The employment shortfall

So, for a quick, back-of-the-envolope calculation, I went to the Bureau of Labor Statistics and checked out the Employment-to-population ratio series.

In September 2008, before the chickens cut their own heads off and started running around, 61.9% of the U.S. population was employed.

In September 2011, 58.3% of the U.S. population was employed.

The difference is 3.6 percentage points.

3.6% of the U.S. population is roughly 11.1 million people.

That is, if employment is to be able to reach the September 2008 ratio to the population, 11.1 million more people would need to find jobs than are currently working.

Ponder that for a minute.

"Occupy Wall Street" raises $300,000

According to CBS, Occupy Wall Street has raised $300,000.

So, at most there were 300,000 out of about 225,000,000 U.S. residents over 18 that were willing to donate $1 to the "cause".

I guess that's a Good Thing™.

Democracy versus tyranny of the majority

Are you part of the 1%?

The 1% who's willing to abide by the principle that just because the members of a group have the numbers on their side, they do not have rights to the life and property of another group of people?

I am.

I know full well that none of the goodies that you see around you were produced by the people who burn cars, destroy others' property, and kill them for their money.

There is a reason I kicked out the moneylenders! reads one sign held by a protester pretending to be Jesus.

Not even a century, and we've come full circle.

United States v. Enmons - What I did not know shocked me.

By coincidence, I found out about a controversial Supreme Court decision in the case of United States v. Enmons. CATO Institute has a detailed explanation.

In short, in 1973, the Supreme Court of the United States upheld a lower courts decision that:

… the appellees were union members on strike against their employer, Gulf States, and that both the strike and its objective of higher wages were legal. The court expressed the view that if 'the wages sought by violent acts are wages to be paid for unneeded or unwanted services, or for no services at all,' then that violence would constitute extortion within the meaning of the Hobbs Act. Id., at 645.

The dissent lays out the problem with this reasoning clearly:

Seeking higher wages is certainly not unlawful. But using violence to obtain them seems plainly within the scope of 'extortion' as used in the Act, just as is the use of violence to exact payment for no work or the use of violence to get a sham substitution for no work. The regime of violence, whatever its precise objective, is a common device of extortion and is condemned by the Act.

So, we live under a regime where it is OK for union members to act like Mafia footsoldiers, under the blessing of the Supreme Court, no less.

I wonder if banks could send loan officers to beat up delinquent mortgage borrowers. After all, their quest to obtain the payments is perfectly legal and this would be violence conducted in furtherance of the legal goal of obtaining re-payment of a loan.

"Indignant" and "against corporate greed"? AP loves you!

AP writes Rome protest against corporate greed turns violent.

I would understand Protests in Rome turn violent, or Protesters in Rome burn cars, destroy shops, or Protesters in Bosnia want to kill the rich or many other variations based on the events reported in the article.

No, instead, we get this:

Really? Protests turn violent. Well, who was violent? Oh, they were not just bloodthirsty commies? They were against corporate greead. That makes it OK, I guess, for them to destroy other people's property, right? I mean, if you have property, you must be a dirty, filthy, capitalist, then, right?

Here's a great snippet from the article:

In the Bosnian city of Sarajevo, hundreds walked through the streets carrying pictures of Che Guevara and old communist flags that read Death to capitalism, freedom to the people.

So, we have a news story, where people are rioting all over, destroying property, and the only value judgement the AP can muster is that the thugs are against corporate greed. That makes them huggable thugs.

We should all study what happened in Zimbabwe.

PS: Another quotation from the story, Turnout was light in Asia, where the global economy is booming. makes me wonder how these people graduated from grade school and joined the labor force. If the global economy were booming, it'd be booming globally.

Why care about revenue neutrality?

Watching the debates, it seems the first question Herman Cain gets about his 999 plan is whether it will be able to raise as much tax revenue as the federal government as does the current tax system.

I find that to be a fundamentally wrong-headed question.

After all, we are suffering from a federal government which is spending on way too many things that go beyond the common defense and general welfare of the country. Maintaining the flow of resources from the private sector in to the hands of bureaucrats is the last thing we should be worried about.

9% income tax rate

Under the current system, incentives to make more money are distorted all the way from the poorest to the riches. At the low end, there are so many programs and subsidies for people who remain under certain income limits that it may not pay a poor family to exert the effort to earn 10% more. At the higher end, people who are close to various thresholds between $100,000 and $1,000,000 annually may see close to 60% of any additional income they make disappear.

Sure, when you are comfortably making millions year after year, you can end up hiring good tax lawyers who reduce the ratio of income taxes you pay to the income you make, but that also comes at a cost and not just to you. The rest of the economy suffers because there is nothing but waste in you and your smart tax lawyer doing nothing but trying to figure out how you can avoid paying tax. You can use that time to actually produce goods and services people want. Your tax lawyer or accountants may direct their efforts into providing their services in other pursuits than just helping people avoid the tax man.

A flat tax income tax does that. I am not averse to having first chink of income we earn be exempt from federal income taxation. What size chunk? Something like the Poverty Thresholds 2009 published by the Census Bureau may be used for guidance here. I figure $15,000 is a good round number. Thanks to Herman Cain's 9% federal income tax, the incentive to earn beyond that chunk is not distorted much: Every extra dollar you earn would always bring in 91 cents after the federal government takes a bite.

Now, there are also state, county, locality taxes, I know. But, those will be there no matter what the federal government does. The existing federal income tax structure did not prevent New York, Illinois, and other states from jacking up their tax rates. A comparison of, say, Indiana's income tax forms to New York's will show you what I mean.

Therefore, it is incumbent upon you to put pressure at the local, city, county, and state levels to get government spending under control.

Is the local sales tax in your village being used to offer free child care at the local library? Why is there a local library to being with?

Is the mayor in your town also a state representative who is not only drawing two salaries from the two positions but is going to have two pensions after he retires at age 42 until he passes away (which, at the rate medical advances are being made may take another 40 years)? Speak up. Elect people who will stop the gravy train.

9% national sales tax rate

Yup, that's going to increase prices you pay for things you consume. Yup, lower income individuals will pay a greater share of their income in sales taxes. But, then, lower income individuals pay a greater share of their earnings in payroll taxes already. With the payroll tax gone, you'd have more disposable income.

In addition, all those business who supply all those items you want will have to pay less to keep lawyers and accountants busy. Reduced "cost of doing business" would make producing and providing goods and services people want a more profitable activity. That would put downward pressure on prices.

9% business tax rate

The important thing here is to eliminate double taxation of dividends which reduces the incentive to invest and increase productive capacity. Plus, with all the special exemptions for this or that politically preferred activity gone, business would be less inclined to waste resources on unproductive activities. For example, switching to all LED light bulbs for no other reason than that it would make some bureaucrat happy is a waste.

The important thing to keep in mind here is that, in the long run, the consumer ends up paying all costs of the business. Lower those costs, reduce barriers to competition, and prices go down.

What revenue neutrality?

Projections made today using data based on the current mess of taxes and regulations cannot tell you what will happen in a future of clear and concise rules. They can only tell you the effects of changes around the edges.

A lower, flatter income tax rate is a key ingredient of a growth oriented economy. There are other ingredients, such as free markets in health care, a health insurance system where you are free to shop for coverage that fits you, privatized personal retirement, private education markets etc also play a role.

Tossing out the current system in favor of a clear and simple one would send a strong signal that the U.S. going to avoid the lost decades of Japan. Positive outlook means growth.

Growth is what we need.

Not making sure Goliath is kept well-fed at all times.

Clueless, Hapless, and Useless: "Occupy Wall Street" in a nutshell

It is hard to take people seriously when they are a couple of years too late in objecting to the stupidity before it took hold.

That makes them clueless.

They are hapless because most of them grew up without experiencing any real adversity and therefore never had the opportunity understand the good fortune of having been born in the U.S.

And, of course, they are useless because, last time I checked, there weren't a lot of consumers looking to pay a premium to be educated in the bits and pieces of deconstructionist social theories and fragments of Marxist rhetoric they are trying to peddle.

I have had it with so-called "distressed" "home-owners"!

Hey, you!

If you really were a home-owner, you would not have to worry about the market price of "your" home.

So, you went and bought something way out of your price range with low money down. You then went and got a second mortgage on what little equity you had. You then got store credit to be able to furnish "your" home with the latest amenities.

So, you spent money stupidly. The fact that someone chose to stupidly lend you money does not make it any better.

It is not our problem.

Either make your payments, or go out and rent. It's a simple choice.

The fact that you are all pushing for this or that government program or intervention to make your choices work out is why "your" home is not appreciating.

Those who might buy a piece of real estate for a reasonable price will not get in the market until the bottom is hit. It is obvious the bottom has not been hit while there are people who are still trying to push the federal government and state governments to keep them in their preferred property.

Seriously, enough!

Herman is smarter than Larry!

It is official.

Herman Cain is smarter than Lawrence O'Donnell.

I know, it is not a high bar. I mean, I have personally interacted with hamsters with better math ability than Larry the Cable Anchor has.

Larry, please learn the difference between serving in the Navy and working at the Navy Department.

I know you are still trying to find your way around the multiplication table, but, Larry, please try to understand that a man who

… graduated from Morehouse College in 1967 with a Bachelor of Arts degree in mathematics, and received a Master of Science degree in computer science from Purdue University in 1971, when he was also working full-time in ballistics for the U.S. Department of the Navy. As a civilian ballistics analyst, he was responsible for developing fire control systems for ships and fighter planes.

is not only hundreds of thousands of bazillions times smarter than you are, he has also served his country admirably by helping develop weapons that kill the enemy more effectively and in larger numbers.

Cain's rise is no surprise

Herman Cain's rise is a surprise only to people who live in the beltway bubble. Cain's life is a demonstration of the finest American values: A thinker and a doer, he never shied away from a challenge and did everything he could to achieve the goals he set for himself.

You owe it yourself to read, at the very least, Cain's Wikipedia profile before you make your decision. It is hard not to be impressed.

He and Santorum are the only two people on the Republican field who understand fully both economic and international issues and are able to actually articulate them.

The current leader of the pack, Romney, already has two strikes against him: He is responsible for Romneycare (a sort of mini Obamacare) and he does not seem to understand the role of free and open trade in guiding the world and the U.S. out of the doldrums.

Against this background, it is easy to imagine Cain pulling away from his rivals.

Cut spending while the economy is weak

One of the two main organizers of the mess we are in right now, Fed Chairman Bernanke, warned Congress not to cut spending in a weak economy:

Federal Reserve Chairman Ben Bernanke said Tuesday that the United States faces yet more jobs pain, as he warned Congress that short-sighted budget cuts and financial turmoil could threaten "faltering" economic growth.

This is exactly the wrong advice.

Just like bailing out Bear Stearns was the wrong thing to do. It would have been far better to come to terms with reality and help the rest of us pick up the pieces. Instead, Bernanke and Paulson got together and arranged for a strong moral hazard signal to the rest of the field.

There is a path to speedy recovery.

This path may even lead to Mr. President keeping his job as well as helping the rest of us.

It is simple.

Everyone with any assets is scared of losing what they've got to either astronomical taxes or rampant inflation in the not so distant future.

Because anyone with a brain can see how much the Federal government is committed to paying out in those years.

We must reduce the growth rate in the growth rate of Federal liabilities.

The only way to put a real dent in that is to allow people to own their retirement and health choices.

Repeal Obamacare and privatize Social Security.

Eliminate capital gains tax and flatten the income tax schedule.

All the associated projections are worthless. Don't even worry about being revenue neutral.

The signal that needs to be sent is not that we'll be in a zero debt/zero deficit environment but that the size of the government sector will be kept under check.

So simple. Yet so hard to swallow for Mr. President and his pals on Wall Street, both in the streets and the high rises ;-)

President Soft Hands

I came across this nugget thanks to James Taranto:

Lux was ultimately not able to ask Obama the question she had prepared about health insurance for small businesses, she did get to shake his hand. It was pretty surreal; he definitely uses moisturizer; his hands were amazingly soft, she said.

To read about the Town Hall meeting, and see photos, go to www.PaloAltoOnline.com and search for "Obama tackles jobs."

Whatever you think about W, I am pretty certain he had calloused hands.