Mark Halperin – editor=at=large of thinly read, left-leaning Time magaine said on live TV that President Obama acted like a (blank) during his press conference yesterday.
Watch the clip to fill in the blank … worth watching.
Archive for June, 2011
Herman Cain’s bona fides …
June 30, 2011When pundits speak about Herman Cain – or introduce him for an interview – they usually reference him as the (black) tea party candidate and former Godfather’s Pizza CEO who once hosted a talk radio show.
As reported by The Atlantic:
It hasn’t gotten much attention that Cain was chairman of the Kansas City Federal Reserve Bank in the mid-1990s.
The Kansas City Fed is one of twelve regional banks that advise the Federal Reserve Board and initiate changes in the discount rate.
The Kansas City Fed in particular has a reputation for monetary conservatism and distrust of central authority.
From 1992 to 1996, Cain served as a director of the Federal Reserve Bank of Kansas City in the capacities of deputy chairman and then chairman of the Board.
Hmmm …. puts a whole new paint job on the candidate.
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Pepsi decides to focus on, well, Pepsi …
June 30, 2011Ken’s Take: Indra Nooyi — PepsiCo’s CEO — is an Obama fav because she pushes healthier foods (even healthier than sugar-water and corn chips ?) and charity causes.
Bottlers ask “Is she ashamed of selling carbonated sugar water?”
Investors and industry insiders are concerned that her push into healthier brands have distracted the company from some core products.
When flagship Pepsi-Cola dropped to number 3 – behind Coke and Diet Coke – even Ms. Nooyi had to take notice.
Her plan: flashier containers and a summer ad campaign featuring Santa.
Might work …
* * * * *
Excerpted from the WSJ:
Snack-food and beverage giant PepsiCo is launching the first new advertising campaign for its flagship Pepsi-Cola in three years—offering one of the most visible signs PepsiCo is throwing new weight behind its biggest brand after it sank to No. 3 in U.S. soda sales last year, trailing not only Coke but Diet Coke.
Ceding the top two spots to rival Coca-Cola Co. marked a huge embarrassment in a cola war that traces its roots to the 19th century.
PepsiCo is launching its first ad campaign in three years with a spot that focuses on its Pepsi-Cola. “Summer Time Is Pepsi Time” featuring Santa on vacation.
PepsiCo says it plans to spend about 30% more this year on TV advertising for its North American beverages, with soda a big focus.
As recently as 2005, PepsiCo spent $348 million on soda ads in the U.S., almost as much as Coke, which spent $377 million.
But by last year, the company had more than halved its spending to $153 million, while Coca-Cola spent $253 million, according to Nielsen Co., which tracks advertising.
* * * * *
In late 2008, Pepsi implemented a costly overhaul of all brands, that were looking “tired on the shelf.”
PepsiCo launched new graphics for all the big beverage brands and new packaging for more than 1,200 individual products, an unusually ambitious redesign.
* * * * *
Move over, Richard Simmons …
June 30, 2011Wally the Walrus is latest fitness icon.
Click the pic for for a smile …
Obama’s a genius, Bachman’s a dunce … oh, really?
June 29, 2011The mainstream media had a field day on Monday when Rep. Michele Bachmann kicked off her presidential campaign on Monday in Waterloo, Iowa, and in one interview surrounding the official event she promised to mimic the spirit of Waterloo’s own John Wayne.
How stupid can she be?
Everybody knows that John Wayne grew up in Winterset, Iowa … not Waterloo.
According to various sources, Waterloo is where his parents met and married, not where The Duke was raised. He grew up in another Iowa town.
How could anybody with a brain get the facts so wrong?
* * * * *
Now let’s compare that to a gaffe that was largely buried by the mainstream media.
Visiting troops at Fort Drum last week, President Obama confused two of his Medal of Honor recipients, referring to one of the soldiers’ comrades who was killed in combat in Afghanistan as being alive.
Speaking to the 10th Mountain Division Obama reflected on the time he spent with members of the Division.
“First time I saw the 10th Mountain Division, you guys were in southern Iraq. When I went back to visit Afghanistan, you guys were the first ones there. I had the great honor of seeing some of you because a comrade of yours, Jared Monti, was the first person who I was able to award the Medal of Honor to who actually came back and wasn’t receiving it posthumously,”
The mainstream media’s explanation: the President simply misspoke.
To put the gaffe in perspective: the Medal of Honor is the highest award in the country, and Obama has only bestowed 6 Medals of Honor.
I guess even a genius can get confused when he’s trying to remember 6 award winners and trying to keep his place on the teleprompter.
Imagine if Bachman (or Bush) had made that mistake …
* * * * *
Follow-up: Why are there more U.S. troops on South Korea’s border than on our own border?
June 29, 2011Yesterday, I posed the question:
Why are there more U.S. troops on South Korea’s border than on our own border?
Specifically, there are about 200 US soldiers per border mile between North & South Korea, but only is about 1 agent or soldier for every 10 miles along the US-Mexican border.
A loyal HomaFiles reader provided an thoughtful answer to my question.
Well this one is pretty easy actually: We are defending against a greater economic threat to the U.S. in South Korea than we currently face in most of the area adjacent to the Mexican border. To wit:
1) North Korea has the world’s largest artillery force, some 13,000 pieces of which are deployed at the DMZ
2) The Korean People’s Army (aka the bad guys) has ~1.1 MM soldiers (plus a reserve of 8 MM) with 70% of that active force within 100km of the DMZ
3) Seoul, South Korea is just 50 from the DMZ and produces ~$210 billion in GDP (Hong Kong is ~$225 billion)
4) Any enduring attack on Seoul would create global supply-chain chaos – much of which would disproportionately impact the U.S. and its allies
5) The most effective deterrent known to the world are U.S. men and women in uniform alert, aware, and armed to the teeth
Draw your own conclusion …
Why are there more U.S. troops on South Korea’s border than on our own border?
June 28, 2011Excellent question posed by CNN’s Jack Cafferty:
There are 1,200 National Guard troops deployed along the U.S. border with Mexico.
The troops were scheduled to leave June 30th, but an extension is likely.
To be fair, there are about 20,000 border agents also on patrol along the 2,000 mile long U.S.-Mexican border.
That’s about 1 agent or soldier every 10 miles.
In comparison, there are 28,000 U.S. troops stationed along the South Korean border with North Korea.
The border between North & South Korea is only about 150 miles.
So, there are almost 200 U.S. soldiers per border mile in North Korea.
And, that’s not counting the highly regarded South Korean army.
Does that make sense to you ?
Hmmm …
Get me a beer, Patches.
June 28, 2011From the HomaFiles human interest files …
Click the pic to see Patches go thru the drive-through, down a burger, and fetch a beer.
Worth a minute … but, only if you want to smile.
About the 20 to 1 troop ratio in Afghanistan …
June 27, 2011Here’s a blog reply that I didn’t want to go unnoticed.
Last week – as an add-on to my remarks on Obama’s Afghan speech, I paraphrased Wolf Blitzer on CNN:
“The U.S. has 100,000 troops in Afghanistan, NATO has about 50,000, and there are supposed to be 300,000 in the Afghan security forces. It’s estimated that there are fewer than 25,000 Talban and Al–Qaeda fighters in the country. With a manpower advantage of almost 20 to 1, shouldn’t we be able to snuff these maggots out?”
A HomaFiles reader provided a very informative answer to the question:
Commenting as an ex-Army officer, you have to be careful with Blitzer’s glib analysis.
First, not all the NATO troops are warfighters – only a small portion are combat effective. The rest are “support” or allied nations providing non-combatants. The tooth-to-tail ratio in modern armies is a lot lower than one might think.
Second, 25,000 enemy fighters is just a “tooth” number- it doesn’t count the undoubtedly numerous locals and Pakistani nationals who provide supply, succor, intelligence, etc. If you want to do a true apples-to-apples comparison of effective numbers, you need to include the “on-demand” support. It is part of fighting an insurgency. The farmer hiding guns or providing water is as an important combat asset as an Army quartermaster.
Third, Blitzer can throw around any overall ratio you want- but in an insurgent fight, a tactical combat, numbers ONLY matter in that specific kill zone. NATO may control the air, communications and supply- but insurgents hold the initiative as to when to give battle. And a shrewd insurgent only gives battle at singular points where he can control the various tactical support ratios. Like crime, insurgency is a tactical problem; war is a strategic one.
There are many more police in Manhattan per violent criminal on any given night. The police have better guns, communication and supplies. But the criminal determines the engagement.
The criminal finds the place where the police are not. That is why you need more police per active criminal- to achieve parity, provide deterrence, and provide superior back-up forces in case of trouble.
Thanks for the informative reply … very compelling case.
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What do Virginia, Texas, & Florida have in common?
June 27, 2011They’re the states whose GDP has grown the most from 2000 to 2010.
Great analysis in USA Today re: state-by-state shifts in the US economy.
A couple of angles from the data:
- No surprise, income-tax-free Texas is soaring; Midwest rustbelt is struggling
- 10 states generate over 1/2 of the US GDP
- “Swing states” have slowest rates of growth (2nd chart)
Hmmm …
Biggest State GDPs
Slowest Growing States 2000-2010
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Why not use spoons?
June 24, 2011This is a classic that I had forgotten.
Reprised in the WSJ in response to Obama’s blaming ATMs for taking jobs from gum-chewing tellers:
The story goes that Milton Friedman was once taken to see a massive government project somewhere in Asia.
Thousands of workers using shovels were building a canal.
Friedman was puzzled.
Why weren’t there any excavators or any mechanized earth-moving equipment?
A government official explained that using shovels created more jobs.
Friedman’s response: “Then why not use spoons instead of shovels?”
Now, I guess the President will be looking for spoon-ready public works projects …
* * * * *
“Your rebate check may look like junk mail”
June 24, 2011Interesting experience, indication of a trend.
Bought a set of new tires … tire guy pointed out that there was an applicable rebate of $20 per tire … even auto-filled out the mail-in form for me.
His parting words:“Your rebate check may look like junk mail … make sure that you don’t accidentally throw it away.”
Nice of the guy.
Have you noticed how more and more rebate and claims checks are, in fact, looking like junk mail?
Historically, few people go through the hassle of submitting all of the docs for rebates. Historically, less than 15% of earned rebates are claimed.
It’s just not worth the time and aggravation.
I guess that some companies think the 15% redemption rate is too high.
So, they try to aggravate “breakage” … doing things to keep folks from cashing the checks they receive.
One way to do it — make the checks look like junk mail.
No way to run a business …
* * * * *
Blah-blah-blah …
June 23, 2011Obama’s speech last night was well-crafted with tight logic and clever metaphors.
But, Dennis Miller summed it up best: “more smoke than the Vatican announcing a new pope.”
I was afraid it was just me thinking that Obama’s speeches have taken on a certain ‘tree falling in the woods’ character.
Like, who cares?
It’s not like anything is going to change.
The Middle East will continue to be a mess, we’ll continue to throw lives and money down the rat hole, and Al–Qaeda will just keep operating out of Pakistan, Yemen and other places.
Only difference: by declaring the withdrawal, Obama owns anything that goes wrong in Afghanistan.
Tell me again why anybody wants to be President ?
* * * * *
Interesting observation …
Paraphrasing Wolf Blitzer on CNN:
“The U.S. has 100,000 troops in Afghanistan, NATO has about 50,000, and there are supposed to be 300,000 in the Afghan security forces. It’s estimated that there are fewer than 25,000 Talban and Al–Qaeda fighters in the country. With a manpower advantage of almost 20 to 1, shouldn’t we be able to snuff these maggots out?”
Good question, Wolf …
* * * * *
Viva McKinsey …. study was “rigorous”
June 23, 2011Of course, I’ve got horses in this race since I’m a McKinsey alum …
When dufass Henry Waxman started attacking McKinsey for lack of credentials and poor methodology, I just had to laugh.
* * * * *
From the WSJ: Shutting Up McKinsey
The White House routinely tries to intimidate its health-care critics, but the campaign against McKinsey & Co. is something else.
The management consultants attempted to find out how U.S. business will respond to ObamaCare,
Democrats don’t like the results, and so McKinsey must pay with its reputation.
The firm’s sin was to canvass some 1,300 companies and report that nearly a third will “definitely” or “probably” stop offering insurance to employees after 2014, dumping them instead into ObamaCare’s subsidized exchanges.
Democrats immediately blasted the results, attacked McKinsey’s integrity and demanded that it release its methodology and full responses.
So this week McKinsey opened its books, and what do you know, the survey was rigorous.
Respondents were a representative cross-section of businesses of many sizes and across industries and regions, and the questions were impartial.
* * * * *
The White House shills declared that the study was not a “predictive economic analysis.”
For truth, they point to the ever-dutiful Congressional Budget Office which – after the CBO got an all expenses paid trip to meet with Obama in the oval office — thinks the law will have little effect on employer coverage.
* * * * *
Viva McKinsey.
The one thing that college does …
June 22, 2011One thing college does do is to keep 25 million students off the unemployment rolls.
That’s according to Bill Gross, co-CEO of PIMCO Bond Funds, on his most recent newsletter: School Daze, School Daze Good Old Golden Rule Days
Gross has jumped on the’ college is worthless’ bandwagon.
He says:
A mind is a precious thing to waste, so why are millions of America’s students wasting theirs by going to college?
- All of us who have been there know an undergraduate education is primarily a four year vacation interrupted by periodic bouts of cramming or Google plagiarizing,
- It used to serve a purpose. It weeded out underachievers and proved at a minimum that you could score on an SAT test. Now, it proves that your parents had enough money to hire SAT tutors to increase your score by 500 points.
Now, however, a growing number of skeptics wonder whether it’s worth the time or the cost.
College now is stultifying and outdated – overpriced and mismanaged – with very little value created.
Fact: College tuition is now 4 times as expensive relative to other goods and services as it was in 1985.
Fact: The average college graduate now leaves school with $24,000 of debt and total student loans now exceed this nation’s credit card debt at $1.0 trillion.
Subjective explanation: Universities are run for the benefit of the adult establishment, both politically and financially, not students.
Conclusion: Students, however, can no longer assume that a four year degree will be the golden ticket to a good job in a global economy that cares little for their social networking skills and more about what their labor is worth on the global marketplace. Our penchant for focusing on liberal arts and high tech value-added jobs should be modified and redirected.
Solution: Focus on retraining existing unemployed workers and redirecting our future students. Instead of liberal arts, focus on technical education, technical institutes and polytechnics as well as apprenticeship programs.
Allow people with good technical skills but limited college education to earn a decent living.
* * * * *
Ken’s Take: I’ve been doing mucho reading on the subject this summer. None of it is very encouraging, The education system is a huge national issue. More to come.
Your thoughts?
* * * * *
Thanks to Tags for feeding this lead
Hybrid car sales respond to high gas prices … with a thud.
June 22, 2011The last time that gas prices soared, hybrid cars were selling above their sticker prices.
Not so much this time.
According to USA Today, hybrid sales fell to only 1.6% of total auto sales – down from their 3.6% peak in 2009.
Why?
“Even with the fuel savings, it doesn’t make sense to buy a hybrid” for many buyers.”
Sure, gas prices hit $4, creating “economic value” versus conventional gas-engine cars … but the fuel savings has narrowed with the introduction of compacts that get 40 mpg and sell for considerably less than hybrids.
Sales of high-gas-mileage, conventional compacts such as the Hyundai Elantra, Ford Focus and Chevrolet Cruze are hot.
The new conventionally powered cars use various strategies to boost gas mileage to near hybrid levels — without the batteries and electric motors that can add $6,000 on average to a vehicle’s cost.
* * * * *
Volt update: Chevy sold 481 Volts in May … pushing it’s total since January up to a whopping 2,184.
* * * * *
It’s structural unemployment … oh, really.
June 21, 2011Now that the “Bush’s fault” excuse is getting a bit dated, liberal economists are starting to push alternative alibis.
For example, journalist-economist Robert Sameulson says there’s a Great Jobs Mismatch causing “structural unemployment”:
In any dynamic economy, constant changes in technologies, products and companies naturally create gaps between skills available and skills wanted.
A survey for the National Association of Manufacturers … found that companies still faced shortages … for engineers and scientists and among aerospace, defense and biotechnology firms.
For skilled blue-collar jobs, high schools have de-emphasized vocational training, community colleges often aren’t well-connected to local job markets, and union apprenticeship programs have withered
“The number one cause for difficulty in filling positions (cited by 45 percent of companies) is lack of sufficient experience.” So it’s a Catch-22: You can’t get hired unless you have experience; but you can’t get experience unless you’re hired.
Americans are less willing to move to take jobs. The McKinsey study reports that, in the 1950s, one in five Americans moved every year; now it’s one in 10. “Work is more mobile than workers,”
* * * * *
Ken Asks:
If it’s a matter of workers being underskilled, why are there “now hiring” signs in box retailers and fast-food joints?
Why aren’t there more pick-up trucks in the parking lot of Anne Arundel Community College – which offers a deep catalog of vocational courses?
Why aren’t construction sites operated 7 X 24 – using multiple crews working around the clock? Would get jobs done fater and emplyee more people …
Why won’t people fish where the fish are – e.g. move from, say, Detroit to Texas?
Does anybody really believe that no American citizens would take the jobs currently occupied by illegals?
Dumping employer provided health insurance … the simple economics
June 21, 2011Recent studies have projected that many employers will drop their health insurance plans when ObamaCare goes live.
Why?
Simple economics.
According to the Kaiser Family Foundation’—reported in the WSJ –, the annual premium for an average policy last year was $5,049 for a single worker, with the company picking up roughly $4,150 (83%) and the employee the rest.
For a family of four, the total cost was $13,770, with the company picking up $9,773 (71%).
ObamaCare, businesses can stop providing health-care coverage, paying a $2,000 per-worker fine instead.
For small businesses, the trade-off is even more attractive: They are given a pass on the first 50 workers.
So what?
The employees formerly covered by employer-subsidized plans will swell. Increasing the costs of ObamaCare.
That is, until the Feds raise the fine (tax?) on employers to cover the shortfall.
Bad estimating or clever foxes?
Think about it.
An induced move into a 1-payer system.
Pretty clever. Especially if funded by a headcount tax (oops, fine) on employers.
Hmmm.
Is that likely to create jobs?
I’m betting the under.
* * * * *
Economists: cranking numbers to answer small problems.
June 20, 2011According to Business Week: Tyler Cowen is America’s Hottest Economist.
* * * * *
Cowen says that most economists don’t read, at least not widely.
Robert Frank, who teaches economics at Cornell University, agrees.
He says the ascent to tenure leads young economists toward math and small questions.
Universities hold on to only the leading figures in each academic sub-specialty.
“You want to climb to the top of a hill,” says Frank, “and it’s a lot easier to climb to the top of a small hill than a big broad one.”
There’s an idea among academic economists that the privilege of writing a narrative argument must be earned through the hard work of modeling and econometrics.
“There is a view that what can’t be disproven isn’t science.”
* * * * *
Electorate says: “GOP generic is my candidate”
June 20, 2011According to Gallup’s most recent polling, a “generic” GOP candidate would beat President Obama by 5 points – 44% to 39%.
Ken’s Take: The GOP debate strategy – pick on Obama’s policies rather than each other – might just take a toll on the President.
If the candidates stay committed to somebody beating Obama rather than “me” winning, the President will be facing a 18 months of substantial drip-drip-drip.
But, I doubt the candidates will stay on message. Eventually, some of the candidates will revert to an “elect me” strategy.
* * * * *
The pretense-of-knowledge syndrome …
June 17, 2011Recent bad economic news has been reported as “surprising” and “unexpected” by the mainstream media.
That causes two problems:
- Since the news is bad, it understandably breeds low consumer confidence.
- More nuanced, since the news is “unexpected”, it breeds low confidence in the folks who are in charge: “do they know what they’re doing?”
While politicos need to maintain an optimistic façade, how much damage has been done by “we’ll hold unemployment under 8%” and “this is recovery summer”?
* * * * *
Excerpted from RDP: Hunkered-Down America by Robert Samuelson
Economists suffer from what one of them (Ricardo Caballero of the Massachusetts Institute of Technology) calls “the pretense-of-knowledge syndrome.”
They act as if they understand more than they do and presume that their policies, whether of the left or right, have benefits more predictable than they actually are.
For example, economic models, based on past relationships and assumptions, don’t capture shifts, which embody new assumptions and beliefs.
So modern economics has been oversold, and the public is now disbelieving.
The disillusion feeds stubbornly low confidence.
Because psychology is so important, the good news is that if the economy surprises on the upside, the boost to confidence could accelerate the recovery.
[The bad news is that if the economy surprises on the downside, the hit to confidence could slow the recovery.]
* * * * *
What to order in a restaurant …
June 17, 2011According to Business Week:
Tyler Cowen is America’s Hottest Economist.
* * * * *
Cowen’s menu searching advice:
Order the strangest thing on the menu.
Chances are the chef put the most work into it.
And, Cowen says the best ethnic food is prepared at strip malls.
Caveat diner.
The pretense-of-knowledge syndrome …
June 17, 2011Recent bad economic news has been reported as “surprising” and “unexpected” by the mainstream media.
That causes two problems:
- Since the news is bad, it understandably breeds low consumer confidence.
- More nuanced, since the news is “unexpected”, it breeds low confidence in the folks who are in charge: “do they know what they’re doing?”
While politicos need to maintain an optimistic façade, how much damage has been done by “we’ll hold unemployment under 8%” and “this is recovery summer”?
* * * * *
Excerpted from RDP: Hunkered-Down America by Robert Samuelson
Economists suffer from what one of them (Ricardo Caballero of the Massachusetts Institute of Technology) calls “the pretense-of-knowledge syndrome.”
They act as if they understand more than they do and presume that their policies, whether of the left or right, have benefits more predictable than they actually are.
For example, economic models, based on past relationships and assumptions, don’t capture shifts, which embody new assumptions and beliefs.
So modern economics has been oversold, and the public is now disbelieving.
The disillusion feeds stubbornly low confidence.
Because psychology is so important, the good news is that if the economy surprises on the upside, the boost to confidence could accelerate the recovery.
[The bad news is that if the economy surprises on the downside, the hit to confidence could slow the recovery.]
* * * * *
Marginal Revolution: America’s hottest economist
June 16, 2011According to Business Week:
Tyler Cowen is America’s Hottest Economist.
The George Mason University professor has written a bestseller, The Great Stagnation, keeps an influential blog, and reads way too many books.
Cowen’s first rule of reading: You need not finish.
He takes up books with great hope and no mercy, and when he is done—sometimes after five minutes—he abandons them in public, an act he calls a “liberation.”
* * * * *
His best seller, The Great Stagnation, runs through three centuries’ worth of what Cowen calls the “low-hanging fruit” of economic growth: free land, technological breakthroughs, and smart kids waiting to be educated. For developed economies.
He argues, none of these remains to be plucked.
Yet America has built political and social institutions on the assumption of endless growth.
Cowen thinks that now that America has used up the frontier, educated all of the farm kids, and built a couple of cars for every family, we might be done growing for awhile.
* * * * *
Cowen is still best known for his blog: Marginal Revolution.
It’s the second-most popular blog on economics.
Greg Mankiw’s eponymous blog at Harvard just edged it out; both picked up far more votes than Paul Krugman’s New York Times blog Conscience of a Liberal, which ranked third, or Freakonomics, at fifth.
* * * * *
If you’re a non-white Liberal man who lives on the west coast and didn’t attend college …
June 16, 2011… you’re more likely than average to have lost your job in the past year.
Last week’s CNN-Opinion Research Poll, asked folks if they lost their job in the past 12 months.
Overall,18% of the sample said they lost their job in the past 12 months.
Some interesting numbers from the ‘internals’:
- 21% of men lost their jobs, 15% of women
- 26% of non-whites lost their jobs, 14% of whites
- 21% who didn’t attend college lost their jobs, 16% who attended college
- 25% of self-identified Liberals lost their jobs, 17% of Conservatives, 14% of Moderates
- 25% of folks living in the West lost their jobs, 19% of Southerners, 14% of Northeasters, 11% of Midwesterners
Draw your own conclusions …
Bad week for the mainsteam media …
June 15, 2011Can you imagine the collective angst of the mainstream media this past week?
First, after trying to ignore Weinergate, the story became too wild and salacious to ignore, So, the MSM had no choice but to air the lib loudmouth’s dirty linen.
Ouch.
Then, the MSM had to send reps to Juneau, Alaska to pick-up hard copies of 24,000 Palin emails.
Surely there has to be a mega-gotcha in the stack.
Nope.
Double ouch.
Then, a gaggle of GOP presidential hopefuls take the debate stage in New Hampshire for a circular firing squad.
But, wait ,,, instead of attacking each other, they pivot and aim at President Obama’s record on foreign affairs and jobs.
Come on GOP … fight fair.
Then, the NLRB hauls Boeing into court to try to stop the company from opening a manufacturing plant in South Carolina — a right-to-work state.
Now, how to convince the lemmings that the Administration is all for free enterprise and job creation?
What an awful week for news …
Victory in Wisconsin …
June 15, 2011Punch line: The Wisc Supreme Court ruled that Gov. Walker can implement rules diminishing public employee unions.
Now, unions will have to collect dues from members themselves if they want to buy politicos with campaign contributions.
And, public employees will have to contribute towards their health care insurance and pensions.
Score one for rationality.
* * * * *
Reported in the Milwaukee Journal Sentinel:
Acting with unusual speed, the Wisconsin state Supreme Court reinstated Gov. Scott Walker’s plan to all but end collective bargaining for tens of thousands of public workers.
In its decision, the state’s high court concluded that “choices about what laws represent wise public policy for the state of Wisconsin are not within the constitutional purview of the courts.”
In its ruling, the Supreme Court said it took up the case because the lower court had “usurped the legislative power which the Wisconsin Constitution grants exclusively to the Legislature.”
So what?
Biggest change ids that union dues won’t be automatically deducted from all public employees paychecks – the unions will have to collect the dues – meaning, that some (many ?) employees will tell the unions to pound sand.
If the unions can’t bank on the dues, then they can’t contribute as much to Democratic campaigns.
Oh well …
The most popular educational site in the world …
June 14, 2011No, not the HomaFiles (but we’re trying) … It’s the Khan Academy.
Punch line: This is worth checking out for 2 reasons:
- Innovative educational “delivery system”
- Lots of 10-minute subject modules that are relevant to MBAs – e.g. finance, econ, stats.
Links follow the excerpt …
* * * * *
Excerpted from Business Week:
Salman Khan: The Messiah of Math
Salman Khan has become a quasi-religious figure in a country desperate for an educational Moses.
His free website, dubbed the Khan Academy, may well be the most popular educational site in the world.
“If you’re teaching math in this country right now, then there’s pretty much no way you haven’t heard of Salman Khan.”
Kahn started by taking math material — both basic and advanced — and broking it down into little 12-minute lectures – created on a Wacom tablet using an electronic pen — feature blackboard-style diagrams and explanatory voice-overs .
Khan groups the concepts into “modules” … all linked to a “knowledge map” that shows how the modules relate to one another, so a math student can pick a path from addition to derivatives.
Some teachers are using the Kahn videos to supplement the classroom..
Teachers using the Khan Academy flip the traditional curriculum; students listen to the lectures at home, on their own time, and work through assignments in class, So, teachers are able to address student issues individually.
From its math roots, Kahn Academy has branched out to a broad array of subject matter, including statistics, finance, economics, and the sciences.
* * * * *
Links to explore the Kahn Academy:
Lecture Example: Present Value
Lecture Example Algebra: Worked Problems
* * * * *
Dodge ObamaCare … by earning less. Huh?
June 14, 2011Punchline: Obama’s solicitor general, defending the national health care law, told a federal appeals court that Americans who didn’t like the individual mandate could always avoid it by choosing to earn less money.
“If you don’t like the mandate, just earn less money>”
Apparently, there’s a provision in the health care law that allows people to avoid the mandate: the minimum coverage provision only kicks in after people have earned a minimum amount of income.
… and, people can choose to earn less and, thus, avoid the mandate.
It’s a matter of choice.
The judge’s response: “That wasn’t in a single speech given in Congress about this…the idea that the solution if you don’t like it is make a little less money.”
Ken’s Take: You just can’t make this stuff up …
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Source: Washington Examiner
Texting isn’t cool anymore …
June 13, 2011According to the WSJ:
U.S. cellphone users sent and received more than 1 trillion texts in the second half of 2010 … but, the rate of growth has subsided.
Text traffic will come under more pressure in the months ahead.
Why?
More folks are messaging thru Facebook and IPad owners can use WiFi connections to bypass carriers and send messages over the Internet.
”It’s not cool anymore to SMS.”
Dutch telecommunications company Royal KPN … reported its youth-oriented brand, Hi, saw an 8% decline in outgoing SMS or text messages per customer in the first three months of this year compared with the first quarter of 2010.
So what?
For carriers such as Verizon, the texting business has low costs and high margins.
A dollar of texting revenue produces at least 80 cents of profit compared with about 35 cents of profit from $1 in wireless data or voice services
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By the numbers: Obama’s economic recovery that isn’t.
June 13, 2011Punch line: Obama inherited a bad situation and made it worse.
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Excerpted from Forbes:
President Obama’s Economic Recovery That Isn’t
At the end of this month, President Obama’s economic recovery will be two years old.
In terms of employment the Obama recovery has been catastrophic
- Total employment (BLS household survey) will be 0.3 million lower than it was at the start of Obama’s “recovery”, two years earlier.
- The unemployment rate will have fallen from 9.5% to 9.1%, but only because 3.6 million people became discouraged and stopped looking for work.
- If the rate of labor force participation in June 2011 were the same as it was in June 2009 (65.7%), the reported unemployment rate would be 11.2% rather than 9.1%.
While employment the Obama recovery has been catastrophic, economic growth has been merely disastrous.
- Real annual GDP growth during the first two years of the Obama recovery should average 2.69% … about half of what is normal for the start of an economic recovery.
- During the first two years of the Reagan recovery, the dollar rose by 12% against other major currencies and by 34% in terms of gold.
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Stop right there, professor … proof of citizenship, please !
June 10, 2011I was cross-haired by two relatively hot political issues last week: voter IDs and proof of legal citizenship.
I was suspected of crossing a border to illegally access government-provided services.
Yes, your mild mannered (usually) man of the classroom … stood up on suspicion of unlawful conduct.
An intimidating officer of the state demanded to see an ID and proof of citizenship.
Really !
OK, it wasn’t the U.S.- Mexico border … it was the Maryland-Virginia border.
The services that I was allegedly attempting to use illegally: use of the “Anne Arundel County landfill and recycling center” (a.k.a. the local dump).
That’s right. In order to throw a mattress and springs into the landfill dumpster, I had to show my driver’s license and to produce proof of Anne Arundel County, Maryland residency. Fortunately, I may be the only person in Maryland driving around with paid real estate tax bills in my glove compartment.
Think about it.
Maryland is a state that – for example – reportedly looks the other way when it comes to admitting illegal immigrants into public schools and allows them to pay in-state tuitions at colleges. No harm, no foul.
But, the line gets drawn in the sand at the local dump.
I didn’t really mind showing my ID docs, but the situation certainly did make me scratch my head …
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Students accumulating credit hours, but not mastering skills …
June 10, 2011Big U.S. employers, worried about replacing retiring baby boomers, are … growing bolder about telling educators how to run their business.
Several initiatives have focused on manufacturing and engineering, fields where technical know-how and math and science skills are needed and where companies worry about recruiting new talent.
The National Association of Manufacturers is leading a drive, partly funded by the Bill & Melinda Gates Foundation, to establish standardized curricula at community colleges across the U.S. with the goal of preparing students to qualify for certification in industrial skills ranging from welding to cutting metal and plastics.
The association … said bright students should be encouraged to consider alternatives that lead directly to jobs.
“We need to move aggressively to competency-based education” based on mastery of skills … rather than on an accumulation of credit hours.
Much of the emphasis is on community colleges and vocational schools because they are affordable and can quickly turn out job candidates.
Employers increasingly are asking community colleges to create custom training programs for specific jobs.
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What do men, low earners, suburbanites and Republicans have in common?
June 10, 2011A majority of them disapprove of the job President Obama is doing.
Based on the most recent CNN-Opinion Research Poll, 48% approve of Obama’s job performance.
Some interesting numbers from the ‘internals’:
- 51% of women approve, 51% of men disapprove
- 61% of non-whites approve, 63% of whites disapprove
- 52% of folks making more than $50K approve, 50% making less than $50k disapprove
- 82% of Democrats approve, 83% of Republicans disapprove
- 57% of urbanitess approve, 52% of suburbanitess and rurals disapprove
In marketing, it’s called segmented appeal.
Draw your own conclusions …
About colleges’ value-to-cost ratio …
June 9, 2011Everybody knows that college tuition is going thru the roof … pushing college out of reach for many and burdening most of the rest with near-lifelong debt.
USA Today reported recent studies by Rutgers University, Northeastern University professor Andrew Sum and Pew Research found that:
- The median student loan for graduates from 2006 through 2010 is $20,000
- Only about three-quarters of college grads younger than 25 were employed …
- … with over a quarter of those employed working jobs that didn’t require a college degree.
- 57% of Americans have decided that the value-to-cost ratio for college is lousy.
Ken’s Take: Anybody see a parallel between the Fed gov’t and higher education? High prices, high debt, low value-to-cost.
Just like peas in a pod …
So much for consumer deleveraging …
June 9, 2011In the 1960s and 1970s, consumer debt as a percentage of after-tax income averaged a bit over 60%.
Starting in the Clinton years – and gaining steam through the Bush years – the ratio doubled – as consumers took out easy money mortgages and credit cards.
The 2009 financial scare prompted a wave of debt-reduction, but it looks like the austerity wave is becoming passé.
* * * * *
According to the WSJ:
The economy is likely to be stuck with at best subpar growth until the private sector’s deleveraging, or debt-shedding, process is complete.
Households have made some progress lately, but this still looks to be in its early stages.
While debt as a percentage of after-tax income has fallen from its peak, it remains about 120% — well above the 89% it averaged in the 1990s.
And, there are signs that consumers are even starting to borrow again:
- Consumer credit outstanding rose by $5.5 billion in April after a $6 billion increase in March.
- Student-loan debt is at record-high levels
- There has been an uptick in credit-card borrowing by cash-strapped consumers.
P.S. In Japan, deleveraging took the better part of 15 years.
![[AOT]](https://i0.wp.com/si.wsj.net/public/resources/images/MI-BJ849_AOT_NS_20110606183004.jpg)
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Has anybody bothered to study the cumulative effect of these things?
June 9, 2011That’s the question that JP Morgan CEO posed – in public – to Fed chair Bernanke.
Bernanke’s answer: “No”.
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Dimon rattled off a couple of the more than 300 new regs that Dodd-Frank will impose on banks.
Then, he popped the question, adding
“I have a great fear that somebody will write a book that the things we did in the crisis will slow down the recovery”.
Bernanke quipped that he thought the Fed and Administration were doing pretty good, then bluntly answered the question: “No”.
O’s under water … again
June 8, 2011According to that bastion of right-wing thinking – the Washington Post – President Obama’s Bin Laden bounce is gone, his approval is ‘upside down’, and 6 of 10 people think things are on the wrong track …
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McKinsey: 78 million Americans could lose employer health coverage … thanks, ObamaCare.
June 8, 2011Punch line: ObamaCare will lead to a dramatic decline in employer-provided health insurance—with as many as 78 million Americans forced to find other sources of coverage.
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Currently, 156 million non-elderly Americans get their coverage at work.
Before ObamaCare passed, the CBO estimated that only 9 million to 10 million people, or about 7% of employees who currently get health insurance at work, would switch to government-subsidized insurance.
A new study by McKinsey – reported in the WSJ — suggests that ObamaCare will lead to a “radical restructuring” of job-based health coverage with as many as 78 million Americans could lose employer health coverage.
The McKinsey study, “How US health care reform will affect employee benefits,” predicts that employers will either drop coverage altogether, offer defined contributions for insurance, or offer coverage only to certain employees.
Up to 50% of employers say they will definitely or probably pursue alternatives to their current health-insurance plan when ObamaCare takes effect in 2014.
And, “something in the range of 80 million to 100 million individuals are going to change coverage categories in the two years” after the insurance mandates take effect in 2014.
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First, they’ll have to (bleep) in a bottle …
June 7, 2011If Floridians want welfare, they’ve got to ditch drug use.
Florida Gov. Rick Scott signed a bill last week that would require welfare recipients to take a mandatory drug test.
Applicants for the federal Temporary Assistance for Needy Families program who test positive for illicit substances won’t be eligible for the funds for a year, or until they undergo treatment.
Those who fail a second time would be banned from receiving the funds for three years.
The logic: It will make sure taxpayers aren’t subsidizing drug use.
The legislation instantly came under a barrage of criticism from the American Civil Liberties Union and several of the Sunshine State’s Democrats.
Their shout-outs: “unfair”, “invasion of privacy, “unconstitutional”.
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Great debate on the topic on one of the news talk shows:
Person A: We don’t want to subsidize drug use.
Person B: You got no right to tell me how to spend my money.
Person A; It isn’t YOUR money.
Person B: Yes it is !
Person A: Many employers require drug-testing
Person B: Welfare ain’t no job.
That debate pretty well sums up the issue …
Source article: Daily News
Another Obama economist bites the dust …
June 7, 2011Austan Goolsbee, chairman of the White House Council of Economic Advisers – and one of the crafters of the administration’s Trillion Dollar-Stimulus plan — plans to resign this summer and return to teaching economics at the University of Chicago.
This past weekend, Goolsbee was pitching the administration’s “bump in the road” response to May’s dismal jobs report.
Sommers, gone.
Romer, gone
Bernstein, gone.
Goolsbee, gone.
Obama says: His economic program saved us from catastrophe. and is working just fine, thank you.
Yeah, right.
Obama confronted with a McDonald’s Dilemma
June 6, 2011Two of Friday’s press reports put Pres. Obama on the horns of a dilemma.
On one hand, First Lady Obama was visible stumping for “My Plate” … the iconic replacement for the “Food Pyramid” …. part of her program to put a dent in childhood obesity and get kids eating healthier.
Obviously, there’s no room for McDonald’s on the First Lady’s plate.
On the other hand, a measly 54,000 jobs were created in May … and, it turns out that half of the jobs came from a single employer — McDonald’s.
McDonald’s ran a big hiring day on April 19 — after the Labor Department’s April survey for the payrolls report was conducted. Reportedly, McDonald’s swelled its workforce by more than 30,000 … more than half of May’s total gain.
So, while Michelle is trying to shut McDonald’s down, Barack is counting on the company for recovery summer deux.
What a dilemma …
* * * * *
P.S. You may remember that McDonald’s got an ObamaCare waiver.
Coincidence?
Flashback: Why private sector jobs won’t be coming back any time soon
June 3, 2011The dismal jobs picture isn’t really very mysterious: CEOs are dismayed by Team Obama’s economic, regulatory and pro-union policies and won’t do any serious hiring while Obama is in power.
For the record, the Homa Files pitched this case almost 2 years ago in a post titled: “Why private sector jobs won’t be coming back any time soon … Hint: it’s called passive aggressive resistance” … the punch lines:
Given the Administration’s anti-corporate rhetoric, actions, and proposed game-changing rules, I doubt that many CEOs will be taking on added costs and risks to boost the administration.
More likely, they will let unemployment continue to creep along, and will slow roll the process of rehiring.
Corporate chieftains will sit back and watch the President squirm and spin his “4 million jobs – saved or created”. As Rev. Wright would say “the chickens will have come home to roost”. Passively aggressive resistance at its very best.
Unfortunately, that means we’ll be seeing high unemployment for some time – at least through the 2012 Presidential elections.
The full original post is worth another read !
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Ken’s current take:
Certainly there won’t be any meaningful hiring until the 2012. elections are in the book.
CEO heels are dug in. I’ve heard cocktail party chatter like “Each job added is a vote for Obama … Fool me once, shame on you … fool me twice, shame on me”
CEOs started to relent a bit when the Congress tilted GOP and Obama extended the Bush tax cuts. (Whatever happened to Immelt’s job creation task force?)
But, recent moves – e.g. stopping Boeing’s move to South Carolina, stumping again for higher taxes, especially on off-shore profits – have more than offset any momentum.
We’ll be stuck with unemployment in the 9s until 2012 … or until there’s a substantial policy roll-back – e.g. repealing ObamaCare.
And, the latter just ain’t gonna happen …
Stop thinking about Weinergate !
June 2, 2011Sorry, but my sophomoric side is relishing the Weiner-roast.
The headlines are hilarious: e.g. “Is that your weiner?”
Now, Congressman Weiner is telling people to forget about his weiner so he can get back to his serious Congressional business, e.g. his self-claim of sending out 300 to 400 tweets per day … which, incidentally, is about a tweet-a-minute.
The ”forget about it” strategy won’t work.
Here’s why, explained by Human Events
At this point, telling people not to think about Weinergate is like telling them not to think about a platypus.
As soon as the command is issued, a giant platypus begins crashing through the imagination of the listener.
(To clarify, that’s what happens when you tell people not to think about a platypus.
When you tell them not to think about Weinergate, an entirely different image is conjured.)
Superpower or welfare state ? … Take your pick.
June 2, 2011Punch line: In a series of adios speeches, Defense Secretary Gates speaks a consistent refrain: America can be a superpower or a welfare state, but not both..
* * * * *
Excerpted from WSJ:
“The reality is that the entitlement state is crowding out national defense.
What’s really happening now is “entitlement overstretch”.
The American entitlement state was born with the New Deal, got fat with the Great Society of the 1960s and hit another growth spurt in the first two years of the Obama era.
The big three entitlements — Social Security, Medicaid and Medicare, plus other retirement and disability expenses — accounted for 4.9% of GDP by 1970, eclipsed defense spending in 1976 and stood at 9.8% as of last year.
Under current projections, entitlements will eat up 10.8% of GDP by 2020, while defense spending goes down to 2.7%.”
* * * * *
Ken’s Take: Note the “secret” to how Clinton was able to balance the budget – simply cut defense & intelligence spending and hope for sustained peace.
Oops.
The Homa Files 