Free Markets, Free People

Daily Archives: June 8, 2011


Top 10 cities with the most pink slips and the 5 worst states to do business in

What do they have in common?  Well, you tell me (but my guess is onerous taxation, over-regulation and an anti-business climate).  Here are the cities that have lost the most jobs recently according to the Daily Mail?

  1. Los Angeles, California, 17,393 workers
  2. New York, New York, 14,312
  3. Chicago, Illinois, 7,835
  4. San Francisco, California, 5,117
  5. Riverside, California, 4,852
  6. San Diego, California, 4,382
  7. Philadelphia, Pennsylvania, 2,747
  8. Seattle, Washington, 2,601
  9. Sacramento, California, 2,467
  10. Pittsburgh, Pennsylvania, 2,205

OK, you say, LA has a lot more jobs to lose than say, Montgomery AL.   True and understood.  But, there’s more.  Take a look at the states in which you find the job losses.  Now peruse the list of the “best/worst states to do business in”.

Bottom 5?

46 Michigan

47 New Jersey

48 Illinois

49 New York

50 California

All deep blue states.  If you’re wondering, PA comes in at 39th just ahead of OH, WV, HI, CT and MA and behind MS.  Yeah, that’s right, MS.  Everyone’s 50th state in most every other comparison.  WA was 34th.

Contrast that with the top 5 states  – TX, NC, FL, TN and GA.  All red, all right to work states, all southern states.  Draw your own conclusions.  By the way, the ratings of the “best/worst states” came from a group of people who ought to know and be able to make such a determination as it relates to business.  The rankings are the product of surveying 550 CEOs.

And, as they indicate, it isn’t rocket science needed to attract and keep businesses in a state:

Business leaders graded the states on a variety of categories grouped under taxation and regulation, workforce quality and living environment. “Do not overtax business,” offered one CEO. “Make sure your tax scheme does not drive business to another state. Have a regulatory environment and regulators that encourage good business—not one that punishes businesses for minor infractions. Good employment laws help too. Let companies decide what benefits and terms will attract and keep the quality of employee they need. Rules that make it hard, if not impossible, to separate from a non-productive employee make companies fearful to hire or locate in a state.”

That, in my estimation, is the primary difference between Texas and California, and why Texas is booming and California is drowning.

Food for thought.

~McQ

Twitter: @McQandO


If freedom is choice, what’s the light bulb ban?

It is a restriction of your freedom to choose.  It is government assuming the role of deciding what is best for you instead of allowing market and consumers the freedom of making that decision and choice.

The greens and the Obama Administration assert that the new light bulbs are good for the lumpen bourgeoisie because they will cut electricity use and save the average household $50 a year. Mr. Obama’s Energy Department told Congress recently that to repeal the ban would "detrimentally affect the nation’s economy, energy security, and environmental imperatives." Yes, and cause the seas to rise to swamp Miami and New York too.

If you catch the sarcasm in the WSJ column cited, I believe it is well deserved.   You see, if the average household found it worth $50 a year to make such a change, they’d do so based on their priorities, not government’s.  That’s freedom.  Instead we have the government forcing that decision on households whether they like it or not.  And the reasoning?  Well it has become almost cliché to cite Orwell when talking about many things modern government does, but in this case, and after the reading the following, tell me if you don’t agree it is entirely appropriate:

In classic doublespeak, the Department of Energy explains that outlawing incandescent bulbs will "empower consumers with lighting choices." Unless your choice is to buy the light bulb the government doesn’t like.

Indeed.  There is no “choice” involved here at all, except to refuse to buy CFLs and sit in the dark.  

When government can reach down to the level of deciding what you can and can’t buy for lighting your house, then you have seen your freedom diminished.  And it can be for all sorts of good intentions – but it doesn’t change the simple fact that your freedom to choose is less today than yesterday.  In fact, we need to update an old saying.  The road to serfdom is paved with freedom killing laws based on good but collectivist intentions.  Yeah, it’s not really very snappy but you get the idea.

Our freedom is slowly bleeding away, suffering a death by a thousand cuts.  And we’re as much to blame as the government.

The question an (allegedly) free society should ask is if CFL bulbs are so clearly superior, why does the government have to force people to buy them?

Because it can.  And we let it.

Insist Congress repeal the ban.  Meanwhile – stock up on incandescent bulbs.  I am.

~McQ

Twitter: @McQandO


Revisiting the Obama administration’s unemployment promise

The folks at e21 remind us of something that should be at the forefront of every person’s memory as they consider what this administration has and hasn’t accomplished in its promise to “stimulate” the economy and create jobs.   I call it the “big promise”.  I don’t call it a “lie” since I use the traditional definition of a lie (a known falsehood) vs. the more modern one in use today by activists on both sides (being wrong about something).  But that’s fodder for a future post. 

In this one I want to issue a reminder of what was promised and what has been delivered.  Promise:

Back in January 2009, Christina Romer and Jared Bernstein produced a report estimating future unemployment rates with and without a stimulus plan. Their estimates, which were widely circulated, projected that unemployment would approach 9% without a stimulus, but would never exceed 8% with the plan.

They got their “stimulus” – $800 plus billion in mostly borrowed money with which they were to stem the tide of unemployment then rising and keep it under 8% as promised.

Result?

updated unemployment stimulus graph

 

The result wasn’t even close.  In fact, other than two months of this year, the unemployment rate has stayed above 9%.  By this time, according to the administrations plan, we were told we’d be at about 6.5%.

So it is clear that the “plan” was a total and unmitigated but costly failure.

What’s their explanation for such a huge miscalculation? 

Romer and Bernstein defend their estimates with the argument that the economic situation turned out worse than they had anticipated; and so the economy would have done even worse without a stimulus.

Is that so?  Then, as e21 says, they owe us a much deeper explanation of why that was so and why they considered their solution at the time to be the proper thing to do.  Because it is seeming more and more like a very expensive boondoggle at the moment:

The recession “officially” ended two years ago, yet the first quarter of 2011 only saw 1.8% growth. The Administration and Congress should have a more robust discussion about their self-proclaimed “2010 Recovery Summer” – if for no other reason than to better inform the public about the recovery challenges the U.S. still faces in 2011.

For example, there is new research that suggests that the stimulus may actually have resulted in a net loss of jobs. Regardless of the exact number of jobs lost or created, however, the fact that some economists are even arguing that it had a negative impact tells you that the stimulus may very well have been a wash overall.

Larry Lindsey offered his own review of the stimulus this week, arguing that it failed what’s colloquially known as the Sharp Pencil Test. As he explains, “if you sit down and do a back of the envelope calculation of the [stimulus] program’s costs and benefits, there is no way to conjure up numbers that allow it to make sense.”

Lindsey went on to offer this analysis:

[E]ven if you buy the White House’s argument that the $800 billion package created 3 million jobs, that works out to $266,000 per job. Taxing or borrowing $266,000 from the private sector to create a single job is simply not a cost effective way of putting America back to work. The long-term debt burden of that $266,000 swamps any benefit that the single job created might provide.

The 3 million claim is dubious at best  with no mention of the type, quality or sector these jobs were supposed “saved or created” (the stimulus propped up a lot of state budgets which helped delay layoffs to government workers).  And as Lindsey points out, the cost of what can only be a temporary “save” are way out of whack with the benefit.  Instead, it appears the stimulus was a giant waste of money that did little if anything to create jobs in the private sector and mostly benefited government at a huge cost per job.

I’m not sure how anyone could economically justify such an outcome.  But I sure would like to hear them try.   I think they owe us some answers on this.   And I’d like to see the GOP begin asking those questions.   This is one part of the Obama record they need to pound on – starting now.

~McQ

Twitter: @McQandO

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