Made in China

How long has it been since you heard someone complain, "Everything is made in China. Greedy businessmen are sending all our jobs to China. That's why there's so much unemployment." Five minutes? Ten minutes?

The facts are that Chinese goods account for 2.7 percent of U.S. personal consumption expenditures.
Like the Jews in the Third Reich, the Chinese have become the whipping boy for all our problems. It helps to turn our attention away from a Senate that hasn't passed a budget in three years and can't even tell American business what payroll taxes will be two weeks from now. 

The Customer Will Just Have To . . . .

In response to Michele Obama, the LA Unified School District got rid of chocolate and strawberry milk, chicken nuggets, corn dogs, nachos and other food high in fat, sugar and sodium. Instead, district chefs concocted such healthful alternatives as  vegetarian curries and tamales, quinoa salads and pad Thai noodles. According to the LA Times, the program "has been a flop". Massive amounts of food are going to waste, and there is a thriving black market in food that the students actually want to eat.


All of this is quite predictable -- at least to anyone who has ever run a business (which excludes Michele and her cohorts who always know what's best for you). I learned long ago that whenever you hear someone utter the words "the customer will just have to learn to _______"  there is a disaster impending. Of course, government never thinks of the populace as customers to be served, but as sheep to be herded. Which explains why so many government programs are "flops".

Didn't this country learn anything from Prohibition?

Economic Ignorance at the Times

This from today's NY Times:

More recently, Bain helped lead the private equity purchase of Clear Channel Communications, the nation’s largest radio station operator, which resulted in the loss of 2,500 jobs. 

Here is a prime example of how economic ignorance passes for journalism. 2500 people may have lost their jobs at Clear Channel, but this did not result in 2500 fewer people being employed. The resources that were tied up employing people in an inefficiently run business were freed up to be employed in other businesses -- including some of Bain's other investments like Staples, Gymboree, Guitar Center and others. That's what capital markets do. They shift resources from less productive uses to more productive uses. That's how the economy grows and produces more jobs in total.

Next up: The Times writes a scathing piece criticizing itself for installing computerized type setting, which resulted in the loss of thousands of jobs at their printing plants.

The Cancer of Utopianism

I recently ran across this from Nancy Pelosi advancing reasons to support Obamacare.

She proffered that it would lead to "an economy where people could be an artist or a photographer or a writer without worrying about keeping their day job in order to have health insurance."

In other words, it would facilitate the migration of people to activities which are less economically productive. Now, in the Utopian fantasy mindset this is all quite wonderful because we don't actually have to confront how the things that support these artists and photographers get produced. But in the real world -- say in places like Greece -- we can see what actually happens when we penalize higher economic producers in order to facilitate more low producers.

This is not really new news. Most people have always known that when you tax an activity you will get less of it, and when you subsidize it you will get more of it.  What (apparently) has still not quite registered is that we are passing the tipping point where the effects of ignoring this fact turn malignant.

The Next Time You Hear Someone Praise Congress as Brilliant . . .

"What Congress did turned out to be absolutely brilliant—it created a system that harnesses private enterprise and private capital to deliver the public benefit of home ownership. And it maximizes this public benefit while minimizing the public risk, and without spending a nickel of public funds."

Franklin Raines, CEO Fannie Mae, May 16, 2000

The Rich Get Poorer. Are You Better Off Now?

According to the IRS, the number of "super-rich" dropped by more than 50% over the last three reporting years.
This should make the Occupy Wall Street crowd ecstatic. Are you feeling better off now?

Number of taxpayers with income of $10 million or more

2007       18,394
2009         8,274

Income Envy Versus Wealth Envy

Why the focus on the top 1% of income earners (which obviously changes quite a bit year to year) rather than than top 1% of wealth ( all financial and non-financial assets, including bank accounts, investments, houses, cars and debt)? Is it possibly because this measure has remained remarkably stable over time? Harder to get worked up over that "growing injustice" I suppose.

Does This Look Like a Matter of Too Little Revenue?

Spending and Taxes as a Percent of GDP