ECONOMY
SEIU drops mask, goes full commie
May 6, 2011 - 11:10 am - by Zombie
A May Day rally in Los Angeles, co-sponsored by the SEIU and various communist groups, as well
as other unions, reflected yet another step in the normalization of self-identified communist and
socialist ideologies in the Obama era. Not only did the SEIU help to organize the rally in
conjunction with communists, they marched side-by-side with communists, while union members
carried communist flags, communists carried union signs, and altogether there was no real way
to tell the two apart.
Click on this link to take you to the web site to see the rest of the artrticle and pictures that go with it................
http://pajamasmedia.com/zombie/2011/05/06/seiu-drops-mask-goes-full-commie/
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Posted 05/05/2011 07:05 PM ET
Economics: As the U.S. languishes, Chile posted a head-turning 15.2% yearly gain in GDP in March, and forecasts for the year are rising. Why can't we do that here?
A year ago, Chile lay in rubble, victim of the world's fifth most powerful earthquake. So Chile's 15.2% growth is a big bounce from a bad setback.
But it shouldn't be dismissed as an anomaly. It's a showy number, but not the only one.
The same day Chile released its data, Goldman Sachs raised its 2011 growth forecast for the country to 6.4% from 6%. In its annual regional business index, Latin Business Chronicle ranked Chile as having the best business climate in Latin America in 2011.
Such numbers are so alien to the U.S. in the economically debilitated Obama era, it makes sense to to look at what Chile has done.
First, Chile's policies for long-term growth were put into effect in the 1980s by the group of Milton Friedman-inspired economists known as the Chicago Boys.
Under them, Chile's pension privatization cost nothing and left the country with no net debt. The private funds now hold assets worth 90% of GNP ($185 billion) - capital used to develop the country. Already, Chile's education and infrastructure are the best in Latin America as a result.
Second, there's free trade, of which Chile is a global champion, signing at least 58 treaties to gain access to 2 billion customers.
That's a big reason Chile's close to full employment and is scrambling to attract growth-hungry US entrepreneurs — and getting them.
Chile's pres., Sebastian Pinera, repeatedly emphasizes the need to focus on productivity as his nation's wealth grows.
So Chile's found ways to do more, "like the A student who finds a way to rise even higher," as Latin Business Chronicle Executive Editor Joachim Bamrud told IBD.
Bamrud says Chile has been turning heads with investors the past year and a half because of its emphasis on improving its corporate environment, its tax regime and its economic freedom, all of which rate highly.
"Chile has always been held out as a model for Latin America, but the reality is, it's now a model for the U.S.," he said.
Corporate taxes are the second lowest in Latin America at 18%, behind Paraguay's 10%. The Latin average is 28%.
Meanwhile, Goldman Sachs' chief economist for Latin America, Alberto Ramos, says Chile has wisely fostered growth by reducing the size of government and not printing too much money. In 2011, it cut government spending to 5% of GDP, or $700 million, more than its projected 5.5%. So GDP has room to grow 6.4%, rather than 6% as first estimated. Those lessons could be duplicated here with the ideas found in the Ryan budget, the Tea Party's policy ideas or even from the Chamber of Commerce. Chile shows that they lead to phenomenal results. The remaining question: Why can't the U.S. do the same here?
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Posted at 10:55 am on April 19, 2011 by Ed Morrissey
We can thank the public-sector unions in Wisconsin for one thing — they gave a great example of why right-to-work principles in the public sector matter. That lesson reached around the world, as Chile demonstrated this week. Chile’s legislature rejected an effort by the Left to amend their constitution to allow for PEU collective bargaining and strikes, but it was a close call:
After two days of debate, a proposed change to Chile’s constitution allowing collective bargaining privileges and a “right” to strike for public unions was voted down. The change got just 21 votes, four short of the two-thirds needed. Even many of the left-leaning opposition abstained. …
All this is relevant because Chile is the first nation whose return to democracy was based on economic freedom. On global economic freedom rankings, Chile stands near the top — in part because its public employees can’t run up debt or corrupt the political process.
The existing constitution makes Chile a full right-to-work country and expressly prohibits government collective bargaining and public employee strikes.
The idea is to prevent the ugly anti-democratic dynamic — now seen in Wisconsin and elsewhere — of public employee unions extorting concessions from politicians in exchange for campaign support.
The constitutional bar on PEU activities was no accident. The Chilean constitution was established in 1980 during the reign of dictator, Augusto Pinochet with the explicit intention of moving Chile towards full democracy. The legislature has amended the constitution dozens of times since Pinochet lost his plebiscite in 1988, but the bar on strikes and collective bargaining in government (which doesn’t apply, apparently, to the private sector) has remained. Its author, Labor and Social Security Minister Jose Pinera, put it in place specifically to prevent what happened in Wisconsin earlier this year, and to prevent politicians from selling out taxpayers to labor unions.
Wisconsin unions claimed the rollback of PEU privileges in the state (which still exceed those given in Chile) was an attack on the entire middle class. How is Chile’s middle class doing? Last quarter, Chile had an annualized GDP growth rate of 7% and per capita income has risen to $17,000, ten times what it was in 1980 at the adoption of the constitution. According to the CIA World Factbook, their population below the poverty line in 11.5%, one of the lowest in the hemisphere, and slightly below ours at 12%. Neighboring Argentina, has 30% living below the poverty line with a similar per-capita income, indicating a great deal more stratification. And remember that Chile suffered a massive earthquake last year that seems to have barely dented their economic strength.
It seems as though Chile knows how to handle its economy and its government. They may have learned a lesson from Wisconsin; maybe we can learn a few lessons from them, including their entirely privatized Social Security system.
Rich Lowry - April 29, 2011 12:00 AM
Slip-Sliding Away
Yet more evidence that government is swallowing up the productive economy. The good news is that wages still make up a majority of the nation's income. Barely.
USA Today reports that in 2010, "wages accounted for the lowest share of income---51.0 percent --- since the government began keeping track in 1929." In February of this year, "wages slipped to another historic low of 50.5 percent of personal income."
As the proportion of our income derived from wages has declined, the proportion derived from government has increased. "A record 18.3 percent of the nation's total personal income was a payment from the government," USA Today writes. The recession obviously had much to do with this, but "the trend shows few signs of easing, even though the economic recovery is nearly 2 years old."
Government accounted for roughly 12percent of income from 1980 to 2000, according to the paper, then started an inexorable march upward. In 1990, Americans on average received $3,686 in benefits from government; in 2000, it was $4,763; in 2010, $7,427. Almost all of it comes from the feds.
Someone has to pay for this, and if it's not our creditors, it's people making money and paying taxes. The private economy is caught in a vise between old-age entitlements and welfare programs for the poor. Everyone knows about entitlements. Social Security and Medicare already cost about $1.2 trillion, even before baby boomers begin to retire in earnest. Medicare has grown by 80 percent since 2000, and is set to careen ever upward.For every dollar of Social Security and Medicare, we spend roughly another 50cents on anti-poverty programs, broadly defined. These programs have expanded at a rate of 89% fasterthan inflation since 2000, according to the Heritage Foundation. Fifty million people are enrolled in Medicaid, and more than 40 million are on food stamps. Under George W. Bush, anti-poverty spending topped 3 percent of GDP for the first time. It is now above 4 percent of GDP, and Pres. Barack Obama's vision is for the programs' perpetual growth.
To save the productive economy from getting swallowed by these twin behemoths, we must both reform entitlements and constrain anti-poverty spending. it is telling, then, that there are two main criticisms of Paul Ryan's budget plan: 1) It will reform entitlements; 2) It will constrain anti-poverty spending. In other words, Ryan's offense is daring to do anything at all about the primary sources of welfare-state overreach.
The purpose of anti-poverty spending was supposed to be to get people out of poverty and off the programs. Their advocates, though, are never embarrassed by their continual increase, which is taken as a fact of nature. Liberals are willing to declare every war a quagmire except the war on poverty; by definition, there is no such thing as a failed poverty program.
According to Robert Rector of the Heritage Foundation, at least half of the spending gets to able-bodied people. If we were to take anti-poverty spending back to pre-recession levels and limit its rate of growth to inflation - as Republican representative Jim Jordan proposes, once unemployment declines to 6.5 percent - it would save $2 trillion in the ensuing ten years.
The fundamental source of contention in politics is whether we accept our current path of enlarged reliance on government, or endeavor to reverse it. We can argue about what the tipping point is when our society will have lost its distinctiveness and dynamism. When we get 20 percent of our income from government, 25 percent? When only 45% of income is from wages: If you'd rather not find out, you're an "extremist."
At the moment, the American economy seems to be hitting a perverse sweet spot of low growth - just 1.8 percent in the first quarter - and rising prices. The Obama economic program is in shambles, unless the unspoken goal was always increasing reliance on government. By that metric, it's been a smashing success. The rend line suggests yet more success to follow.
-Rich Lowry is editor of National Review. He can be reached via e-mail,comments.lowry@nationalreview.com
Copyright 2011 by King Features Syndicate
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IBD Editorials - Viewpoint
Tax The Rich? Good Luck With That
By Walter Williams (Posted 04/11/2011 06:31 PM ET)
I've often said that I wish there were some humane way to get rid of the rich. If you asked why, I'd answer that getting rid of the rich would save us from distraction by leftist hustlers promoting the politics of envy.
Not having the rich to fret over might enable us to better focus our energies on what's in the best interest of the 99.99% of the rest of us. Let's look at some facts about the rich laid out by Bill Whittle citing statistics on his RealClearPolitics video "Eat the Rich."
This year, Congress will spend $3.7 trillion dollars. That turns out to be about $10 billion per day. Can we prey upon the rich to cough up the money?
According to IRS statistics, roughly 2% of U.S. households have an income of $250,000 and above. By the way, $250,000 per year hardly qualifies one as being rich. It's not even yacht and Learjet money.
All told, households earning $250,000 and above account for 25%, or $1.97 trillion, of the nearly $8 trillion of total household income. If Congress imposed a 100% tax, taking all earnings above $250,000 per year, it would yield the princely sum of $1.4 trillion. That would keep the government running for 141 days, but there's a problem because there are 224 more days left in the year.
How about corporate profits to fill the gap? Fortune 500 companies earn nearly $400 billion in profits. Since leftists think profits are little less than theft and greed, Congress might confiscate these ill-gotten gains so that they can be returned to their rightful owners. Taking corporate profits would keep the government running for another 40 days, but that alone with confiscating all income above $250,000 would only get us to the end of June. congress must search elsewhere.
According to the Forbes 400, America has 400 billionaires with a combined net worth of $1.4 trillion. Congress could confiscate their stocks and bonds, and force them to sell their businesses, yachts, airplanes, mansions and jewelry. The problem is that after fleecing the rich of their income and net worth, and the Fortune 500 corporations of their profits, it would only get us to mid-August.
The fact of the matter is there are not enough rich people to come anywhere close to satisfying Congress' voracious spending appetite. They're going to have to go after the non-rich.
But, let's stick with the rich and ask a few questions. Politicians, news media people and leftists in general entertain what economists call a zero-elasticity view of the world. That's just fancy economic jargon for a view that government can impose a tax and people will behave after the tax just as they behaved before the tax, and the only change is more government revenue.
One example of that vision, at the state and local levels of government, is the disappointing results of confiscatory tobacco taxes. Confiscatory tobacco taxes have often led to less state and local revenue because those taxes encourage smuggling.
Similarly, when government taxes profits, corporations report fewer profits and greater costs. When individuals face higher income taxes, they report less income, buy tax shelters and hide their money. It's not just rich people who try to avoid taxes, but all of us -- liberals, conservatives and libertarians.
What's the evidence? Federal tax collections have been between 15% and 20% of GDP every year since 1960. However, between 1960 and today, the top marginal tax rate has varied between 91% and 35%.
That means whether taxes are high or low, people make adjustments in theireconomic behavior so as to keep the government tax take at 15% to 20% of GDP. Differences in tax rates have a far greater impact on economic growth than federal revenues.
So far as Congress' ability to prey on the rich, we must keep in mind that rich people didn't become rich by being stupid.
They're going to have to go after the non-rich.
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Private Business Net Investment Remains in a Deep Ditch
by Robert Higgs- Independent Institute
Recently by Robert Higgs: Public Service Is a Noble Calling, Some Say
If any one thing estimated in the Commerce Department's National Income and Product Accounts may be described as the engine of economic growth, private domestic business net investment is that thing. This variable has such tremendous importance because, if accurately gauged, it tells us better than any other measure how many resources are being devoted to building up the private business capital stock and improving it by innovation. An economy that has anemic private business net investment almost certainly will falter soon, if it is not doing so already.
Notice that every aspect of this awkwardly named variable is critical.
- First, it has to do with private investment, not so-called government investment. The latter, which looms fairly large in the official accounts, ought never to have been labeled as investment, because it comes about not as a result of wealth-seeking motives and rational economic calculations, but as a result of political motives, calculations, and actions that often clash with the creation of real wealth rather than contributing to it.
- Second, we are looking here at business investment, excluding what the Bureau of Economic Analysis calls private "household and institutions" investment, which has somewhat murky underlying objectives determinants and consequences.
- Third, we are examining net, rather than gross, investment. the latter includes a large element of expenditure aimed merely at compensating for the wear and tear and obsolescence of the existing stock of private business capital. For example, even at the most recent peak for gross private domestic business investment, in the third quarter of 2007, it was running at $1,661B (annual rate), whereas net private domestic business investment was only $463 billion (annual rate), or about 28 percent of the total. (The investment date cited in this article are taken from Table 5.1, Saving and Investment by Sector in the National Income and Product Accounts, accessed 02/16/11.)
With that essential idea in mind, let us examine what has happened recently to private domestic business net investment, which I will henceforth call simply net private investment. Such investment reached its recent cyclical peak in the third quarter of 2007, at $463 billion (annual rate). It then fell steadily for the next four quarters, reaching $336 billion in the third quarter of 2008. At that point, it plunged steeply, falling to only $159 billion, or by 53 percent, in the fourth quarter of 2008.
Although the financial-market panic that had flared up in late September 2008 began to subside early in 2009, net private investment continued to tall, becoming negative (-$53 billion, annual rate) in the first quarter of 2009 and even more negative in the second quarter (-$119 billion). Although some improvement began in the third quarter of 2009, net private investment remained negative during the third and fourth quarters. For the entire year 2009, the amount of net private investment amounted to a large negative amount ($-69 billion). So, in other words, the value of the private business capital stock fell by that amount. Hardly by coincidence, real GDP also fell substantially n 2009, by 2.6 percent.
In 2010, net private investment increased smartly for three quarters, reaching an annual rate of $270 billion in the third quarter, then contracted sharply - by almost 47 percent - to $144 billion in the fourth quarter. For the entire year, the amount of private net investment was $177 billion. Whether the collapse in the final quarter of 2010 will turn out to have been a fluke or the beginning of a longer term decline, we shall have to wait to see.
According to the National Bureau of Economic Research, the most recent business-cycle peak occurred in December 2007, and the trough was reached in June 2009. As we have seen, net private investment peaked slightly sooner, in the third quarter of 2007. So, we are now more than three years past the economy's overall peak and some 20 months past its trough, yet net private investment in the most recent quarter was running at only 31 percent of the annual rate at its previous peak.
Private net investment is currently running far below the rate required to sustain a rapid rate of economic growth. Real consumer spending in contrast, peaked in the fourth quarter of 2007, fell only slightly (about 2.5%) to the second quarter of 2009, and by the fourth quarter of 2010 exceeded its previous quarterly peak (by almost 1 percent). Despite the wailing and gnashing of teeth among Keynesian economists and politicians with regard to allegedly inadequate consumption, a collapse of consumption is not to blame for the economy's net investment - continues to sputter, running in the most recent quarter at less than a third of its previous peak rate and, for the entire year 2010, at only 40 percent of its rate for the entire year of 2007.
Unless net private investment recovers more rapidly, the overall economy's recover is sure to remain slow, at best, certainly too slow to bring down significantly the high unemployment rate that has been stuck for a long time between 9 percent and 10 percent (and would be substantially greater if we took into account the millions who have left the labor force recently because they did not believe they could find a job even if they searched for one). As matters now stand, real stagnation is a likely prospect and, given the Fed's massive ongoing purchases of Treasury debt and the stupendous amount of excess reserves in the commercial banks' accounts at the Fed, stagflation also seems to be a credible expectation.
Investors continue to view the future with major misgivings, owing to the unsettled condition of the government's future actions with regard to health care, financial regulations, energy regulations, taxation, and other matters that have serious implications for business costs and the security of private property rights in business capital and its returns. Although ObamaCare and the Dodd-Frank bill have already been enacted, these massive statutes leave scores of important details awaiting determination by administrative agencies and courts whose actions will be fiercely contested at every step. Future tax rates also remain up for grabs in Congress.
Nor are the investment-paralyzing uncertainties confined to the United States. Europe in particular continues to wrestle with the aftermath of the mal-investments and other distortions wrought in its asset markets and financial institutions during the boom of 2002-2006, and several countries teeter on the brink of sovereign default. Given the close linkages of national markets in today's world, U.S. companies will fee a great impact from any new crisis in Europe - something else to worry about as they contemplate the desirability of increasing their investment spending.
Of course, the major trading countries and their governments may ultimately find a way to muddle through. They have eventually weathered major storms in the past. Yet, however the world's economy remains troubled, at best. A substantial, rapid recovery of private business net investment must await the clearing of these clouds. Until such a recovery does occur, however, overall economic prospects must remain rather gloomy for the near and medium terms.
February 21, 2010
Reprinted from the Independent Institute.
Robert Higgs (send him mail) is senior fellow in political economy at the Independent Institute and editor of The Independent Review. He is also a columnist for LewRockwell.com. His most recent book is Neither Liberty Nor Safety: Fear, Ideology, and the Growth of Government. He is also the author of Depression, War, and Cold War: Studies in Political Economy, Resurgence of the Warfare State: The Crisis Since 9/11 and Against Leviathan: Government Power and a Free Society.
Copyright 2010 Independent Institute
