Questions and Observations

Free Markets, Free People

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.

Etc.

~McQ

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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.

~
Dale Franks
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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.

~
Dale Franks
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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.

~McQ

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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.

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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.

‘Kay?

~McQ

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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.

Observations

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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Economic Statistics for 25 Jan 13

The following US economic statistics were announced today:

New home sales in December plunged 7.3% to an annual rate of 369k. This drop mainly reflects a huge upwards revision to November, however, making the month-to-month comparison look particularly bad. Having said that, it was still a less robust number than analysts expected. On the other hand, the report notes that the median home price is up 1.3% to $248,900, the highest in more than five years.

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Dale Franks
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Will we learn from Britain and France?

One of the more frustrating things I observe is our apparent unwillingness, as a country, to learn from the mistakes of other countries.  For instance, we’ve watched the effects of the welfare state in Europe and its fiscal impact, yet we continue down the same road toward the same cliff they’re now getting ready to go over.

More specifically, we’ve watched other countries raise taxes higher and higher and subsequently watched them lose their native talent.  France is in the process of doing that now.  And Britain?  Well, they’ve been suffering from it for a while:

Nick de Bois, secretary of the 1922 Committee of backbench MPs, said that Britain needs a “culture change” to stem the flow of talented emigrants by encouraging success.

“Our most economically active are leaving to apply their talents elsewhere,” the MP said, warning that talented Britons are being lured away to “growth economies” elsewhere in the world.

Office for National Statistics figures obtained by Mr de Bois show that in the ten years to 2011, a total of 3,599,000 people permanently left the UK.

Contrary to the perception of the typical emigrants being older people retiring to a life in the sun, the figures show that 1,963,000 of those who left were aged between 25 and 44.

By contrast, only 125,000 people of retirement age emigrated.

Note what is “luring” them away?  “Growth economies“.  And what does one usually find is anything labeled a “growth economy”?  Economic opportunity.  A chance to better your own situation without being punished and vilified for doing so.  You’d think that might be something our “leaders” would understand and appreciate.

But it’s about culture, isn’t it?  About the culture our leadership fosters.  And that culture in this country is “class warfare”:

“Government must help lead a culture change in this country that competes with the new economies, one where competitiveness and success are valued and personal achievement and personal wealth are respected, not pilloried,” he said.

That’s not at all where this particular government is headed, is it?
And the result?  Human Nature 101.  See Britain.

~McQ

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