Saturday, August 27, 2011
BEIJING — The operators of China’s most vibrant equivalent of Twitter notified each of its 200 million users Friday that several bloggers deemed to have spread unfounded rumors would have their accounts suspended for one month.
China State TV Deletes Video Implying Hacking of Western Sites (August 27, 2011)
In messages, the operators of Sina.com’s Weibo microblog detailed the suspensions of the bloggers. The announcements provoked a torrent of online protest, some of which was directed at the government on the assumption that it was behind the punishments.
BEIJING–Beijing's Communist Party chief issued a veiled warning to Chinese Internet portal Sina over its Weibo microblogging service after a visit to the company's headquarters, a sign of the government's growing anxiety over Weibo's explosive growth and spreading influence that threatens the government's media controls.
Friday, August 26, 2011
16 Aug, 2011, 04.55PM IST, Reuters
multiple offenses against freedom in this one. USA #1.
The Problem of Compulsory Unionism in Europe
Thursday, August 25, 2011
The Justice department bullies Gibson without filing chargesThe Federal Department of Justice in Washington, D.C. has suggested that the use of wood from India that is not finished by Indian workers is illegal, not because of U.S. law, but because it is the Justice Department’s interpretation of a law in India. (If the same wood from the same tree was finished by Indian workers, the material would be legal.) This action was taken without the support and consent of the government in India.
On August 24, 2011, around 8:45 a.m. CDT, agents for the federal government executed four search warrants on Gibson’s facilities in Nashville and Memphis and seized several pallets of wood, electronic files and guitars. Gibson had to cease its manufacturing operations and send workers home for the day, while armed agents executed the search warrants. Gibson has fully cooperated with the execution of the search warrants.
• Raid shut down Gibson factories and cost company money
This is the second time that federal agents have raided Gibson facilities and disrupted production – this time causing lost productivity and sales.
• Wood seized was Forest Stewardship Council Controlled
The wood the Government seized on August 24 is from a Forest Stewardship Council certified supplier and is FSC Controlled, meaning that the wood complies with the standards of the Forest Stewardship Council, which is an industry-recognized and independent, not-for-profit organization established to promote responsible management of the world’s forests. FSC Controlled Wood standards require, among other things, that the wood not be illegally harvested and not be harvested in violation of traditional and civil rights. See www.fsc.org for more information. Gibson has a long history of supporting sustainable and responsible sources of wood and has worked diligently with entities such as the Rainforest Alliance and Greenpeace to secure FSC certified supplies. The wood seized on August 24 satisfied FSC standards.
• Nearly two years later, no charges have been filed
In 2009, more than a dozen agents with automatic weapons invaded the Gibson factory in Nashville. The Government seized guitars and a substantial amount of ebony fingerboard blanks from Madagascar. To date, 1 year and 9 months later, criminal charges have NOT been filed, yet the Government still holds Gibson’s property. Gibson has obtained sworn statements and documents from the Madagascar government and these materials, which have been filed in federal court, show that the wood seized in 2009 was legally exported under Madagascar law and that no law has been violated. Gibson is attempting to have its property returned in a civil proceeding that is pending in federal court.
The Justice Department has asked the judge to stop the court case indefinitely.
• Information sought in raid was already made available
Since 2009, Gibson has fully cooperated with the Government’s investigation of wood and has provided substantial documentation regarding Gibson’s wood-buying activities over the years. Yet, the Federal Government raided Gibson’s facilities on August 24, 2011, without warning or communication of any kind. Had the Government simply communicated with Gibson, Gibson would have cooperated without having to stop its production and send workers home.
• Not about illegal logging, not about conservation, not about the environment
The U.S. Lacey Act does not directly address conservation issues but is about obeying all laws of the countries from which wood products are procured. This law reads that you are guilty if you did not observe a law even though you had no knowledge of that law in a foreign country. The U.S. Lacey Act is only applicable when a foreign law has been violated.
• Gibson is innocent and will fight to protect its rights
Gibson has complied with foreign laws and believes it is innocent of ANY wrong doing. We will fight aggressively to prove our innocence.
Henry E. Juszkiewicz
c/o Gibson Guitar Corp.
309 Plus Park Blvd.
Nashville, TN 37217
(615) 871-4500 Extension 2405
About Gibson Guitar:
Gibson is known worldwide for producing classic models in every major style of fretted instrument, including acoustic and electric guitars, mandolins, and banjos. The Gibson Les Paul guitar is the best-selling guitar of all time and bears the name of the late, great Les Paul. Gibson’s line of Robot guitars, including the revolutionary new Firebird X, represents the biggest advances in electric guitar design in over 70 years. The Gibson Foundation is the philanthropic arm of the Gibson Guitar Corp., and dedicates its time and services to making the place a better world for children through its support of music, education, health and human services. Founded in 1894 in Kalamazoo, Michigan and headquartered in Nashville since 1984, Gibson Guitar Corp.’s family of brands now includes Epiphone, Dobro, Kramer, Steinberger, Tobias, Echoplex, Electar, Flatiron, Slingerland, Valley Arts, Maestro, Oberheim, Baldwin, Sunshine Piano, Take Anywhere Technology, J&C Fischer, Chickering, Hamilton, and Wurlitzer.
Visit Gibson’s website at www.gibson.com.
For breaking Gibson News: Press RSS Feed.
Follow Gibson on Twitter at www.twitter.com/gibsonguitar and Facebook at www.facebook.com/gibsonguitar.
Gibson, 1-800-4GIBSON (1-800-444-2766) or www.gibson.com
Jeremy Singer / Gibson UK, 020 7167 2144 / Jeremy.Singer@Gibson.com
Chris O’Hearn / Gibson Australia 61 2 9929 2257 / ThrillHillEnt@BigPond.com
Muslim Brotherhood, what you do is your business, until you declare war on beautiful women.
» Chicago Teachers Union Threatens to Strike Over Raises; Silent on Failing Schools - Big Government
Karen Lewis of the Chicago Teachers Union is angry.
- Photo: Labor Beat
There’s a gross injustice being perpetuated in Illinois’ public schools, and the CTU isn’t going to take it anymore. In fact, the powerful teachers union is considering a strike in hopes that it would create so much public pressure that the Powers That Be have no choice but to correct this outrageous injustice.
Like many Illinois citizens, the CTU has seen reports that three out of four state high school graduates are not ready for college. And the union’s response has been, well … the CTU hasn’t really said anything about it.
You see, the fact that students are leaving Illinois’ K-12 public education system totally unprepared for college, the workplace or life in general – that’s not really the CTU’s thing.
Instead, the union is “upset” and feeling very “disrespected” because the Chicago Board of Education doesn’t have the money to pay CTU members the four percent pay raise they were promised in their contract.
The union is also steaming over the fact that more than 1,500 teachers have been laid off, some of which have been placed on a “secret” do-not-hire list, CTU President Karen Lewis told the Chicago Sun-Times.
Pay, benefits, working conditions – these are the things that the teachers unions are willing to strike over. If only 23 percent of Illinois high school grads pass a college-readiness test, well, what do you expect them to do about it? Lewis is quick to point out that union teachers are just simple “workers,” doing the best they can with the kids they are given. (It’s mostly the parents’ fault, anyway.)
Sure, some trouble making education reformers may suggest that kids are doing badly on the tests because their school days have been frittered away on silly social justice lessons, but the fact that the CTU is being stiffed on its four percent pay raise only underscores the need for such a curriculum.
The CTU will remind you that the labor unions created America’s middle class.
But don’t bother pointing out that the self-serving teachers unions are creating a generation of ignoramuses who are so poorly educated that they will never have a chance at a middle class lifestyle.
Like we said, accountability isn’t really their thing.
Freedom of speech is fucking vital to life.
Wednesday, August 24, 2011
The Finnish demand that their portion of the second Greek bailout be adequately collateralized.
Definition of COLLATERALIZE
Slavery for Every Insignificant Underling?
Speaker Boehner: Underwhelming CBO Outlook Shows Obama Administration’s Policies Still Impeding Job Growth, Making It Harder to Balance the Budget | Speaker of the House John Boehner | speaker.gov
Obama's precious IL is the worst on the list.
Top States with the Worst Debt Trouble are Forced Union States
After discovering that the Top 10 states with the highest tax rates were all Forced Union states, it comes as no surprise that the top states with the worst debt trouble are also Forced Union states. Back in January Forbes tallied up several factors to identify which states were in the worst debt trouble (50 being the worst). The ‘Debt Per Capita and Unfunded Pensions Per Capita’ number is how much is owed per person in the state. Forbes looked at the following:
The metrics we looked at for each state included unfunded pension liabilities, changes in tax revenue, credit agency ratings, debt as a percentage of Gross State Product, debt per capita, growth expectations for employment and the state economy, net migrations and a moocher ratio that compares government employees, pension burdens and Medicaid enrollees to private-sector employment.
Forced Union vs Right-to-Work States:
Of the top 15 states with the worst debt troubles every one listed is a Forced Union state other than Mississippi and Louisiana. These states are outliers because they have assumed larger debt due to rebuilding after the devastation of Hurricane Katrina. Of the top 15 states with the least debt troubles, all but 4 (New Hampshire, Montana, Colorado and Indiana) are Right-to-Work states. Note that in 2005 Governor Daniels of Indiana revoked the collective bargaining rights of public sector unions. It is also notable that the Forced Union states have a higher percentage of unionized government workers than the Right-to-Work states.
Interesting or expected? Is this completely the fault of the Governors for continually ignoring this ever growing problem or the State Legislatures? Public sector Unions have been able to make sweet pension and retirement benefit deals all across the country but they absolutely have more power in forced union states, especially when they ‘collectively bargain’ with the very people they elect – Democrats. This one-sided collective bargaining is no bargain for the taxpayers who are responsible for paying for this debt, the pension bills and the unfunded pension liabilities that will be coming up in future years.
According to Forbes:
The pension problem for state and city governments is one of the biggest debt hurdles localities face. The U.S. Government Accountability Office (GAO) released a study in November that examined the unfunded pension liabilities for the 50 states and 39 largest local governments. It found that these entities had liabilities exceeding $530 billion, led by California on the state level at $62 billion and New York City on a city basis at $60 billion.
Forbes turned to professors Robert Novy-Marx and Joshua D. Rauh to calculate the pension problem. They came up with numbers that are frighteningly different, yet to Forbes more accurate – $3.2 Trillion in cumulative unfunded pension liabilities. This number has also been touted as the more accurate number across the country by other financial experts and economists.
Even their estimates of future costs, high as they seem, are far lower than can be expected. Pension benefits are based on an employee’s final working years, for example, so as state workforces age the pension obligations rise dramatically. These estimates also don’t include any future workers added to the state payroll. (emphasis added)
To get an idea of what states are spending your hard-earned tax dollars on each year you can visit U.S. Government Spending. A few examples of the Forced Union states’ budgets and Right-to-Work states’ budgets for the year 2010 are listed below.
The first thing that screams out from the pie charts above is that Right-to-Work states spend more of their budget on Education than any of the Forced Union states. Funny how teachers’ unions are constantly whining about needing more money for education yet their beloved Forced Union states spend less on it. Pensions in the Forced Union states above are 14% of the total state budget for 2010 – in Illinois that is more than they spend on Education; in New Jersey and Wisconsin it is the same amount as spent on welfare. Virginia is the exception to the rule above with pension vs. welfare spending – they actually spend more on pensions than welfare.
What is going to happen when Governors and Legislators finally tackle the unfunded pension liabilities in the Forced Union states? The states cannot ask the already ‘Taxed Enough Already’ tax payers for an increase in taxes. The people simply cannot afford it. Cuts in spending will have to be made – where will that happen? Cuts to welfare? Cuts to health care? Even if unions agree to contribute more to their pension plans and retirement health care plans, it is not going to be enough to cover the liabilities that will be coming due. With collective bargaining, the unions can collectively bargain to change their contributions to a lower amount in the next contract round and will likely get that ‘bargain’ if a Democrat is in office.
The bottom line is that Forced Union states not only have the highest tax rates but they are also in the worst debt trouble compared to Right-to-Work states. Public Sector unions have too much power over the politicians and tax payers. The tax payers have absolutely zero say in any contract negotiations other than voting in politicians who are willing to ‘face the music’ and the reality of the outrageous retirement benefits that unions have been able to negotiate for years. With many states now trying to curb health and retirement benefit collective bargaining power and many attempting to become Right-to-Work states – the numbers, the history, the future and the facts state their cases for them quite clearly.
Cross-posted at www.anystreet.org & www.modernconservative.com
Commentary: Right-to-work states, not union, create needed jobs
By Mark Fantozzi
For the Cupertino Courier
Despite a $6 billion windfall in tax revenue, the unions representing government employees and teachers are clamoring to raise taxes. Instead of allocating the money from this windfall for education and safety, the Legislature spent it on programs such as requiring hotels to provide fitted sheets on their beds (I am not kidding). By the way, this bill was supported by the hotel workers union. This way, the Democrats blow the money on nonsense and claim they still need to raise taxes.
Just to show you how bad things really are, San Jose City Councilman Pete Constant is being sued by the city's employee union because he refuses to hire an administrative assistant that he says he doesn't need. He wants to save the taxpayers' money, where the union wants to spend it for no other reason than to support a union position.
To go even farther, the teachers union is urging Gov. Jerry Brown to extend taxes that are due to expire at the end of the year, without a vote of the people. David Sanchez, the union's president, says he is afraid that voters will reject the taxes if they're put on the ballot after they expire in June. As usual, they threaten further cuts in school spending if taxes are not raised. But the reality is that despite recent cuts, education spending and the student-teacher ratio are about the same as they were in 2004.
From 1970 to 2005, school spending per pupil--adjust-ed for inflation--doubled, while achievementscores were flat. Over roughly that same time period, public school employment doubled per student, according to a study by researchers at the University of Washington. Comparing Texas and California, both have very similar demographics, yet Texas outperforms California on all four national tests across the demographic groups, despite spending less money per pupil.
Between 2004 and 2007, the state increased K-12 and community college funding to $56 billion from $47 billion. Even as student enrollment declined, schools added 4,000 teaching, 2,100 administrative and 5,200 student support jobs. Meanwhile, school districts that experienced a boom in property tax revenue increased teacher benefits and salaries. Those of you who voted for Measure C should feel a bit suckered right about now.
Just so you fully understand that raising taxes is not about saving education, you need to look at Compton. A majority of parents exercised their right under a new state law to petition to replace the administrators at McKinley Elementary School in Compton and invite a charter school operator to take over. McKinley is one of the worst schools in one of the worst-performing districts in the country.
Fewer than half of the Compton Unified School District's students graduate from high school, and only 3.3 percent of those graduates are eligible to attend California's public universities. The parents want McKinley to be run by Celerity Education Group, which operates three high-performing charter schools in the Los Angeles area.
The educational empire has not taken this well. At a PTA meeting, teachers urged parents to rescind their petitions, and during school hours they pressured students whose parents supported the trigger effort. When this intimidation failed, the school district suddenly came up with a new signature verification process. The district required parents, many of whom work multiple jobs, to show up at McKinley at appointed times on one of two days. It also required parents to bring official photo identification, knowing that some of them are illegal immigrants.
The parents have sued to stop this harassment. According to the parents' attorney Kirkland & Ellis, "The district is making it more difficult to petition a local school for reform than to vote for the president of the United States."
A judge issued a temporary restraining order stopping the district's verification gambit, so the empire struck back again, declaring at a hastily called community meeting that every petition had been disqualified on technicalities, as some petitions were stapled. Really, the parents will challenge this in court.
Meanwhile, the powers in Sacramento are trying to undermine the parent trigger statewide. On his first day in office, Gov. Brown replaced seven reform members of the state board of education with union allies, including a lobbyist for the California Teachers Association. The new board immediately announced that it would write new rules to govern parent trigger law, throwing out eight months of work by the previous board. In addition, state Assemblywoman Julia Brownley and new state school chief Tom Torlakson--both of whom voted against parent trigger law last year--are drafting what they call "clean-up legislation" to amend the law. Expect "cleanup" to equal repeal.
Despite the turn of events in last year's November election, where the rest of the country decided to turn toward the direction of fiscal responsibility, California re-elected the same people who got us into this mess. The Democrats have controlled both houses of the state legislature for the last 12 years. California has had a budget deficit for the last 10 years. That should tell you something.
The problem lies with government unions that have a guaranteed revenue stream from employee dues that they use to finance political campaigns favoring unions. The teachers' union gave generously to Brown's campaign and now is asking him to ignore the voters and raise taxes.
California needs to become a right-to-work state. Right-to-work states have tended to do much better than non-right-to-work states. Contrary to much union rhetoric, right-to-work laws don't ban or bust unions. They simply grant individual workers the right to join or not join, even once a workplace is organized by a union.
But as we have seen in Wisconsin, unions will do anything to prevent that from happening. The reason is that workers who decline to join the union can't be forced to have dues taken out of their paycheck. That means the union won't have a guaranteed source of funds to finance union political campaigns.
Right-to-work states outperform force-union states in almost every measurable category and worker well-being. A new study by economist Richard Vedder finds that from 2000 to 2008, some 4.7 million Americans moved from forced-union to right-to-work states. The study also found that from 1977 through 2007, there was "a very strong and highly statistically significant relationship between right-to-work laws and economic growth." Right-to-work states experienced a 23 percent faster rise in per capita income over that period. The regions that have lost the most jobs in recent years are mostly forced-union states.
We need government services, but we don't need government unions that control our legislature. Even FDR knew this was wrong.
Mark Fantozzi is a Cupertino resident and president of The Fantozzi Company, Inc., an engineering consulting firm.
Tuesday, August 23, 2011
» Obama Labor Department to Re-Define Term ‘Employer’ to Exclude Union Bosses – Eliminates Union Disclosure - Big Government
Chamber: White House Review Won’t “Make Any Impact on the Overall Regulatory Burdens” Facing Job Creators | Speaker of the House John Boehner | speaker.gov
they want to remove the psychosis from the book of crazy. these people are sick, it is the worst of mental dysfunctions, any child with a ruined life agrees with me, burn this demented establishment to the ground and make them immensely suffer. then go to www.familywatchdog.us and use the map to rid society of this evil. Some people kill bums, everyone should kill pedophiles.
Monday, August 22, 2011
Mitt Romney today issued the following statement on the situation in Libya:
“The world is about to be rid of Muammar el-Qaddafi, the brutal tyrant who terrorized the Libyan people. It is my hope that Libya will now move toward a representative form of government that supports freedom, human rights, and the rule of law. As a first step, I call on this new government to arrest and extradite the mastermind behind the bombing of Pan Am 103, Abdelbaset Mohmed Ali al-Megrahi, so justice can finally be done.”
— George Carlin
Sunday, August 21, 2011
UAW President Bob King Calls Entry-Level Wages "Not Livable"
A $14-an-hour wage translates into $29,120 annual income for an individual worker. Also, the Detroit Three can afford to pay its workers better or could face the threat of losing them in favor of better jobs if there will be no improvement made regarding their issues. "We've got to raise those wages so workers will want to stay and workers can support their families by working full-time in the auto industry," Bob King was quoted as saying by Automotive News.
It is worth mentioning the fact that Chrysler has the most entry-level workers. Detroit Three smallest manufacturer’s entry-level workers earn wages and benefits that are half those of traditional UAW-represented auto workers. Figures revealed the fact that out of 23,000 US hourly work force about 5,000 are entry level. Among those Ford Motor Co. has about 2,000 entry-level workers and temporaries out of 41,000 US hourly workers. King explained that the compensation of parts supplier workers also is a big issue.
He said that the UAW is trying to avoid Detroit Three’s counterparts to pay suppliers more for parts so they can pay their workers more. "We have to collectively find solutions so that the supplier companies are getting a fair price so they can be viable long-term and, in turn, pay their workers a good, middle-class standard of living," Bob King, UAW President was cited by the aforementioned source.
United Nations believes that wealth and consumption were built on the backs of the poor and must thus be re-distributed from the rich to those who decided to work less, study less, and play the game of victiomology.
Jobs & economy
Factory jobs going unfilled
Area, state manufacturers report difficulties finding employable workers.
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DAYTON — For many area residents, finding jobs right now is tough. But for Rob Baker, manager of the local Behr Thermal Products plant, finding good employees is just as difficult.
Behr, which employs 1,000 people in Dayton, could use dozens of additional workers now. “We could bring in 55 more tomorrow,” Baker said, snapping his fingers.
But the German auto parts producer — whose customers include General Motors, Ford, BMW and Mercedes-Benz — regularly encounters local applicants who can’t read at an eighth-grade level, can’t pass a drug screen or aren’t willing to put in eight hours on their feet, Baker said.
Baker is not alone. Other state and local manufacturing industry insiders report similar problems finding workers with basic work skills or even a simple desire to work hard at a time when manufacturing in Ohio is rebounding.
“It’s the soft skills that are in shortage,” said Eric Burkland, president of the Ohio Manufacturing Association. “It’s things like passing a drug test. It’s coming to work on time.”
“To find young folks interested in the manufacturing and machine tool trade, with skills and a good work ethic, is getting difficult,” said Michael van Haaren, president and chief operating officer of Troy’s Stillwater Technologies Inc. “For some, we even have to give a reward just for showing up for work, it seems.”
Ellyn Chaney, the Behr plant’s human resources manager, recalled that earlier this year, a worker asked to be fired because it would be easier for him to get unemployment benefits than work.
“It’s a vicious cycle,” Chaney said. “I think at this point in time, we’ve lost more people than we’re bringing into the plant.”
Manufacturing jobs are vital to Ohio’s economy. According to a 2010 Ohio Manufacturing Association report, manufacturing was the top private sector employer, comprising 14.11 percent of Ohio jobs in 2008, higher than health care and retail trade, second only to government.
At Behr’s Dayton plant, 1600 Webster St., the jobs available are unskilled labor positions at starting hourly wages of $11.65, including benefits such as tuition assistance. After the first 90 days, there are raises, and bonuses, such as an additional $1.76 an hour for coordinator positions. Four skilled trade positions, two electricians and two maintenance positions also are open.
Of the 259 candidates who have been offered jobs at the plant since January, 132 have made it through a hiring process that included an interview, an aptitude test, a 90-day hair follicle drug screen and other steps. Of those, 76 workers have stayed on the job to date, leading to a crunch for Behr just as the auto industry has experienced new strength (compared to the past two years). Workers are putting in seven-day weeks because there aren’t enough employees to do the work without extensive overtime, Baker and Chaney said.
“It’s been an unbelievable battle,” Chaney said.
Roy Turner Jr., president of the local union that represents Behr plant employees, International Union of Electronic Workers-Communication Workers of America Local 775, couldn’t be reached. But Jim Clark, president of the international, said Behr “will have to reconsider their overtime demands if they want to retain qualified new hires.”
Clark said he knows of about 100 graduates of the local Manufacturing Skills Standards Council program — an industry standards-based training, assessment and certification program to train workers in manufacturing — who are looking for full-time work.
Bill Lukens, chairman and chief executive of Stillwater Technologies, has 80 employees at his plant. But if he could find the right people, “We could probably take four or five right now,” he said.
“When we need to find young, good, technical people, with interest in the manufacturing field, they are very hard to find,” van Haaren said. “Competing manufacturing companies seem to be fighting over an ever smaller pool of people — who are aging fast.”
An estimated 200,000 “replacement workers” will be needed for Ohio manufacturing jobs in the next five years as older workers retire.
Further complicating matters is advancing technology, which requires new workers have greater skills and problem-solving abilities. And manufactures also acknowledge they let too many workers go during the recent recession.
“There are good manufacturing jobs that are not being filled because the talent pipeline was allowed to erode,” said John Gajewski, executive director of manufacturing for the Workforce and Economic Development Division of Cuyahoga Community College in Cleveland. “And now we have to develop that talent pipeline.”
He thinks it will take a partnership of community colleges, universities, businesses and government to begin to fill that gap.
“We in manufacturing need to do a better job of communicating the opportunities that are available in manufacturing, and we need our public partners to assist in that,” Burkland said.
There need to be “fewer walls” between educators and the manufacturing community, Burkland said, adding that he wants to see a return to job apprenticeships, internships and co-ops.
“Those are programs that work, and we know they work,” Burkland said.
Like Lukens, Gajewski believes educators, parents and students need to see manufacturing with fresh eyes.
A career in manufacturing “is a viable option, and it’s very important and honorable,” Gajewski said.
“It’s not your father’s job anymore,” Lukens said. “It’s considerably more sophisticated.”
How to apply to Behr
Go to the Dayton plant human resources office, 1600 Webster St., any business day from 7:30 a.m. to 4 p.m. to complete a written application. Applicants must visit in person.
Manufacturing in Ohio
Manufacturing is responsible for almost 18 percent of the state’s gross domestic product. It contributes:
More than 500,000 jobs.
An annual payroll of more than $38 billion, the highest total annual wages of any economic sector in the state.
More than $34 billion in products to more than 213 countries and territories.
Source: Ohio Manufacturing Association 2010 report, “Ohio Powered by Manufacturing”
THE STUPIDITY AND IDIOCY OF KEYNESIAN ECONOMICS
When challenger John Bell and Delegate Bob Marshall debated last week (see here), Bell twice cited economist John Maynard Keynes. To prove that President Barack Obama’s profligate spending makes sound economic sense, Bell cited the expertise of Keynes. Unfortunately, I doubt most people either understand or appreciate the sheer stupidity and idiocy of Keynesian Economics.
What Does Keynesian Economics Mean?
An economic theory stating that active government intervention in the marketplace and monetary policy is the best method of ensuring economic growth and stability.
Investopedia explains Keynesian Economics
A supporter of Keynesian economics believes it is the government’s job to smooth out the bumps in business cycles. Intervention would come in the form of government spending and tax breaks in order to stimulate the economy, and government spending cuts and tax hikes in good times, in order to curb inflation.
Because they support government intervention, Democrats almost invariably support Keynesian Economics. Conservatives do not. Conservatives understand that in practice Keynesian Economics just gives Liberals one more excuse to increase government spending.
Yet Keynes’ largest influence came from a convoluted, badly organized and in places nearly incomprehensible tome published in 1936, during the depths of the Great Depression. It was called “The General Theory of Employment, Interest and Money.”
Keynes’ basic idea was simple. In order to keep people fully employed, governments have to run deficits when the economy is slowing. That’s because the private sector won’t invest enough. As their markets become saturated, businesses reduce their investments, setting in motion a dangerous cycle: less investment, fewer jobs, less consumption and even less reason for business to invest. The economy may reach perfect balance, but at a cost of high unemployment and social misery. Better for governments to avoid the pain in the first place by taking up the slack. (from here)
Keynes is the man who provided Liberal spenders an academically credible excuse for deficit spending. Ironically, Reich goes so far in defending Keynesian Economics that he credits World War II, not Franklin D. Roosevelt and the Democratic Party, with ending the Great Depression.
As the Depression wore on, Roosevelt tried public works, farm subsidies and other devices to restart the economy, but he never completely gave up trying to balance the budget. In 1938 the Depression deepened. Reluctantly, F.D.R. embraced the only new idea he hadn’t yet tried, that of the bewildering British “mathematician.” As the President explained in a fireside chat, “We suffer primarily from a failure of consumer demand because of a lack of buying power.” It was therefore up to the government to “create an economic upturn” by making “additions to the purchasing power of the nation.”
Yet not until the U.S. entered World War II did F.D.R. try Keynes’ idea on a scale necessary to pull the nation out of the doldrums — and Roosevelt, of course, had little choice. The big surprise was just how productive America could be when given the chance. Between 1939 and 1944 (the peak of wartime production), the nation’s output almost doubled, and unemployment plummeted — from more than 17% to just over 1%. (from here)
Please note Reich’s curious notion of “productivity.” By 1944 the United States had become a gigantic war machine, productivity then being ultimately defined by the ability to destroy and eradicate entire nations.
Prosperity did not actually return until the end of the war. When World War II ended, America finally emerged from the poverty of the Great Depression and the self denial required to win World War II. With the war’s end, government spending and economic control radically decreased.
After years of poverty and then war, Americans had had enough of government. To the surprise of many, the economy slipped quite easily from war to peace with very little government intervention.
So what did Keynes contribute? Keynes poorly written economic tome provided yet one more excuse for government to spend more money than we pay in taxes. When Democrats want to spend money we don’t have, they simply proclaim the virtues and necessity of Keynesian Economics.
In an earlier post, THE STUPIDITY CYCLE, I bemoaned the expected passage of a stimulus bill. What did that post say? Despite Reich’s claims to the contrary, there is no real consensus among economists about government’s role in the economy. Our politicians cannot explain how a stimulus bill helps the economy. Their theory and their numbers don’t add up.
What that post did not explain is why Keynesian Economics cannot work. What is the problem? Government spending and private spending have distinctly different motivations. Government spending is controlled by politicians. Instead of economic values, political gains motivate government spending. Instead of being central to government spending, profit and economic efficiency are incidental to government spending.
Consider what happens in the private economy. When we spend our own money, we want something of value. So almost every time money changes hands, more value is added of our economy. In fact, to get our hands on a dollar in the private economy, each of us has to work and contribute something somebody else needs. The farmer has to grow a crop. The railroad engineer has to take grain to mill. The trucker has to carry cereal to a grocery store. The grocery store clerk has to stock shelves and sell consumer products. And so forth.
On the other hand, when a conniving politician spends a dollar, the value he wants is influence. To satisfy a politician, government spending has to buy the votes he needs. That is why so much government spending involves entitlements and welfare. This is money given away to buy votes. As important as our votes may be, our votes add little value to our economy. Thus, much of the money government spends is wasted just to buy votes.
Charity, of course, is noble. In fact, it is because charity is too important and too costly we cannot entrust it to elected officials. Such have a conflict of interest that is just too obvious. Thus, when Bell proclaims the virtues of Keynesian Economics, we know he is unqualified for the job he seeks.