Don't Get Too Bearish Though - Everybody Else Already Is
When gas prices hit $4 this spring, it was predictable the economy's rate of growth would soften, but when politicians needlessly pushed our financial system towards the brink of a crash just to get their disfunctional club to the negotiating table, the first casualty is confidence.
There is so much money in this country on the sidelines. Financing is cheap. There is alot of demand building for home upgrades, goods, autos etc. But investment is deferred because it isn't easy to take a risk now. The responsibility for this is our out of touch leadership in Washington; those who know how to win elections, but dont' know how to govern.
We all feel this fading outlook, but the loss of confidence is also showing up in the economic statistics. Consumer confidence took a huge dip 2 weeks ago. Orders for durable goods took a dip this week and business owners I work with, are not seeing the business they would like to see lately. The timing for this Washington contrived crisis is needless and badly timed. If Obama and Boehner would instill confidence and progress towards solving our problems, this economy would be doing well.
What do they know, these politicians? They know how to get elected to and serve the money interests that get them into office. Whether it is an ideological interest or an economic interest group, these Republicans and Democrats will sell out their country's interest to take care of their sponsors first.
What don't they know? They dont' know that America is great when the average person can work hard to better themselves. America isnt' great because of entitlements, or the rich or those who hold elected office and think this is a golden goose.
These politicians don't know that they are responsible to solve problems that are theirs to solve. They have abdicated their responsibility time and time again in the interest of being reelected. Witness our debts, our costly and broken health and education systems, our decaying, expensive and energy intensive infrastructure. Our unfocused unbelievably expensive foreign wars. Idiot, unqualified politicians are behind all of it and they do nothing about it.
When will we take the influence of money out of our elections and policy making and get able and qualified people to govern in the public interest?
In the meantime, this story has been on the radar screen for months and alot of caution is built in. If the politicos get anything positive done, we can recover.
Thursday, July 28, 2011
Friday, July 22, 2011
Questions on Record Corporate Profits - Bad Reasons for Good Earnings
We are on track this year to see the most profitable year ever collectively for the largest companies in America.
If that is because they are selling more than ever across the globe, winning market share across the globe or innovating great. That is less thae case than we would like.
Unfortunately there are other reasons at play in this succes story that are not so healthy for them or for us and are going to experience a blowback at some point.
Lowest Tax Rates Ever: This is the result of playing loopholes, pitting one taxing nation against another and just benefiting from the widespread belief that if taxed less, companies will invest and hire more.
Outsourcing US Jobs: If big corporate America is making more and more money by lowering their costs by sending still more jobs overseas, I have to object at this point. Well that is the case. A recent report said small and medium sized companies added 700,000 jobs this year. The biggest, most profitable companies have added only 20,000 jobs. I feel betrayed by this. Do you?
Henry Ford back in the day, paid his men a big wage at the time, $5 a day. He did so because he believed that a mass market for Model T's required a class of people who could afford them.
Today's corporate leaders are less pragmatic or interested in the welfare of their nation.
If that is because they are selling more than ever across the globe, winning market share across the globe or innovating great. That is less thae case than we would like.
Unfortunately there are other reasons at play in this succes story that are not so healthy for them or for us and are going to experience a blowback at some point.
Lowest Tax Rates Ever: This is the result of playing loopholes, pitting one taxing nation against another and just benefiting from the widespread belief that if taxed less, companies will invest and hire more.
Outsourcing US Jobs: If big corporate America is making more and more money by lowering their costs by sending still more jobs overseas, I have to object at this point. Well that is the case. A recent report said small and medium sized companies added 700,000 jobs this year. The biggest, most profitable companies have added only 20,000 jobs. I feel betrayed by this. Do you?
Henry Ford back in the day, paid his men a big wage at the time, $5 a day. He did so because he believed that a mass market for Model T's required a class of people who could afford them.
Today's corporate leaders are less pragmatic or interested in the welfare of their nation.
Thursday, July 14, 2011
US Policy Makers: Incompetent, Partisan and Compromised by Self Interest; Mishandle the Economy
1- Politicians serve the interests of the economic or ideological groups that finance their election campaigns before the interest or our nation. The result is bad policy, partisan sound bites and unqualified elected leaders. The solution for the economic crisis is at the mercy of this compromised body of leaders.
2-The economy is uncompetitive and mismanaged. The persistent joblessness points to how out of touch policy makers are with the deep problems in our country starting with we don't make stuff anymore.
3- Post WWII economic theories aren't showing us how to get out of this. After trillions dollars in stimulus and 3 years into a recovery interest rates, jobs and tax receipts should be rising and deficits falling. This is not in the range of normal and indicates how dire the situation really is.
4-Big business has every advantage in today's economy but they only created a net of 20,000 jobs this year. They are still outsourcing jobs overseas. Policy makers turn a blind eye. Not acceptable.
5-Health care costs in the US are $1 trillion too high. For profit health businesses milk Medicare and insured patients, trial attorneys exploit the system adding costs in malpractice insurance and forcing MD's to defend their own liability by prescribing excessive diagnostic procedures. Drug companies don't charge any country what they charge us for drugs.
6-Too many regulations or not enough regulation. Bureaucratic class have failed our economy but saved their careers. The mortgage/housing bubble is the showcase for this issue.
7-Short term business leaders. Short term policy makers.
8-China trade has been a disaster. Ross Perot thought Mexico would be the cause of a great big sucking sound as jobs left America. He was wrong. Trade with Mexico is two way. China is the jobs predator and our smug policy makers have turned a blind eye to their theft of our patents, refusal to buy our goods, pricing below cost to put our manufacturers out of business.
9- US big business is China's best ally. They have outsourced jobs and continue to do so to lower costs boost profit margins to record levels even as the real per capita of US households continue its 10 year long decline. Today's big business leader put themselves ahead of their shareholders and even their country. They are under taxed and overpaid.
10-Education spending in the US per student is almost the highest in the world. What a terrible return on our investment we have received. Is it our culture, self serving education professionals or our families that are at fault? It needs to be addressed or expect our future generation to suffer stagnation under the weight of unproductive, unskilled people mired in real poverty.
2-The economy is uncompetitive and mismanaged. The persistent joblessness points to how out of touch policy makers are with the deep problems in our country starting with we don't make stuff anymore.
3- Post WWII economic theories aren't showing us how to get out of this. After trillions dollars in stimulus and 3 years into a recovery interest rates, jobs and tax receipts should be rising and deficits falling. This is not in the range of normal and indicates how dire the situation really is.
4-Big business has every advantage in today's economy but they only created a net of 20,000 jobs this year. They are still outsourcing jobs overseas. Policy makers turn a blind eye. Not acceptable.
5-Health care costs in the US are $1 trillion too high. For profit health businesses milk Medicare and insured patients, trial attorneys exploit the system adding costs in malpractice insurance and forcing MD's to defend their own liability by prescribing excessive diagnostic procedures. Drug companies don't charge any country what they charge us for drugs.
6-Too many regulations or not enough regulation. Bureaucratic class have failed our economy but saved their careers. The mortgage/housing bubble is the showcase for this issue.
7-Short term business leaders. Short term policy makers.
8-China trade has been a disaster. Ross Perot thought Mexico would be the cause of a great big sucking sound as jobs left America. He was wrong. Trade with Mexico is two way. China is the jobs predator and our smug policy makers have turned a blind eye to their theft of our patents, refusal to buy our goods, pricing below cost to put our manufacturers out of business.
9- US big business is China's best ally. They have outsourced jobs and continue to do so to lower costs boost profit margins to record levels even as the real per capita of US households continue its 10 year long decline. Today's big business leader put themselves ahead of their shareholders and even their country. They are under taxed and overpaid.
10-Education spending in the US per student is almost the highest in the world. What a terrible return on our investment we have received. Is it our culture, self serving education professionals or our families that are at fault? It needs to be addressed or expect our future generation to suffer stagnation under the weight of unproductive, unskilled people mired in real poverty.
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