Archive for the ‘economics’ Category

The hidden cost of rising gas prices …

Recently, gasoline thefts have been reported in the Rundberg/Parkfield area by Northeast Austin businesses. These types of thefts have been reported in the past and appear to be increasing. Business owners are advised to take precautions to secure company vehicles in such a manner that will not allow potential gas thieves to have access to large company vehicles or their gas tanks.

Yikes, that’s my area of town!


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Free milk and a cow

NPR Sunday Morning laments that savers are not getting much interest these days, interest from banks that is.

Risk-averse savers who shun stocks and bonds often turn to government-insured Certificates of Deposit. With these investments, savers tie up their money for a set period — anywhere from three months to five years — in return for a steady, reliable payout from a financial institution.

But these days, CD interest rates are so low, many investors feel cheated.

Interest rates have been at very low levels ever since the financial crisis hit in the fall of 2008. The shock caused the stock market to plunge, credit markets to freeze up and housing sales to stall. To help bolster the economy, the Federal Reserve decided to drive down interest rates.

Low-cost loans helped make housing more affordable, and made it easier for businesses and consumers to get loans. But the strategy of propping up borrowers came with a cost — and savers had to pay it.

The point missed by NPR is that there is no demand for cash by the banks. The Government is giving money away. Why buy the cow when the milk is free? At no cost, banks have no need to go to the private sector to buy money. Host Lian Hansen asks somewhere in the audio, since the economy is more stable why can’t banks just raise their cd rates. Yeah, why pay more for something you have plenty of, and is anyone convinced of the economy being stable?

The Fed needs to start shrinking the money supply. This will help thaw the iced up flow of money. Stop giving money away.

PS  it appear Fannie and Freddie, the smoking gun of this whole financial mess, not included in financial reform bill.

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Devotion to Hockey

PatsPapers take a look a water consumption during the recent Olympic gold metal hockey game between the US and Canada.

The city of Edmonton’s water utiity EPCOR published the most incredible graph of water consumption last week. By now you’ve probably heard that up to 80% of Canadians were watching last Sunday’s gold medal Olympic hockey game. So I guess it stands to reason that they’d all go pee between periods.

What I would like to see if possible would be a graph superimposed on the one shown of beer consumption during the same time period, or maybe calls to police about burglaries, or traffic violations.

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For whatever reason, my personal brand of self-expression seems to tickle Kathryn.

What can I say?  After 6 minutes of actuarial foreplay, with a climax of “If you think that [the American people] want a government takeover of health care, I respectfully submit, you aren’t listening to them,” my conservative bodice is officially ripped.   What isn’t shown in the video is the sputtering, rambling, shambling, unfocused, and incoherent response from President Red Pill-Blue Pill.  I sat through it: it was long enough for me to finish my cigarette.

OK, it’s a girl thing.  Philo- keep your shirt on.

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Rangel on Taxes

Charlie Rangel is proposing lowering the corporate tax rate from 35% to 28%—a move that comes close to McCain’s proposal to lower it to 25%, but not so close to Reagan’s better proposal to lower it to 0%—while raising the top individual tax rate to 44%, applying on income over $200,000. One out of two….

Why do Democrats think, for example, that two-income professional couples are rich?

During the 1920s, a time of great prosperity, the top tax rate fell from 77% to 24%. The top rate, moreover, didn’t kick in until one reached very high incomes, ranging, depending on the year, from $100,000 to $1,000,000. That’s roughly $1.1 million to $11 million in 2008 dollars. I think raising tax rates is a bad idea at any income level. But if one is committed to raising the top rate, why have it begin at a level that is far from rich, and which, in the 1920s, would have been taxed at rates ranging from 16% down to 8%?

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Puzzling Juxtapositions

Have you noticed?

  • Obama won 52% of the vote—a “landslide,” according to the increasingly foolish mainstream media. California’s Proposition 8 also passed with 52% of the vote. Why is no one calling that a landslide?
  • Obama is said to have won because voters were concerned about the economy. But the stock market has plummeted since he was elected although there has been little economic news. Investors evidently see that his economic policies have a lot in common with those implemented under Herbert Hoover and FDR: raise taxes, restrict trade, increase federal spending, empower unions, and regulate.
  • The average UAW worker has a salary and benefits package worth almost $150,000. Two average auto workers who marry are likely to earn about $250,000 in salary between them. Shouldn’t Obama favor “spreading their wealth around”?
  • Thirty years ago, the average steelworker at the Ambridge (PA) plant made over $100,000 (in 1978 dollars!), due to lax overtime rules. The plant closed shortly thereafter. Maybe workers have been resisting unions, not because companies pressure them, but because they correctly note that unions tend to destroy the source of their jobs? In short, maybe workers realize that unions do not promote their long-term interests?
  • Why are those most concerned about monopolies and cartels among companies least concerned about monopolies and cartels among unions?
  • The likelihood of extensive and expensive regulation of carbon emissions, including scrapping over a hundred coal-burning power plants nearing completion and devastating coal-producing regions, has gone up dramatically, even while economic woes lower energy usage and evidence accumulates that the earth is cooling on its own.

On unions, consider these words of Meghan McArdle:

First, after the unions have put companies into an untenable position, they come to the rest of us looking for a handout to continue the unsustainable levels of pay and benefits. Almost everyone I know makes less than an autoworker, and has a whole lot less job security. Why should they pay autoworkers for the privilege of making cars no one wants?

I also really loathe and despise the way the unions use work rules and featherbedding to make their companies and industries less productive than they otherwise would be.

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He disapproves:

Barack Obama has the kind of cocksure confidence that can only be achieved by not achieving anything else.

Anyone who has actually had to take responsibility for consequences by running any kind of enterprise– whether economic or academic, or even just managing a sports team– is likely at some point to be chastened by either the setbacks brought on by his own mistakes or by seeing his successes followed by negative consequences that he never anticipated.

The kind of self-righteous self-confidence that has become Obama’s trademark is usually found in sophomores in Ivy League colleges– very bright and articulate students, utterly untempered by experience in real world….

For someone who has actually accomplished nothing to blithely talk about taking away what has been earned by those who have accomplished something, and give it to whomever he chooses in the name of “spreading the wealth,” is the kind of casual arrogance that has led to many economic catastrophes in many countries.

The equally casual ease with which Barack Obama has talked about appointing judges on the basis of their empathies with various segments of the population makes a mockery of the very concept of law.

After this man has wrecked the economy and destroyed constitutional law with his judicial appointments, what can he do for an encore? He can cripple the military and gamble America’s future on his ability to sit down with enemy nations and talk them out of causing trouble….

Add to Obama and Biden House Speaker Nancy Pelosi and Senate Majority Leader Harry Reid, and you have all the ingredients for a historic meltdown.

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