, the Federal Reserve Board has taken on the job of monitoring the money supply, and thus controlling overall prices. The Fed's target rate of inflation is about 2 percent. But over the past year, it's been closer to 1 percent, and that's why the Fed has been pumping more money into the economy, increasing the money supply and thereby supporting inflation and growth. Prices rise to absorb the amount of money available.
However, the U.S. economy has not yet fully recovered from the Great Recession of the last decade, despite monetary stimulus by the Fed and fiscal stimulus by the Administration.
And in Europe, the inflation rate is declining, a sign of trouble ahead. In October, inflation throughout the nations that use the euro as a common currency was annualized at 0.7 percent, down from 1.1 percent in September. A year ago, it was 2.5 percent. For all EU nations, the rate was 0.9 percent in October, down from 1.3 percent in September. A year ago, the annual inflation rate was 2.6 percent.
Four nations recorded negative rates (declining prices), according to Eurostat, the statistics agency of the EU, and three were flat. The lowest annual rates were in Greece ( -1.9 percent), Bulgaria ( -1.1 percent), and Cyprus ( - 0.5 percent). Rates in Ireland, Spain and Latvia were flat, and the highest inflation rates for October were in the United Kingdom and Estonia, both at 2.2 percent, Eurostat said.
What does this mean? Match it with overall growth, as measured by GDP, a calculation of the value of all goods and services produced in an economic area. In the euro area, GDP was up by just 0.1 percent in the third quarter, and throughout the EU by 0.2 percent. And the U.S. growth rate wasn't much better. Eurostat reported that U.S. growth was 0.7 percent from the second quarter, and 1.6 percent from a year ago, while the U.S. Commerce Department claimed a growth rate of 2.8 percent in seasonally adjusted annualized data (whatever that means), but experts are now forecasting that GDP growth for the final three months of this year will fade to 1.9 percent.
In Japan, meanwhile, the third-largest world economy, GDP growth slowed to 0.5 percent in the July-September period, down from a 0.9 percent pace in the second quarter.
And in China, the world's second largest economy, things are still booming, with a 2.2 percent jump in the third quarter from 1.8 percent in the second quarter. However, on a yearly basis, that's down -- to 7.4 percent from 7.6 percent in the second quarter and 8.1 percent in the first three months of the year.
All things considered, though, that's too fast to last, government leaders in China are looking to modify their economic strategies even more. For a long time, Chinese officials have been incorporating capitalist ideas and practices into a communist economic strategy, and that's continuing.
Worldwide, then, government officials are looking for a Goldilocks economy, influenced by monetary policy and inflation -- not too slow, and not too fast, but just right.
Inflation is bad, right? When prices rise, that's a bad thing, right? And when prices fall (deflation) that's a good thing, right?
Well, maybe.
When prices rise too far, too fast, that's called runaway inflation, and that can break many family and national budgets.
When prices plummet during serious deflation, that's a symptom of economic depression, and nobody wants that.
So which is it? When inflation slows down and shows signs of going negative -- to deflation status -- it could mean an economy is heading for trouble. On the whole, then, it's probably better to have a little inflation, to show that the economy is healthy and growing, but not so fast as to put some folks in the poorhouse.
In other words, not too slow or not too fast, but just right -- a Goldilocks inflation.
But how slow is too slow, and how fast is too fast, and how much is just right? As the king said, "Is a puzzlement."
In America, the Federal Reserve Board has taken on the job of monitoring the money supply, and thus controlling overall prices. The Fed's target rate of inflation is about 2 percent. But over the past year, it's been closer to 1 percent, and that's why the Fed has been pumping more money into the economy, increasing the money supply and thereby supporting inflation and growth. Prices rise to absorb the amount of money available.
However, the U.S. economy has not yet fully recovered from the Great Recession of the last decade, despite monetary stimulus by the Fed and fiscal stimulus by the Administration.
And in Europe, the inflation rate is declining, a sign of trouble ahead. In October, inflation throughout the nations that use the euro as a common currency was annualized at 0.7 percent, down from 1.1 percent in September. A year ago, it was 2.5 percent. For all EU nations, the rate was 0.9 percent in October, down from 1.3 percent in September. A year ago, the annual inflation rate was 2.6 percent.
Four nations recorded negative rates (declining prices), according to Eurostat, the statistics agency of the EU, and three were flat. The lowest annual rates were in Greece ( -1.9 percent), Bulgaria ( -1.1 percent), and Cyprus ( - 0.5 percent). Rates in Ireland, Spain and Latvia were flat, and the highest inflation rates for October were in the United Kingdom and Estonia, both at 2.2 percent, Eurostat said.
What does this mean? Match it with overall growth, as measured by GDP, a calculation of the value of all goods and services produced in an economic area. In the euro area, GDP was up by just 0.1 percent in the third quarter, and throughout the EU by 0.2 percent. And the U.S. growth rate wasn't much better. Eurostat reported that U.S. growth was 0.7 percent from the second quarter, and 1.6 percent from a year ago, while the U.S. Commerce Department claimed a growth rate of 2.8 percent in seasonally adjusted annualized data (whatever that means), but experts are now forecasting that GDP growth for the final three months of this year will fade to 1.9 percent.
In Japan, meanwhile, the third-largest world economy, GDP growth slowed to 0.5 percent in the July-September period, down from a 0.9 percent pace in the second quarter.
And in China, the world's second largest economy, things are still booming, with a 2.2 percent jump in the third quarter from 1.8 percent in the second quarter. However, on a yearly basis, that's down -- to 7.4 percent from 7.6 percent in the second quarter and 8.1 percent in the first three months of the year.
All things considered, though, that's too fast to last, government leaders in China are looking to modify their economic strategies even more. For a long time, Chinese officials have been incorporating capitalist ideas and practices into a communist economic strategy, and that's continuing.
Worldwide, then, government officials are looking for a Goldilocks economy, influenced by monetary policy and inflation -- not too slow, and not too fast, but just right.
Saturday, November 16, 2013
Privacy
There is no privacy on the Internet.
Regardless of many claims of ostensibly secure computer programs, your system can be hacked into. More to the point, however, is the idea that social media platforms have the right to use whatever you post in advertising for other products and services.
To their credit, at least, the Facebook folks are up front about it: Anything and everything you put on your page becomes their property, and in signing up you give them permission to reuse a comment about a fine dinner you had at a certain restaurant in ads posted elsewhere touting that restaurant. Along with your name and photo.
They've been under pressure from government and privacy advocates to limit that practice, but it remains that in signing up you agree to let them reuse your comments.
Problem: You don't get compensation for the use of your name, image and comment in advertising. In addition, the FB computers don't recognize sarcasm. So when you post a snide comment that there certainly is a choice when considering a political candidate for office, in your profile or in ads comes the notation, "John likes X." No, I don't.
So, what to do? One choice is to drop out. That's not always a good choice, since you lose contact with your friends and family.
A second choice is to accept that your recommendations will be used in advertising, whether you approve or not.
A third is, never post recommendations. Unless, of course, you like Editor's Revenge.
Finally, remember the editor's advice to politicians, and a guiding principle of Editor's Revenge: If you don't want to see it in print, don't say it.
Regardless of many claims of ostensibly secure computer programs, your system can be hacked into. More to the point, however, is the idea that social media platforms have the right to use whatever you post in advertising for other products and services.
To their credit, at least, the Facebook folks are up front about it: Anything and everything you put on your page becomes their property, and in signing up you give them permission to reuse a comment about a fine dinner you had at a certain restaurant in ads posted elsewhere touting that restaurant. Along with your name and photo.
They've been under pressure from government and privacy advocates to limit that practice, but it remains that in signing up you agree to let them reuse your comments.
Problem: You don't get compensation for the use of your name, image and comment in advertising. In addition, the FB computers don't recognize sarcasm. So when you post a snide comment that there certainly is a choice when considering a political candidate for office, in your profile or in ads comes the notation, "John likes X." No, I don't.
So, what to do? One choice is to drop out. That's not always a good choice, since you lose contact with your friends and family.
A second choice is to accept that your recommendations will be used in advertising, whether you approve or not.
A third is, never post recommendations. Unless, of course, you like Editor's Revenge.
Finally, remember the editor's advice to politicians, and a guiding principle of Editor's Revenge: If you don't want to see it in print, don't say it.
Friday, November 15, 2013
Free Health Care
Was it a slip, or an example of things to come, the latest line of attack by opponents of President Obama and everything he does?
On CNN, an interview subject used the term "free health care," and while the news anchor noted the phrase, the exigencies of broadcasting demanded a break for commercials. There was no followup.
Nevertheless, the phrase is now out. What does it mean? It could portend a new line of attack by conservatives, who have been been fond of mocking what they call "takers" -- read moochers -- and "makers" -- upstanding citizens who are the backbone support of the American way. And Republican conservatives, at that.
Reality: Health care is not free. Someone pays for it, either directly in cash or through insurance plans, or indirectly through taxpayer support of hospital emergency departments, where the indigent go, and where hospitals are required by law to care for patients, regardless of their ability to pay.
The Affordable Care Act, also known as Obamacare, is a law that requires all Americans to buy health insurance, and for those few with little or no money, there are government subsidies. And yes, for some that means a policy acquired from a private company will be free, after government subsidies.
But to imply that such a situation will be widespread and a rampant erosion of the resources of the wealthy is disingenuous at least and a flat-out lie at worst.
However, fact and reality have never interfered with political objectives, especially when it comes to bad-mouthing or destroying the opposition.
So we can expect a new effort by the radical righteous, this time claiming a horde of moochers will descend on the system and drain the public trough through their reliance on "free health care."
The fact is that insurance of any kind doesn't work unless many folks sign up, contribute to the pools and thus spread the risk.
Consider these objections:
"I'm young and healthy, so I don't need health insurance."
"I drive carefully, so I don't need auto insurance."
"I live in a new house, so I don't need fire insurance."
"Floods, hurricanes and earthquakes never hit this area, so I don't need property damage insurance."
"I have a good job and I'll never be out of work, so I shouldn't have to contribute to unemployment insurance."
"I lead a charmed life. Lightning will never strike me."
Dream on. Deniers are those most in need of help.
On CNN, an interview subject used the term "free health care," and while the news anchor noted the phrase, the exigencies of broadcasting demanded a break for commercials. There was no followup.
Nevertheless, the phrase is now out. What does it mean? It could portend a new line of attack by conservatives, who have been been fond of mocking what they call "takers" -- read moochers -- and "makers" -- upstanding citizens who are the backbone support of the American way. And Republican conservatives, at that.
Reality: Health care is not free. Someone pays for it, either directly in cash or through insurance plans, or indirectly through taxpayer support of hospital emergency departments, where the indigent go, and where hospitals are required by law to care for patients, regardless of their ability to pay.
The Affordable Care Act, also known as Obamacare, is a law that requires all Americans to buy health insurance, and for those few with little or no money, there are government subsidies. And yes, for some that means a policy acquired from a private company will be free, after government subsidies.
But to imply that such a situation will be widespread and a rampant erosion of the resources of the wealthy is disingenuous at least and a flat-out lie at worst.
However, fact and reality have never interfered with political objectives, especially when it comes to bad-mouthing or destroying the opposition.
So we can expect a new effort by the radical righteous, this time claiming a horde of moochers will descend on the system and drain the public trough through their reliance on "free health care."
The fact is that insurance of any kind doesn't work unless many folks sign up, contribute to the pools and thus spread the risk.
Consider these objections:
"I'm young and healthy, so I don't need health insurance."
"I drive carefully, so I don't need auto insurance."
"I live in a new house, so I don't need fire insurance."
"Floods, hurricanes and earthquakes never hit this area, so I don't need property damage insurance."
"I have a good job and I'll never be out of work, so I shouldn't have to contribute to unemployment insurance."
"I lead a charmed life. Lightning will never strike me."
Dream on. Deniers are those most in need of help.
Thursday, November 14, 2013
Obamacare
Health care insurance is too important to be left solely to private enterprise.
Obamacare is a misnomer.
The nation's media failed to explain the Affordable Care Act and its workings to the American public.
To begin with, it is not a government-run health insurance plan similar to Medicare or Medicaid. The new law requires that everyone have health care insurance. If you don't already have a policy through your employer, on your own, or through Medicare (for the elderly or the disabled) or Medicare (for the poor), you now must obtain a policy.
Moreover, the policy must meet minimum standards established by the new law. If you don't have health insurance, or your current plan doesn't meet new requirements, there is a shopping center to help you pick one. It's on a web site called healthcare.gov.
Oops, sorry. That's broken. Oh, well.
The point is, the new law says you must buy this product called health care insurance. And carrying out the plan could have been done better.
Both the government and the news media failed to adequately explain the law and the plan, and that was worsened by a poorly designed and executed computer system that is supposed to help citizens acquire health insurance. As a result, there was and remains confusion over what people must do to sign up.
With Medicare, a health insurance program run by the government, no action is necessary. When you turn 65, you're in.
Universal health care is a noble goal, certainly, and it is already in effect in several other countries, including Canada, Australia, the United Kingdom, and several other European nations. Moreover, unlike the American plan, the others are run by governments.
Finally, there has been too much emphasis by the media on the controversy over the program, and not enough coverage in explaining the law, the program and how it can and should work.
And while President Obama has admitted his team fumbled in setting up the web site, the American news media fumbled in explaining the game. They spent too much time listening to the political opponents crying "Foul!" when they should have documented how to score.
Obamacare is a misnomer.
The nation's media failed to explain the Affordable Care Act and its workings to the American public.
To begin with, it is not a government-run health insurance plan similar to Medicare or Medicaid. The new law requires that everyone have health care insurance. If you don't already have a policy through your employer, on your own, or through Medicare (for the elderly or the disabled) or Medicare (for the poor), you now must obtain a policy.
Moreover, the policy must meet minimum standards established by the new law. If you don't have health insurance, or your current plan doesn't meet new requirements, there is a shopping center to help you pick one. It's on a web site called healthcare.gov.
Oops, sorry. That's broken. Oh, well.
The point is, the new law says you must buy this product called health care insurance. And carrying out the plan could have been done better.
Both the government and the news media failed to adequately explain the law and the plan, and that was worsened by a poorly designed and executed computer system that is supposed to help citizens acquire health insurance. As a result, there was and remains confusion over what people must do to sign up.
With Medicare, a health insurance program run by the government, no action is necessary. When you turn 65, you're in.
Universal health care is a noble goal, certainly, and it is already in effect in several other countries, including Canada, Australia, the United Kingdom, and several other European nations. Moreover, unlike the American plan, the others are run by governments.
Finally, there has been too much emphasis by the media on the controversy over the program, and not enough coverage in explaining the law, the program and how it can and should work.
And while President Obama has admitted his team fumbled in setting up the web site, the American news media fumbled in explaining the game. They spent too much time listening to the political opponents crying "Foul!" when they should have documented how to score.
Stalled
The Great Recession hit hard, and after five years the world's major economies are in recovery mode. But that doesn't mean we have all recovered. Things may be a bit better, but they're still not good.
Consider these news items:
* Generally, economic growth as measured by GDP (Gross Domestic Product, the total value of all goods and services produced in the country) grew by just 0.7 percent in the third quarter ended Sept. 30, about the same rate as in the second quarter.
But who you gonna believe? That number comes from Eurostat, the statistical agency of the European Union. The U.S. government, however, put third quarter growth at 2.8 percent, up from 2.5 percent in the second quarter.
* In Europe, GDP is barely moving upward. It grew by 0.1 percent for the 17 nations that use the euro as a common currency, and growth for all 29 nations in the European Union was just 0.2 percent.
* In Japan, the third quarter growth rate dipped to 1.9 percent, from 3.8 percent in the second quarter.
* In Germany, with the healthiest economy in Europe, the pace of growth was cut in half, to 0.3 percent from 0.7 percent.
* Economic growth in the United Kingdom was effectively stalled, at 0.8 percent in the third quarter, compared to 0.7 percent in the second three months of the year.
* In America, exports fell and imports rose from August to September, which pushed the nation's international trade deficit up by 8 percent.
* Finally, the home ownership rate in America has faded and median housing values have dipped. In the survey period 2010-2012, home ownership rate was 64.68 percent, down from 66.41 percent in the prior period, 2007-2009. Median values fell by $17,300 in the same time frame, to $174,600 from $191.900.
All data are official government agency figures, either from the U.S. Commerce Department and Census Bureau, or from Eurostat, the statistics agency of the European Union, or official Japanese government sources.
In all, the economies of the world are on the verge of improving, but -- as happened in 1937 when support programs were pulled -- a second fall could happen. And to better understand the problem and find solutions, government and business leaders need numbers to identify specific issues. A major problem during the Great Depression was that there were few statistics at all.
Today, there are many. However, the recent crisis "also revealed a need for more and better data, data that go beyond traditional statistics," according to David Lipton, deputy managing director of the International Monetary Fund. At a forum in Washington this week, Lipton said new data sets are needed "especially as the focus of policy has shifted to the stability of global and domestic financial systems."
Insularity -- closing international doors and trying to solve economic woes alone -- can only worsen any nation's economic and social issues.
To solve a problem, we must first describe and understand it.
Consider these news items:
* Generally, economic growth as measured by GDP (Gross Domestic Product, the total value of all goods and services produced in the country) grew by just 0.7 percent in the third quarter ended Sept. 30, about the same rate as in the second quarter.
But who you gonna believe? That number comes from Eurostat, the statistical agency of the European Union. The U.S. government, however, put third quarter growth at 2.8 percent, up from 2.5 percent in the second quarter.
* In Europe, GDP is barely moving upward. It grew by 0.1 percent for the 17 nations that use the euro as a common currency, and growth for all 29 nations in the European Union was just 0.2 percent.
* In Japan, the third quarter growth rate dipped to 1.9 percent, from 3.8 percent in the second quarter.
* In Germany, with the healthiest economy in Europe, the pace of growth was cut in half, to 0.3 percent from 0.7 percent.
* Economic growth in the United Kingdom was effectively stalled, at 0.8 percent in the third quarter, compared to 0.7 percent in the second three months of the year.
* In America, exports fell and imports rose from August to September, which pushed the nation's international trade deficit up by 8 percent.
* Finally, the home ownership rate in America has faded and median housing values have dipped. In the survey period 2010-2012, home ownership rate was 64.68 percent, down from 66.41 percent in the prior period, 2007-2009. Median values fell by $17,300 in the same time frame, to $174,600 from $191.900.
All data are official government agency figures, either from the U.S. Commerce Department and Census Bureau, or from Eurostat, the statistics agency of the European Union, or official Japanese government sources.
In all, the economies of the world are on the verge of improving, but -- as happened in 1937 when support programs were pulled -- a second fall could happen. And to better understand the problem and find solutions, government and business leaders need numbers to identify specific issues. A major problem during the Great Depression was that there were few statistics at all.
Today, there are many. However, the recent crisis "also revealed a need for more and better data, data that go beyond traditional statistics," according to David Lipton, deputy managing director of the International Monetary Fund. At a forum in Washington this week, Lipton said new data sets are needed "especially as the focus of policy has shifted to the stability of global and domestic financial systems."
Insularity -- closing international doors and trying to solve economic woes alone -- can only worsen any nation's economic and social issues.
To solve a problem, we must first describe and understand it.
Wednesday, November 13, 2013
Budget Yammerfest
The conservative yammerfest about budget deficits doesn't hold up after a quick glance at history and fact.
Since the end of World War II, Republican-led administrations have posted more and larger deficits than the so-called tax-and-spend Democrats.
For example, of the 67 federal budgets put in place since 1947, all but 12 posted deficits. Of those 12 that listed surplus funds, only three were set up by a Republican Administration -- under President Dwight D. Eisenhower. The other nine fiscal year budgets that posted a surplus were arranged by Democratic presidents; specifically, Harry S. Truman, Lyndon Baines Johnson and Bill Clinton.
Moreover, Republican presidents who inherited budgets with surplus funds soon squandered that surplus and ran up ever larger deficits. The most recent was Republican President George W. Bush, who took office in January 2001 and inherited a budget with a surplus of $128 billion. Eight years later, Bush had gone through that surplus and ran the deficit to $1.4 trillion, which was passed on to the first year of the Obama presidency.
And the GOP fiscal scolds now blame President Barack Obama for budget deficits. But the reality is that from a budget deficit of $1.4 trillion the year he took office -- the 2009 fiscal year -- the Obama Administration reduced the deficit in each subsequent year, bringing it back below $1 trillion for the first time in five years.
More examples: Republican President Richard M. Nixon took office in January 1969, inheriting a surplus of $3.2 billion in a budget prepared by Democrat Lyndon Johnson. Two years later, the deficit leaped above $23 billion.
Republican Ronald Reagan started in January 1991, and in four years the deficit ballooned from $79 billion to $221 billion. His vice president and successor, George H.W. Bush, drove the deficit even higher, to $290 billion for fiscal year 1992 and saddled the next president, Democrat Bill Clinton, with a budget deficit of $255 billion.
However, three years later, the Clinton Administration lined up a budget with a surplus of nearly $70 billion -- the first since fiscal year 1969, when the budget for that year was written by LBJ, another Democrat.
After four more fiscal years of budget surpluses, Clinton handed on a budget with a surplus of $128 billion to Bush 2. And, as noted, that surplus quickly disappeared.
Is the nation out of the woods yet? No. As Doug Elmendorf, chief of the Congressional Budget Office, told a conference committee led by Rep. Paul Ryan and Sen. Patty Murray, "In the near term, the weak recovery from the recent severe recession has led to slow job growth." And for the long term, he added, "the prolonged weakness in the economy has lowered its productive capacity for years to come."
But Elmendorf also noted that long term challenges can be met partly by reducing future deficits, even though current problems are "exacerbated" by recent sharp reductions in deficits.
Do deficits matter? Many economists say no, since the government borrows money by selling bonds, most of which are owned by Americans. So, as one expert put it, "We owe it to ourselves." And even those U.S. bonds owned by foreign entities are easily sold on the open market to others, rather than seeing them demand payment in full from the government.
So while fiscal hawks and deficit scolds try to score political points by ranting about the evils of deficit spending, their own conservative Republican leaders lead the pack in running up the tally. All the while, deficit spending helps to revive the national economy. And Democrats rescue budgetary boondoggles.
Or, as the White House crowed today, "We've cut the deficit in half since the President (Obama) took office."
Since the end of World War II, Republican-led administrations have posted more and larger deficits than the so-called tax-and-spend Democrats.
For example, of the 67 federal budgets put in place since 1947, all but 12 posted deficits. Of those 12 that listed surplus funds, only three were set up by a Republican Administration -- under President Dwight D. Eisenhower. The other nine fiscal year budgets that posted a surplus were arranged by Democratic presidents; specifically, Harry S. Truman, Lyndon Baines Johnson and Bill Clinton.
Moreover, Republican presidents who inherited budgets with surplus funds soon squandered that surplus and ran up ever larger deficits. The most recent was Republican President George W. Bush, who took office in January 2001 and inherited a budget with a surplus of $128 billion. Eight years later, Bush had gone through that surplus and ran the deficit to $1.4 trillion, which was passed on to the first year of the Obama presidency.
And the GOP fiscal scolds now blame President Barack Obama for budget deficits. But the reality is that from a budget deficit of $1.4 trillion the year he took office -- the 2009 fiscal year -- the Obama Administration reduced the deficit in each subsequent year, bringing it back below $1 trillion for the first time in five years.
More examples: Republican President Richard M. Nixon took office in January 1969, inheriting a surplus of $3.2 billion in a budget prepared by Democrat Lyndon Johnson. Two years later, the deficit leaped above $23 billion.
Republican Ronald Reagan started in January 1991, and in four years the deficit ballooned from $79 billion to $221 billion. His vice president and successor, George H.W. Bush, drove the deficit even higher, to $290 billion for fiscal year 1992 and saddled the next president, Democrat Bill Clinton, with a budget deficit of $255 billion.
However, three years later, the Clinton Administration lined up a budget with a surplus of nearly $70 billion -- the first since fiscal year 1969, when the budget for that year was written by LBJ, another Democrat.
After four more fiscal years of budget surpluses, Clinton handed on a budget with a surplus of $128 billion to Bush 2. And, as noted, that surplus quickly disappeared.
Is the nation out of the woods yet? No. As Doug Elmendorf, chief of the Congressional Budget Office, told a conference committee led by Rep. Paul Ryan and Sen. Patty Murray, "In the near term, the weak recovery from the recent severe recession has led to slow job growth." And for the long term, he added, "the prolonged weakness in the economy has lowered its productive capacity for years to come."
But Elmendorf also noted that long term challenges can be met partly by reducing future deficits, even though current problems are "exacerbated" by recent sharp reductions in deficits.
Do deficits matter? Many economists say no, since the government borrows money by selling bonds, most of which are owned by Americans. So, as one expert put it, "We owe it to ourselves." And even those U.S. bonds owned by foreign entities are easily sold on the open market to others, rather than seeing them demand payment in full from the government.
So while fiscal hawks and deficit scolds try to score political points by ranting about the evils of deficit spending, their own conservative Republican leaders lead the pack in running up the tally. All the while, deficit spending helps to revive the national economy. And Democrats rescue budgetary boondoggles.
Or, as the White House crowed today, "We've cut the deficit in half since the President (Obama) took office."
Monday, November 11, 2013
Nitpicker's Diary
The CBS program "60 Minutes" apologized for a "mistake" in using part of an interview in which the subject claimed he was at the American Embassy during the attack in Benghazi. Reason: "We were misled," said reporter Lara Logan, since what the man said to CBS differed from what he told the FBI.
Note that CBS did not use the word "retraction" but used "mistake" and "misled." Question: What if the report was true, and that the interview subject "misled" the FBI?
In all the years "60 Minutes" has been on the air, there have been (to our memory) only two other instances where a report was put in doubt. Once over a Mike Wallace report, where corporate yielded to government pressure and held a report, and another time over a Dan Rather report where the comments of a subject were not fully corroborated. In both cases, however, the reports were true.
So why did CBS bend to political pressure?
The latest trend in journalism is the appointment of "content managers" who will coordinate stories with advertising department goals.
Bad idea. When editors lose their independent judgement over what story to run and how to handle it, the profession and the people suffer.
Or, as I used to say to those who emphasized how much they spend on advertising in the newspaper where I worked, "If you can influence coverage, so can your competitor. Do you really want that?"
Key to Obamacare -- "You tell us how much you can afford, and we give you a range of options to fit your budget." Sound familiar? It's from an insurance company's TV ad. The new health care law requires everyone to have health insurance. If you don't already have it, you must buy it from an insurance company. And, of course, there are government subsidies for those who can't afford the private company rates. Bottom line: Obamacare is not itself health care insurance, but a program that says you must buy it. No wonder there has been no opposition from corporate America. Except to prevent a single-payer, government program such as Medicare for everyone.
Seen in a surgeon's waiting room: "Displacement requires surgical intervention to restore anatomic relationships." In doctor-speak, that translates to "When it's broken, fix it.'
A TV ad for Cadillac features theme music from the James Bond movies. True fans know that Agent 007 drove an Aston Martin.
Grammar gremlins -- It's common in English that nouns can become verbs and vice versa. But a two-word verb form becomes a single word when used as a noun. The latest and most noticeable infringement of this rule is "shutdown." As a noun, it's one word, but the verb form remains two words: shut down.
Note that CBS did not use the word "retraction" but used "mistake" and "misled." Question: What if the report was true, and that the interview subject "misled" the FBI?
In all the years "60 Minutes" has been on the air, there have been (to our memory) only two other instances where a report was put in doubt. Once over a Mike Wallace report, where corporate yielded to government pressure and held a report, and another time over a Dan Rather report where the comments of a subject were not fully corroborated. In both cases, however, the reports were true.
So why did CBS bend to political pressure?
The latest trend in journalism is the appointment of "content managers" who will coordinate stories with advertising department goals.
Bad idea. When editors lose their independent judgement over what story to run and how to handle it, the profession and the people suffer.
Or, as I used to say to those who emphasized how much they spend on advertising in the newspaper where I worked, "If you can influence coverage, so can your competitor. Do you really want that?"
Key to Obamacare -- "You tell us how much you can afford, and we give you a range of options to fit your budget." Sound familiar? It's from an insurance company's TV ad. The new health care law requires everyone to have health insurance. If you don't already have it, you must buy it from an insurance company. And, of course, there are government subsidies for those who can't afford the private company rates. Bottom line: Obamacare is not itself health care insurance, but a program that says you must buy it. No wonder there has been no opposition from corporate America. Except to prevent a single-payer, government program such as Medicare for everyone.
Seen in a surgeon's waiting room: "Displacement requires surgical intervention to restore anatomic relationships." In doctor-speak, that translates to "When it's broken, fix it.'
A TV ad for Cadillac features theme music from the James Bond movies. True fans know that Agent 007 drove an Aston Martin.
Grammar gremlins -- It's common in English that nouns can become verbs and vice versa. But a two-word verb form becomes a single word when used as a noun. The latest and most noticeable infringement of this rule is "shutdown." As a noun, it's one word, but the verb form remains two words: shut down.
Sunday, November 10, 2013
Veterans Day Perspective
$36,264
That's the annual median income of veterans in 2012, compared with $26,278 for the population as a whole, according to the American Community Survey, from the Census Bureau web site.
Census also reports that 16 percent of Americans lived in poverty that same year, a figure basically unchanged from the year before. The bureau sets the poverty line for a family of four at $23,492.
Question: Does the median income figure for veterans also include officers?
Three states have with 1 million or more veterans, according to Census data. These states were California (1.9 million), Texas (1.6 million) and Florida (1.6 million).
Poverty rates are higher in the South than in other areas of the nation. For example: Louisiana, 21.3 percent; Mississippi, 20.7 percent; New Mexico, 20.3 percent; DC, 19.3 percent; Arizona, 18.5 percent; Georgia, 18.5 percent; Arkansas, 18.1 percent.
The unemployment rate nationwide has been above 7 percent all year.
Welcome home, vets. Good luck finding a job.
That's the annual median income of veterans in 2012, compared with $26,278 for the population as a whole, according to the American Community Survey, from the Census Bureau web site.
Census also reports that 16 percent of Americans lived in poverty that same year, a figure basically unchanged from the year before. The bureau sets the poverty line for a family of four at $23,492.
Question: Does the median income figure for veterans also include officers?
Three states have with 1 million or more veterans, according to Census data. These states were California (1.9 million), Texas (1.6 million) and Florida (1.6 million).
Poverty rates are higher in the South than in other areas of the nation. For example: Louisiana, 21.3 percent; Mississippi, 20.7 percent; New Mexico, 20.3 percent; DC, 19.3 percent; Arizona, 18.5 percent; Georgia, 18.5 percent; Arkansas, 18.1 percent.
The unemployment rate nationwide has been above 7 percent all year.
Welcome home, vets. Good luck finding a job.
Friday, November 8, 2013
Boomlet
Beware the boomlet. Sudden sharp increases often cannot be maintained, and can lead to another drop as an economy moves to recovery.
And while the U.S. economy seems to be advancing nicely -- third quarter growth, as measured by GDP, posted a strong 2.8 percent leap, up from 2.5 percent in the second quarter -- other economies in the world are still struggling.
However, the nation's poverty rate was stuck at 16 percent in 2012, the Census Bureau noted, virtually unchanged from the year before.
Personal income edged up a bare 0.5 percent in September, the Bureau of Economic Analysis said, and the consumption increase lagged income -- up 0.2 percent. The income increase in September was the same as in August, while the spending increase declined. Meaning: Americans are cutting back on spending.
Overall, U.S. economic growth will pick up next year, according to a wide-ranging report from the International Monetary Fund. On the other side of the world, the economy in China -- the world's second largest, after the U.S. -- "is now projected to grow at 7.25 percent next year," said IMF regional director Alejandro Werner.
However, China's economy is vulnerable because of the extremely strong growth rate, and the government there is moving to tame the tiger, and "move to a more balanced and sustainable growth model," said IMF analyst Steven Barnett.
In Europe, unemployment remains high -- Greece and Spain show rates of about 26 percent, according to data compiled by Eurostat, the statistical agency of the European Union. Economic recovery there remains fragile, and is not likely to pick up for months, and the rate of inflation is down to less than 1 percent. Overall, growth in Europe next year is likely to be just 1.1 percent in the euro zone, and 1.4 percent throughout the EU, news reports said.
And central banks are continuing their efforts to stimulate economies through low interest rates. The latest report from the Bank of England said it will keep its lending rate at 0.5 percent.
Meanwhile, America is changing. Which is always true of any country and culture, but here are a few examples.
-- Teen births are at historically low levels, according to the Census Bureau, and more women are delaying motherhood until their 30s.
-- Recruiting younger agents is the main challenge for real estate firms, according to a new survey. "The real estate business is aging out," said Renwick Congdon, CEO of Imprev, a real estate software firm based in Bellevue, Wa. "Broker-owners are under pressure to find new talent," he added.
More than 40 percent of those in the field are older than 60, according to data from the National Association of Realtors, and only 6 percent are younger than 34.
Comment from our itinerant Dublin correspondent: "Every country needs to replenish its population one way or another. If the birth rate is dropping in the US then the population still needs to be replenished. The next time someone makes a case about restricting immigration to the US, perhaps a case should also be made for those already in the U.S. to start making more babies."
So why should Americans care about conditions in Europe or China or anywhere else? Because the world economy is more interlinked than ever. Any attempt to withdraw and resort to an isolationist tactic can only backfire.
Isolationism failed 80 years ago. It will fail again now.
And while the U.S. economy seems to be advancing nicely -- third quarter growth, as measured by GDP, posted a strong 2.8 percent leap, up from 2.5 percent in the second quarter -- other economies in the world are still struggling.
However, the nation's poverty rate was stuck at 16 percent in 2012, the Census Bureau noted, virtually unchanged from the year before.
Personal income edged up a bare 0.5 percent in September, the Bureau of Economic Analysis said, and the consumption increase lagged income -- up 0.2 percent. The income increase in September was the same as in August, while the spending increase declined. Meaning: Americans are cutting back on spending.
Overall, U.S. economic growth will pick up next year, according to a wide-ranging report from the International Monetary Fund. On the other side of the world, the economy in China -- the world's second largest, after the U.S. -- "is now projected to grow at 7.25 percent next year," said IMF regional director Alejandro Werner.
However, China's economy is vulnerable because of the extremely strong growth rate, and the government there is moving to tame the tiger, and "move to a more balanced and sustainable growth model," said IMF analyst Steven Barnett.
In Europe, unemployment remains high -- Greece and Spain show rates of about 26 percent, according to data compiled by Eurostat, the statistical agency of the European Union. Economic recovery there remains fragile, and is not likely to pick up for months, and the rate of inflation is down to less than 1 percent. Overall, growth in Europe next year is likely to be just 1.1 percent in the euro zone, and 1.4 percent throughout the EU, news reports said.
And central banks are continuing their efforts to stimulate economies through low interest rates. The latest report from the Bank of England said it will keep its lending rate at 0.5 percent.
Meanwhile, America is changing. Which is always true of any country and culture, but here are a few examples.
-- Teen births are at historically low levels, according to the Census Bureau, and more women are delaying motherhood until their 30s.
-- Recruiting younger agents is the main challenge for real estate firms, according to a new survey. "The real estate business is aging out," said Renwick Congdon, CEO of Imprev, a real estate software firm based in Bellevue, Wa. "Broker-owners are under pressure to find new talent," he added.
More than 40 percent of those in the field are older than 60, according to data from the National Association of Realtors, and only 6 percent are younger than 34.
Comment from our itinerant Dublin correspondent: "Every country needs to replenish its population one way or another. If the birth rate is dropping in the US then the population still needs to be replenished. The next time someone makes a case about restricting immigration to the US, perhaps a case should also be made for those already in the U.S. to start making more babies."
So why should Americans care about conditions in Europe or China or anywhere else? Because the world economy is more interlinked than ever. Any attempt to withdraw and resort to an isolationist tactic can only backfire.
Isolationism failed 80 years ago. It will fail again now.
Tuesday, November 5, 2013
In Your Dreams
Little Bo Peep has lost her sheep
And doesn't know where to find them.
Leave them alone, and they'll come home,
Wagging their tails behind them.
"If you build it, they will come." -- Field of Dreams
Supply creates its own demand.
If there be an excess supply of workers (unemployment), wages (the cost of labor) will fall so that demand and supply in the market for labor will rebalance to economic equilibrium.
At least, that's the theory in classical economics, also known as free market economics. This line of thinking, still found among conservatives, calls for little or no government involvement in business. In a free market, producers can make what they want, when they want, in whatever quantity and quality and want, and price their goods at whatever the market will bear.
They have a right to try. Equally, they have a right to fail.
From an abstract, academic, scientific standpoint, this view holds.
And while adherents of this line of thinking praise the value of competition, in the real world producers don't want competition at all, but a monopoly. This was common in the 19th Century in America, when there was almost no government involvement in business.
In this Golden Era of the 19th Century -- the era of corruption, monopolies, robber barons and the contrast of the super-wealthy and those in abject poverty, there was, in accordance with classical economic theory, there was virtually no government regulation of anything, anywhere, ever.
So if there was a large supply of workers available, employers could, and did, reduce wages and even cut the pay of those already on the job, in the name of free market economics obeying the Law of Supply and Demand as it applied to the labor market.
Workers, of course, objected and protested, and were fired, to be replaced by others willing to work for less. Result: Labor unions were formed to protect the rights of workers. To the contrary, many company owners felt workers had no such "rights," and should defer to management in all things.
"The rights and interests of the laboring man will be protected and cared for -- not by the labor agitators, but by the Christian men of property to whom God has given control of the property rights of the country, and upon the successful management of which so much depends."
So said George Frederick Baer, president of the Philadelphia and Reading Railroad, speaking for mine owners during a coal strike in 1902.As for any "divine right" of capitalists, workers were having none of that argument.
But this was the 19th Century, when there were no rules, regulations or laws dealing with food production and distribution, and no standards governing medicines and pharmaceuticals. There was no Food and Drug Administration, no Federal Reserve Board to control the money supply and try to keep down inflation and smooth out the business cycle. There were no labor unions, and no worker compensation or unemployment insurance program benefits.
But there was a free market economy. And the theory was that the economy, left to itself, would eventually rebalance as market forces combine to reach a new equilibrium of supply and demand, which in turn determined price levels.
Eventually.
But how long is eventually?
Can a nation afford to ride out a storm of unemployment, stalled production and starvation until the ivory tower economic theory, in the long run, adjusts to reality?
This is not ancient history. Such attitudes were widespread in the 19th Century, but soon a perfect storm of economic problems combined, and there are many still alive today who remember the Great Depression of the 1930s.
Even so, there were many so-called experts who maintained that the business cycle had a mind of its own, and there was nothing that government could or should do to try to smooth it out or control it. Any attempt to intervene was doomed to failure and would only cause additional problems.
That was then, and this is now. Even so, many of the same factors that led to a worldwide economic collapse more than 80 years ago contributed to a new, Great Recession, beginning just six years ago.
At that time, one of the heroes of the conservative, free market, classically oriented economists was Friedrich Hayek, who insisted that government intervention was not only inadvisable but impossible, and would only lead to more problems.
But his legacy carries on, and his book, "The Road to Serfdom," was discovered a few years ago by conservative talk show host Glenn Beck.
Those who do not learn from history are condemned to repeat it.
Supply side economics, as it's called, was reincarnated during the presidency of Ronald Reagan, and represents a return of theories held by conservatives since the 19th Century. Their hero is Hayek.
Hayek was a contemporary and rival of John Maynard Keynes who, contrary to classical economic policy, urged government spending to reboot a stagnant, failing economy and rescue the capitalist system, with the proviso that government should step back and ease off stimulating the economy when the business life cycle turns up again. Call it demand-side economics.
There were then, and are today, many who believe that any effort to jump-start the economy through government programs would be doomed to failure and only make things worse.
It was a Little Bo Peep way of thinking. Leave things alone, and the sheep will come home, happily wagging their tails behind them.
Eventually.
In the long run.
We can't afford to wait out the multiple disasters of joblessness, poverty, hunger and disease while the economic storm subsides.
The story of Little Bo Peep does not take into account the possibility of wolves in the wilderness.
And as Keynes pointed out, "In the long run, we are all dead."
And doesn't know where to find them.
Leave them alone, and they'll come home,
Wagging their tails behind them.
"If you build it, they will come." -- Field of Dreams
Supply creates its own demand.
If there be an excess supply of workers (unemployment), wages (the cost of labor) will fall so that demand and supply in the market for labor will rebalance to economic equilibrium.
At least, that's the theory in classical economics, also known as free market economics. This line of thinking, still found among conservatives, calls for little or no government involvement in business. In a free market, producers can make what they want, when they want, in whatever quantity and quality and want, and price their goods at whatever the market will bear.
They have a right to try. Equally, they have a right to fail.
From an abstract, academic, scientific standpoint, this view holds.
And while adherents of this line of thinking praise the value of competition, in the real world producers don't want competition at all, but a monopoly. This was common in the 19th Century in America, when there was almost no government involvement in business.
In this Golden Era of the 19th Century -- the era of corruption, monopolies, robber barons and the contrast of the super-wealthy and those in abject poverty, there was, in accordance with classical economic theory, there was virtually no government regulation of anything, anywhere, ever.
So if there was a large supply of workers available, employers could, and did, reduce wages and even cut the pay of those already on the job, in the name of free market economics obeying the Law of Supply and Demand as it applied to the labor market.
Workers, of course, objected and protested, and were fired, to be replaced by others willing to work for less. Result: Labor unions were formed to protect the rights of workers. To the contrary, many company owners felt workers had no such "rights," and should defer to management in all things.
"The rights and interests of the laboring man will be protected and cared for -- not by the labor agitators, but by the Christian men of property to whom God has given control of the property rights of the country, and upon the successful management of which so much depends."
So said George Frederick Baer, president of the Philadelphia and Reading Railroad, speaking for mine owners during a coal strike in 1902.As for any "divine right" of capitalists, workers were having none of that argument.
But this was the 19th Century, when there were no rules, regulations or laws dealing with food production and distribution, and no standards governing medicines and pharmaceuticals. There was no Food and Drug Administration, no Federal Reserve Board to control the money supply and try to keep down inflation and smooth out the business cycle. There were no labor unions, and no worker compensation or unemployment insurance program benefits.
But there was a free market economy. And the theory was that the economy, left to itself, would eventually rebalance as market forces combine to reach a new equilibrium of supply and demand, which in turn determined price levels.
Eventually.
But how long is eventually?
Can a nation afford to ride out a storm of unemployment, stalled production and starvation until the ivory tower economic theory, in the long run, adjusts to reality?
This is not ancient history. Such attitudes were widespread in the 19th Century, but soon a perfect storm of economic problems combined, and there are many still alive today who remember the Great Depression of the 1930s.
Even so, there were many so-called experts who maintained that the business cycle had a mind of its own, and there was nothing that government could or should do to try to smooth it out or control it. Any attempt to intervene was doomed to failure and would only cause additional problems.
That was then, and this is now. Even so, many of the same factors that led to a worldwide economic collapse more than 80 years ago contributed to a new, Great Recession, beginning just six years ago.
At that time, one of the heroes of the conservative, free market, classically oriented economists was Friedrich Hayek, who insisted that government intervention was not only inadvisable but impossible, and would only lead to more problems.
But his legacy carries on, and his book, "The Road to Serfdom," was discovered a few years ago by conservative talk show host Glenn Beck.
Those who do not learn from history are condemned to repeat it.
Supply side economics, as it's called, was reincarnated during the presidency of Ronald Reagan, and represents a return of theories held by conservatives since the 19th Century. Their hero is Hayek.
Hayek was a contemporary and rival of John Maynard Keynes who, contrary to classical economic policy, urged government spending to reboot a stagnant, failing economy and rescue the capitalist system, with the proviso that government should step back and ease off stimulating the economy when the business life cycle turns up again. Call it demand-side economics.
There were then, and are today, many who believe that any effort to jump-start the economy through government programs would be doomed to failure and only make things worse.
It was a Little Bo Peep way of thinking. Leave things alone, and the sheep will come home, happily wagging their tails behind them.
Eventually.
In the long run.
We can't afford to wait out the multiple disasters of joblessness, poverty, hunger and disease while the economic storm subsides.
The story of Little Bo Peep does not take into account the possibility of wolves in the wilderness.
And as Keynes pointed out, "In the long run, we are all dead."
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