Washington's Wake

Archive for the ‘Economy’ Category

If any of the folks on Wall Street had brains (and perhaps testicles) they’d be pulling out of the markets as quickly as possible. It seems to me that the value of every single company and piece of property in this country is over-valued by a factor of 10.

Now, I realize I’m no one. I get it. There is no reason to listen to a word I say, and frankly, I hope they ignore me, even if I’m not wrong. It doesn’t serve anyone to have a monsterous crash. However, as the government has stepped in with the iron fist of the Obama Gestapo and the Secret Pelosi Police (ok, ok, that is hyperbole) fully 40% of the economy (at minimum) is run by the government.

This government is reporting debt that is substantially below the reality, due in part to the type of accounting used and the creative ways legislators and government agencies pretend everything is alright.

Ok, those might seem like unrelated things, but consider that industries that were once making profits will now be run by the same people that are lying about their revenues, expenses and putting out bogus reports. Nearly one half of the economy is going to be devestated, if only in that it will no longer generate wealth and revenue. The multiplier effect of this cuts across all parts of the economy and devalues all stocks and all property values.

If I owned a company right now, I would be doing ANYTHING to get out. My advice to myself: Liquify and flee this market – it is completely illusory.

So, who do we believe?

We have ADP who actually processes payroll for private companies. ADP says we lost(pdf) 23,000 jobs between February and March.

According to today’s ADP National Employment Report®, private sector employment decreased by 23,000 from February to March on a seasonally adjusted basis.

Then there’s the “official” employment statistics.

Payrolls rose by 162,000 workers, the third gain in the past five months and the most since March 2007

But, there’s a lot of adjusting of numbers and other noise going on. Depending on who you read, 48,000 of those people that became employed became employed as government works as part of the 2011 census. Ok. So private employers then theoretically hired 114,000 employees.

Zero Hedge has a wonderful article talking about all the adjusting going on. They show from the governments own statistics that there were 81,000 jobs “created” due to the birth/death adjustment. In reality, those are literally numbers made up. Those 81,000 “jobs” are completely made up wholesale. If we remove those we are left with 33,000 actual real jobs that private employers created.

But the number that gets trumpeted is the 162,000 even though most of that number is comprised of government jobs and fake jobs. And yet we’re going to make policy based upon those fake numbers. Doesn’t make me feel good that anyone in positions of power has a clue about what’s going on in the real world where the taxpayer lives.

The health insurance industry needs competition (from the government, of course) because it consistently makes a killing. Right?

The way most news outlets tell it, that’s the case. However, this fact check article tells another story:

Health insurers posted a 2.2 percent profit margin last year, placing them 35th on the Fortune 500 list of top industries. As is typical, other health sectors did much better – drugs and medical products and services were both in the top 10.

…

HealthSpring, the best performer in the health insurance industry, posted 5.4 percent. That’s a less profitable margin than was achieved by the makers of Tupperware, Clorox bleach and Molson and Coors beers.

The star among the health insurance companies did, however, nose out Jack in the Box restaurants, which only achieved a 4 percent margin.

So, the way I read that, what we really need is for the government to get into the fast food business. Give Jack in the Box a run for its money. Mmmm. Government cheeseburgers. Sounds like a winner to me.

I can’t figure out if I want to buy gold or foreign currencies? I’m stymied.

Part of me is saying, “Wait for the market to crash again!” and then buy. Another part of me is thinking the next crash could be a lot worse than the last, and i might want to invest in commodities and durable goods.

It’s all so harrowing as we stand on the precipice.

This irks me. No, let’s be honest, this pisses me off.  With unemployment hugging nearly 1 out of 10 people, somehow (thanks to unions) the United States Postal Service has about 11,000 idle employees at any given time at a cost of about $50 million annually.

Did I mention the post office has an $8 billion dollar deficit this year, and is positioned for a $4 billion bailout?  I know $50 million is a tiny drop in the $8 billion bucket, but still, it’s 50-freaking-million.

So let’s get this straight:

• I cannot be idle at work, lest I lose my underpaying job.
• I pay taxes on my too-small paycheck.
• Said taxes go to DC to be funneled to the bailout du jour, in this case, the USPS.
• While some of that cash actually goes to pay someone to sort and deliver our junkmail, plenty of those taxes pay someone to sleep in a “blue room.”

Did I mention how exhausted I am?  I mean, how come I’m not getting paid to sleep?  I must be doing something wrong.

PS – Yeah, sounds like a great model for our healthcare system.

While many of us debate the minutia of the various bills and proposals, dissect the monetary costs, discuss the cultural price tag and wallow in an overwhelming sense of foreboding, Massachusetts is already living some of the consequences of this foolishness.

Today on Boston.com it was reported that the commonwealth is upwards of $200M short in tax receipts. Now, this is not directly related to the Mass healthcare debacle that is unfolding daily, but it is an indirect result. You see, our healthcare mandates have pushed up expenses quite a bit and to cover that, the moron governor pushed through a 25% tax increase from 5% to 6.25%. The opponents continually pointed out that it would not raise the revenue that they forecast, but the governor and his troglodytes in the legislature pushed it through anyways.

The result, predictably enough, significantly less revenue than expected.

Why?

I’m not an expert, but I think it’s pretty safe to say that Rep. Michael Rodriguez isn’t the exception when he drives across the border to New Hampshire to buy his liquor without the sales tax. People change their behavior when you charge them more. This isn’t just a rule of taxation, it’s a fundamental rule of economics.

If I were to run a business like Taxachusetts is run, I would expect to double revenue if I doubled the price of my widget. “Gee, wow, I made $1,000 selling these for $1 each.. I need $10,000 — so i’ll just sell them for $10 each.”

Do you really think 1000 people will buy the widget for 10x more? I suppose, if it’s insanely awesome, they might, but more than likely, if i do that, my revenue will drop to almost nothing.

All of the healthcare proposals on the table are completely unrealistic. Government can try to raise taxes to pay for the monstrosity, but in the end, people will avoid the taxes, and revenues WILL fall. Then we’ll not only be worried about paying for the stupid healthcare shenanigans, but any and all other services we’ve come to rely on.

It’s even worse, really, because there are even wider repercussions of  these insane policies…

First of all, people will work less. Why work more for the US Govt? Why not just sit back and rake in the welfare? It’s not like you won’t have health insurance or a paycheck.

Another unavoidable effect of confiscatory taxation is that the best and the brightest will relocate, either out of the country, or to the parts of the country where the tax code and business situation is the friendliest.  This will leave the dregs and the scum running the places most in need of the best. There is a reason why the most Liberal areas are shrinking at the fastest rate.

You’ll notice that all of these things are indirect results, but they are real and provable. The types of policies being pursued in this country right now are destructive to the economy, destructive to the social fabric and most certainly unsustainable for any length of time.

All of this starts us down a convoluted path, where every niggling little bit of economic spewtum is examined for it’s usefulness to government. Agencies are required to track all behaviors, because ultimately all behavior is economic behavior.  I was reading on hotair.com about tax exemptions for pets - and that is really the next logical step isn’t it? The government starts offering lollipops on the bank counter. Everyone loves a little gift, it makes them feel like everything is good.  yes, it’s a republican proposal, but that’s really just a symptom of the larger problem. This isn’t about the cat or the dog, or the behavior, this is about tossing a bone to the tax payer to keep them from boiling. Government, Republican and Democrat, now use whatever they can do bribe the electorate.

Healthcare is the final step. Once you have power over a person’s life…and death… there is no need to bribe. Take what you need by gunpoint and demand what you want.

Massachusetts will pretend to make ‘tough choices’ and ‘do the right thing’ but in the end, nothing will change, people who are smart will leave, and the commonwealth will grow more and more a cesspool where no rational person will want to live.

Ultimately, THAT is what this healthcare debate is about. Do we want to be a gray lifeless totalitarian cesspool state or not?

I would forgo all benefits and let my children and grand children off the hook. In fact, I’d pay to the end of my working life, so as to minimize what future generations would owe.

Looking at the numbers that came out today, particularly the chart linked to on hotair.com, I am ready to throw a temper tantrum. That whole program is criminal and in my opinion unconstitutional.

I keep hearing people ask who will be the sucker when that ponzi scheme fails – if my generation had any guts, they’d stand up and say, “Fine, we’ll do it, but you better kiss our asses.”

Here’s a wonderful update about the amount of money and the jobs that are being saved up here in the great Live Free or Die state.

The report also revealed that through the end of June that stimulus money created or saved 796 jobs, with 700 of those state workers who did not have to get laid off thanks to the federal grants, Fitch said.

So much for “shovel ready” projects that could help save jobs. As I’ve said before, this bill masquerading as pork is nothing more than a complete and utter political payoff to HRH The Sun Kings supporters.

The state has so wonderfully created a nice google map showing the spending, which can be viewed at http://www.nh.gov/recovery/map/index.htm. You click on the link for the statewide amount and a nice bubble pops up. Then click on the wonderful summary tab and please note that the wonderful number ZERO is listed for employment.

Stimulus my ass. This does nothing for private sector jobs that pay for the public sector. Nothing but a complete and utter waste of taxpayer money. And the chattering skulls in DC don’t understand what yesterday was about, do they? Well they’ll find out when they’ve been voted out in 2010. Oh and the republican party had better understand that they’re in the cross hairs too.

George Stephanopolis, former Clinton flack, had an interview with Tax Cheat Timmy yesterday. And the inevitable has finally come around. We’re in for some taxes people and boy they’re going to be big ones too.

Geithner was clear that he believes a key component of economic recovery is deficit reduction. When I gave him several opportunities to rule out a middle class tax hike, he wouldn’t do it.

“We have to bring these deficits down very dramatically,” Geithner told me. “And that’s going to require some very hard choices.”

I got your hard choices right here Tax Cheat Timmy. First off, you can stop passing new big government entitlement plans. There’s one way to reduce the budget deficit. Let’s see if you and your boss are man enough to do that.

And then there’s the bailouts and the Government Motors and the cap and trade bills. Gee Timmy, I wonder where else we could start before raising taxes. I supposed we could always give Congress a pay cut. After all, don’t they want to share the pain that the average American is experiencing?

Of course the bind that you have is your boss was quite clear and emphatic about the no new taxes. As a matter of fact, let’s go to the videotape to see what your boss said himself.

Seems pretty cut and dried. Guess he was either lying then or now. Either way, he was lying and so are you.

I’m pretty sure this story got swept under the radar.

White House officials are embracing a plan to tax “gold-plated, Cadillac” insurance policies, giving momentum to an idea that is receiving bipartisan consideration on Capitol Hill.

And since HRH The Sun King has boasted of his own wonderful plan that is only available to the Mandarins of DC, I can rest assured that when I hear them mention this tax that they, naturally, will include this tax on themselves and Government Motors?

I know, I’m such a joker. Of course they won’t do that. It’s all about do as I say, not as I do.

And to point out the republican hypocrisy, we have this wonderful little turn of a phrase.

Sen. Charles Grassley of Iowa, the top Republican on the Senate Finance Committee, said Friday on Bloomberg TV that he is “taking an intense look at it.”

Yo Chuck. Why don’t you take an intense look at cutting the budget, ya putz.

Seriously. You republicans out there. You better do something about your big government tax and spenders, because you are just like the democrats and will never get into power if you don’t you know have principles. And to make this matter worse, you have to see who thought up this plan.

Sen. John Kerry (D-Mass.) has floated the plan, which would charge an excise tax on policies that exceed a specific amount, perhaps tied to the average benefit received by federal employees.

Yet again, throwing into the plebeians face, the incredible amount of wonderful manna that is given to the holiest workers on the planet, while the proletariat has to do with less and give more.

And to show the wonderful spinelessness of the rino’s in DC, here’s another wonderful quotes for you.

“We’re interested in it, not for the sole reason of raising money, although it would do that,” Grassley said.
…
Senator Olympia Snowe (R-Maine), another swing vote on the Finance Committee, said the idea “may be a practical option, as a way of attacking future costs in health care and driving them down and creating disincentives for the most expensive policies,”

Who says there isn’t bipartisan bullshit going on in DC?

Hey Chuck, stop lying. All taxes exist to raise money from the people to the politicians. There is no other reason to have a tax. Whether the tax “accomplishes” something else is gravy for you bastards.

Yet again, we have a “proposal” that will do nothing but suck more cash to DC with the largess being the pols in charge. They will exempt themselves and their supporters because, well, they can. And if anyone else has a problem with that, you can go suck eggs because quite frankly, they don’t give a damn. And what was the problem with term limits again?