Free Markets, Free People

Daily Archives: February 29, 2012


Economic Statistics for 29 Feb 12

The following statistics were released today on the state of the US Economy:

The Commerce Department revised fourth quarter GDP growth up to 3.0% from the initial estimate of 2.8%. Mainly, the change stemmed from upward revision to nonresidential fixed investment, a downward revision to imports, and an upward revision to personal consumption. Interestingly, inflation, as measured by the GDP price index, was revised upwards to 0.9%. That’s quite a drop from 3Q, where it was measured at 2.6%, despite 3Q growth being significantly slower at 1.8%

The Mortgage Bankers Association reports mortgage applications fell by -0.3% last week as refinance apps dropped -2.2%. Purchase apps jumped 8.3%, though MBA isn’t impressed with that gain.  They note, "Purchase application volume increased over the week, but remains within the narrow and anemic range of activity we have seen since the expiration of the homebuyer tax credit in May 2010."

The Chicago Purchasing Manager’s Index rose sharply to 64 from 60.2 last month. The Production, New Orders, and Employment sub-indexes were all up sharply. The Chicago PMI is widely seen as a predictor of the national ISM Index, which is due out tomorrow.

The Feds "beige book", which compiles anecdotal evidence on economic conditions from each of the 12 Federal Reserve districts, is due out later today. This document generally serves as a guide to Fed policy makers at the regular meetings of the FOMC, which determine the Fed’s monetary policy moves.

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Dale Franks
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Obama’s UAW speech fantasy, Kaus’s auto industry reality

Trying to justify the unjustifiable with a pep-rally like political speech to the UAW, Obama points to what he contends are the favorable results of his decision to intrude into the auto market and rearrange the bankruptcy process to favor his cronies.

I know our bet was a good one because I had seen it pay off firsthand.  But here’s the thing.  You don’t have to take my word for it.  Ask the Chrysler workers near Kokomo — (applause) — who were brought on to make sure the newest high-tech transmissions and fuel-efficient engines are made in America.  Or ask the GM workers in Spring Hill, Tennessee, whose jobs were saved from being sent abroad.  (Applause.)  Ask the Ford workers in Kansas City coming on to make the F-150 — America’s best-selling truck, a more fuel-efficient truck.  (Applause.)  And you ask all the suppliers who are expanding and hiring, and the communities that rely on them, if America’s investment in you was a good bet.  They’ll tell you the right answer. 

Of course Chrysler is now owned by a foreign auto company, courtesy of the Obama administration, Ford took no federal money and, had normal bankruptcy proceeded, taxpayers wouldn’t be out $80 billion dollars (still unpaid despite claims to the contrary) and a leaner, more competitive GM would be in existence.   Those suppliers would still be supplying and after the shakeout a more viable corporation would have come into existence.

uaw-gmInstead, the same GM is in existence boosted by taxpayer money.  As Micky Kaus points out, “You’d be successful in the short run too if the government gave you $80 billion dollars.”

Speaking of those GM workers in Spring Hill, TN, Kaus lays out another reality that the president doesn’t present:

Toyota and Honda are coming back online after the tsunami and Southeast Asia floods crippled production. VW is building roomy American-style cars in Tennessee using $14.50/hour non-union workers instead of $28/hour UAW workers. Hyundai is expanding rapidly. Competition is going to be vicious–it’s widely believed there’s still overcapacity in the industry. A new oil price spike could crimp sales of high-profit trucks. Will GM still be making money in 5 years? Or, I should say, will GM still be making money building cars in the U.S. (as opposed to importing them from China) in 5 years? I’m skeptical. I don’t think deficient corporate cultures change that easily. Normally we rely on the market to simply kill them off.

The two points to be made here are important.   One, GM’s current “success” is a result of huge infusion of taxpayer money.  Its problem was/is its corporate culture and its unions.  Neither problem have been addressed or fixed.  Instead, like Solyndra, they’ve simply been given an extension via the taxpayer that will eventually run out.  Secondly, as competing auto companies  using non-union labor continue to locate in right to work states and pay a competitive wage (but not the high end union wage), they will continue to take market share from GM, who is still stuck with that toxic corporate culture and grasping unions.

But, of course, Obama won’t care because he’ll be out of office.  This is the usual short term vote buying, just on a grander scale than we’ve ever seen it before.  Crony capitalism at its worst.

Long term viability?

Who cares?  Certainly not President Obama.

~McQ

Twitter: @McQandO


Georgetown law students prefer YOU pay for their contraception so they can use their money for their priorities

Unbelievable.  This is so indicative of the mindset of many today.  It would be hilarious if it wasn’t so telling and serious.

A Georgetown co-ed told Rep. Nancy Pelosi’s hearing that the women in her law school program are having so much sex that they’re going broke, so you and I should pay for their birth control.

Speaking at a hearing held by Pelosi to tout Pres. Obama’s mandate that virtually every health insurance plan cover the full cost of contraception and abortion-inducing products, Georgetown law student Sandra Fluke said that it’s too expensive to have sex in law school without mandated insurance coverage.

Seriously, when you listen to Sandra Fluke talk, that’s precisely her argument:

Apparently, four out of every ten co-eds are having so much sex that it’s hard to make ends meet if they have to payartificial contraception for their own contraception, Fluke’s research shows.

"Forty percent of the female students at Georgetown Law reported to us that they struggled financially as a result of this policy (Georgetown student insurance not covering contraception), Fluke reported.

It costs a female student $3,000 to have protected sex over the course of her three-year stint in law school, according to her calculations.

"Without insurance coverage, contraception, as you know, can cost a woman over $3,000 during law school," Fluke told the hearing.

Oh, my … $3,000?  No wonder you should pay for it, that’s a lot of money for a law student, isn’t it?

Of course, reality, using her numbers, points to something I’m sure she didn’t intend:

At a dollar a condom if she shops at CVS pharmacy’s website, that $3,000 would buy her 3,000 condoms – or, 1,000 a year. (By the way, why does CVS.com list the weight of its condom products in terms of pounds?)

Assuming it’s not a leap year, that’s 1,000 divided by 365 – or having sex 2.74 times a day, every day, for three straight years.

And they want YOU to pay for it for heaven sake because they’re going broke.

A Georgetown law student arguing it is the responsibility of others to pay for her birth control because she and the 40% would prefer to spend their money on other things (can’t wait for that generation of lawyers to hit the courts, can you?).

Craig Bannister comes to one serious and one tongue-in-cheek conclusion:

  1. If these women want to have sex, we shouldn’t be forced to pay for it, and
  2. If these co-eds really are this guy crazy, I should’ve gone to law school

More important is the point to be made by watching this testimony and realizing that this supposedly intelligent woman has been so conditioned in her life to accept that others should pay for her indulgences.

THAT is the real lesson and problem (watch the video at the link).

~McQ

Twitter: @McQandO