Tag Archives: Employment


Trade, the exchange of goods and services, makes all people wealthier.  It always has.  And as long as personal liberties are enforced, it always will.

Consider how we normally trade; money for goods.

This weekend my young nephew was in town and the kids wanted to play Wii.  We only had one controller so I needed another.  Out to the store I went.

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I Hate Unions

There are a number of things wrong with Unions.  They reduce jobs.  They price out the under skilled of a job.  They make products more expensive.  They force restrictive trade agreements.  Really, there’s no end to the nastiness they elicit.

But the story of the retired Marine being forced to join a Union is a perfect example to illustrate just how ugly I think they are.

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Perspective: China Style

I suspect we’re all guilty of it.  It being the practice of seeing things ONLY from where we sit.  Of seeing things in ways that are colored by the ways we have always seen things.

I’m guilty of it all the time.

I look at people, react to people and come to conclusions based on my past experiences.  This is my perspective.

Lot’s of times it works like it should; dark alleys get avoided.

Some times it doesn’t work like it should.

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Capitalism: Millions of People Are Being Yanked Out of Abject Poverty Daily

It’s a pretty familiar refrain “Everything is made in China, that’s why it’s so cheap!”

This is usually followed up with the typical “slave labor” and “sweat shop” and other oft trotted out horror stories.

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Feature Not Bug

A long time ago [longer than I like] I turned 10.  My folks performed the usual; presents, cake and a party.  My friends came over, maybe spent the night, fun was had and Normal America ruled the day.  But there was something else that occurred on that birthday.  See, when I turned 10 that year, I was given something that I am still enjoying today; a job!

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A twofer!

Another in a long line on why I hate unions.

See, where I work, if you do well you get bigger raises, bigger bonuses and if you do well over the long haul, you get promoted.  On the other hand, if you don’t exceed you may not get fired, but you won’t reap the rewards of the high achievers.  Then again, if you continue to produce so marginally that the firm finds itself better off without your services, you will, in fact, eventually be promoted; to customer.  In other words, the company will no longer employ you.

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The Power of the Free Market

Creative Destruction

The new reigning champion?  The cell phone.

The devices left in its wake:

  1. Digital assistant
  2. Telephone
  3. Digital camera
  4. iPod
  5. Watch
  6. Alarm clock
  7. Radio
  8. Radar detector
  9. GPS device
  10. Video game
  11. Answering machine
  12. Computer

These are just a few.  Many many more are being “destroyed” everyday.

The impact?

Investors should heed the mobile phone’s Schumpeterian powers. When the century began, bankers ‘beamed’ each other information via the now-quaint infrared technology of the Palm Pilot, whose maker boasted a $92 billion market value. Palm shifted into mobile phones but lost 97 percent of its value along the way. This should provide a cautionary tale to other industries standing in the cell phone’s path.

But is this a good thing?  With all of these “industries” going the way of the dinosaur, aren’t we all worse off?

There will certainly be winners from the cell phone’s creative destructive properties. New companies will spring up to innovate. Each wave of technological innovation creates more market cap than the one it replaces, Morgan Stanley notes.

Indeed.  Rage on.

Seriously Confused

This time, it’s me I am accusing.  Not Obama.

I have been reading the reports of the unemployment situation today and two things have stood out. The first, from the BLS:

The unemployment rate edged down to 10.0 percent in November, and nonfarm payroll employment was essentially unchanged (-11,000)

And the second from MarketWatch:

The report was much better than expected by economists surveyed by MarketWatch, who were looking for 100,000 fewer jobs…

Okay, let’s start with #2 first.  I have seen several reports that show November was expected to lose 100,000 to 130,000 jobs.  And we came in losing only 11,000.  No one, not ONE single person O have seen has stopped and said, “Huh”?  This is off by just a little bit folks.  These guys were off by a FACTOR OF TEN!  No one is THAT wrong and gets away with it.  Unless of course, you are Al Gore.

So, okay, experts were wrong.  And by a lot.  But that gets us to point #1.  We still lost jobs.

In October, unemployment stood at 10.2%.  We lost jobs.  Even if it was only 1, we lost net jobs.  The rate HAS to stay the same or get worse.  Right?  Wrong.  We lost job AND the unemployment rate got better.


Unrelated news.  Houston is expecting 2 inches of snow.  Silly polar bears need migrate!

California: Part II

A lot of talk going on about projections and what ifs.  So much so, that for many of us, we begin to lose sight of  “what is” within the forest of  theoretical science.  Sometimes, really, a picture is simply worth a thousand words.  Or maybe, a picture is not having to read a thousand words.

Who get's it? Who doesn't.

Why, you may ask, is the unemployment rate so much higher in California than in Texas?

What’s the worst state to do business in? According to readers of Chief Executive magazine, it’s California. In the same poll, Texas won first place as the best state in which to put your headquarters. As reported in The Economist, the two largest states in the nation have very different philosophies and very different success rates.

The article goes on to mention why Texas is doing a better job:

  1. Texans on average believe in laissez-faire markets with an emphasis on individual responsibility.  Since the ’80s, California’s policy-makers have favored central planning solutions and a reliance on a government social safety net.
  2. Californians have largely treated environmentalism as a “religious sacrament” rather than as one component among many in maximizing people’s quality of life.
  3. California has placed “ethnic diversity” above “assimilation,” while Texas has done the opposite.
  4. Texas has focused on streamlining the regulatory and litigation burden on its residents.  Meanwhile, California’s government has attempted to use regulation and litigation to transfer wealth from its creators to various special-interest constituencies.

The whole article is an awesome read as a “how to guide” for planners.  It would be great if Barack Obama would read it.

Hat Tip Mark Perry and Rick Perry

A Breeze – Not Wind – of Change

This can’t be good news for Obama.

AT FIRST sight, the idea that Europe has anything to teach America about tackling unemployment seems preposterous. America has some of the most flexible labour markets in the developed world, while continental Europe, in the popular imagination, is a sclerotic place with powerful unions, rigid labour markets and high entrenched joblessness. Over the past quarter-century America’s unemployment rate has averaged 5.8%, compared with 9.5% in France and 9.1% in Germany.

This picture may be changing. Although output in the euro area has fallen as much as in America, the unemployment rolls have not grown as much. The euro-wide jobless rate is up by less than a third, compared with a doubling across the Atlantic. At 9.7%, euro-area unemployment is high, but slightly lower than in America, where new figures due on November 6th were expected to show joblessness hitting double digits.

Unemployment Comparison

Well, then again it might.  I am convinced that our President is out to build a more left leaning European socialist state than the right leaning socialist state that we have now.  So really, it’s hard to tell.  But what I mean, really mean, is that The Economist is actually calling him out on it!

The United States has put in place a hefty fiscal stimulus, but relatively little of that money has gone into labour-market policies—schemes to slow firing, boost hiring or support the jobless.

Europe’s policymakers, in contrast, appear to have a more coherent strategy: one which uses government money to subsidise a shortened work week, cuts labour costs and, in a few cases, offers tax subsidies to support new jobs. The OECD says 22 out of 29 of its member countries have extended support for workers on furlough, and 16 have cut payroll taxes and other social contributions

Now, before we get all “crazy talk” here, I wanna point out that shortened work weeks and paid furloughs are NOT my ideas of economic good ideas.  And as I was reading my edition of The Economist at my favorite Thai place, I just about lost my belly.  See, I mostly think that The Economist calls itself The Economist because they wanna trick conservatives into reading leftist views.  Almost as if…. But then, in a last second Hail Mary, The Economist pulls off the improbable:

Consider the subsidising of shorter work weeks, continental Europe’s most dramatic innovation. By in effect paying firms to hoard workers, governments have slowed the rise in joblessness and helped prop up consumer confidence and demand. In a vicious temporary slump, driven by a credit crunch and the collapse of global spending, such subsidies make short-term sense. But they prop up demand by fossilising a country’s job structure and preventing the shift of workers from industries with excess capacity (like carmaking) to more promising ones. That ossification will surely come to haunt continental Europe. And in an economy like America’s, where the end of the debt-fuelled consumer-spending binge is forcing big structural shifts, it would be insane.

And the revolution over at The Economist continues:

That is why Europe’s governments are right to focus on waiving or reducing their high payroll taxes, especially for additional hires. And it is why American proposals to finance an extension of unemployment insurance with payroll taxes are misguided. Heavy labour taxes are one reason why Europe entered the downturn with far higher unemployment than America. Lightening that burden would do most to boost jobs—on both sides of the Atlantic.

Thai tasted a whole lot better today.  And it was just some more bad news for Obama.