Free Markets, Free People

Monthly Archives: January 2013

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Reality smacks the left again – this time unions

Funny how this works, isn’t it?  Make up all sorts of grand claims about something and then when it is passed into law find out that making up stuff doesn’t change reality one iota:

Labor unions enthusiastically backed the Obama administration’s health-care overhaul when it was up for debate. Now that the law is rolling out, some are turning sour.

Union leaders say many of the law’s requirements will drive up the costs for their health-care plans and make unionized workers less competitive. Among other things, the law eliminates the caps on medical benefits and prescription drugs used as cost-containment measures in many health-care plans. It also allows children to stay on their parents’ plans until they turn 26.

To offset that, the nation’s largest labor groups want their lower-paid members to be able to get federal insurance subsidies while remaining on their plans. In the law, these subsidies were designed only for low-income workers without employer coverage as a way to help them buy private insurance.

You have got to love the outrageousness of the union’s desire I’ve emphasized.  In essence it says, “we voted for something, got it wrong, and it it up to the taxpayer to bail us out”.

Oh, wait, that’s not outrageous at all is it?

That pretty much sums up the entitlement/welfare culture being so carefully nurtured by the left to a tee, doesn’t it?


Economic Statistics for 31 Jan 13

The following US economic statistics were announced today:

The Bloomberg Consumer Comfort index continued its decline, falling to -37.5 this week. The index has lost 5.7 points so far this year.

The Chicago Purchasing Managers Index rose to 55.6 for January, on increases in new orders and production.

The Employment Cost Index rose 0.5% in the 1st Quarter, while the year-over-year increase was 1.9%, as wage inflation remains restrained.

The Challenger Job-Cut Report shows a total of 40,430 announced layoffs for January.

Initial jobless claims rose 38,000 to 360,000 last week, erasing last week’s sharp decline. The 4-week average fell 7,000 to 352,000. Continuing claims rose 22,000 to 3.197 million.

Personal income rose a sharp 2.6% in December, while consumer spending rose 0.2%. The PCE Price index, an inflation measure, was unchanged at both the headline and core levels. On a year-over-year basis, personal income rose 6.9%, while spending rose 3.6%. The PCE price index rose 1.3%, with a core rate increase of 1.4%.

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Another country from which to “learn”

The question, as posed earlier concerning Britain and France, is will we?

Electricity prices are rising in Germany – and citizen with a low-income are suffering particularly. They are at risk of fuel poverty. 10 to 15 percent of Germans are now struggling to pay their energy bills. 600,000 households have the electricity turned off every year.

Remember, Germany ran scared after the Fukushima disaster and dumped nuclear power (because, you know, German has so many earthquakes and tsunamis).  They then went “green”.  Result?  See above?

Other result?

The CEOs of manufacturing industries are warning that production in Germany is at risk because of low energy prices in the United States. The energy prices there are now only a third of those in Germany. “Many industrial companies are planning to build new factories in the U.S. and not in Europe because of low energy prices there,” said Gisbert Rühl, chief of steel trader Kloeckner. “We are now reacting to this development and plan new business units in the United States.” To move production to the U.S. is especially attractive for companies in energy-intensive industries such as steel and aluminium or chemistry.

That would seem to be good news for us, no?

Well, it should be … except for the Democrats plan to raise taxes on the oil companies.  And Obama’s new wave of regulations.  Oh, and the Obama desire to see fuel prices “skyrocket”, ably aided by his Secretaries of Energy and the Interior.  And the EPA.



Economic Statistics for 30 Jan 13

The following US economic statistics were announced today:

The Commerce Department reports that 4th Quarter GDP came in well below expectations, declining -0.1%. The GDP Price Index, an inflation measure, rose 0.6%. Government purchases fell by 6.6%, leading the decline, but the rest of the report is generally more sluggish than in the 3rd quarter, with final sales of domestic product rising only 1.1%, versus 2.4% in the 3rd quarter.

MBA Purchase applications fell -8.1% last week, with mortgages down -2.0% and re-fis down -10.0%.

ADP estimates a gain of 192,000 private payroll jobs in December.

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Economic Statistics for 29 Jan 13

The following US economic statistics were announced today:

Consumer confidence continues to drop, with the January index falling to 58.6, the lowest in two years.

The State Street Investor Confidence Index rose to 86.8, despite economic concerns among institutional investors in Europe.

S&P Case-Shiller reports home prices rose 0.6% in November, and were up 5.5% on a year-over-year basis.

In weekly retail sales, Redbook reports another slow week, with a 1.6% increase from the previous year. ICSC-Goldman reports a weekly sales decrease of -1.0%, and only a 2.0% increase on a year-over-year basis.

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The myth of “collective action”

As we launch ourselves further into an era of “collective action” as Obama called it in his 2nd Inaugural address, we can be sure that reality won’t stop the left from remaining true believers in its ultimate power and good and demanding it be forced on us all.  But what does that really mean?

Let’s hark back to Mancur Olson’s critique of collective action for a moment and point out a little ground truth about it, shall we?

Olson’s critique of collective action is complicated, and it is made less accessible by an ungainly prose style. But the gist is that large numbers of people do not naturally band together to secure common interests. In fact, the larger the group, the less likely it is to act in a truly collective manner.

As Olson explained, the interests that unite large groups are necessarily of the lowest-common-denominator variety. Therefore the concrete benefits of collective action to any individual are usually small compared with the costs — in time, effort and money — of participation. “Free-riding” is a constant threat — as the difficulties of collecting union dues illustrates.

By contrast, small groups are good at collective action. It costs less to organize a few people around a narrow, but intensely felt, shared concern. For each member, the potential benefits of joint action are more likely to outweigh the costs, whether or not success comes at the larger society’s expense.

Now, to me, that’s common sense. The bigger the group the more unlikely it will find common ground than a smaller group. So urging a nation of 300 million to a common effort or collective action? Yeah, not going to happen – at least in the areas Obama is likely to want to make such an effort.

That’s not to say that collective action won’t happen. It happens everyday in DC as Charles Lane points out:

Hence, the housing lobby, the farm lobby and all the special-interest groups that swarm Congress. Hence, too, the conspicuous absence of an effective lobby on behalf of all taxpayers or, for that matter, all poor people.

If there is any “collective action” that will take place in DC, besides those noted, it will be among the politicians who band together (and break apart) depending on what they’re after this week or next.  Their constituency?  Not that big of a concern to most.  Those that reside inside the beltway are more likely on their radar than those who voted to put them in office.

So when Obama called on Americans to once again act “as one nation, and one people,” he was, at best, stating an aspiration.

No he’s not – he’s mouthing platitudes to calm the masses, put the opposition on the defensive and set himself up to get his way. And this is how that will work:

Olson’s assessment of reality, both historical and contemporary, is less lofty but more accurate: “There will be no countries that attain symmetrical organization of all groups with a common interest and thereby attain optimal outcomes through comprehensive bargaining.”

Nope. It will be the group/party that is able to appeal the best to the masses and thereby garner more  of a veneer of support for their agenda than can the other party/group, whether or not the ultimate goal of the action is good for the country or the majority or not. Whether it really benefits the country as a whole usually has little bearing on the effort. And the minority? Well, they’re simply left hanging in the wind.

Their call for “collective action” is a cover, a means of draping the usual politics in high sounding rhetoric. The reality of the situation is that what he calls “collective action” is simply a new code phrase for continued class warfare and redistribution of income. The purpose of proposing “collective action” is to enable him and his cronies to label anyone who opposes them and their actions as divisive, unpatriotic and just about any other name they can think of necessary to demonize and dismiss them.

Meanwhile, the “collective” dismantling of this once great country will continue apace.


Economic Statistics for 28 Jan 13

The following US economic statistics were announced today:

Durable goods orders jumped a better-than-expected 4.6% in December on a spike in aircraft orders. Ex-transportation orders rose 1.3%.

The Dallas Fed Manufacturing Survey slipped to 5.5 in January from the prior reading of 6.8, but the production index jumped 10 points to 12.9.

The Pending Home Sales Index fell 4.3% to 101.7 in December, as tight supplies are drying  up the availability of homes.

Dale Franks
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Tax on the rich? Boy it didn’t take long to spend that, did it?

Remember, this “tax fairness” was something which was going to solve our fiscal problems, if you listened to the left’s claim that is.  However, reality is fairly brutal and usually doesn’t much pay attention to rhetoric based in lies and stupidity.  Case in point:

Congress is poised to clear the final $50 billion chunk of emergency aid for Superstorm Sandy relief Monday — and in one vote, it will have used up all the new tax money President Obama won by raising rates on the wealthy in the “fiscal cliff” deal.

The “cliff” … well they’re busily engaged in trying to see if they can kick the can nearer the edge and, by the way, make the “cliff” a little higher while they do that by raising the debt limit … again.

Meanwhile, let’s talk about immigration, gun bans and whatever else our “leaders” can think of to distract us from this pending disaster.



Observations: The QandO Podcast for 27 Jan 13

This week, Bruce Michael, and Dale discuss the events of the week.

The direct link to the podcast can be found here.


As a reminder, if you are an iTunes user, don’t forget to subscribe to the QandO podcast, Observations, through iTunes. For those of you who don’t have iTunes, you can subscribe at Podcast Alley. And, of course, for you newsreader subscriber types, our podcast RSS Feed is here. For podcasts from 2005 to 2010, they can be accessed through the RSS Archive Feed.

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