Would you willingly spend $2,000 to buy an iPhone that today costs a grand? That’s how much veteran analyst Tim Bajarin tells me it would cost Apple to retail if it made iPhones in the United States.
Why shouldn’t Apple makes iPhones here? Well, here’s the problem. It’s not just money. Yes, there’s way lower labor costs involved. Skilled workers in China make about $100 a week, way less than we offer. There’s also the availability of parts in Asia and the lack of suitable manufacturing facilities here.
Think about the parts dilemma for a second. Remember that Apple makes more than 200 million iPhones yearly and has to come up with OLED screens, camera sensors, solid state storage drives and the like to put into every one of them.
These are all made-in-Asia products. “We lost manufacturing to Asia, Southeast Asia, India and Mexico two to three decades ago, and it’s never coming back,” Bajarin told me recently. Apple’s not alone. Cameras have been made in Asia for decades, Samsung creates its Galaxy phones in South Korea, Vietnam and India, Amazon gets Echo speakers made in China and Google gets the Pixel phone made in South Korea.
And from National Public Radio’s Marketplace‘s Stacey Vanek Smith’s 2014 report when the iPhone 5 cost between $650-$850 retail:
Labor’s not the most significant financial advantage to manufacturing the iPhone in China, where Apple has been able to create enormous iPhone-assembling villages. “They have these special regions, like Shenzhen, which is an industrial region,” explains Rene Ritchie, editor-in-chief of iMore, a publication about Apple products. “Anything you need is just a couple of buildings away, and the ability to keep everything so close together has incredible logistic advantages for Apple.”
Ritchie says it would be almost impossible to re-create that in the U.S., which would mean longer assembly times, less efficient assembly and lots of micro-shipments. “It’s an incredibly complicated process to build one of these devices and you’d have to move that entire culture of production to the U.S. in order for it to work,” says Ritchie.
“For almost every component that goes into the device, there may be as many as two or three sources,” says Andrew Rassweilier, Senior Director of Materials and Cost Benchmarking at IHS technology. “Then if you were to dig down another layer into some of the components, such as the display, the touch screen, the batteries. Those are also assemblies that are comprised of multiple components coming from, potentially, multiple counties.”
Rassweiler says making all of the iPhone’s parts in the U.S. would push the price of the iPhone’s components from $190 to around $600. “If the materials alone are costing $600,” says Rassweilier, “it stands to reason, that same iPhone could cost, perhaps, $2,000 at retail.”
That’s right. $2,000 for an iPhone. And it wouldn’t even earn political goodwill from most of its customers.
The U.S. only brings in 6 percent of profits from iPhone sales. “Two out of three Apple customers aren’t in the USA anymore,” says the Yankee Group’s Carl Howe. “That’s quite a change from many years ago when most of Apple’s customers were in the US.”
In addition to not understanding the basic economic principles of international trade, the Mercantilist-in-Chief also apparently doesn’t understand very well the business principles and dynamics of international production activities that are driven by complex, intricate, cross-border, global supply and value chains that have taken decades to develop. And it’s those global supply chains that are at work with the ultimate goal of producing products most efficiently to provide maximum value for global consumers. The Apple iPhone is a perfect example of a globally produced product for global consumers, with two-thirds of those consumers living outside the USA.
Apple, Inc. has a responsibility to its shareholders and consumers to produce and sell its products at the lowest price in a hyper-competitive global marketplace. Large multi-national corporations like Apple, although many are headquartered in the USA, operate in global marketplaces for inputs, parts, production, and sales and have to operate with a global mindset to be competitive and remain in business. To force those global companies like Apple to operate within Trump’s nationalistic and mercantilist view of the global economy is a sure formula for impoverishing America and its multi-national corporations, not a formula for any kind of American greatness.
https://libertyfirst.org/wp-content/uploads/logo_v6_225x110.png00DrRichSwier.comhttps://libertyfirst.org/wp-content/uploads/logo_v6_225x110.pngDrRichSwier.com2022-08-16 16:52:342022-08-16 16:52:34A ‘Made in America’ iPhone Would Cost $2,000, Studies Show
In each of these cities, inflation is higher than 10 percent.
My wife and I recently were out for our morning walk and she commented on how weird inflation is. Some prices are sky high, she observed, while others have barely budged.
A carton of eggs is up 33 percent over the last year, while tomatoes haven’t changed at all. Airline flights are through the roof, but the cabin we rented on our last vacation was several hundred dollars less than in previous years. Our electric bill is soaring, but her personal care products and my son’s new sneakers were about the same (or less) than what she had previously paid.
It’s clear that prices are a complicated business, and not just because value is subjective. The cost of producing and distributing goods in an economy is incredibly complex, something no single person can possibly understand, let alone calculate.
While the basic economics of inflation tend to be simple—increase the money supply and, all else equal, money becomes less valuable—the specifics of inflation can be complex and difficult to understand, because economies are complex and difficult to understand.
We see this not just in the fact that some products and services are impacted by inflation more than others. We also see it by the fact that inflation is rising in some places more than others.
While recent data released by the Labor Department show that inflation slowed down in July (8.5 percent annualized), it remains hot, especially in certain places. A recent report by WalletHub found that in many US cities, prices are 10 percent higher than a year ago.
Below is a list of the five cities where inflation is the highest, according to the latest Consumer Price Index (CPI) data.
Anchorage, Alaska: 12.4%
Phoenix, Arizona: 12.3%
Atlanta, Georgia: 11.5%
Tampa Bay, Florida: 11.2%
Baltimore, Maryland: 10.6%
‘Largely a History of Inflation’?
Following the release of the government’s inflation numbers on Wednesday, many suggested the US economy may be at an inflation “turning point.” Hopefully this is true, but it is far from certain.
An abundance of historical evidence shows that governments are far better at creating inflation than curbing inflation, a phenomenon that has plagued (and even destroyed) civilizations ranging from the Roman Empire to 20th Century China and beyond.
“I do not think it is an exaggeration to say history is largely a history of inflation, usually inflations engineered by governments for the gain of governments,” the Nobel Prize-winning economist F.A. Hayek once observed.
This is why Hayek saw it as imperative to take the control of money “out of the hands of government.” History shows that those in power spend beyond their means, and these debts eventually come due. When they do, rulers turn to money printing or other forms of currency debasement, eroding its value (sometimes slowly, sometimes rapidly).
The US is a long way from the hyperinflation that crippled Weimar Germany—where in 1923 a single US dollar was worth a trillion marks—and plagues Venezuela even today, but inflation is a patient killer. Over time, it eats away at retirement accounts, pensions, wages, and savings, and as my colleague Peter Jacobsen noted last year, working-class and poorer Americans are the ones least able to protect themselves from inflation and most likely to feel the difference.
Most Americans don’t need an economist or politician to point out the harms of inflation, especially those living in Anchorage, Phoenix, Atlanta, Tampa, and Baltimore.
What they need is sound money, but it’s clear that is something they will not get as long as the government controls it.
Jonathan Miltimore is the Managing Editor of FEE.org. His writing/reporting has been the subject of articles in TIME magazine, The Wall Street Journal, CNN, Forbes, Fox News, and the Star Tribune. Bylines: Newsweek, The Washington Times, MSN.com, The Washington Examiner, The Daily Caller, The Federalist, the Epoch Times.
https://libertyfirst.org/wp-content/uploads/logo_v6_225x110.png00DrRichSwier.comhttps://libertyfirst.org/wp-content/uploads/logo_v6_225x110.pngDrRichSwier.com2022-08-16 16:52:332022-08-16 16:52:33The 5 Cities With the Highest Inflation in America
What are we, medieval peasants? Of course we will hack our showerheads.
Showerheads used to be easy to hack. And never doubt the need to do so. What do we want out of a shower? We want fantastic amounts of water pouring down on our heads, ideally like the waterfall we see in movies and art. At very least, this requires pulling out the government-mandated flow stopper after the purchase and before the installation.
In recent years, these stoppers have become more difficult to remove. Some are downright impossible. A few years ago, I bought an expensive showerhead and spent Saturday afternoon with hammers, ice picks, drills, and the experience ended in total frustration.
So yesterday, I decided to settle the issue once and for all. I sprung for 5 different showerheads – purchased based on what I perceived to be their hackability – and tried it out on each one. I’m astounded and thrilled at the results. It turns out to be ridiculously easy and cheap to bypass the bureaucrats and enjoy a decent shower.
The Background
Bad showers by government mandate are one symptom of a larger problem. Beginning in the 1970s, and in the most stealthy way, government at all levels began to unravel the gains civilization had made over the century in household management. Through regulations, bans, restrictions, and controls, essential domestic functions have been seriously compromised.
Think of all the great advances: indoor plumbing, showers and baths, washing machines, dishwashers, refrigerators, and flush toilets. What would life be like without them? None of us can even imagine. But the government apparently can imagine it because its regulatory apparatus is gradually taking them all away.
To be sure, government once pretended to do good things for us like build parks, boost income, bring electricity to rural areas, and the like. Today, it is the opposite. It sees its role as restricting and tearing down what the private sector creates — for our own good. This is why it is constantly telling us that it must curb our lifestyles. The regulators restrict what we consume, control what we do, crack down on our ability to live a good life.
If some activity is going well, some new item is making life better, some food or gadget is newly popular, you can be sure that some bureaucrat is plotting to restrict its use or ban it. Politicians on both the left and the right imagine that their main role is thinking of ways to control how we live, direct how we spend what money we make, and take away freedoms and rights once taken for granted.
A glorious morning shower is one casualty of this regulatory invasion.
The Showerhead
If you head to the Delta Faucet site, you will see a notice about flow restrictors in their showerheads. “While it is possible to remove flow restrictors from showerheads, we strongly advise against it for several reasons. Flow restrictors for faucets are an integral part of most aerators and it is generally not possible or desirable to remove them.”
Is that so? Of course it is not so. Showers in the old days were fantastic. They covered us with water — hot water — and kept us clean. Then government got involved to regulate how much water the bureaucrats think we should be using. The result was the mandate that every showerhead had to be deliberately degraded. The words on the Delta website reflect fear of government and have nothing to do with reality.
Today smaller manufacturers have found profits in advertising showerheads with “removable” flow restrictors. These are best but you can also remove them from the parts you get at the big-box hardware stores. Once I had to actually take a drill to the thing to make it happen but it can be done. And it must be done or else you find yourself running around in the shower trying to get yourself covered with the pathetic trickle that the government has mandated for us.
You might have some vague memory from childhood, and perhaps it returns when visiting someone who lives in an old home. You turn on the shower and the water washes over your whole self as if you are standing under a warm-spring waterfall. It is generous and therapeutic. The spray is heavy and hard, enough even to work muscle cramps out of your back, enough to wash the conditioner out of your hair, enough to leave you feeling wholly renewed — enough to get you completely clean.
I was just in Brazil, a socialist country. Many terrible things are happening in this country but one great thing never changes. The showers are amazing. Amazing, I tell you! Go to Brazil and take a shower and you will never readapt to the terrible American ones.
Somehow, these days, it seems nearly impossible to recreate this in your new home. You go to the hardware store to find dozens and dozens of choices of shower heads. They have 3, 5, 7, even 9 settings from spray to massage to rainfall. Some have long necks. They glisten and look amazing. Masterful design!
Some you can hold in your hand. Some are huge like the lid to a pot and promise buckets of rainfall. The options seem endless. But you buy and buy, and in the end, they disappoint. It’s just water, and it never seems like enough.
Why do we believe that a showerhead can magically cause us to have better showers? The head part is only as good as the flow, and the flow needs to be as unimpeded as possible. It’s pretty simple if you think about it. All the rest is just marketing.
Regulatory Bite
Here is one example of why your showerhead cannot be good, from the Santa Cruz City Water Conservation Office: “If you purchased and installed a new showerhead in the last ten years, it will be a 2.5 gpm [gallons-per-minute] model, since all showerheads sold in California were low consumption models beginning in 1992.”
And it is not just crazy California. The Federal Energy Policy Act of 1992 mandates that “all faucet fixtures manufactured in the United States restrict maximum water flow at or below 2.5 gallons per minute (gpm) at 80 pounds per square inch (psi) of water pressure or 2.2 gpm at 60 psi.”
Or as the Department of Energy itself declares to all consumers and manufacturers: “Federal regulations mandate that new showerhead flow rates can’t exceed more than 2.5 gallons per minute (gpm) at a water pressure of 80 pounds per square inch (psi).”
As with all regulations, the restriction on how much water can pour over you at once while standing in a shower is ultimately enforced at the point of a gun. Manufacturers must adhere to these regulations under penalty of law, and to be on the safe side and adjust for high-water pressure systems, they typically undershoot. If you try your showers right now, you will probably find that they dispense water at 2 gallons per minute or even less.
Together with other regulations concerning water pressure, your shower could fall to as low as 1.5 gallons per minute! This is not a modern shower. This is medieval peasantry. Poverty. Pathetic, state-of-nature stuff.
Sign of Prosperity, Gone
A rotten shower creates a rather serious problem for nearly everyone in the country. In the post-war period, Americans fell in love with luxurious showers, just because we could. A long shower with a blasting spray is a sign of prosperity, individualism, and good health. Popular lore holds that Americans are some of the most showered people in the world. If so, part of the reason is that we had great showerheads.
Clearly, the regulators, who regard it as their job to crush luxury and convenience whenever possible, wanted to put a stop to this. That’s the reason for the flow restrictors. Forget all that talk about saving water: these restrictions have a negligible effect on overall water use. In any case, whether we use more or less water should be governed by market forces.
To be sure, some companies have tried to get around the regulations by making models with multiple showerheads. This worked for a while because the regulations, if read literally, only regulate the amount of water a per-shower-head basis. But the companies that make double and triple-headed models have also faced investigation and harassment.
But then what can the government do about the length of showers? After all, there is no real way to regulate how much water we use and pay for. Maybe the shower heads have to have timers on them. And maybe the feds need to put up little monitors in our showers to make sure that we have stopped and started them.
You might say that water needs to be conserved. Yes, and so does every other scarce good. The peaceful way to do this is through the price system. But because municipal water systems have created artificial shortages, other means become necessary. One regulation piles on top of another, and the next thing you know, you have shower commissars telling you what you can or cannot do in the most private spaces.
You Pay for What You Use
And also consider this. According to the government’s own water usage statistic, domestic use constitutes only 1 percent of the total, and that includes all the water we use on our lawns. In other words, whether we use a lot or a little bit of water in our showers means absolutely nothing as regards our nation’s consumption of water. Why are they doing this to us then? Just to spread that sense of obedience and misery, I suppose. But has central planning ever been more ridiculous, intrusive, and self-defeating?
Most manufacturers adhere to the regulations, and the government has pushed them to make their products ever more useless. But savvy consumers know how to get around the problem. Many people now hack their showers — or customize them, if you prefer.
You can take your shower head down, pull the washer out with a screwdriver, and remove the offending intrusion that is restricting water flow. It can be a tiny second washer or it can be a hard plastic piece. Just pop it out and replace the washer. Sometimes it is necessary to trim it out using a pen knife.
Using such strategies, you can increase your water flow from 2 gallons per minute to 3 and even 4 gallons per minute. You can easily clock this using a stopwatch and a milk carton.
Using this method, I was easily able to expand my gallons per minute on each shower in my house to an average of 3.4 gpm, thereby recreating that childhood sense of gushes of water pouring down.
But Which One?
I headed over to Home Depot and checked out their selection. You have to be very careful. There are hundreds of products, ranging in price from $1.97 to this one for $4,249.69:
Fancy, huh? I can’t be sure but I’m guessing that you can’t hack it. It does no more to get water on you than the cheapest one. But it can be intimidating even just shopping. We all want a good shower, and most of us know that our showers are terrible. Surely spending more will improve our lot in life? Surely? Here is the shocking answer: no. It will not be better. It will be fancier but not better.
I bought 5 affordable ones, and hacked 4 of the 5 (the 5th one I destroyed and still couldn’t hack).
There was one showerhead that was the easier to hack. I pulled out the washer and pushed in long-nosed pliers. The flow stopper came right out. I put the washer back in and put it in the shower. The results are absolutely spectacular.
But here is the shock. The right showerhead is the cheapest one they offer. It costs $1.97. It is plastic. Light. Pretty. Easy to hack. Forget the supposed performance rating. Once hacked, this beauty is an 11.
You know the old rule that you get what you pay for? Maybe that is true in a pure free market. But in our regulated, truncated, tricked-up consumer marketplace, illusions abound. Sometimes you are just paying for what you think will be better but is actually not. This is the #1 example I’ve ever seen.
And you know what? I love that I’ve written this article, especially if you follow my advice. You will be thanking me every day for the rest of your life.
Here is my image post-hacking. I used the one tool pictured here and the offending flow-stopping was easily removed.
Conclusion
Government is often working to roll back the gains markets have made over the centuries and slowly unravel the resulting civilization, driving us back and back. Fortunately government is doing this more slowly than private markets are building civilization, which is why we continue to see progress all around us. It’s a race between them and us. How long can we keep outrunning them? I don’t know, but insofar as we are able, we must keep trying.
Hacking your showerhead is a great start. It is a way to be part of the solution. After all, it will only set you back $1.97 and about 10 seconds of your time.
You don’t even have to take the risks of dealing with a black-market showerhead dealers, as in this famous Seinfeld episode.
Think your rent is too damn high? Well, taking a look at the latest figures out of Manhattan might make you feel better by comparison.
In July, the average rent for a one-bedroom in Manhattan rose to $5,113, CBS News reports. That’s an astounding $1,000 more than a year ago and a new record high. These levels of rent are astronomical and impossible for all but the most affluent New Yorkers to afford.
But before you blame capitalism or greedy developers, let’s take a deeper look at how rents in New York City got so out of control.
The Basics of Rental Markets and Supply & Demand
How are rental prices determined in the first place? Well, in a free market, supply and demand interact to reach a price. If there’s far more demand for housing than there is supply in a given area, rents will be high, at first. But those high rents will encourage more developers to come in and build housing, increasing supply and ultimately bringing the price down.
Yet in places like New York City, local governments have made that adjustment impossible through restrictions on supply. The result of artificially-constrained housing supply in a high-demand area is as predictable as it is perilous: high prices and a housing crisis.
How Has NYC Restricted Supply?
There’s a long and complicated history of government meddling in New York City’s rental market. But here are a few of the biggest ways local officials have hindered the market’s ability to provide affordable housing.
1. Single-Family Zoning & Height Limits
Through zoning, the local government has declared that large swaths of the city’s property may only host single-family residences. This doesn’t make much sense in a city with millions of people.
According to the advocacy group Open New York, “Roughly 15% of New York City’s land area is still zoned as single-family-only land, banning apartments or multiple-unit dwellings of any size, including those with only two units.” These restrictions are highly inefficient and prevent the development of large-scale housing, like apartments, that could greatly increase the supply compared to a single home.
So, too, arbitrary restrictions on height limits remain in place on many NYC properties. These force landlords to provide fewer apartments per lot than they’d otherwise be able to, fueling the affordability crisis and pricing New Yorkers out of homes, often in the name of scenic beauty or protecting special interests.
2. Highly Restrictive Permitting Process
New York City’s government has made it very hard to get approval to build new housing.
“New York City housing permitting has cratered to lows not seen since the Great Recession, and it’s not for lack of demand,” housing policy expert Nolan Gray told me. “NYC [has] had some of the strictest zoning rules in the country, making it hard to legally build much of anything.”
Look, for example, at the below graph showing how much housing (relative to population) various cities have permitted in recent years. You’ll see New York City at the very bottom.
With the supply of new housing so blatantly throttled, it’s no surprise that rents have skyrocketed. It’s exactly what the laws of economics predicted, given the myriad government restrictions on NYC’s housing market.
But, unfortunately, many unknowing onlookers may look at the egregious $5,000+ rent rates popping up in Manhattan and blame the market, when, in fact, it is the government’s constraints on the free market that are to blame. They might even respond to the manifest injustice of this affordability crisis by supporting more of the nice-sounding, big-government policies that got us into this mess.
Yet, hopefully, people can look deeper and see the real root causes at play here. Because New Yorkers will continue to suffer until policymakers wake up—and finally free the rental market once and for all.
https://libertyfirst.org/wp-content/uploads/logo_v6_225x110.png00DrRichSwier.comhttps://libertyfirst.org/wp-content/uploads/logo_v6_225x110.pngDrRichSwier.com2022-08-16 15:51:202022-08-16 15:51:20Rents for One-Bedroom Apartments in Manhattan Hit a Record High of $5,100 in July. Here’s Why
Editors Note: The following is an excellent analysis of this atrocious piece of legislation. While the “devil is in the details”, we cannot forget that our own Senator, Krysten Sinema, and Joe Manchin are the two people that previously held the line against Build Back Better, only to cave on a slightly less expensive version. But, they were hardly alone as it took complete Democrat Party loyalty to pull this off. But closer to home, when you think of a hoard of bureaucrats driving up the price of gasoline and auditing your returns, remember BOTH Senators from Arizona voted for this monstrosity. They are betting we will forget. We won’t. We have a chance to vote out Kelly this fall. Let’s get on with it. Donate time, money, and effort. If it is not worth the effort now, then when?
In a major reversal, U.S. Senator Joe Manchin (D–WV) struck a deal with Senator Chuck Schumer (D–NY) to enact a major climate, entitlement, and tax bill. This legislation has been praised by President Biden, Al Gore, and otherproponents of highly progressive policies.
Dubbed the “Inflation Reduction Act of 2022,” Senate Democrats voted to pass this bill only 11 days after releasing its 725 pages of text. Democrats are pushing this bill so rapidly through Congress that the Congressional Budget Office estimates it won’t be able to “provide a complete cost estimate for the legislation” until more than a week after Congress is expected to pass it.
“address record inflation by paying down our national debt, lowering energy costs and lowering healthcare costs.”
“displace dirtier products” and ensure “American energy is affordable, reliable, clean and secure.”
bring “good paying energy and manufacturing jobs back to America.”
“make America more energy secure” and “financially sound.”
not raise taxes on “families and small businesses making less than $400,000 a year.”
“lower the cost of healthcare for working families and small businesses.”
support “the everyday hardworking Americans we have been elected to serve.”
adopt “a tax policy that protects small businesses and working-class Americans….”
In reality, the legislation will do almost none of what Manchin claims it will—and often the exact opposite. If it becomes law, the Inflation Reduction Act of 2022 will:
have no material impact on inflation.
increase pollution by subsidizing electric vehicles, which emit more toxic pollutants over their lifespans than normal cars.
enrich “green” energy investors while doing little-to-nothing to help workers.
raise energy costs and make America poorer by subsidizing products that are much more expensive.
harm the manufacturing sector.
enact hidden taxes that fall on Americans of all income groups.
reduce incentives to work by giving people more welfare.
increase the costs of prescription drugs for working Americans by pushing more of the research and development costs onto them.
target wealthy people with IRS audits while letting the vast bulk of tax dodgers continue cheating the honest taxpayers of America.
For more details and thorough documentation of these facts, continue reading.
The very name of the “Inflation Reduction Act” and nearly everything Joe Manchin has said about it is a farce that betrays his promise to support “the everyday hardworking Americans we have been elected to serve.” Contrary to Manchin’s claims that his bill will:
reduce inflation, there is no credible evidence it would do so.
“displace dirtier products,” it heavily subsidizes electric vehicles, which emit more pollution over their lifespans than normal cars.
will bring “good paying energy and manufacturing jobs back to America,” it will enrich green energy investors while neglecting workers and harming the manufacturing sector.
lower energy costs, it enacts a form of stealth spending to subsidize energy products that are far more costly than other options.
not raise taxes on “families and small businesses making less than $400,000 a year,” it does exactly that by enacting hidden taxes that fall on Americans of all income groups.
“lower the cost of health insurance,” it will make taxpayers pick up the tab by forcing them to pay Obamacare subsidies for people with incomes above 400% of the poverty line.
“lower the cost” of prescription drugs, it will simply shift more of those costs onto working Americans.
ensure people “making less than $400,000 and small businesses will not be targeted” by the IRS “because they are already paying their taxes,” the bill will let the vast bulk of tax dodgers continue cheating the honest taxpayers of America.
Are you fed up? Are you worried that America in rapidly sliding into a neo-Marxist state by the radical left in control of Washington with historically narrow majorities in the U.S. House and Senate and an Executive controlled by unnamed far leftists in place of a clinically incompetent President Biden. They are desperate to keep power and complete their radical progressive agenda that will change America and our liberty forever.
Americans just witnessed the passage of the Inflation Reduction Act of 2022 without one Republican vote in the U.S. Senate and House (just as Obamacare was passed in 2010). The IRS will be hiring 87,000 new agents, many armed, to terrorize American taxpayers.
Americans witnessed the FBI raid at the Trump Mar-A-Lago home and property of President Trump, truly a first in all of American history. We know what that is about.
It is undeniable that the Democrat Party and the administrative state (the executive branches of the DOJ, FBI, IRS, et al) are clear and present dangers to our Republic and our liberty as they increasingly veer further away from the rule of law and the Constitution. What is the solution? At this critical juncture, there is only one action we can all take.
The only viable and timely solution at this critical point is to vote – yes, vote correctly and smartly to retake the U.S. House and Senate on November 8th and to prepare the way to retake the White House in two years. Vote and help everyone you know to vote. Please click the TAKE ACTION link below – we must vote correctly and in great numbers to be sure our votes are counted to diminish the potential for the left to rig and steal the midterms and the 2024 elections as they are clearly intending to do after their success in 2020.
https://libertyfirst.org/wp-content/uploads/logo_v6_225x110.png00ThePricklyPear.orghttps://libertyfirst.org/wp-content/uploads/logo_v6_225x110.pngThePricklyPear.org2022-08-16 04:00:002022-08-16 04:00:00The “Inflation Reduction Act” Will Do Almost Nothing That Joe Manchin Says It Will
Our various governments allocate money. Then the money goes into a black hole. Readers of this column know I tried to find out where Los Angeles City spent $1 billion on homelessness in a recent year and hit a brick wall. As you know our federal government has allocated amounts in the trillions and we never find out where the money goes. Remember President Obama’s “shovel-ready jobs?” Where did that money go?
There is now a study on the Paycheck Protection Program (PPP), so I decided to dig into it.
The study was performed by a team at the National Bureau of [Economic] Research (NBER) headquartered in Cambridge Mass. The study was headed by David Autor who is MIT’S Ford Professor of Economics. Professor Autor was initially responsive especially after I sent him a misrepresentation of the program from a Left-wing author. Unlike the errant Leftist, I have intimate knowledge of the program as I helped some clients make applications and answered hundreds of their questions.
I found fault with the study from the beginning since it did not adequately explain the genesis of the program. The study did identify that it was a completely new program that was envisioned to work through our banking system (banks did the loan package review) with final approval of the loans by the SBA. The study properly cites there were initially some unanswered questions. Considering that the program was new, the amount of unanswered initial questions were minor. The biggest one was whether there would be federal loan relief with proof of proper fund usage. It was determined that the loans would be relieved.
Overview of the program: In 2020, the federal government decided they would do a shutdown of businesses with the idea that it would stem the pandemic. The idea of the program was to provide funds for small businesses to stay alive and keep their workforces intact so that when the pandemic subsided the businesses would be able to gear up quickly and not cause major economic upheaval. The employees would be kept in place and off unemployment. Of course, COVID was not as short-term as initially believed, but the U.S. was only in an economic downturn for two months and PPP helped steady business owners through an uncertain time.
The study stated, “The program deserves high marks for timeliness.” Other systems were in place to deliver money to people, “but these systems struggled to handle the flood of initial unemployment insurance claims.” “Despite obstacles, PPP succeeded in delivering a staggering sum of money over a two-month period in the spring of 2020.”
The study produced some bizarre (unexplained) statistics. It stated that the per job preserved cost was between $170,000 and $257,000 each. Since the program was aimed toward eight weeks of payroll and the most it could cover of any employee’s salary was based on an annual amount of $100,000 — or $15,384+ related payroll taxes — the authors’ calculation of cost per job saved made no sense.
The authors stated the program had a 94% participation rate. With an estimated 31.7 million small businesses as per the Small Business Administration (SBA), that made no sense either because 30 million businesses did not participate. The authors also stated 66% to 77% of the PPP funding did not go to wages. It is a mystery how they came to that conclusion since to get loan relief you had to prove that you spent 60% of money on wages.
Why certain small businesses got funded while others did not is something the authors correctly questioned. These are small businesses that generally do not carry significant in-house accounting staffs geared to applying for such programs. The companies that had relationships with outside consultants (like CPAs) that could perform the calculations quickly were able to get their loan packages in promptly and get approval in the first group of loans. Other owners who were not as astute were left without funding in the initial group of loans. By the time they woke up, they were able to get funding in the second group of loans in 2020.
Also, the fact some businesses had strong banking relationships helped to grease the wheels during the loan process. Others who did not know their banker faced greater challenges. Listen up: know your banker.
The authors criticized the program because banks largely processed loans from their existing clientele (thus shutting out others) due to the volume of loans requested. This turned out to be a godsend for protecting the integrity of the program. Since the banks were largely dealing with existing clientele, it cut significantly into the fraudulent outlays experienced in other programs due to funding “faceless” people (i.e., unknown) during this period of upheaval.
The authors did draw a conclusion with which I wholeheartedly concur. There was a third release of PPP loans in 2021 which was based on requirements of reduced levels of revenues in 2020 for the applying businesses. This aspect of funding was largely unnecessary since the economy had already bounced back and the stimulus was overkill.
The authors came to two conclusions showing their true colors which were either left-of-center universities or the federal reserve (quasi-governmental employees). The first conclusion was that “building U.S. administrative capacity prior to the next pandemic” would be an enhancement to the program. No, it would not. It would just add layers of government employees that have no sense of urgency to administer a program. These employees would be there waiting for another pandemic while we paid them for doing nothing. It is a nonsensical recommendation. The program as designed turned out to be genius. Experienced professionals working through the existing banking system reviewed loan packages of largely pre-existing relationships cutting down time and assuring the integrity of the applications. No, we do not need more government employees.
The authors also concluded that the unemployment system payments went more directly to households, so they believed that the program was more successful in distributing money to lower-income individuals. That may be correct in small regard because it was getting money to people that were now unemployed because their employers had been crushed by the government-mandated operational shutdowns. The authors did not mention the overwhelming amount of fraud in this program, estimated at a $20 billion minimum in California alone. The GAO estimated the 2021 fraud in the program nationally was $78 billion. Yet the authors suggested the unemployment system was more effective than PPP.
The other aspect the authors left out was that the people trying to receive the benefits faced an unemployment benefit bureaucracy that during good times is largely unresponsive. During the pandemic, it was simply overwhelmed with increased applications while the government employees worked out of their homes with inadequate computers and communication systems.
The overarching conclusion in reviewing the study is to not rely on studies like these. The authors had no firsthand experience with the program. In fact, they probably have never had firsthand experience with any program. They create complicated formulas with biased outcomes toward governmental-run programs because that is what they understand.
PPP — except for the unnecessary funds laid out in the second year of the program — was remarkably successful in keeping small businesses in place and the economy running. It was successful because it was designed by people who had real-world experience as opposed to lifelong government wonks or think tank eggheads. Did it have flaws? Yes. Considering it was developed on the fly in the middle of a unique crisis it worked out pretty darn well with a minimum of fraud.
*****
This article was published by FlashReport and is reproduced with permission from the author.
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Are you fed up? Are you worried that America in rapidly sliding into a neo-Marxist state by the radical left in control of Washington with historically narrow majorities in the U.S. House and Senate and an Executive controlled by unnamed far leftists in place of a clinically incompetent President Biden. They are desperate to keep power and complete their radical progressive agenda that will change America and our liberty forever.
Americans just witnessed the passage of the Inflation Reduction Act of 2022 without one Republican vote in the U.S. Senate and House (just as Obamacare was passed in 2010). The IRS will be hiring 87,000 new agents, many armed, to terrorize American taxpayers.
Americans witnessed the FBI raid at the Trump Mar-A-Lago home and property of President Trump, truly a first in all of American history. We know what that is about.
It is undeniable that the Democrat Party and the administrative state (the executive branches of the DOJ, FBI, IRS, et al) are clear and present dangers to our Republic and our liberty as they increasingly veer further away from the rule of law and the Constitution. What is the solution? At this critical juncture, there is only one action we can all take.
The only viable and timely solution at this critical point is to vote – yes, vote correctly and smartly to retake the U.S. House and Senate on November 8th and to prepare the way to retake the White House in two years. Vote and help everyone you know to vote. Please click the TAKE ACTION link below – we must vote correctly and in great numbers to be sure our votes are counted to diminish the potential for the left to rig and steal the midterms and the 2024 elections as they are clearly intending to do after their success in 2020.
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Imagine if this system were to be extrapolated to other fields.
The present system for pharmaceutical drugs requires a doctor’s prescription as a precondition for their sale to members of the public.
At first glance this seems like a reasonable plan. After all, most people simply lack the necessary information to determine whether they need or can benefit from drugs such as Penicillin, Vicodin, Albuterol, Lisinopril, Levothyroxine, Gabapentin, Metformin, Lipitor, Amlodipine, Tamsulosin, Finasteride, Digoxin, Metoprolol, Celecoxib to name but a tiny sample of those drugs covered by this rule. Moreover, even if people had that knowledge, which the average person most certainly does not, they would be totally lost as far as proper dosage is concerned.
However, all is not well under present institutional arrangements. For here we are not talking about advice and counsel from a physician to a patient. That is all well and good. Rather, the problem is that the horse is placed before the cart: the client must seek the permission of a person who is for all intents and purposes an employee of his, not an employer.
That should be the proper relationship between the two, and in the free society that is exactly what would occur. Instead, nowadays, the patient is not seeking, nor obtaining, information, knowledge, advice. Instead, he must appear on bended knee to beg for permission from his physician.
Imagine if this system were to be extrapolated to other fields of endeavor. Then, instead of the motorist telling the mechanic which of his services he requires, matters would be inverted: the former would have to gain the approval of the latter regarding the proper procedures to be followed. Instead of the customer telling the cab driver where to go, the former would have to seek approval from the latter regarding the destination deemed by him to be the most appropriate.
Similarly, the diner would have to ask the permission of the waiter as to what kind of meal to order; if the latter deemed the former’s choice to be in any way problematic, he would simply reject his request. Travelers would propose destinations to air carriers; the latter would say yea or nay. After all, doctors nowadays sometimes refuse to write prescriptions for patients if they deem those prescriptions harmful; they make the final determination to the request, not the order, of the patient.
Yes, yes, there are disanalogies here. Pharmaceuticals have life and death implications, certainly those for good health. Some, but not all of these examples are fully apropos. But this is a dramatic and accurate way of depicting exactly what is going on in the prescription system.
How should matters work, ideally? Architects give advice to builders. Mechanics give advice to automobile owners. That is exactly the relationship that should prevail between a doctor and a patient. The former should advise the latter as to proper medication. But the patient should be free to ignore what the physician says, to seek a second opinion, and to have access to whatever (legal) drug there is out there. (All drugs should be legal, but that is entirely a different matter.)
Lawyers know more than us about law; the same thing follows; they are our employees, not employers. Physicists, chemists, mathematicians, economists, musicians, plumbers, and electricians are also more knowledgeable about their own specialties than we laymen; still, this gives them not a shred of justification to boss us around.
Yes, doctors, too, know more than us, specifically about medicine. But that shouldn’t make them our bosses. Their brief should not be to permit, or to withhold permission. We, their clients, are not children. We should not be treated as such.
Walter Edward Block is an American economist and anarcho-capitalist theorist who holds the Harold E. Wirth Eminent Scholar Endowed Chair in Economics at the J. A. Butt School of Business at Loyola University New Orleans. He is a member of the FEE Faculty Network.
EDITORS NOTE: This FEE column is republished with permission. All rights reserved.
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It looks as if we can add another line to the long list of lockdown harms. Sloth.
This explains so much actually. For months, we’ve been watching working/population ratios and labor participation rates and have been stunned by how they both continue to plummet. We search for explanations. Early retirement. Women driven out due to childcare shortages. Unemployment payments.
All these factors contribute but there is still more to explain.
In the midst of the astonishing hullabaloo over the raid of Donald Trump’s home – and the confiscation of a pro-freedom Republican Congressman’s smartphone – the Bureau of Labor Statistics dropped a remarkable report on labor productivity. Here we see something we’ve never seen before.
It’s low and falling. Lower than it has been than in the entire postwar period. It breaks all records. This chart is from 1948 to the present. It adjusts for all factors including participation, population, retirement, and so on. It only looks at hours over output. Here is what we see.
What does this mean?
The immediate response might be that Americans have gotten lazy. They got used to their Zoom lifestyles and pretending to work. They want to hang around on apps, Tweet, chat it up with their friends on Facebook or Slack, and otherwise fake out the boss who can’t fire them anyway for fear of lawsuits. They aren’t doing much anymore, at least not those in high-end employment in professional office suits.
I resisted that conclusion and looked more deeply into how this number is calculated. It looks at total economic output compared to the number of labor hours from the wage and salary of employees involved in making that output. The result is a figure that estimates productivity per hour. And yes, it is probably widely inaccurate as these sorts of macroeconomic magnitudes tend to be. We use them anyway because they are consistently inaccurate: the same method used to calculate in one quarter is used to calculate in all. It thereby becomes useful.
And what it reveals is probably what we might expect. American workers have dealt with lockdowns and shutdowns, plus vaccine mandate demoralization, plus inflation eating away at real wages, plus an existing or impending recession, and you have the result. A nation of goof-offs.
It might be more than that. Lockdowns kicked off a national substance-abuse crisis: liquor, drugs, weed, you name it. And depression too. Even today, one cannot help but notice the smell of weed in large cities. This is not the smell of ambition and productivity.
We can combine this with the sheer number of people who have left the workforce completely and you paint a grim picture.
Economist and Brownstone Senior Fellow David Stockman has an interesting take on this. Rather than just fire people outright, companies are keeping unproductive employees on the payroll just in case. He writes:
Today’s Q2 productivity report…came in at -4.7%, on top of the -7.7% decline posted in Q1. Together they amount to the worst back-to-back productivity declines ever reported.
Our point is that this development puts a whole new angle on the so-called “strong” labor market. To wit, owing to the labor market turmoil and disruptions of the Covid-Lockdowns and massive stimmy injections since 2020, employers are apparently hiring on a just-in-case basis like rarely before. This is otherwise known as top-of-the-cycle labor hoarding.
As shown below, since Q4 2021 economic output, which is a close derivative of real GDP, has shrunk by –1.2%. By contrast, the US nonfarm payroll has increased by 2.77 million jobs or nearly +2.0%.
Needless to say, with far more labor spread over contracting output, labor productivity took it on the chin. That is to say, bad Washington policies including $6 trillion of stimmies, massive money-pumping and the brutal Lockdowns of the Virus Patrol have apparently left employers dazed and confused.
At length, however, employers will wake-up to the fact that bloated payrolls against declining sales will result in a severe profit margin squeeze. Then the labor-shedding and layoffs will commence big time, even as the Keynesians in the Eccles Building are reduced to babbling about the “strong” labor market which suddenly vanished.
What he is getting at is what I’ve called (after Keynes) the coming euthanasia of the overclass. It won’t be the people actually doing real stuff who will face layoffs but the Zoom workers who stayed home because government said they could and their employers could not object. Employees gradually discovered that they could be anywhere – at the pool, in bed, on the road, climbing mountains – and so long as they had a Slack app running, no one could tell.
Lockdowns acculturated an entire generation to believe that work is fake, productivity is a ruse, money comes for nothing, the boss is an idiot, and many workers are privileged to be wealthy forever due to papers handed out for $200,000 by colleges and universities. Who needs productivity, much less ambition?
In the old days, in an ethos formed from bourgeois experience over hundreds of years, the idea of working and doing one’s part was ingrained as a moral habit, part of the liturgy of life itself. When the government told everyone to stop in the name of virus control, something went haywire in people’s brains. If governments say that the work ethic amounts to nothing but pathogenic spread, and we can all contribute more by staying home and doing less, it’s hard to go back. It wrecked a generation. We are paying the price now.
The good news for the productive few is that this means higher wages and job opportunities galore, especially if you have the actual skill and a desire to work. The bad news for everyone else is that many companies will soon discover that you are useless. That’s when the unemployment numbers will start ticking up, making this recession look more like the ones in the past except for the relentless decline in real wages.
To answer the question about whether Americans have become lazy bums, the answer is many but not all. It’s sector-specific. And individual specific.
Are you fed up? Are you worried that America in rapidly sliding into a neo-Marxist state by the radical left in control of Washington with historically narrow majorities in the U.S. House and Senate and an Executive controlled by unnamed far leftists in place of a clinically incompetent President Biden. They are desperate to keep power and complete their radical progressive agenda that will change America and our liberty forever.
Americans just witnessed the passage of the Inflation Reduction Act of 2022 without one Republican vote in the U.S. Senate and House (just as Obamacare was passed in 2010). The IRS will be hiring 87,000 new agents, many armed, to terrorize American taxpayers.
Americans witnessed the FBI raid at the Trump Mar-A-Lago home and property of President Trump, truly a first in all of American history. We know what that is about.
It is undeniable that the Democrat Party and the administrative state (the executive branches of the DOJ, FBI, IRS, et al) are clear and present dangers to our Republic and our liberty as they increasingly veer further away from the rule of law and the Constitution. What is the solution? At this critical juncture, there is only one action we can all take.
The only viable and timely solution at this critical point is to vote – yes, vote correctly and smartly to retake the U.S. House and Senate on November 8th and to prepare the way to retake the White House in two years. Vote and help everyone you know to vote. Please click the TAKE ACTION link below – we must vote correctly and in great numbers to be sure our votes are counted to diminish the potential for the left to rig and steal the midterms and the 2024 elections as they are clearly intending to do after their success in 2020.
https://libertyfirst.org/wp-content/uploads/logo_v6_225x110.png00ThePricklyPear.orghttps://libertyfirst.org/wp-content/uploads/logo_v6_225x110.pngThePricklyPear.org2022-08-15 04:00:002022-08-15 04:00:00Did Lockdowns Turn Americans Into Lazy Bums?
Biggest investors in single-family houses: “We need to be patient and allow the market to reset.”
We’re now getting all kinds of commentary from housing industry insiders and big institutional investors in single-family houses. They’re talking about this during their earnings calls.
American Homes 4 Rent is one of them. The company was founded during the Housing Bust and bought up tens of thousands of single-family houses that it then rented out. In addition to buying houses, in recent years it has started building its own subdivisions with just rental houses, that are specifically built for rentals. The company received enormous amounts of funding over the years from investors, including when it went public via an IPO in 2013.
So American Homes 4 Rent, during its earnings call last week, said a bunch of things that we have already seen in the data. And the data coming from all directions has for months been pointing at a housing downturn.
There is now a huge supply of new houses for sale, in all stages of construction, over 9 months’ supply in total, according to the Census Bureau. In terms of the number of houses, by June, there were 463,000 new single-family houses at all stages of construction for sale, the highest since May 2008, and up by over 30%, from a year ago.
Homebuilders’ cancellation rates spiked to nearly 18% of their total signed contracts in July, more than double from earlier this year and last year, according to data from real estate consulting firm, John Burns. And this cancellation rate was even worse than the cancellation rate in April 2020, during the lockdowns.
The Census Bureau reported that sales of new single-family houses have plunged 17% from a year ago, and are just barely above the lockdown low of April 2020.
The National Association of Homebuilders reported that its index for foot traffic of prospective buyers of new houses plunged in June and is now down to levels not seen since 2014, except during the lockdowns in March and April.
Traffic is an indication of interest by buyers, and buyers have lost interest – at least at these prices.
Homebuilders reacted by cutting prices: 13% of the builders reduced home prices in June to boost sales “and/or limit cancellations,” according to the National Association of Homebuilders.
And based on Census data, prices of new houses have plunged 12% in the two months of May and June, as homebuilders are trying to sell their inventory that is piling up.
Similar thing with previously-owned houses, condos, and townhouses that a homeowner or investor is trying to sell. Realtors have been complaining for months about the plunging foot traffic and showings.
Sales of single-family houses nationwide dropped by nearly 13% year-over-year in June; and sales of condos and co-ops plunged by 25%, according to the National Association of Realtors. This was the 11th month in a row of year-over-year sales declines.
Just an example of what to expect: Pending sales in California – an indication of what future closed sales might look like – collapsed by 40%, according to the California Association of Realtors.
The sales declines have been accelerating, amid the surge in mortgage rates to around 5.5%, even as inventory is suddenly coming out of the woodwork.
The $739 billion Inflation Reduction Act of 2022 being pushed through the U.S. Senate to be passed by reconciliation (50 votes plus the Vice President) before the upcoming August recess is a threat to America’s economy and the well-being of all Americans. The article above makes clear that Senator Kyrsten Sinema is the one Democrat vote that America is looking at. She alone can stop this legislation. Please contact her at her office locations in Washington, D.C. and in Arizona by phone and letter. Click the red TAKE ACTION link below for Senator Sinema’s contact information.
Although Senator Mark Kelly is a do-as -Chuck Schumer- tells-you-to-do partisan shill, contacting him may be helpful given his significant vulnerability in the November general election. His contact information is also found at the TAKE ACTION link below. We suggest that copying him on your letter to Senator Sinema may possibly have some impact on his voting behavior. Calling his office is also important – the staffs do score the relative positions of constituents and this too may influence the voting behavior.
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Someone should tell Washington’s elite that Gulliver’s Travels is a satire, not a handbook.
Yes, in Part III of Jonathan Swift’s tale, Laputa sounds a lot like Washington, D.C. It also sounds a lot like the Spanish word for “whore,” about which the late P. J. O’Rourke is surely laughing from Heaven.
The island of Laputa floats miles above Balnibarbi, allowing the King and his court to focus on their interests without seeing, much less hearing, the ordinary citizens beneath them. The latter is, in current parlance, the Deplorables.
For Laputa’s denizens, the people fall as far below them in intelligence as in altitude, particularly in understanding higher math. The court Ministers consider taking measurements or adding numbers beneath them. As a result, on Laputa “their Houses are ill built, the Walls bevil, without one right Angle in any Apartment; and this Defect ariseth from the Contempt they bear for practical Geometry.” The elite explanation, of course, is that their “Instructions” are “too refined for the Intellectuals of their Workmen.”
Likewise, the Biden Administration denied the reality of inflation for months, because they understood economics better than the rest of us. Their about-face, evident in the name of the Inflation Reduction Act, offers little comfort to those of us unable to bring home the bacon (now 18 percent more expensive than last year). The White House might be structurally sound, but its resident’s economic policies are as askew as any building on Laputa.
But in Swift’s satire, such practical matters are less alarming than astronomical concerns. Laputa’s elite are so worried about the demise of the planet that they hardly sleep: “When they meet an Acquaintance in the Morning, the first Question is about the Sun’s Health.” They even conduct conversations “with the same Temper that Boys discover, in delighting to hear terrible Stories of Sprites and Hobgoblins, which they greedily listen to, and dare not go to Bed for fear.”
One senses similar delicious anxiety in D.C., where the elite have devised an Inflation Reduction Act with $369 billion to combat climate change. Only those with their heads in the clouds could understand the relationship between those issues.
Meanwhile, citizens cope with the threats and destruction wrought by the elite. On Balnibarbi, citizens watch the movements of Laputa warily. If they “refuse to pay the usual tribute,” the King has “two Methods of reducing them to Obedience.” One is to position his island over their land in such a way as to deprive them of sun and rain. In some cases, they are even “pelted from above with great Stones, against which they have no Defence.”
Unfortunately, in the absence of great stones to throw at citizens, the IRS has for years been stockpiling guns and ammunition, and they seek to hire more IRS agents to improve their rate of collection (or assault).
The more drastic alternative for the King of Laputa is to drop the island on citizens’ heads, a solution avoided due to the risk of damaging the island itself. Fortunately, our leaders cannot crush citizens with a floating island, though their politicized approach to laws unravels the fabric of our country. Just ask the parents targeted by the FBI or the Supreme Court Justices threatened not simply by citizens but a leader of the United States Senate.
Even Swift’s gullible protagonist senses something is wrong. On Laputa, the courtiers neglect Gulliver because he is their inferior in math and music, so he descends to the land of Balnibarbi. What he finds is a land in disorder: people with wild eyes, fields badly cultivated, houses collapsing. What, he asks his host, has happened?
It is not only his question about ours. Why has the rate of homicides spiked, particularly in large cities? Why is there a literacy crisis? Why are we paying so much for basics like eggs and oranges?
Swift’s wise Lord Munodi explains that decades earlier: Some individuals visited Laputa and returned to Balnibarbi with “schemes for putting all Arts, Sciences, Languages, and Mechanicks upon a new Foot.” They erected an Academy of Projectors, who had been projecting away for decades. The result was “Houses in Ruins, and the People without Food or Cloaths.”
Rather than admit error, however, the Projectors doubled down on their schemes and shamed those who followed established systems. Such rational people were “Enemies to Art, ignorant, and ill Commonwealth-men, preferring their own Ease and Sloth before the general Improvement of their Country.”
Those who resisted faced Cancellation. Even Lord Munodi, “being then not very well at Court,” was pressured to agree to one scheme, which wrecked his mill.
Despite such failures, however, all cities in Balnibarbi have Academies of Projectors. Gulliver visits one, where he sees such useful experiments as a man trying to extract sunbeams from cucumbers, and another trying to reduce excrement to its original food. Such projectors are constantly in need of funding, just like many of our current scientists. It is why NASA awarded Princeton a grant to study how humans would react to aliens.
Likewise, the ill success of Balnibarbi warns us of the failure of many new schemes for teaching, among other things, math. Reducing standards or calling math “racist” will not help students or build a better society.
Nor will it work to force a new language on people. At the Academy of Lagado, one failed scheme was to replace words with things: One would simply cart around everything necessary for a conversation. Fortunately, women along with “the Vulgar and Illiterate” threatened to rebel “unless they might be allowed the Liberty to speak with their Tongues, after the Manner of their Forefathers: Such constant irreconcilable Enemies to Science are the common People.”
And such were the “common People” who rebelled this year against the threat to free speech presented by Biden’s Disinformation Board.
Perhaps, like the professors at the school of political projectors, we are also “out of [our] Senses” in suggesting that our leaders reward merit and work with the wise. Perhaps we are doomed to live under the shadow of a government that, like Laputa, hovers over us with extraordinary power.
Or perhaps, like the King on the Island of Laputa, our elite need a reminder of the danger of wielding such power. Unlike Swift’s protagonist, we are not gullible.
*****
This article was published by AIER, American Institute for Economic Research, and is reproduced with permission.
TAKE ACTION
The $739 billion Inflation Reduction Act of 2022 being pushed through the U.S. Senate to be passed by reconciliation (50 votes plus the Vice President) before the upcoming August recess is a threat to America’s economy and the well-being of all Americans. The article above makes clear that Senator Kyrsten Sinema is the one Democrat vote that America is looking at. She alone can stop this legislation. Please contact her at her office locations in Washington, D.C. and in Arizona by phone and letter. Click the red TAKE ACTION link below for Senator Sinema’s contact information.
Although Senator Mark Kelly is a do-as -Chuck Schumer- tells-you-to-do partisan shill, contacting him may be helpful given his significant vulnerability in the November general election. His contact information is also found at the TAKE ACTION link below. We suggest that copying him on your letter to Senator Sinema may possibly have some impact on his voting behavior. Calling his office is also important – the staffs do score the relative positions of constituents and this too may influence the voting behavior.
https://libertyfirst.org/wp-content/uploads/logo_v6_225x110.png00ThePricklyPear.orghttps://libertyfirst.org/wp-content/uploads/logo_v6_225x110.pngThePricklyPear.org2022-08-14 03:55:002022-08-14 03:55:00Gulliver’s Travels in Washington, D.C.
Their exclusion reveals DEI’s double standards, stereotypes, discrimination, and sophistry.
Hamza Kopanja, a 32-year-old Croatian-American, is excluded from diversity, equity, and inclusion initiatives, although by any definition of “minority” and “disadvantaged,” he fits the bill.*
He can’t complain about the exclusion, however, because it would be seen in some quarters as proof that he is insensitive to the plight of people of color and maybe even racist.
Meanwhile, the same quarters see the plight of his people as irrelevant and unimportant, because they are deemed to have the wrong epidermis. Those who make such prejudicial judgments see themselves as deep thinkers but are about as superficial as they come.
Who are Hamza’s people? They’re victims of the Bosnian War.
Hamza’s father was killed in 1994 in the war, and his mother was brutally raped, one of an estimated 30,000 women who had been raped in the war. After the war, she took Hamza and his sister Aleza to the United States as refugees and moved to St. Louis, which has the largest concentration of Bosnian refugees in the US and possibly the world.
Hamza and his mother and sister are three of the estimated 70,000 Bosnian refugees who settled in St. Louis. Most of them made their home in the former German section of the city, on the south side, not far from my boyhood home.
Many of the Bosnians have since moved to the suburbs or other cities, due to criminals from nearby high-crime areas who prey on the community. (The City of St. Louis comprises only 10 percent of the population of metro St. Louis, because so many people, including many African Americans, have fled the city for the suburbs over the decades.)
The fear of crime intensified in 2014, when a Bosnian American named Zamir Begic was beaten to death with hammers by a gang of African Americans and Latinos on a major thoroughfare in the Bosnian community as he tried to protect his fiancé. Many Bosnians saw it as a hate crime, believing that the two were targeted because of their race.
Hamza’s mother works as a maid, and he works as a night manager in a convenience store, where his life is literally at risk. He had good grades in high school and earned an associate’s degree at a nearby community college. He had applied to St. Louis-based Washington University and St. Louis University, hoping to be accepted under their set-aside programs, but was rejected.
He tried but failed to land a management trainee position with one of the many large employers in metro St. Louis that tout their diversity bona fides, such as Emerson Electric, Monsanto, Wells Fargo Advisors, Anheuser-Busch, and the National Geospatial-Intelligence Agency. He suspected that he was of the wrong race and not seen as a disadvantaged minority, although his family is poor, and Croatians are one of the smallest minority groups in America.
No doubt, these big companies have departments of diversity and inclusion. They should be called departments of epidermis. It’s a safe bet that they had put Hamza into the category of White, not only because of his skin color but also because he doesn’t fit the other official racial/ethnic categories of Black, Hispanic, Asian, Pacific Islander, and Native American.
These six contrived categories hide the fact that there are hundreds of unique ethnocultural groups in America and the world, each with a unique blend of physical characteristics, culture, religious beliefs, nationality, socioeconomic class, and histories of being oppressors and the oppressed. The categories erase this heritage and reflect a profound ignorance of anthropology, sociology, ethnography, and history.
The White category encompasses a large share of the hundreds of ethnocultural groups, including Croatians. It also includes 40 million Americans who live in poverty, some of whom are descendants of dirt-poor sharecroppers, and others of whom live in de-industrialized towns suffering from broken families, drug addiction, blight, and a dearth of economic opportunities.
Hamza knows that the game of diversity roulette is rigged against him. He also knows that when employers and colleges say that diversity is a strength, they aren’t referring to him. And when they say that professional jobs, management jobs, and boards of directors should reflect the diversity of the nation, they aren’t referring to Croatians, or to the scores of other minority groups of limited political and economic power who are categorized as White.
He knows this because of the mandatory racial-sensitivity class he took in community college. The themes of the class were that whites are privileged, that they attained their privilege from oppressing non-whites, that they all have identical values and beliefs, that they are consciously or unconsciously racist, and that they stay in power and keep non-whites down by adhering to white norms and beliefs, such as marriage and capitalism. As such, they have nothing new to add in the classroom or workplace and should defer to the opinions of non-whites.
Actually, Hamza would have a lot to add. He knows the history, geography, and ethnic makeup of the former Yugoslavia (a k a Land of Slavs). He knows the failures of communism, socialism, and one-party rule. He can look at a map and point out the location of Croatia, Montenegro, Serbia, Slovenia, Bosnia, Herzegovina, Macedonia, Kosovo, and Vojvodina. He can list the main ethnic groups that reside in what is the former Yugoslavia, including Serbs, Croats, Bosniaks, Macedonians, Slovenes, Albanians, Montenegrins, Hungarians, Bulgarians, and Turks. And he knows that the dominant religions are Catholic, Orthodox Christian, and Muslim (Sunni Muslim, to be exact).
Most important, he knows what can happen in a multiethnic society when racial and ethnic resentments, recriminations, and revenge are encouraged by the state and/or powerful agitators. This is what led to the Bosnian War in Bosnia and Herzegovina, a war in which 100,000 people died and 2.2 million were displaced.
No wonder Hamza is excluded from diversity, equity, and inclusion initiatives and his views aren’t solicited. If Croatians and the hundreds of other unique ethnocultural groups were recognized and listened to, the entire edifice of DEI would collapse, because it would become obvious that the edifice is built on double standards, stereotypes, discrimination, and sophistry.
* Hamza Kopanja and family are fictional characters but true to life.
TAKE ACTION
The $739 billion Inflation Reduction Act of 2022 being pushed through the U.S. Senate to be passed by reconciliation (50 votes plus the Vice President) before the upcoming August recess is a threat to America’s economy and the well-being of all Americans. The article above makes clear that Senator Kyrsten Sinema is the one Democrat vote that America is looking at. She alone can stop this legislation. Please contact her at her office locations in Washington, D.C. and in Arizona by phone and letter. Click the red TAKE ACTION link below for Senator Sinema’s contact information.
Although Senator Mark Kelly is a do-as -Chuck Schumer- tells-you-to-do partisan shill, contacting him may be helpful given his significant vulnerability in the November general election. His contact information is also found at the TAKE ACTION link below. We suggest that copying him on your letter to Senator Sinema may possibly have some impact on his voting behavior. Calling his office is also important – the staffs do score the relative positions of constituents and this too may influence the voting behavior.
https://libertyfirst.org/wp-content/uploads/logo_v6_225x110.png00ThePricklyPear.orghttps://libertyfirst.org/wp-content/uploads/logo_v6_225x110.pngThePricklyPear.org2022-08-14 03:50:002022-08-14 03:50:00Croatians Excluded from Diversity, Equity and Inclusion
Demand for single-family homes surged in the past two years, as the coronavirus pandemic prompted people to look for more living space. The increased demand, facilitated by low-interest rates and coupled with supply constraints, led to soaring home prices. (These are 15 cities with the most overpriced housing markets.)
But now the U.S. housing market appears to be coming back to earth, with some parts of the country showing early distress signs. Foreclosure filings — a measure of the health of housing markets at local, state, or national levels — are on the rise across the country.
According to Attom, a curator of land and property data, home foreclosure filings – which include default notices, bank repossessions, and scheduled auctions – are up 153% in the first half of 2022 compared to the same period last year.
In Arizona, foreclosures rose by 165.5%, from 1,208 in the first six months of 2021 to 3,207 in the first half of 2022. The foreclosure rate in the state of one in every 961 homes ranks as the 18th highest in the nation.
According to five-year estimates from the U.S. Census Bureau’s 2020 American Community Survey, 63.3% of homeowners in Arizona are paying down a mortgage, the 20th largest share among states.
The typical household in the state has an income of $61,529 a year, and the typical home is worth $242,000. For context, the typical American household’s annual income is $64,994, and the national median home value is $229,800.
Rank State Foreclosure rate (foreclosures per housing unit) Homes in foreclosure, 1st half 2022 Homes with a mortgage (%) Median home value ($)
The $739 billion Inflation Reduction Act of 2022 being pushed through the U.S. Senate to be passed by reconciliation (50 votes plus the Vice President) before the upcoming August recess is a threat to America’s economy and the well-being of all Americans. The article above makes clear that Senator Kyrsten Sinema is the one Democrat vote that America is looking at. She alone can stop this legislation. Please contact her at her office locations in Washington, D.C. and in Arizona by phone and letter. Click the red TAKE ACTION link below for Senator Sinema’s contact information.
Although Senator Mark Kelly is a do-as -Chuck Schumer- tells-you-to-do partisan shill, contacting him may be helpful given his significant vulnerability in the November general election. His contact information is also found at the TAKE ACTION link below. We suggest that copying him on your letter to Senator Sinema may possibly have some impact on his voting behavior. Calling his office is also important – the staffs do score the relative positions of constituents and this too may influence the voting behavior.
https://libertyfirst.org/wp-content/uploads/logo_v6_225x110.png00ThePricklyPear.orghttps://libertyfirst.org/wp-content/uploads/logo_v6_225x110.pngThePricklyPear.org2022-08-13 08:24:002022-08-13 08:24:00How the Foreclosure Rate in Arizona Compares to the Nation
The Inflation Reduction Act raises taxes on the middle class and will sabotage the country’s power grid by making green energy unavoidable.
Democrats and their leftist allies are celebrating the U.S. Senate’s passage of the misnamed “Inflation Reduction Act.” Subject to a vote out of the Rules Committee mid-week, it’s expected that H.R. 5376 will be voted on in the U.S. House of Representatives on Friday or over the weekend at the latest.
The Democrats’ tax and spending bill weighs in at more than 750 pages and covers a wide range of issues from health care to energy. What it doesn’t do is reduce inflation. What it does do is raise taxes in a recession. Violating a key campaign promise of Joe Biden, the bill raises taxes on people making less than $400,000 a year.
When natural gas prices are approaching historical highs, the bill also raises taxes on natural gas, including for household use, by $6.5 billion. This amounts to an average family shelling out 17 percent more for natural gas. With $12 billion in additional taxes on oil and $1.2 billion on coal, Democrats are aggressively pursuing a large-scale “transition” to green energy.
Perhaps Congress should have first asked the Germans how their transition — known there as “Energiewende” — is working out. With German power prices soaring even before Russia invaded Ukraine, Germans are increasingly turning back the clock to coal and, in some cases, even further back to wood.
Ironically, the Inflation Reduction Act has a provision that provides $2,000 for the installation of “A biomass stove or boiler which (has) a thermal efficiency rating of at least 75 percent.” A “biomass stove” is a fancy term for a wood-burning stove.
Burning wood is terrible for air quality. California’s chief air quality regulator warns that burning wood generates carbon monoxide, oxides of nitrogen (volatile organic compounds that make photochemical smog), ozone, particulates, sulfur dioxide, lead, and mercury. In parts of California, wood burning is banned during air quality alerts. So that fancy $3,000 high-efficiency biomass stove that the federal government underwrote for $2,000 may sit idle on those cold winter days.
The bill also has provisions aimed at preventing tax credits from subsidizing wind, solar, electric vehicles, and batteries that use material from China. But these measures will simply result in substitution: Chinese steel not used in a federally subsidized wind turbine will instead be used in a commercially built high rise.
In 2020, America imported more than $4.6 billion in wind turbines and parts. It’s unclear how rapidly American manufacturing can fill the gap to meet the federally spurred demand. Just in case, the bill has a provision that allows the secretary of energy to waive American provisions if the costs of domestic materials are 25 percent higher than imports from China.
However, an even larger problem hides in plain sight regarding our electric grid. The Inflation Reduction Act doubles down on federal support for wind and solar installations and the costly transmission lines to connect these typically rural facilities with the urban areas that use their power. This problem can be seen in two states that have, for differing reasons, embraced renewable energy: California (mostly solar) and Texas (mostly wind).
In 2020, the wind power industry installed hardware capable of generating 16.9 gigawatts of wind capacity, almost double the prior year. For perspective, on hot summer days, Texas consumes about 80 gigawatts of power.
But wind power is highly variable. Depending on the location and season, wind turbines produce about 40 percent of their installed capacity.
In Texas, on Aug. 9, the state’s more than 15,000 wind turbines had an installed capacity of about 38 gigawatts — some 29 percent of America’s total wind power — but only generated a peak of 10.4 gigawatts at 2 a.m., falling to 1.4 gigawatts at noon when the power demands were far higher. Thus, Texas’s vast wind farms generated 27 percent of their theoretical capacity at night and less than 4 percent during the day. This is pretty common.
To be useful in a modern nation, an electric grid must reliably generate energy every single hour of every day. As the output from wind power jumps around, it tends to displace reliable hydrocarbon-based power at night, forcing those facilities to curtail their output. Armed with the federal Production Tax Credit, wind producers often pay the grid to take their power — the federal government more than making up for the loss.
The government constantly reimbursing wind production facilities distorts the marketplace, discouraging investment in power plants that generate dispatchable power. Power plants are able to produce power on demand, unlike wind or solar installations, and the government chooses to subsidize the less effective means of energy production.
H.R. 5376 continues this power grid investment distortion. As a result, every year that sees more wind and solar added to the grid will mean greater pressure on natural gas and coal-fired power plants to close. Without adequate dispatchable power on hand, the grid will become more prone to blackouts or “demand reduction” measures where the “smart grid” will tell your air conditioner to turn off on a hot day.
Further, the cost of electricity will necessarily skyrocket. While federally subsidized wind and solar are “cheap” — if we ignore the billions in needed new transmission lines and the lack of reliability — dependable energy becomes increasingly more expensive as the requirement for standby power and massive battery farms grow.
Thus, H.R. 5376 dumps federal funds on wind and solar while making the grid more unstable and electricity more expensive.
Not to fear, though, the bill appropriates $100 million for studies and modeling to look at the effect of climate change on the grid, batteries, “demand-side management” (which is little more than the remote turning up of your thermostat), and nationalizing the electric grid. So once federal policy makes the grid unstable, the feds will have a plan to take over the mess they created.
The $739 billion Inflation Reduction Act of 2022 being pushed through the U.S. Senate to be passed by reconciliation (50 votes plus the Vice President) before the upcoming August recess is a threat to America’s economy and the well-being of all Americans. The article above makes clear that Senator Kyrsten Sinema is the one Democrat vote that America is looking at. She alone can stop this legislation. Please contact her at her office locations in Washington, D.C. and in Arizona by phone and letter. Click the red TAKE ACTION link below for Senator Sinema’s contact information.
Although Senator Mark Kelly is a do-as -Chuck Schumer- tells-you-to-do partisan shill, contacting him may be helpful given his significant vulnerability in the November general election. His contact information is also found at the TAKE ACTION link below. We suggest that copying him on your letter to Senator Sinema may possibly have some impact on his voting behavior. Calling his office is also important – the staffs do score the relative positions of constituents and this too may influence the voting behavior.
https://libertyfirst.org/wp-content/uploads/logo_v6_225x110.png00ThePricklyPear.orghttps://libertyfirst.org/wp-content/uploads/logo_v6_225x110.pngThePricklyPear.org2022-08-13 03:58:002022-08-13 03:58:00Democrats’ Green Energy ‘Transition’ Costs You Way More And Gives You Way Less
On Sunday afternoon, it took all 50 Democratic senators, along with Vice President Kamala Harris, to pass their deceptively named Inflation Reduction Act (H.R. 5376) by a 51–50 vote, sending it to the House. The bill at one time was thought to have been “dead in the water,” but gained life with the support of Senators Kyrsten Sinema (D-Ariz.) and Joe Manchin (D-W.V.).
Today’s sky-high inflation is largely caused by last year’s Democratic spending of $1.9 trillion in the taxpayer-funded American Rescue Plan. Spending another $740 billion on climate and healthcare boondoggles with this bill will only accelerate inflation.
Political analyst David Harsanyi notes, “The Inflation Reduction Act is to inflation what the Affordable Care Act — which doubled premium costs — was to health care insurance.”
Even Senator Bernie Sanders (I-Vt.), who voted for the new bill, complained that it doesn’t do what its title claims — namely, reduce inflation — referring to it as the “so-called” Inflation Reduction Act. “I say so-called by the way, because according to the CBO and other economic organizations that have studied this bill, it will, in fact, have a minimal impact on inflation,” Sanders said on Saturday.
The Inflation Reduction Act includes hundreds of billions for boondoggle “green energy” projects, and hundreds of billions in tax increases — all of which will fuel inflation, not reduce it. Democrats have claimed this bill as a big win, especially for their leftist constituents, but it’s a big loser for American consumers and taxpayers, who will actually be paying for corporate tax increases and government redistribution of tax benefits for this bill’s pet projects.
Here are key points from the Democrats’ own summary of the Inflation Reduction Act:
• Enacts historic deficit reduction to fight inflation
• Lowers energy costs, increases cleaner production, and reduces carbon emissions by roughly 40 percent by 2030
• Allows Medicare to negotiate drug prices and caps out-of-pocket costs to $2,000
• Lowers ACA health care premiums for millions of Americans
• Make biggest corporations and ultra-wealthy pay their fair share
• There are no new taxes on families making $400,000 or less and no new taxes on small businesses — we are closing tax loopholes and enforcing the tax code.
In a recent interview on Fox & Friends Weekend, American Legislative Exchange Council economist Jonathan Williams hammered Democrats’ latest effort to combat inflation with the Inflation Reduction Act, arguing that raising taxes and increasing spending is “economic malpractice.”
Williams shared, “What we need is [to go] in the opposite direction and actually cut spending in Washington. It’s clear we don’t have a problem with the lack of tax revenue here. We’ve hit record tax revenue numbers time and time again in recent years, but we just spend faster than the taxes are coming in. And this is a huge problem here.”
All the Republican senators pushed hard against the bill, including Senator Tom Cotton (R-Ark.) who blasted Biden’s $369 billion on “climate” and $433 billion in new spending: “This bill is going to fuel even more inflation. It’s not going to fight inflation, no matter what Joe Manchin says. And it is going to kill jobs by raising taxes on businesses. And by the way, those taxes will also fuel more inflation because businesses will pass tax hikes along to consumers. The last thing we should be doing is putting another trillion-dollar tax and spending bill into an economy that has both record-high inflation and a recession. That is something that only Joe Biden could have accomplished.”
If this bill becomes law, The Heritage Foundation estimates: “Taxpayers with adjusted gross incomes below $75,000 would ultimately shoulder an estimated $136 billion of new revenues from the corporate minimum tax and the IRS enforcement provisions, or about 26% of the total. Indeed, the revenues would fall disproportionately hard on taxpayers making less than $25,000 per year.”
What will the House of Representatives do with the Senate’s Inflation Reduction Act? If they pass it as it stands now, Americans will continue to suffer under Biden’s leftist regime. And with November elections nearing, Democrats in the House will need to consider their electability as their constituents decide if they deserve to remain in office. We can only hope this bill is too much for House Democrats to pass.
The $739 billion Inflation Reduction Act of 2022 being pushed through the U.S. Senate to be passed by reconciliation (50 votes plus the Vice President) before the upcoming August recess is a threat to America’s economy and the well-being of all Americans. The article above makes clear that Senator Kyrsten Sinema is the one Democrat vote that America is looking at. She alone can stop this legislation. Please contact her at her office locations in Washington, D.C. and in Arizona by phone and letter. Click the red TAKE ACTION link below for Senator Sinema’s contact information.
Although Senator Mark Kelly is a do-as -Chuck Schumer- tells-you-to-do partisan shill, contacting him may be helpful given his significant vulnerability in the November general election. His contact information is also found at the TAKE ACTION link below. We suggest that copying him on your letter to Senator Sinema may possibly have some impact on his voting behavior. Calling his office is also important – the staffs do score the relative positions of constituents and this too may influence the voting behavior.
https://libertyfirst.org/wp-content/uploads/logo_v6_225x110.png00ThePricklyPear.orghttps://libertyfirst.org/wp-content/uploads/logo_v6_225x110.pngThePricklyPear.org2022-08-12 04:00:002022-08-12 04:00:00“Inflation Reduction Act” Is “Economic Malpractice”
Japan’s fiscal mismanagement and massive national debt violate the principles of democratic fiscal responsibility.
Editor’s Note: The years from 1991 to 2001 are known as “The Lost Decade” in Japan. After years of rapid growth in the 1980s, the Japanese economy fell into a prolonged slump marked by persistent, high unemployment, low growth rates, and erratic monetary policy. (See “The Lost Decade” for additional information on this.)
In recent years, Japan’s economy has somewhat rebounded but as economist Hiroshi Yoshida explains below, new issues are now arising that call into question Tokyo’s increasing debt. One of the problems he identifies is present here in the US as well, namely, “Not enough people stand up for future generations when it comes to fiscal policy.”)
The only transactions that can happen in a market are ones where both parties mutually benefit and can say arigatо̄ (thank you, in Japanese) as a result. By using accounting to examine such transactions we know that both parties’ utility increases; both are better off as a result of completing the transaction. On top of that, people are not worse off than they were before should they decline to engage in a given transaction.
Governments are run by taxes. The main concern of public finance, however, has from the beginning been to raise the largest sums with the least resistance. In a nation that advocates democracy, the people also called the citizens or the taxpayers, are sovereign. Taxes can only be levied with the consent of the governed. Running a deficit and burdening children and the unborn is in direct conflict with the principles underlying democratic fiscal policy. Never shift your deficit onto your children; that is a cornerstone to democratic governance.
Here in Japan, we must also reject the notion that we can rack up the national debt and use it as a source of financing. Yet future generations don’t have a say in what the government does here and now. Not enough people stand up for future generations when it comes to fiscal policy. In 1965, Japanese government bonds (JGBs) were issued to cover a revenue shortfall of 5.3% of government spending. Last year in 2021, that increased to cover 40 percent of government spending. The outstanding balance of government bonds issued on an ongoing basis is now twice Japan’s GDP.
When the market is allowed to function it determines interest rates, the rate at which people can borrow capital. If the economy does not grow, it is not possible for a borrower such as the Japanese government to pay back a loan with interest.
The 1492 Summa de arithmetica, written by Italian mathematician Luca Pacioli (1445-1517), contains a mathematical law known as the Rule of 72. This rule states that if you divide a given interest rate by 72, you can find the number of years needed for the principal investment to double. That would mean it takes 10 years for an investment to double at a 7.2 % interest rate. Let’s try this with an electronic calculator to see if it really works. Enter the number “1” and hit “x” button twice, and input 1.072 (a 7.2% interest rate). Hit the “=” button 10 times. The initial value ends up doubling, doesn’t it? When Japan started to stray from a balanced budget (1972-1987) the interest rate on JGBs was around 8%.
The interest rate on government bonds has since been lowered to reduce the rapidly growing outstanding debt and the cost of government bonds. It will take 14,400 years to double the principal at the current interest rate of 0.005 percent. To give you an idea of how long 14,400 years is, 14,400 years ago is when mankind finally began rice cultivation in the Yangtze River basin in China. That is prehistory; a time before mankind started keeping written records. It is impossible to double the principal of a sum of money without taking a long time at such an interest rate. Not only has issuing government debt left future generations to foot the bill, but the interest rate of only 0.005 percent on JGBs is a statement of the nation’s inability to grow the economy. Hopefully, Japanese taxpayers will take notice of this.
By lowering interest rates, the government’s interest payments have become smaller and the future value of money has decreased. The Bank of Japan holds more than half of the JGBs issued by the Japanese government. And now, as both the rate and value of the yen against the US dollar begin to fall, prices have started to rise. The price of iPhones in Japan is going up 20 percent this month.
Where there is good politics, people gather. That is to say, people vote with their feet, as my friends in America know from inter-state migration. Japan’s fiscal mismanagement and massive national debt violate the principles of democratic fiscal responsibility. As a result, Japan is losing its lure and appeal to future generations and the birth rate continues to plummet.
The $739 billion Inflation Reduction Act of 2022 being pushed through the U.S. Senate to be passed by reconciliation (50 votes plus the Vice President) before the upcoming August recess is a threat to America’s economy and the well-being of all Americans. The article above makes clear that Senator Kyrsten Sinema is the one Democrat vote that America is looking at. She alone can stop this legislation. Please contact her at her office locations in Washington, D.C. and in Arizona by phone and letter. Click the red TAKE ACTION link below for Senator Sinema’s contact information.
Although Senator Mark Kelly is a do-as -Chuck Schumer- tells-you-to-do partisan shill, contacting him may be helpful given his significant vulnerability in the November general election. His contact information is also found at the TAKE ACTION link below. We suggest that copying him on your letter to Senator Sinema may possibly have some impact on his voting behavior. Calling his office is also important – the staffs do score the relative positions of constituents and this too may influence the voting behavior.
https://libertyfirst.org/wp-content/uploads/logo_v6_225x110.png00ThePricklyPear.orghttps://libertyfirst.org/wp-content/uploads/logo_v6_225x110.pngThePricklyPear.org2022-08-12 03:50:002022-08-12 03:50:00Japan’s Government Looted the Future—and Its Children Are Paying the Price
An Economic Justice Agenda designed with the help of a leftist La Raza group is getting $113 million from the Biden administration to bridge the racial wealth gap by helping low-income renters achieve homeownership. The taxpayer dollars will flow through the Department of Housing and Urban Development (HUD), which is committed to expanding asset building polices for renters as a reparative tool for economic justice. “We’re looking at everything through a lens of equity and how we address systemic racism,” HUD Secretary Marcia L. Fudge said in a statement announcing the nine-figure allocation. “We’re giving people who have historically been left out and underserved the resources to take a chance on their futures – to improve their credit, save resources for homeownership and other needs, and build wealth. That’s what this is all about.”
The HUD initiative receiving the sizable allotment is officially known as the Family Self-Sufficiency (FSS) program and it aims to help those already receiving government assistance increase earned income and improve financial stability. It is part of an agency wide plan for economic justice that outlines actions to help low-income renters build assets. A 13-page document titled “Bridging the Wealth Gap: An Agenda for Economic Justice and Asset Building for Renters” outlines how the administration plans to accomplish it. Many of the ideas in the extensive HUD racial agenda were concocted with the help of an influential open borders group, National Council of La Raza, which changed its name to a less divisive UnidosUS a few years ago. Biden administration officials convened with the national open borders organization throughout the summer and fall of 2021, according to the agenda, which claims to provide a “cohesive framework to guide both internal policy creation and external stakeholder engagement.”
The HUD plan aims to bridge the wealth gap by focusing on asset building through increased savings, banking, and credit history improvement for the poor. “Unequal access to savings, positive credit history, and banking is a national problem that especially impacts renters and contributes to the racial wealth gap,” the agency writes in its economic justice agenda. The government must intervene, according to the initiative, because many hard-working families and individuals earn low incomes due to persistent and systemic inequality. “This agenda recognizes the role that government programs can play in perpetuating those inequalities and is an effort to break down some of the barriers within federal programs that can erode progress towards financial stability,” the plan states, adding that “asset building policies have the potential to move federal assistance programs in a more equitable direction and facilitate economic justice for millions of Americans.”
The backbone of the agenda is homeownership because it is a pillar of wealth building and is critical to creating a source of wealth that can be passed down to future generations, HUD asserts. “Therefore it needs to be attainable for more families, especially families of color,” the agency writes, adding that “racial disparities in homeownership remain significant” in the U.S. In fact, the agenda says, “recent research shows that in 2020, the Black-White homeownership gap reached 31 percentage points, the greatest gap in decades.” Part of the problem is that poor credit prevents minorities—especially blacks—from qualifying for home loans. HUD refers to this as “credit invisible” and reveals that black people have the lowest credit scores in the country, followed by Hispanics. The agency does not offer specific details on how to correct this pervasive issue in communities of color but does blame “wage gaps along racial and educational divides” as a big contributing factor to the crisis. “Families looking to increase their wages face numerous additional barriers such as racism, discrimination, and lack of accommodations for certain people such as parents who need childcare,” according to HUD.
Even in instances when black people attain the American dream of home ownership the properties are often “appraised at lower values and home value can depreciate over time,” HUD’s agenda claims. To correct the problem, Secretary Fudge launched an Interagency Task Force on Property Appraisal and Value Equity (PAVE) to “root out racial and ethnic bias in home valuation.” The federal agency charged with creating inclusive communities and affordable homes also writes in its economic justice agenda that homeownership is not enough to help the nation’s black population, though it “is a critical part of closing the racial wealth gap.” HUD points out that there are also racial differences in other mechanisms for generating wealth such as stock ownership that make the racial wealth gap difficult to close. It is not clear if the housing agency plans to launch a stock ownership plan for poor minorities.
https://libertyfirst.org/wp-content/uploads/logo_v6_225x110.png00DrRichSwier.comhttps://libertyfirst.org/wp-content/uploads/logo_v6_225x110.pngDrRichSwier.com2022-08-11 08:51:402022-08-11 08:51:40Economic Justice Agenda Created with La Raza Group’s Help Gets $113 Mil from HUD
My wife just came back from a routine grocery store run. She said, “These people are destroying the country.” She wasn’t talking about the store—she was talking about our elite political class that are spending our country into high inflation. And now they are poised to spend even more.
They have just passed a bill touted as something to “reduce inflation,” but critics note it could only increase it.
These days, you can tell that whenever the left wants to deceive their way into passing a bill, they provide an Orwellian name for the exact opposite effect.
This inflation-promoting bill is labeled “the Inflation Reduction Act.” Obamacare, which has proved quite unaffordable for many, was passed as “the Affordable Care Act.” The left tried to pass the “For the People Act,” which would have unconstitutionally taken election control from the states (where the Constitution puts it) and benefitted the politicians already in office.
This new $750 billion bill delivers a wish come true for those who believe that man’s activities can control the weather—in other words, our activities exacerbate climate change.
An article in Breitbart.com notes, “Rep. Jim Banks (R-IN) detailed the 50 most radical policies in the Inflation Reduction Act.” It is a wish list for every leftwing scheme imaginable, including funding abortion at taxpayers expense. But it will not do what it is touted to do—reduce inflation.
The article adds, “Banks emphasized that the legislation would not reinvigorate the economy, as the Penn Wharton Budget Model found that the bill would not curb inflation. ‘That’s reason enough to vote against the package,’ Banks remarked.”
Where does all the money for the new spending comes from? From we the people. Government has no money of its own. It confiscates it from we the people.
The Gateway Pundit reports: “The majority of new revenue from IRS audits and scrutiny will come from those making less than $200,000 a year, according to a study from the nonpartisan Joint Committee on Taxation.”
Furthermore, Ted Cruz notes that this bill will expand the IRS by 87,000 new agents. He adds, “The Democrats are making the IRS bigger than the Pentagon, plus the Department of State, plus the FBI, plus the Border Patrol combined. This is a massive power grab.”
In his 2021 book, Beyond Biden, former Speaker of the House Newt Gingrich explains how there really is an American majority that is not being represented by the left today. For example, Gingrich said that 75% of Americas support income tax cuts, not increases.
The founders of America believed in sound fiscal policy.
Thomas Jefferson once said, “To take from one, because it is thought that his own industry and that of his fathers has acquired too much, in order to spare to others, who, or whose fathers have not exercised equal industry and skill, is to violate arbitrarily the first principle of association, ‘the guarantee to every one of a free exercise of his industry, & the fruits acquired by it.’”
As to government debt, Jefferson once noted: “I place economy among the first and most important virtues, and public debt as the greatest of dangers to be feared. To preserve our independence, we must not let our rulers load us with perpetual debt. If we run into such debts, we must be taxed in our meat and drink, in our necessities and in our comforts, in our labor and in our amusements. If we can prevent the government from wasting the labor of the people, under the pretense of caring for them, they will be happy.”
I remember hearing President Ronald Reagan say in 1984 that the Congress was spending money like drunken sailors. Then he added that he must apologize to the Navy men because at least the sailors were spending their own money. How much worse in 2022.
When you have debt that gets into the trillions of dollars, then the situation is totally out of control. Somebody once gave this illustration to help grasp how much a trillion is, say, in comparison with a million:
If I owed you $100 and said I’d pay you in a million seconds, when would I pay you? In 12 days.
If I owed you $100 and said I’d pay you in a billion seconds, when would I pay you? In 32 years.
If I owed you $100 and said I’d pay you in a trillion seconds, when would I pay you? In 32,000 years.
Reagan once quipped that the closest thing to eternal life on this earth is a government program. Yet this “Reduce Inflation Act” will add more government programs. So the chance of stopping all the reckless government spending is an uphill battle. But it’s a battle worth fighting—for the sake of our country and our children and children’s children.
Words cannot express my disappointment in your vote on the completely mis-labeled Inflation Reduction Act that was recently voted on. The nation’s inflation rate has never been effectively reduced by spending another pile of tax-payer money that has yet to be collected. In the words of Milton Friedman: “Inflation is always and everywhere a monetary phenomenon in the sense that it is and can be produced only by a more rapid increase in the quantity of money than in output.”
Most economic analysts suggest that this bill will retard economic growth, reduce jobs and increase inflation. How can this be in the best interests of Arizona’s residents? Only a complete simpleton would look at the content of this senatorial pork-fest and cry: “victory” unless your goal is to drive this nation from recession into the depths of depression.
I was not very enthusiastic about your election to the Senate but you have at least not voted in lock-step with the DNC as your colleague Mr. Kelly has done. It appears now that you have abandoned any economic sense and decided that going ‘green’ at the expense of your constituents is somehow a good idea.
Bear in mind that the nation of China (which has a greater carbon footprint each month than the US does for the year) will be quitting any and all climate conversations as a result of Ms. Pelosi’s ill-timed and politically provocative trip to Taiwan. I have not seen any outcry from you or any of the other politicians on the Hill for that stupidity. Now, we are supposed to believe that this bill is actually good for the average household. Try this novel approach – stop spending money you don’t have!
If you are really interested in reducing the world’s carbon footprint and affecting global warming, stop all this congressional pontification over ‘green’ energy, and let’s get back to energy independence in this country. You will never convince me that the Venezuelans, the Iranians, or the Saudis can produce oil for our nation at a lower climate cost than American producers, and it is certainly not a lower economic cost.
It may have been a long time since you had to actually produce something to earn your living but, for those of us who do, I cannot find anything in this bill that will make my life any easier and it will undoubtedly raise my cost of living. Thanks for your part in pushing this nation from recession into an outright depression.
TAKE ACTION
The $739 billion Inflation Reduction Act of 2022 being pushed through the U.S. Senate to be passed by reconciliation (50 votes plus the Vice President) before the upcoming August recess is a threat to America’s economy and the well-being of all Americans. The article above makes clear that Senator Kyrsten Sinema is the one Democrat vote that America is looking at. She alone can stop this legislation. Please contact her at her office locations in Washington, D.C. and in Arizona by phone and letter. Click the red TAKE ACTION link below for Senator Sinema’s contact information.
Although Senator Mark Kelly is a do-as -Chuck Schumer- tells-you-to-do partisan shill, contacting him may be helpful given his significant vulnerability in the November general election. His contact information is also found at the TAKE ACTION link below. We suggest that copying him on your letter to Senator Sinema may possibly have some impact on his voting behavior. Calling his office is also important – the staffs do score the relative positions of constituents and this too may influence the voting behavior.
https://libertyfirst.org/wp-content/uploads/logo_v6_225x110.png00ThePricklyPear.orghttps://libertyfirst.org/wp-content/uploads/logo_v6_225x110.pngThePricklyPear.org2022-08-11 03:55:002022-08-11 03:55:00An Open Letter to Senator Sinema
The Democrats are masters of misnaming the intended purpose of bills they offer up to disguise what is really happening. It is indicative of how gullible they believe we are. The Inflation Reduction Act of 2022 will do nothing to reduce inflation. The main reason is that revenues will not be achieved to offset the expenditures.
This column has a ban on using definitive terminology. I do not use words like Never, Always, or Every. That is because those terms are rarely applicable. However, here is a truism. Whenever there is a projection of revenues that will be produced from a new tax increase, they never come to fruition. Here is another truism. Whenever there is a reduction in tax rates, they always produce increased governmental revenues. I know this because I have both studied and written about it for over 40 years.
This ridiculously named bill has a few major elements of the supposed increase in revenue. Please do not believe the eventual scoring by the Congressional Budget Office (CBO). The CBO is rarely correct because they do their scoring based on whatever Congress tells them to do. Just think about this: if Schumer named this bill which he did, do you think he gave the CBO realistic numbers on which to do a projection?
The first element of this bill’s increased revenues has to do with money flowing in from audits because of new hires at the IRS. This is an agency that cannot even answer their phones. This is an agency that cannot even process their tax returns – the current estimate is they are twenty million behind, but who really knows? I believe they have finally processed all the 2020 tax returns. They are now digging into the unprocessed 2021 returns. This is an agency that is currently auditing a client of mine and they are having a problem because neither the computer of the auditor nor his supervisor can read a thumb drive I sent them. They cannot read any thumb drives.
Yes, the IRS needs an increased budget to tackle its basic problems which include a wholly inadequate computer system. Agents communicate this regularly. It is compounded by allowing agents to work from home which has significantly impacted IRS production because of these inadequate systems. If the system does not work well when they are sitting in front of their office screens, how well do you think they operate remotely?
Until they fix these problems, how are they going to hire a slew of new people to perform audits? And where are they getting all these new personnel to work at the most reviled agency in the country? We cannot get people to work at our restaurants, car repair shops, or appliance stores. So how is the IRS going to get qualified personnel to work their audits? How many people graduating college with an accounting degree are going to work for the IRS when there is a shortage of personnel at accounting firms with a much more attractive environment and future? They may be able to hire people with sociology or geography degrees who can only get jobs as bartenders. How long do you think it will take them to get prepared to audit your tax return? How long to audit Amazon?
I can say if you should get audited by these people, the process will take at least twice as long as it should because they will be inexperienced. A professional CPA will need to walk them through everything about which they have no clue. So, you tell me, is this $80 billion spent over the next ten years going to bring in an additional $204 billion from all those supposed tax cheats out there? And will spending an additional $8 billion a year on the IRS for the next ten years do anything to reduce inflation in 2022, 2023, or 2024? I think you know that answer.
Then there is the big lie of this bill. It repeals the Trump “rebate rule.” This was a vague rule that has to do with Medicare Part D that was never implemented by Trump, has not been implemented by Biden, and the regulation never going into effect. This is a magical savings of $120 billion that was never implemented and thus becomes “mystery savings.”
Last, we must confront the corporate minimum tax of 15%. Sounds nice. I have read a substantial number of analyses of these corporations that supposedly pay no taxes. We hear this kind of malarkey all the time. I will get a call from a client. They will tell me they spoke to someone, and they were paying no taxes. “Why am I paying so much?” My answer is always they are full of ———. You fill in the blank. Then I tell them to get a copy of the tax return for analysis. And that is the problem, the Left-wing analyses of these “non-paying entities” never include a full analysis of the reasons why these entities are not paying taxes.
They may be getting research credits which Congress created to encourage companies to spend money on research and development with the idea that these companies will maintain or increase their position to be competitive in the world economy. They may be buying Low Income Housing Tax Credits which encourages the development of affordable housing. They may be getting credits for tax paid to foreign countries based on income made in foreign countries just like you may be getting on your investments. If we limit that tax offset, these companies will be paying a lot more than a minimum tax of 15% since they pay tax in America on their worldwide income.
This is the ultimate act of industrial policy initiated by the Democrats. They are throwing money at the computer chip industry and anybody who spends money on their questionable green policies. They want to pay for it by reducing deductions at a group of other companies. Those companies have been allowed to deduct the expense for new equipment and other purchases as opposed to writing them off over seven years or more. That encourages those companies to expand, improve efficiency and safety and hire more Americans. These tax and spending plans are used to steal the money directly from you and me. Now they have lurched into full bore Socialistic government planning policy as if that has worked anywhere.
Remember the age-old truism. Corporations do not pay taxes; they just pass the tax onto their customers or cut jobs.
And the fact that a large portion of the tax increase will come from a group President Biden has stated he would not raise taxes on – those couples making under $400,000 a year. Senators Schumer and Manchin said nothing about that.
The Democrats got their wish with new spending of over $750 billion between the Chips bill and the Inflation Will Continue Unabated Bill. They are never going to get their revenue offset. Mr. Manchin, how naïve you must be.
The $739 billion Inflation Reduction Act of 2022 being pushed through the U.S. Senate to be passed by reconciliation (50 votes plus the Vice President) before the upcoming August recess is a threat to America’s economy and the well-being of all Americans. The article above makes clear that Senator Kyrsten Sinema is the one Democrat vote that America is looking at. She alone can stop this legislation. Please contact her at her office locations in Washington, D.C. and in Arizona by phone and letter. Click the red TAKE ACTION link below for Senator Sinema’s contact information.
Although Senator Mark Kelly is a do-as -Chuck Schumer- tells-you-to-do partisan shill, contacting him may be helpful given his significant vulnerability in the November general election. His contact information is also found at the TAKE ACTION link below. We suggest that copying him on your letter to Senator Sinema may possibly have some impact on his voting behavior. Calling his office is also important – the staffs do score the relative positions of constituents and this too may influence the voting behavior.
https://libertyfirst.org/wp-content/uploads/logo_v6_225x110.png00ThePricklyPear.orghttps://libertyfirst.org/wp-content/uploads/logo_v6_225x110.pngThePricklyPear.org2022-08-11 03:50:002022-08-11 03:50:00A Little Reality About the New Spending Bill
The S&P 500, the broadest measure of U.S. stocks, is down 21%, the Nasdaq nearly 30% and the Dow 16% so far this year, and Americans are seeing the value of their retirement accounts dwindle along with the drops.
And the Democrats just passed a massive tax and spend bill that will escalate it further. Democrats hate you.
Alicia Munnell, director of the Center for Retirement Research at Boston College, wrote in a blog post this week that retirement plans have collectively lost upwards of $3 trillion since the beginning of January.
According to Munnell’s latest data, 401(k) plan participants have lost about $1.4 trillion from their accounts and IRAs have lost $2 trillion since the end of 2021.
One woman told FOX Business her 401(k) has “been decimated” to the point that she is now wondering if her plans for starting her golden years might need to be delayed.
“It’s horrible, I mean, I was thinking I might be retiring, you know, in the next year or two,” she said. “And now, I don’t know. I don’t know when I can do that.”
“They’re not doing too good right now,” another man said of his investments. “We’ve been losing a lot of money.”
Multiple people told FOX Business they are scared to even take a peek at where their accounts stand. stock trader
Traders work on the floor of the New York Stock Exchange NYSE in New York, the United States, June 16, 2022. (Photo by Michael Nagle/Xinhua via Getty Images / Getty Images)
“We’ve got a [Thrift Savings Plan], a 401, a 529,” a second woman explained. “I don’t want to look at it.” She said the last time she glanced at her husband’s TSP it was down $200,000.
The losses coupled with inflation sitting at a 40-year high, means Americans are hemorrhaging money. That has also caused some people to make tough decision regarding retirement.
“It’s been painful,” another person said. “I honestly had to take out some funds out of my 401(k) to, you know, support myself and my family with the inflation and everything else that’s happening.”
