Friday, June 08, 2018

$119,050,900,000: Merchandise Trade Deficit With China Hit Record Through April

President Xi is sitting pretty

These figures are not as alarming as they seem. They are part of a triangular trade flow that includes Australia. To make all the gadgets they sell to Americans China needs a lot of raw materials, particularly iron ore, aluminium oxide and metallurgical coal. And Australia has heaps of them all -- sometimes just sitting on the ground just waiting to be scooped up

So China buys heaps of those things using the surplus dollars that they get from trading with America. And Australia in turn buys heaps from America using the greenbacks they got from China. Australia doesn't make much. It is overflowing with natural resources that other countries buy. So it makes sense to buy in manufactured goods with the easy dollars Australia gets from exporting commodities. And Australia buys in lots of stuff from America. So Australia has a big trade deficit with America. In other words, some of those greenbacks that flow to China come back to America via Australia. It doesn't all balance out exactly but the balance is not as bad as it looks at first.

So what does China do with its great hoard (trillions) of greenbacks? It sends a lot of them straight back to America as investments. It uses them to buy American companies and American real estate. That sounds bad to a lot of people but again it is not as bad as you think. China is in fact very trusting in doing so.

Say they buy an American farm. Does that deprive America of anything? Hardly. They cannot pick the farm up and take it back to China can they? They just take it on faith that America will let them keep and use it. They make themselves hostage to America. And whether they buy farms or companies it will usually be something that they already know about -- something in which they have expertise. So they will combine their expertise with American expertise to create a better business

Let me give a theoretical example: Say they buy up a soy bean farm. Chinese eat a lot of soy beans. The American farmer will probably be left in charge of the farm because he knows best how to farm in America. What the Chinese know about in great detail will be what cultivar of the beans is most popular in China and how best to market the beans. So the new Chinese owner will guide the American farmer on what beans to plant, when to plant them and how to prepare them for export. Result: more exports of beans from America to China -- thus helping to reduce that trade imbalance.

It's not always as simple and as balanced as that but something like that does often happen. So again, the imbalances are not as bad as they look at first. There is still a lot of work for Mr Trump to do, however. There is a real imbalance in America's trade with China and one part of the reason for that is that China put up barriers to imports from America. Mr Trump has already got some of those barriers pulled down but there is still more to be done

And as every economist will tell you, there are "invisible" exports -- for instance the financial services of Wall St and patent rights. China buys a lot of them. Americans hold a lot of patents and charge people to use them.  China is often slack in buying patents it uses but when they want to export something they have to have the patent rights that thing uses.  So America has a big surplus with China on "invisibles". There is still not an overall balance but Mr Trump has less work to do to get fair trade than it at first appears

The U.S. merchandise trade deficit with China set a record through April, hitting $119,050,900,000 for the first four months of 2018, according to data released today by the Census Bureau.

From January through April, the Census Bureau reports, the United States exported $42,291,500,000 in goods to China while importing $161,342,400,000.

In other words, when measured by dollar value, the United States bought about 3.8 times as much in goods from China as China bought from the United States.

Prior to this year, the record for the highest trade deficit with China in the first four months of the year came in 2015, when it hit $115,320,000,000 in constant April 2018 dollars (adjusted using the Bureau of Labor Statistics inflation calculator).

The last time the U.S. ran a merchandise trade surplus with China in any given month, according to the Census Bureau data, was in April 1986, when the U.S. ran a $54,000,000 trade surplus with China. In every month since then, the U.S. has run a merchandise trade deficit with China.

In 2017, according to the Census Bureau, the top products the U.S. imported from China (by dollar value) were cell phones and other household goods ($70,359,818,000); computers ($45,515,206,000); telecommunications equipment ($33,490,521,000); computer accessories ($31,648,577,000); toys, games and sporting goods ($26,751,412,000); apparel, textiles, nonwool or cotton ($24,137,388,000); furniture, household goods ($20,669,126,000); other parts and accessories of vehicles ($14,406,417,000); household appliances ($14,138,581,000); and electric apparatus ($14,080,858,000).

The top products the U.S. exported to China in 2017, according to the Census Bureau, were civilian aircraft, engines, equipment and parts ($16,264,533,000); soybeans ($12,258,835,000); passenger cars, new and used ($10,211,268,000); semiconductors ($6,076,509,000); industrial machines, other ($5,447,303,000); crude oil ($4,400,921,000); plastic materials ($4,002,797,000); medicinal equipment ($3,453,343,000); pulpwood and woodpulp ($3,359,165,000); and logs and lumber ($3,177,402,000).



Fish oil won't help your heart

That's what the study below tells you.  I give the full abstract for those who might want to evaluate the study for themselves but it a pretty good demolition of the fish oil religion.  There were a couple of published replies trying to save the religion but the authors below gave them a pretty good rejoinder here

Associations of Omega-3 Fatty Acid Supplement Use With Cardiovascular Disease Risks; Meta-analysis of 10 Trials Involving 77 917 Individuals

Theingi Aung ET AL.


Importance:  Current guidelines advocate the use of marine-derived omega-3 fatty acids supplements for the prevention of coronary heart disease and major vascular events in people with prior coronary heart disease, but large trials of omega-3 fatty acids have produced conflicting results.

Objective:  To conduct a meta-analysis of all large trials assessing the associations of omega-3 fatty acid supplements with the risk of fatal and nonfatal coronary heart disease and major vascular events in the full study population and prespecified subgroups.

Data Sources and Study Selection:  This meta-analysis included randomized trials that involved at least 500 participants and a treatment duration of at least 1 year and that assessed associations of omega-3 fatty acids with the risk of vascular events.

Data Extraction and Synthesis:  Aggregated study-level data were obtained from 10 large randomized clinical trials. Rate ratios for each trial were synthesized using observed minus expected statistics and variances. Summary rate ratios were estimated by a fixed-effects meta-analysis using 95% confidence intervals for major diseases and 99% confidence intervals for all subgroups.

Main Outcomes and Measures:  The main outcomes included fatal coronary heart disease, nonfatal myocardial infarction, stroke, major vascular events, and all-cause mortality, as well as major vascular events in study population subgroups.

Results:  Of the 77 917 high-risk individuals participating in the 10 trials, 47 803 (61.4%) were men, and the mean age at entry was 64.0 years; the trials lasted a mean of 4.4 years. The associations of treatment with outcomes were assessed on 6273 coronary heart disease events (2695 coronary heart disease deaths and 2276 nonfatal myocardial infarctions) and 12 001 major vascular events. Randomization to omega-3 fatty acid supplementation (eicosapentaenoic acid dose range, 226-1800 mg/d) had no significant associations with coronary heart disease death (rate ratio [RR], 0.93; 99% CI, 0.83-1.03; P = .05), nonfatal myocardial infarction (RR, 0.97; 99% CI, 0.87-1.08; P = .43) or any coronary heart disease events (RR, 0.96; 95% CI, 0.90-1.01; P = .12). Neither did randomization to omega-3 fatty acid supplementation have any significant associations with major vascular events (RR, 0.97; 95% CI, 0.93-1.01; P = .10), overall or in any subgroups, including subgroups composed of persons with prior coronary heart disease, diabetes, lipid levels greater than a given cutoff level, or statin use.

Conclusions and Relevance:  This meta-analysis demonstrated that omega-3 fatty acids had no significant association with fatal or nonfatal coronary heart disease or any major vascular events. It provides no support for current recommendations for the use of such supplements in people with a history of coronary heart disease.



Food for thought

Dr Madsen Pirie explains


An elegant proof of why planned economies don't work: the efficient markets hypothesis

The efficient markets hypothesis tells us that it's not possible to regularly beat the market. For information about what prices should be is already incorporated into those prices. Sure, some beat it for some period of time because that's just the way statistical variability works. Some, like Warren Buffett, beat it for a long time but then his cost of funds is lower than the market's.

We also have all sorts of people out there who insist that the use or markets to allocate economic resources is the wrong way to be doing it. That the wise people in government should be doing this for us instead perhaps.

At which point, an interesting comparison:

"The message is clear: the beat-the-market efforts of professionals are impressively and overwhelmingly negative. In any asset class, the only consistently superior performer is the market itself. It is well to consider, briefly, the connection between the socialists and the active managers. I believe they are cut from the same cloth. What links them is a disbelief or skepticism about the efficacy of market prices in gathering and conveying information."

Odd to equate socialists and money managers, true. But the underlying point does stand. If we had evidence from our unfettered (no, don't titter at the back there) financial markets that they could consistently be beaten by good planners, then it's possible that good planners with adequate powers could improve upon a market economy.

We don't see that market outperformance - thus the planning part isn't going to work either, is it? For all the evidence we have is insisting that we cannot beat the market.



The balance of old and young

There is much current comment about an alleged imbalance between addressing the problems faced by young people today and attending to those bearing more upon older people. Some analysts claim that too much emphasis has been placed on meeting the problems of the elderly, and not enough on those of the young.

Older people [in Britain] have a triple-lock pension, rising with inflation or wages, or at 2.5%, whichever is the largest. They have free travel passes, a Christmas bonus, and a winter fuel allowance. Those over 75 have free TV licences, plus free or reduced admission to many attractions and services. Many are home-owners, free of mortgages, with private pensions to supplement the state’s provision.

Young people, by contrast, find it difficult to become home-owners with an inadequate housing stock, rising prices, fairly static incomes, and difficulty in saving enough for a deposit. Many graduates face tuition fee debts of nearly fifty thousand pounds. They face increased taxes and National Insurance, and many lack the comfort of an adequate private pension to support them in retirement.

This has created a political tension between young and old, a tension that comes out at the ballot box. Some of this showed in the 2017 UK general election, when the Labour Party offered to cancel tuition debt and help young people with social housing and a minimum wage increase. The Conservatives, by contrast, offered little to young people, and threatened the elderly with the confiscation of their homes to defray social care costs.  In that election Labour did better than expected or predicted.

The elderly are more numerous than the young, and historically more likely to vote, although this may have been less true than usual in the 2017 election. Some political observers see the prospect of a bidding war at general elections, with parties bidding for the votes of these two divergent constituencies. Should the young be taxed to fund benefits for the elderly, or should cuts in benefits for the old finance tax cuts for the young? Someone has to pay for the benefits.

There is a way to avoid having today’s young funding today’s old. It can be done by having yesterday’s young funding today’s old. This involves young people building up savings funds while they are earning, and using those funds to support themselves when old. It still involves the young funding the old, but removes the bidding war by having the elderly pay for their own benefits from savings when younger, accumulated over their working lives.

This personal fund, dubbed a “Fortune Account” by the ASI, would be the property of the individual, with any money remaining at death forming part of a person’s estate, to be inherited by heirs.

The Treasury fears that some people would not save enough, but dump themselves onto a state unable to let them starve, people the Treasury calls “freeloaders.” This is a valid concern, and one reason why people would be required to pay into such funds. There would be no net gain in compulsion, since National Insurance is not voluntary either.

The transition itself presents a major problem. One generation has to save for their own retirement, while simultaneously funding the commitments made to today's elderly. It might involve some one-off source of finance to fund the changeover, perhaps by a sale of remaining state assets such as land and buildings.

People would choose between competing providers to handle their Fortune Accounts, as happened when Sweden privatized its state pension scheme. The state would provide funds on behalf of those unable to earn enough to finance their own savings.

The change would be disruptive, without doubt, but it would prove a massive source of future investment as the providers put the funds to good use, investment that would augment economic growth.

Above all, it would end the divisiveness caused by the political struggle between young and old as each group sought to benefit itself at the other’s expense. And it would end the imbalance between them.



Kathy Griffin Launches Vile Attack on Ivanka over Kate Spade’s Suicide

I thought Ivanka's comment was very well judged but I think what we see below is Leftist envy.  Ivanka has got it all and Griffin is just an unfunny comedian

Washed-up “entertainer” Kathy Griffin is best known to the American public for the incredibly distasteful picture she posted of herself last year holding a mock severed head representing President Donald Trump

She has also insinuated the president’s sons are rapists, and supported Canadian comedian Samantha Bee’s vile insult of Ivanka Trump while chatting with the harpies on ABC’s “The View.”

But Griffin’s own attack on Ivanka this week – in response to the first daughter’s thoughtful Twitter post on the suicide of fashion designer Kate Spade — was beyond the bounds of rational behavior. Even for a nut job like Griffin, it was way too far.

As word of the death spread, Ivanka Trump – who has built her own brand of success in the fashion world — took to Twitter to express her sadness, and urge any readers who might be in danger of harming themselves to seek help.

“Kate Spade’s tragic passing is a painful reminder that we never truly know another’s pain or the burden they carry,” she wrote. “If you are struggling with depression and contemplating suicide, please, please seek help.”

That’s about as unobjectionable a tweet as has even been posted. But for a borderline-lunatic like Griffin, it was a red flag to charge.

"You're all talk feckless, you're all talk."

Using the word “feckless” no doubt to bring to mind Bee’s vicious words last week

In another tweet she expanded on that: “If someone is feckless does that mean they have no feck? So when it comes to Ivanka can I say she’s all talk and no feck?”

But other than using a tragic death as an opportunity to exercise some mean-girl bullying muscles, and opportunistically try to boost her own sagging career, it was difficult to understand what Griffin might have been talking about.

Griffin is clearly not someone playing with a full deck, so it’s understandable that she would be sensitive to mental health issues. But even with that, the idea of attacking Ivanka doesn’t make sense.

In any case, lashing out at Ivanka Trump for apparently heartfelt advice to those suffering from depression is simply unhinged. Maybe Griffin’s the one who should be seeking help. Before it’s too late.



For more blog postings from me, see  TONGUE-TIED, EDUCATION WATCH INTERNATIONAL, GREENIE WATCHPOLITICAL CORRECTNESS WATCH, AUSTRALIAN POLITICS, and Paralipomena (Occasionally updated),  a Coral reef compendium and an IQ compendium. (Both updated as news items come in).  GUN WATCH is now mainly put together by Dean Weingarten. I also put up occasional updates on my Personal blog and each day I gather together my most substantial current writings on THE PSYCHOLOGIST.

Email me  here (Hotmail address). My Home Pages are here (Academic) or  here (Pictorial) or  here  (Personal)


Thursday, June 07, 2018

Kate Spade found dead by hanging at her Upper East Side home after telling her daughter it's not her fault in suicide note

For some reason this news really upset me. I had never heard of her before and what I know about fashion could be written on the head of a pin, but the thought this news brought to me was:  "What does it take to be happy?"  By most criteria she was a good woman who had it all but she had been depressed for a long time.  How come she couldn't find a way out of her problems?  How fragile many of us are and how  little we understand about ourselves and about human relationships.  Given that she had a 13 year old daughter, how much pain she must have felt to take that way out

Putting my psychologoist's hat on, however, I think I can venture an explanation of what she did.  For a start, she apparently had endogenous depression -- depression that came from within her rather than being a response to external stresses.  Her friends  tried for years to get her to seek help with it.  But she refused treatment in case news of the treatment leaked out and damaged the cheerful image of her brand.  She herself described herself as a worrier. So she had  anxious depression.  Although depression and anxiety are traditionally conceptualized as two independent disorders, they are highly co-morbid.

But she had a good marriage and a young daughter she loved.  So that kept her going.  But there is some hint that strains had developed in her marriage and the daughter had just turned 13.  And a 13 year old daughter can be a problem. I took two step-daughters through that age so I know a little about it.  It is the time of daughters finding their individuality, the time when they separate theselves from their parents.  So a little darling can suddenly become a little critic.

And that is exactly what happened to Kate in a rather big way.  She recently commented about her dauighter saying that whatever she wanted and valued, her daughter would want the opposite.  She who could least bear it encountered a strong case of daughterly rejection.  And that pushed her over the edge.  Hence it was to her daughter that she left her suicide note, which was loving to the end. I feel so sorry for her

UPDATE:  Since I wrote the above ,more information has come to light.  It has been confirmed that Kate was having difficulties with her marriage.  I took account of that but considered it only a contributing factor, though undoubtedly an important one  But one claim that I don't credit is that she was manic depressive.  There is NO record of manic behavior on her part but plenty of evidence of chronic anxiety.  So I stick with my diagnosis of anxious depression, aggravated by her daughter's transition to a teenager,

Iconic designer Kate Spade hanged herself with a scarf in the bedroom of her Upper East Side home — and left a note telling her daughter it wasn’t her fault, sources said.

A housekeeper found the body of the 55-year-old fashion maven inside her Park Avenue apartment about 10:10 a.m. Tuesday, police said.

Spade’s husband Andy, the brother of comedian David Spade, was home at the time. But the couple’s 13-year-old daughter Frances was at school, sources said.

The note left by Kate Spade, in addition to absolving her daughter of responsibility, instructed the teen to seek answers from her father.

Spade was upset over “problems at home,” said a source. The source did not elaborate.

Spade was a 30-year-old former magazine editor in 1993 when she launched a line of sleek handbags that grew into a $2.4 billion global empire.



Patrick Buchanan: Boehner's Right – It's Trump's Party Now,/b>

"There is no Republican Party. There's a Trump party," John Boehner told a Mackinac, Michigan, gathering of the GOP faithful last week. "The Republican Party is kind of taking a nap somewhere."

Ex-Speaker Boehner should probably re-check the old party's pulse, for the Bush-Boehner GOP may not just be napping. It could be comatose.

Consider. That GOP was dedicated to free trade, open borders, amnesty and using U.S. power to punish aggressors and "end tyranny in our world." That GOP set out to create a new world order where dictatorships were threatened with "regime change," and democratic capitalism was the new order of the ages.

Yet, Donald Trump captured the Republican nomination and won the presidency — by saying goodbye to all that.

How probable is it that a future GOP presidential candidate will revive the Bush-Boehner agenda the party rejected in 2016, run on it, win, and impose it on the party and nation?

Bush-Boehner Republicanism appears to be as dead today as was Harding-Coolidge Republicanism after 1933. And if Trumpism is not the future of the GOP, it is hard to see what a promising GOP agenda might look like.

A brief history: In seven elections starting in 1992, Republicans won the presidency three times, but the popular vote only once, in 2004, when George W. was still basking in his "Mission Accomplished" in Iraq.

What fractured and overwhelmed the Bush-Boehner Republican Party?

First, demography. The mass immigration of Third World peoples that began with the 1965 immigration act, and the decline in the birth rate of native-born Americans, began to swamp the Nixon-Reagan New Majority.

Second, the collapse of the Soviet Empire and USSR removed the party's great unifying cause from Eisenhower to Bush I — the Cold War. After the Red Army went home, "America First" had a new appeal!

Third, faithful to the free trade cult in which they were raised, Republicans championed NAFTA, the WTO, and MFN for China.

Historians will look back in amazement at how America's free trade zealots gave away the greatest manufacturing base the world had ever seen, as they quoted approvingly 18th- and 19th-century scribblers whose ideas had done so much to bring down their own country, Great Britain.

Between 1997 and 2017, the EU ran up, at America's expense, trade surpluses in goods in excess of $2 trillion, while we also picked up the bill for Europe's defense.

Between 1992 and 2016, China was allowed to run $4 trillion in trade surpluses at our expense, converting herself into the world's first manufacturing power and denuding America of tens of thousands of factories and millions of manufacturing jobs.

In Trump's first year, China's trade surplus with the United States hit $375 billion. From January to March of this year, our trade deficit with China was running at close to the same astronomical rate.

"Trade deficits do not matter," we hear from the economists.

They might explain that to Ohio, Michigan and Pennsylvania.

And perhaps someone can explain the wisdom of handing 4 percent of our GDP each year to an adversary nation, as U.S. admirals talk tough about confronting that adversary nation over islets and reefs in the South China Sea.

Why are we enriching and empowering so exorbitantly those whom we are told we may have to fight?

Fourth, under Bush II and Obama, the U.S. intervened massively in the Near and Middle East — in Afghanistan, Iraq, Libya, Syria, Yemen. And the forces that pushed up into those conflicts, and so disillusioned the nation that it elected Barack Obama, are back, pushing for a new war, on Iran. They may get this war, too.

Yet, given the anti-interventionist and anti-war stance of Trump's winning campaign, and of the Bernie Sanders campaign, U.S. involvement in Middle East wars seems less America's future than it does her past.

After his 16 months in office, it appears as though the Trump presidency, no matter how brief, is going to be a watershed moment in U.S. and world history, and in the future of the GOP.

The world is changing. NATO and the EU are showing their age. Nationalism, populism and tribalism are pervasive on the Old Continent. And America's willingness to bear the burden of Europe's defense, as they ride virtually free, is visibly waning.

It is hard to see why or how Republicans are ever again going to be the Bush-Boehner party that preceded the rise of Trump. What would be the argument for returning to a repudiated platform?

Trump not only defeated 16 Bush Republicans, he presented an agenda on immigration, border security, amnesty, intervention abroad, the Middle East, NAFTA, free trade, Putin and Russia that was a rejection of what the Bush-Boehner Party had stood for and what its presidential candidates in 2008 and 2012, John McCain and Mitt Romney, had run on.

If the Republican Party is "napping," let it slumber on, undisturbed, for its time has come and gone. We are in a new world now.



Cut the Red Tape to Get More Affordable Housing

“I’d love to live in San Francisco, but I don’t want to pay $750,000 to live in a closet.” That’s what I tell my introductory economics students when I discuss housing prices. I probably need to update it to $2 million or something like that.

Why? Why is housing so expensive in cities like San Francisco, Boston, New York? It’s expensive because demand is high and rising. It’s insanely expensive to live in San Francisco because practically everyone wants to live in San Francisco.

But that’s only half the story. Housing is also insanely expensive because supply isn’t rising very quickly.

When you have demand rising quickly and supply changing slowly, you get rising prices. So how do we fix it?

First, we need to take a very hard look at the rules making it very hard to supply new housing. As Thomas Sowell points out in a Hoover Institution interview, land-use restrictions make it “prohibitively expensive” to build new housing in a lot of places.

In a 2008 paper in the Southern Economic Journal, the economists Edward Glaeser and Kristina Tobio argue that since 1970, the ease of increasing the housing supply explains the explosive growth of “Sunbelt” cities like Houston, Atlanta, and Dallas (their published paper is here, an ungated policy brief explaining their finding is here).

Second, we need to take a very hard look at how our moral intuitions might cloud our judgment. Trade-offs are everywhere, and by forcing housing to be safer and more comfortable we necessarily make it more expensive. Just as people are willing to live in a mediocre school district or high-crime area to get cheaper housing, they might be willing to accept the risks associated with less-safe housing if it means cheaper housing. This is a hard pill to swallow, but it’s important to respect that choice.

Consider the “lodger evil” of the Progressive Era. According to the historians David T. and Linda Royster Beito, the term “referred to the practice of many urban double up through subletting” so that they could “save on rent and earn extra income.” As the Beitos put it, “(t)he lodger evil was very much the trial-and-error creation of ordinary people and clashed head-on with the top-down approach of Progressive Era political elites.”

A tragic reality? Of course, but paraphrasing something I once heard from the economist David Henderson, we don’t make people better off by eliminating the choices they actually make.

Third, we need to look at the “rules about the rules,” or the constitutional political economy for which James M. Buchanan won the 1986 Nobel Prize, that makes it possible for people to enrich themselves at others’ expense—in this case, by making it easy for homeowners to increase the value of their own property in desirable areas by making it prohibitively expensive for others to build or move in. This is the NIMBY phenomenon—“not in my backyard”—that leads people to oppose new residential and commercial development.

But if property rights mean anything, they mean that my backyard is not your backyard—nor is your backyard mine.

A literal example illustrates. There’s an empty lot just across the alley from my backyard, situated between two houses the next street over. It’s entirely possible that the owner of that lot might build something I don’t like—a brutalist house painted hot pink, for example, or a halfway house for recovering drug addicts. But My Backyard ends at the property line. If I want a say in what ends up on that lot, I should buy the lot.

One might object that something like a halfway house or a hot pink brutalist monstrosity would generate negative externalities. I’m sympathetic to the argument (believe me: I’m looking at the trees on the lot as I type this). That risk, however, was reflected in the price of the house when we bought it. In that sense, we’ve already been “compensated” for negative spillovers that might emerge. If we’d wanted a lot of control over what our neighbors can do with their property, we could’ve bought a home in a gated community with a powerful Homeowners’ Association and lots of strict rules. We didn’t.

Housing is expensive for two basic reasons: high demand and low supply. There’s a solution, though: get rid of some of the rules making it so hard for people to supply new housing.



Golden Deep State

 The surging national economy has given California a budget surplus by some accounts of more than $5 billion, with tax collections up about $3.8 billion above what Governor Jerry Brown anticipated in January. California taxpayers should not expect Brown to return any money to the taxpayers, in the style of governor George Deukmejian, who passed away on May 8. As he said back in 1987, “I think we can be very pleased that we were able to protect this money for the taxpayers and that we have honored the spending limit enacted by the voters through the initiative process.” Outgoing governor Brown has other plans.

He wants to give state prison guards their biggest raise since the recession, a 9.3 percent hike over three years that will cost $114.6 million in the budget year that begins July 1 and $331 million over the next two years. The pact also allows the guards to cash out up to 80 hours of accrued vacation time. Other sweetheart deals are surely set in store, and taxpayers might recall the back story.

On his first watch as governor, Brown made it a priority to expand collective bargaining for government employees. These unions implement government policy and function as a kind of “deep state” that remains in place, whatever the administration. So politicians tend to give the government employee unions what they want.

On Brown’s second watch, the Service Employees International Union demonstrates outside the capitol chanting “this is our house!” That is in fact the case, and the governor has sweetened the deal. He backs measures to boost funding for low-income students and English learners, then under his principle of “subsidiarity,” lets the various districts spend the money on bureaucracy. For example, in 2014 the massive Los Angeles Unified School District gave principals and administrators a pay raise of 6.64 percent, adding a lump-sum bonus equal to 2 percent of salary. And all this comes apart from any hike in student achievement or accountability.

Whatever happens with the Delta tunnels or the bullet-train, Jerry Brown’s legacy is a state where deep-state drones are number one.



Trump Clips Eagles' Wings
No pandering there!  Trump withdraws respect from those who disrespect their country

Donald Trump was elected in large part because normal Americans grew tired of rabid leftists calling them jingoist racists. And even if it means canceling traditional meet-and-greets with sports champions at the White House, Trump is going to stand with the American people — in this case, against the NFL’s kneeling social justice warriors.

With less than 24 hours’ notice, Trump scrapped the planned ceremony to recognize the Super Bowl champion Philadelphia Eagles, citing the long-running dispute over the national anthem and the small contingent of Eagles players (fewer than 10) even willing to attend.

“The Philadelphia Eagles are unable to come to the White House with their full team to be celebrated tomorrow,” Trump said in a White House statement. “They disagree with their President because he insists that they proudly stand for the National Anthem, hand on heart, in honor of the great men and women of our military and the people of our country. The Eagles wanted to send a smaller delegation, but the 1,000 fans planning to attend the event deserve better. These fans are still invited to the White House to be part of a different type of ceremony — one that will honor our great country, pay tribute to the heroes who fight to protect it, and loudly and proudly play the National Anthem.”

For the record, the Eagles released the only player who kneeled during a preseason game. Others stood with power fists during the season. In any case, Trump is making this is a victory lap of sorts after the NFL’s recent policy announcement threatening to fine teams with players who kneel for the anthem.

But Trump isn’t taking guff from any professional sports team. He uninvited the NBA champion Golden State Warriors last year (look for the same thing to happen after they win again this year). In Trump’s estimation, if millionaire celebrity sports stars are going to snub him and the country, why not return the favor? As the Washington Examiner’s Becket Adams put it, “Donald Trump truly is the culture war president.”



For more blog postings from me, see  TONGUE-TIED, EDUCATION WATCH INTERNATIONAL, GREENIE WATCHPOLITICAL CORRECTNESS WATCH, AUSTRALIAN POLITICS, and Paralipomena (Occasionally updated),  a Coral reef compendium and an IQ compendium. (Both updated as news items come in).  GUN WATCH is now mainly put together by Dean Weingarten. I also put up occasional updates on my Personal blog and each day I gather together my most substantial current writings on THE PSYCHOLOGIST.

Email me  here (Hotmail address). My Home Pages are here (Academic) or  here (Pictorial) or  here  (Personal)


Wednesday, June 06, 2018

Hooray! U.S. Supreme Court backs Christian baker who rebuffed gay couple

But how deplorable that it needed SCOTUS for the plain language of the constitution to be implemented.  What a disgrace the State courts are!

The U.S. Supreme Court on Monday handed a victory on narrow grounds to a Colorado baker who refused based on his Christian beliefs to make a wedding cake for a gay couple, stopping short of setting a major precedent allowing people to claim religious exemptions from anti-discrimination laws.

The justices, in a 7-2 decision, said the Colorado Civil Rights Commission showed an impermissible hostility toward religion when it found that baker Jack Phillips violated the state's anti-discrimination law by rebuffing gay couple David Mullins and Charlie Craig in 2012. The state law bars businesses from refusing service based on race, sex, marital status or sexual orientation.

The court concluded that the commission violated Phillips' religious rights under the U.S. Constitution's First Amendment.

But the justices did not issue a definitive ruling on the circumstances under which people can seek exemptions from anti-discrimination laws based on religion. The decision also did not address important claims raised in the case including whether baking a cake is a kind of expressive act protected by the Constitution's free speech guarantee.

Two of the court's four liberals, Stephen Breyer and Elena Kagan, joined the five conservative justices in the ruling authored by Justice Anthony Kennedy, who also wrote the landmark 2015 decision legalizing gay marriage nationwide.

The baker case became a cultural flashpoint in the United States, underscoring the tensions between gay rights proponents and conservative Christians.

Both sides claimed a measure of victory. The couple's supporters noted that the ruling embraced the importance of gay rights and made it clear that businesses open to the public must serve everyone. The baker's lawyers said the ruling emphasized that the government must respect religious beliefs.

"Our society has come to the recognition that gay persons and gay couples cannot be treated as social outcasts or as inferior in dignity and worth," Kennedy wrote.

But Kennedy said the state commission's hostility toward religion "was inconsistent with the First Amendment's guarantee that our laws be applied in a manner that is neutral toward religion."

In one exchange at a 2014 hearing before the commission cited by Kennedy, former commissioner Diann Rice said that "freedom of religion, and religion, has been used to justify all kinds of discrimination throughout history, whether it be slavery, whether it be the Holocaust."

Kennedy said the commission ruled the opposite way in three cases brought against bakers in which the business owners refused to bake cakes containing messages that demeaned gay people or same-sex marriage.

Republican President Donald Trump's administration, which intervened in the case in support of Phillips, welcomed the ruling. "The First Amendment prohibits governments from discriminating against citizens on the basis of religious beliefs," Attorney General Jeff Sessions said in a statement.

The decision made it clear that even if the court ultimately rules in a future case that bakers or other businesses that sell creative products such as florists and wedding photographers can avoid punishment under anti-discrimination laws, most businesses open to the public would have no such defense.

Kennedy wrote that any ruling in favor of creative professionals must be "sufficiently constrained, lest all purveyors of goods and services who object to gay marriages for moral and religious reasons in effect be allowed to put up signs saying 'no goods or services will be sold if they will be used for gay marriages,' something that would impose a serious stigma on gay persons."

Of the 50 states, 21 including Colorado have anti-discrimination laws protecting gay people.

The case marked a test for Kennedy, who has authored significant rulings that advanced gay rights but also is a strong advocate for free speech rights and religious freedom.

"The outcome of cases like this in other circumstances must await further elaboration in the courts, all in the context of recognizing that these disputes must be resolved with tolerance, without undue disrespect to sincere religious beliefs, and without subjecting gay persons to indignities when they seek goods and services in an open market," Kennedy wrote.

Mullins and Craig were planning their wedding in Massachusetts in 2012 and wanted the cake for a reception in Colorado, where gay marriage was not yet legal. During a brief encounter at Phillips' Masterpiece Cakeshop in the Denver suburb of Lakewood, the baker politely but firmly refused, leaving the couple distraught. [The poor petals!]

They filed a successful complaint with the state commission, the first step in the six-year-old legal battle. State courts sided with the couple, prompting Phillips to appeal to the top U.S. court.

"Today's decision means our fight against discrimination and unfair treatment will continue," the couple, represented by the American Civil Liberties Union, said in a statement. "We have always believed that in America, you should not be turned away from a business open to the public because of who you are."

Mullins and Craig said Phillips was using his Christian faith as pretext for unlawful discrimination based on sexual orientation.

Phillips and others like him who believe that gay marriage is inconsistent with their Christian beliefs have said they should not be required to effectively endorse the practice.

"Government hostility toward people of faith has no place in our society, yet the state of Colorado was openly antagonistic toward Jack's religious beliefs about marriage. The court was right to condemn that," said lawyer Kristen Waggoner of the conservative Christian group Alliance Defending Freedom, which represents Phillips.

Phillips himself was not available for comment.

The litigation, along with similar cases around the country, is part of a conservative Christian backlash to the Supreme Court's gay marriage ruling.

The court will soon have the opportunity to signal its approach to handling similar cases. The justices on Thursday are set to consider whether to hear an appeal filed by a flower shop owner in Washington state who refused to create an arrangement to celebrate a gay wedding based on her Christian beliefs.



Globalization is political poison

Martin Hutchinson

Since 1991, globalization has been touted as the solution to all the world’s problems, that will pull emerging markets out of poverty while making rich countries more efficient and competitive. Yet in the last few years, public opinion has soured on it; whenever new measures of globalization are proposed, voters oppose them vehemently. There are good reasons for this.

The simple optimism of Thomas Friedman’s 2005 “The World is Flat” suggested that over time, modern communications would iron out the political differences and economic inequalities between societies, making a harmonious world that was both more equal and richer. Even back then, it was clear that low-skill workers in rich countries would suffer relatively, but it was believed that global growth would be sufficiently rapid to handle the problem. After all, if the best brains of China and India were now able to play a role in driving innovation, surely innovation must speed up enormously from its previous level, with corresponding benefit to global productivity and growth rates.

This has not happened, mainly because the world’s governors have added several other policies into the mix that have nothing to do with classical Ricardian liberalism, the motive-force behind globalization. These policies have turned the fairly marginal benefits available from globalization into gigantic costs, at least as far as the majority of rich countries’ populations is concerned.

The most damaging policy error that globalist governments have made is to over-regulate, using new international bodies to impose regulations from which businesses can’t escape. Before regulation was global, companies that wanted cheap labor or which had an unpleasant manufacturing process could simply locate in an emerging market whose inhabitants would be glad of the jobs. Now that is no longer possible; global environmentalist and labor regulators, and their NGO enforcers chase all over the world, harassing businesses wherever they operate. Only anti-globalist “rogue regimes” are exempt, one reason why popular support for such regimes is growing.

Over-regulation, whether environmental or otherwise, has a doubly damaging effect on the victims of globalization. It slows overall global growth, so that the benefits of globalization may no longer be sufficient to protect the loving standards of the low-skilled in wealth countries. Further, regulations are generally differential in their application, so rich country manufacturers can escape some of the more foolish domestic regulations by relocating manufacturing to the Third World – thereby hollowing out the good blue-collar jobs that the rich country labor force needs.

A second downside of globalization is crony capitalism. In a non-globalized world, companies from all over the world compete, and have competitive advantages only in their own countries. However, as the world globalizes, the major multinationals can buy up or drive out local competitors. Once this happens, the multinationals’ innovation and resulting productivity growth is slowed by their gigantic behemoth size and inefficiency. However, as governments have grown larger and regulations more complex, the multinationals have been able to ally with host governments all over the world to draft regulations that favor them and keep out upstart competitors. Even in the high-tech sector, the symbiotic relationship of Facebook and Google, not with their domestic regulators but with EU regulators, is able to ensure that their global oligopoly is preserved for all time, and not subject to erosion by pesky new competitors. Again, globalization makes cronyism inevitable, and with cronyism comes bloated bureaucracy and sluggish innovation.

A third accompaniment of globalization has been ultra-low interest rates, already set below the optimum level by Fed chairman Alan Greenspan in 1995 and lowered further worldwide with each economic hiccup. On a global scale, these have narrowed the capital cost differential between rich and poor countries, artificially speeding the relocation of rich county industries, since new factories can be erected artificially cheaply in emerging markets. Then, within economies, these low interest rates have encouraged tsunamis of misdirected investment, whether on companies that should have been allowed to die or on over-priced real estate. Millennials now cannot afford urban housing; ultra-low interest rates, in many cases negative in real terms, have driven house prices to artificial and unsustainable levels. By misdirecting capital, low interest rates have also lowered productivity growth, the only means by which living standards can be improved. In general, low interest rates have enriched those with connections, at the expense of everybody else; with globalization, there has been no escape from them.

A moderate amount of high-skill immigration is necessary in a globalized world; you must attract the skills that are not available locally. However, globalization’s proponents have widened this to include massive low-skill immigration, whether on guest-worker contracts or simply illegal, as well as endless floods of refugees. This kind of immigration lowers domestic wages and strains welfare systems, depressing living standards (and indeed quality of life) throughout the economy.

Finally, globalization has been accompanied by a bloating of government spending worldwide. To some extent, governments bloat spending because they can. If interest rates are ultra-low, even negative in real terms, there is no incentive to stop wasting money on boondoggles that may attract votes. However, apart from the unsustainability of most current budget deficits, by bloating government, resources are diverted from their most productive uses to the utterly unproductive public sector. Thereby, real productivity (which may differ from that in GDP accounting, which takes all government activity as beneficial) is once again caused to decline.

In Third World countries also, where controls on corruption are feeble, bloated government spending attracts the “best and brightest” into the public sector, where dodgy money can be made most quickly – the Malaysian 1MDB mess, aided and abetted by Goldman Sachs, is a prime example of this, which should now be punished to the fullest extent of available law. However, allowing democratic change to punish government malfeasance is not a sufficient solution to this problem; it will merely cause the crony globalist governments to rig the political system, as the EU is attempting to do in Italy and elsewhere, to prevent that change from happening.

In theory, globalization should enable poor countries to grow rich, while rich countries also benefit and innovation proceeds at a wildly accelerated pace – that’s what the Ricardian textbooks say. In practice, over-regulation, cronyism, artificially low interest rates, excessive immigration and government bloat have made globalization increasingly damaging to the living standards of ordinary people in both rich and poor countries. That damage to living standards is growing further day by day as the poorly controlled globalist economic system becomes more corrupt and inefficient.

To win an election, therefore, just get your opponents to advocate a thoroughly globalist, international platform (or, within the EU, EU-integration, which comes to the same thing). The voters have seen through the follies of globalization and will duly reward the party that opposes it most vehemently.



Roseanne and the double standard

Who knew we would look back at Roseanne Barr's crotch-grabbing massacre of the national anthem in 1990 and see a mere flesh wound on her career? She embarrassed herself, mocking America in front of America, but her hit show rolled along.

But one egregiously racist tweet destroyed the "Roseanne" reboot of 2018 in a Hollywood minute. Tweeting that former Barack Obama top aide Valerie Jarrett is a mixture of the Muslim Brotherhood and "Planet of the Apes" put an abrupt end to the top broadcast television program of the year.

ABC made the right decision — and the obvious business decision. You cannot compare blacks to monkeys. That is an old, dehumanizing trope. It is viciously mean-spirited to compare President Donald Trump to an orangutan, as many leftists have. But that is a mockery of one man's hair and intelligence, not the rhetorical equivalent of a burning cross.

In retrospect, everyone said ABC should have known this was going to happen. Barr has always been a loose cannon, and her politics have zigzagged from running on the presidential ticket of the nutty-left Green Party all the way over to backing Trump. But the network thrived with the original formula of "Roseanne," and it saw a win-win with a reboot: The show's old audience would tune in, and ABC could sell itself as reaching out to the red states after mysteriously dumping Tim Allen's hit show. The ratings were terrific. Then Roseanne drove the reboot over a cliff.

Dehumanizing tropes about black people don't always destroy careers ... when the black is a Republican. For example, Pat Oliphant didn't stop being the most widely syndicated political cartoonist in the world after he drew then-Secretary of State Condoleezza Rice as a parrot with large lips sitting on then-President George W. Bush's hand in 2008.

This was a trend. Christian Science Monitor cartoonist Jeff Danziger drew a barefoot Rice in a rocking chair saying, "I knows all about aluminum tubes! (Correction) I don't know nuthin' about aluminum tubes ..." In the radical fever swamps, cartoonist Ted Rall drew one with Rice saying, "I was Bush's beard! His house n——!" And a black male character replies, "Now hand over your hair straightener." He is wearing a T-shirt that says, "You're not white, stupid."

Even as "Roseanne" is canceled, let's not congratulate Disney CEO Bob Iger as the King of Televised Civility. This is the same company that dragged its feet for weeks after ABC co-host Joy Behar insulted millions on "The View" when she cracked that Christians like Vice President Mike Pence who act like "Jesus talks to you" have a "mental illness." We protested until Behar apologized on air, and she has since compared Trump to an orangutan, because it's just another day in the Resistance.

Days before the Barr debacle, Disney-owned ESPN rehired Keith Olbermann, fresh off a series of unhinged Trump-hating videos for GQ magazine and a book titled "Trump Is F—-ing Crazy (This Is Not a Joke)." He's also vicious on Twitter, like this tweet to the president and former Sheriff Joe Arpaio: "You and @Potus can go f—- yourselves, you racist Nazi f—-s!" In another tweet, he lectured Republicans with emphasis: "This is the creature you have unleashed



For more blog postings from me, see  TONGUE-TIED, EDUCATION WATCH INTERNATIONAL, GREENIE WATCHPOLITICAL CORRECTNESS WATCH, AUSTRALIAN POLITICS, and Paralipomena (Occasionally updated),  a Coral reef compendium and an IQ compendium. (Both updated as news items come in).  GUN WATCH is now mainly put together by Dean Weingarten. I also put up occasional updates on my Personal blog and each day I gather together my most substantial current writings on THE PSYCHOLOGIST.

Email me  here (Hotmail address). My Home Pages are here (Academic) or  here (Pictorial) or  here  (Personal)


Tuesday, June 05, 2018


The party car has no brakes

On May 10th, Tom Steyer was shouted down at his own town hall for pointing out that President Trump hasn’t actually killed millions of people.

Steyer was in Cedar Rapids on the road with his Need to Impeach tour. The billionaire had come to Iowa to boost his political standing by going further to the extreme than the Democrat leadership. Rep. Pelosi, Rep. Schiff and other top Dems had been warning against impeachment messaging. Steyer embraced it.

But hating Trump, like every other leftist extreme viewpoint, has no actual stopping point.

A woman in the audience asked, “What's the difference between him and Hitler?” "Hitler ended up killing millions and millions of people," the leftist billionaire noted in his reply. "Mr. Trump has shown a disregard for our law... but he hasn’t killed millions of people."

And the audience swiftly shouted him down for stating the obvious.

The trouble with trying to outleft the left is that there’s always someone more extreme than you are. Even if you want to impeach Trump, you’ll be deemed a sellout for not calling for his assassination.

It’s not enough to compare Trump to Hitler, as Steyer did, you have to insist he’s every bit as bad as Adolf.

The scene in Cedar Rapids was the inevitable outcome of building politics around hating one man as hard as possible. The transformation of the Democrats into the anti-Trump party means that if he really wanted to get a wall built tomorrow, all he would have to do is come out against it this afternoon.

Over at Mother Jones, Kevin Drum pleaded, “Liberals Really Shouldn’t Be Defending MS-13 Just Because Donald Trump Doesn’t Like Them.” But tell that to Nancy Pelosi. If Trump hates MS-13, the left will learn to love it, even if it never heard of it before, and draw on all the old rationalizations of terrorism (there’s a moderate MS-13 wing, innocent immigrants get caught up in the hunt for MS-13, dehumanizing people is dangerous) to rationalize its reflexive antipathy. If Jared and Ivanka show up in Jerusalem, the left will learn to love Hamas. The left’s response to North Korea shifts with Trump. When Trump negotiates, the left hates the Norks, when he threatens them, it’s come on down Kim Jong-un.

It’s not a cult of personality, but a cult of anti-personality. The Democrats feverishly worship whatever they imagine the antithesis of Trump to be at any given time. Even if it’s a violent murder and rape gang.

But it’s not just a case of, “Whatever Trump’s for, I’m against it.”

Bernie’s socialism was controversial in the ’16 primaries. In ’18, most of his ideas have been embraced by his prospective ’20 rivals. His people are rising within the DNC.

Hillary Clinton didn’t just kill off her crooked political dynasty. Her defeat also killed triangulation.

What’s the point of waiting around for decades, playing the long game, moving to the middle, trying to avoid taking a controversial stand or uttering an uncensored thought, only to lose twice?

No Dem wants to be the next Hillary Clinton. They want to be the next Obama or Bernie.

The Overton window isn’t just open, it’s broken. There are few ideas that can’t be put forward anymore. Especially on the left. In tribal politics, moderation isn’t a virtue, it’s a vice.

That’s the problem.

The lack of boundaries is liberating. But everyone has boundaries. Even the guy with a Need to Impeach tour. He just has no way to set them anymore. Or point out that Trump isn’t literally Hitler.

Neither does the rest of his political movement.

You’re either an extremist or a sellout. And there’s always someone crazier out there to cry sellout.

Free health care, college education and jobs have already been done. Bernie ran on free college and healthcare. Cory Booker, Kirsten Gillibrand and Kamala Harris are already all over free jobs.

What’s next? How do you out-Bernie him in 2020? Free homes, free cars and free drugs?

Socialism works until you run out of other people’s money. But at this rate, the Dems will run out of other people’s ideas even before they even manage to run out of other people’s money.

And then the 2024 Dems will run on straight Communism.

Extremism in hating Trump is no vice, among the Dems, and no virtue is greater than loving socialism.

The first casualties of campaign finance reform were the moderates. The power shifted from local districts to big national donors with massive organizations. Goodbye Bill and Bob in Pennsylvania, hello George Soros and the other SPECTRE board members of the Democracy Alliance. Crowdsourced platforms like ActBlue allowed San Francisco donors to pour big money into local red state races.

And the most passionate and committed Dem donors weren’t moderates, but extremists. National single issue lobbies consolidated into a coordinated campaign to push pro-life and pro-gun Dems out of the party. The progressive political machine manufactured passion candidates who were unqualified extremists. Mostly the machine lost. But it won big when a Chicago lefty took the White House.

As the Democrats head into the midterm elections, some in the leadership are trying to moderate their tone. But why bother? Extremism pays. Just look at the cash flowing to key #resistance politicians.

When Rosie O’Donnell got into trouble for illegally over-sized campaign contributions, she claimed that she donates money ActBlue to help her cope. “My anxiety is quelled by donating to those opposing trump, his agenda — especially at night — when most of these were placed.”

She’s not alone. There’s a river of blue state money pouring into local; elections. The cult of anti-personality that the Democrats have built around Trump has been a financial windfall for the left. The Democrats hold fewer elected seats, but their holders are more likely to be politically correct. It wasn’t a defeat for the left. But a successful purification of a political party by what was an extremist faction.

The descent of the Democrats into extremism allowed Republicans to achieve a nearly unprecedented electoral dominance. As the Democrats tightened their grip on urban minority blocs and suburban bedroom communities, the South and the Midwest slipped through their fingers. But instead of moderating their tone, they consolidated control over the media and unelected officials.

The eavesdropping on Trump officials and the resulting Mueller investigation are the result.

If the Democrats succeed in reversing the results of the 2016 election by engineering a coup through the DOJ and the media, elections will cease to matter. And that will eliminate any final check on the left’s political extremism. That is what the investigations tearing apart America are really about.

The social consensus is gone. Instead the left manufactured its own social consensus on values and used the entertainment industry and the educational system to indoctrinate each generation anew. The political consensus was swept out on a tide of cash. And the electrical consensus is under siege by a movement that is trying to make elections in America as irrelevant as they already are in California.

And the Democrats are going as crazy nationally, as they did in California.

The Founding Fathers rebelled against a mad king notorious for talking to trees. But old George was replaced with a tyranny of leftists who, unlike him, may not shake hands with trees, but do hug them.

Madness is the privilege of absolute power. When there is no one to challenge their right to rule, governments go mad. North Korea’s insane Marxist madhouse is a typical example. The Democrats have been set free to indulge in the extremes of madness with none of the political consequences. The media won’t hold them accountable and, if they have their way, the voters won’t be allowed to either.

The Democrat car, environmentally correct, painted bright red and full of the exact right number of minority drivers, is racing for the cliff. It has no brakes and no one in the cars wants to use them anyway.



Chick-fil-A Mocks the Lefty Myth About Wage Stagnation

“As the owner, I’m looking at it big picture and long term.” Those are the words of Eric Mason, owner of a Chick-fil-A in Sacramento, CA.

Mason was talking about his employees and sales. He believes successful restaurants are an effect of happy, well-paid workers.  That’s why he’s offering his employees wage increases that would boost their pay from $12-13/hr. to $17-18/hr.

That Mason is raising worker pay well beyond California’s minimum wage is a reminder that pundits on the left are flying blind when they emote about stagnant wages.  They could learn a lot from Mason. Mason sees very clearly what they don’t: low-wage workers are incredibly expensive.

They are because they’re not very productive.  As is frequently said, you get what you pay for.  Low-wage workers don’t need to perform very well simply because they’re not being compensated for it.  Mason wants his business to boom, which means he wants his employees to feel well rewarded.  Quoted in the Washington Post about his decision to boost employee compensation, Mason said “[W]hat that [pay well above the minimum wage] does for the business is provide consistency, someone that has relationships with our guests, and it’s going to be building a long-term culture.”

“Long term culture” is crucial here.  Mason’s point is that employee turnover is very costly.  Not only is it time consuming to train workers who will soon depart, it’s also bad for the business.  People patronize restaurants for all sorts of reasons.  Consistency in terms of food and service, and a welcoming atmosphere plainly factor.  Each quality is more likely to be found in restaurants that retain their employees for the long term.

The above speaks loudly to how expensive it is to underpay.  To do so, as in to presume to exploit, is to drive away the workers who are capable of mastering the menu, creating a “long term culture,” and who will know many customers by name and order.

Mason’s insight is as old as profit is.  Henry Ford understood long ago what Mason does now.  Poorly paid workers are a business-sapping burden. Ford didn’t give his employees raises so that they would buy Ford cars; rather he offered them impressive raises because annual turnover of over 300% was limiting his ability to profit.  Low wages were costing Ford’s eponymous company a great deal.  Mason wants to avoid the high cost of short-changing his employees. 

Mason’s actions belie the popular lefty belief that businesses thrive by paying their workers as little as possible.  He’s a wise owner for sure, but can those who think businesses grow through exploitation really believe that Mason’s view about compensation is a minority one? More realistically, well-run corporations of varying shapes and sizes well understand that businesses succeed thanks to the people who show up for work each day.  Successful owners and CEOs understand that parsimony is not the path to profits.

Profitable businesses get that way by overpaying.  Does anyone remember General Electric’s nickname when it was the premiere U.S. blue chip in the late 1990s? “Generous Electric” employees were exceedingly well compensated, and then it was said about Time Warner around the same time that it retained its workers with “golden handcuffs.” So fearful was it of losing its human capital to Silicon Valley upstarts, Goldman Sachs handed out generous stock bonuses during the original internet boom. More modernly, readers need only consider Amazon.  It’s one of the five most valuable companies in the world.  Not surprisingly, the pay at Amazon is very impressive.  Anyone who doubts this need only consider the feverish competition among North American cities for the Seattle giant’s second HQ.

Are the previous examples too large and too corporate?  Too coastal, or too outlier? Too college-degree focused? If so, fine.  Consider the plumbing industry.  In a front page Wall Street Journal story from last week, it was reported that Ft. Collins-based Neuworks Mechanical is offering plumbers “on-site tap flows with craft beer”, roasted espresso, a smoker for brisket lunches, and next up, a yoga studio. A plumbing company in St. Paul offers arcade games and a “quiet room,” while another plumbing outfit unearthed by the Journal provides its workers with massages and spa treatments.

Which brings us to the myth about stagnant pay in the U.S.  Really? If pay were stagnant, does anyone think businesses would be paying so much and offering so much in order to win and retain workers? No doubt some owners and CEOs are quite simply enlightened and realize that a happy work force means happy customers, but to some degree this bidding war for workers is the result of a scramble for talent among all businesses. 

Stagnant pay presumes a lack of economic growth, and a dearth of successful businesses.  Except that that U.S. has had some of the greatest growth since the early 1980s, and it houses a majority of the world’s most valuable companies.  In an economy reliant on people, it’s only natural that the people staffing U.S. businesses are being paid more and more, and being compensated in ways that are more and more creative.  So impressive is compensation in the U.S. that even fast food businesses must pay up to compete.  Indeed, as the Chick-fil-A story reminds us, it’s not just Starbucks that is going out of its way to retain workers with pay and perks.

So while many on the left surely want the best for workers, far too many labor under the false illusion that businesses strive to minimize employee costs.  Not at all.  They can’t afford to. They strive to overpay because a failure to retain employees is the path to decline.



TSA and Border Patrol stole his life savings but never charged him with a crime

His American dream was helping his family in Albania. It ended when he walked through security at Cleveland Hopkins International Airport.

A U.S. citizen for more than a decade, Rustem Kazazi was flying back to Europe to help his Albanian family repair their home and maybe even to buy a little beach house somewhere along the Adriatic Sea. He placed $58,100 into three clearly marked envelopes, then packed the money away in his carry-on luggage.

It was 13 years of his life savings – and the federal government took every penny.

TSA employees discovered the cash, and agents with U.S. Customs and Border Protection seized it. But first they strip-searched Kazazi and interrogated the 64-year-old without a translator as he covered himself with a towel.

That was in October. Kazazi still hasn’t been convicted (or charged!) of any crime, and CBP didn’t offer any explanation for a month. But thanks to a law enforcement procedure called civil asset forfeiture, CBP also hasn’t given Kazazi his savings back. The federal government finally came up with an explanation: they suspected he was “involved in a smuggling/drug trafficking/money laundering operation.”

The large sum wasn’t for anything nefarious explained Kazazi, a former Albanian police office. “The crime in Albania is much worse than it is here,” he told the Washington Post. “Other people that have made large withdrawals [from Albanian banks] have had people intercept them and take their money.” Plus, hard U.S. currency is worth more.

And because traveling with that kind of cash isn’t a crime, the Kazazi family has filed suit against the federal government.

“You have the right to travel with cash in America, even when you’re flying internationally,” said Wesley Hottot, an attorney with the Institute for Justice, which represents the Kazazis in the lawsuit. “But again, we’re encountering a situation where law enforcement sees somebody with legal cash, assumes they must have done something criminal, and they just take the money. It is disturbing how little respect federal agents show for the civil rights of American citizens.”

Those federal agents aren’t an anomaly. It’s not just a bad apple here and a rotten one there. Civil asset forfeiture is the preferred policy of the nation’s top cop.

"I love that program," Attorney General Jeff Sessions said at a law enforcement conference last September. "We had so much fun doing that, taking drug dealers' money and passing it out to people trying to put drug dealers in jail. What's wrong with that?"

Turns out, a lot is wrong with the 1980s-era policy. Police aren’t just nabbing drug money. Around the country, law enforcement are taking cash, cars, and real-estate without ever charging victims with a crime. To seize property, the police only need to suspect it is connected to criminal activity. Afterwards, even clearly innocent citizens like Kazazi have no recourse except a lawsuit.

“This family’s case, like so many others, shows why civil forfeiture must end,” explained IJ attorney Johanna Talcott. “The Kazazis did nothing wrong and were never charged with a crime, but the government still won’t return their money all these months later. This kind of abuse is far too common because civil forfeiture is an inherently abusive process that will always have disastrous effects on innocent people. Enough is enough.”



For more blog postings from me, see  TONGUE-TIED, EDUCATION WATCH INTERNATIONAL, GREENIE WATCHPOLITICAL CORRECTNESS WATCH, AUSTRALIAN POLITICS, and Paralipomena (Occasionally updated),  a Coral reef compendium and an IQ compendium. (Both updated as news items come in).  GUN WATCH is now mainly put together by Dean Weingarten. I also put up occasional updates on my Personal blog and each day I gather together my most substantial current writings on THE PSYCHOLOGIST.

Email me  here (Hotmail address). My Home Pages are here (Academic) or  here (Pictorial) or  here  (Personal)


Monday, June 04, 2018

Record Wage Increases, Record-Low Unemployment

A good economy is bad for Democrats, and today brings more good economic news.

As we noted last month, a good economy is bad for Democrats. And we got another load of good economic news this morning, regardless of Leftmedia spin.

First up, The Wall Street Journal’s James Freeman writes, “The number of small companies raising wages hit a record high in the U.S. this month. That’s according to the latest National Federation of Independent Business employment survey. … A full 35% of owners of small firms report increasing labor compensation, the highest percentage since NFIB started asking about it in 1986.” That trend could get even better, as Freeman notes that “businesses are ramping up spending on the tools that make their workers more productive and therefore able to command higher wages.”

Much of the wage increases are due to a tighter labor market. Employers added 223,000 jobs in May, which was higher than media expectations but not quite as surprising for those of us not blinded by Trump Derangement Syndrome. Headline unemployment dropped to 3.8%, the lowest since 2000. Black unemployment dropped to a new record low of 5.9%. And The Washington Post reports, “Many economists predict it will fall even further this year, potentially dropping to 3.5 percent, which would be the lowest rate since 1969.” It might have physically hurt that poor Post reporter to note such good news under Donald Trump.

Nancy Pelosi called Republican tax cuts “Armageddon” before dismissing them as “crumbs.” Back here in reality, the American economy is enjoying the fruit of good policy, brought to you without a single Democrat vote.



BOOM: Black Unemployment Hits All-Time Low Just Like President Trump Promised

The American people as a whole were in for a treat on Friday with the latest economic numbers. According to The Daily Caller:

The numbers reveal that the U.S. economy is booming and many key indicators of economic health are trending in the right direction. According to the Labor Department, the unemployment rate is 3.8 percent, the lowest in nearly two decades.

223,000 jobs were created and the May increase in payroll was bullish, surprising economists, according to NPR.  However, the most historic data points seem to be centered around black unemployment. The unemployment rate for African-Americans plunged to 5.9 percent in May. That is a record low. Interestingly, the gap between white ad black unemployment has shrunk to the smallest since these numbers have been recorded. The white unemployment (3.5%) and black unemployment (5.9%) is the smallest gap since the release of these numbers, beginning in the early 1970s.



Trump Puts an End to Taxpayer Subsidies for Unions

Government employee unions have enjoyed an absolute boondoggle in recent years, receiving hundreds of millions in taxpayer funds. But the boon could soon be over thanks to a new executive order from President Donald Trump.

Last Friday, the president signed an executive order requiring that federal government employees who work full-time for the public employee unions at taxpayer expense spend at least 75 percent of their paid time on the government’s business. The administration estimates this will save taxpayers $100 million.

This measure is one of three executive orders the president signed on Friday. Those orders do not eliminate taxpayer subsidies for public employee unions altogether—that is Congress’ job—but they do end the taxpayer subsidy of travel for union business; mandate that unions be charged fair market value for rents of government office space; streamline the public employee appeals process so that bad apples can be fired more rapidly; and force taxpayer-funded union workers to spend at least three-quarters of their time doing the people’s business.

Most people are shocked to learn that taxpayers have been footing the bill for public employee union salaries, but they become incensed when they learn that in 2016, union employees were paid $177 million by the federal government, not counting office space and travel expenses.

A 2013 Freedom of Information Act request by Americans for Limited Government discovered that the Department of Veterans Affairs alone had over 250 employees working full time for unions in 2011. The Transportation Department had 35 employees on full-time “official time,” many of whom had salaries in excess of $170,000 per year.

And in 2012, when the IRS was busy playing politics by delaying and denying tea party group applications for nonprofit status, The Washington Times reported that more than 200 full-time IRS employees were engaged in nothing but union activity. The same report added that taxpayers picked up the bill for another $687,400 in union travel at the IRS alone.

It’s bad enough that the federal government spent between $150 and $200 million a year on union salaries and travel, but what’s worse is that this indirectly subsidized unions’ political activity. Because money is fungible, the money that public employee unions didn’t have to spend on personnel could then be turned around and spent on politics.

Public employee unions are among the biggest donors in politics, with the American Federation of State, County and Municipal Employees ranked the 15th-largest contributor so far in 2018, according to OpenSecrets. And this group, in particular, has overwhelmingly favored Democrats over Republicans.

Of the $4,843,291 that this group has poured into politics this year, exactly $6,000 of it went to groups, causes, or politicians considered to be Republican or conservative. In 2016, it spent almost $16 million on politics with under $8,000 going to Republican or conservative groups. In that same election cycle, its political action committee could not find a single Republican to support, giving 100 percent of its money to Democrats.

This is just one case out of many. For years, taxpayers have subsidized public unions that pursue political activities and overwhelmingly donate to Democrats. Their donations are designed to grow government, and consequently, their own membership.

Public employee unions don’t even pretend to be anything but big government advocates. The president’s executive order forcing taxpayer-funded union employees to spend 75 percent of their time doing their federal job is a good first step in reigning in this far-left government funding stream.

Trump deserves kudos for recognizing the absurdity of taxpayer funding of the left, and in particular, he deserves credit for hiring people like Russ Vought and James Sherk for the Office of Management and Budget and White House staff, respectively, and Nathan Mehrens for the Labor Department.

By hiring people who have studied and understand how the current federal civil service system perpetuates the administrative state, Trump set himself up for success when it comes to dealing with the wash, rinse, repeat swamp cycle that the public employee unions perpetuate.

Recently, much of the discussion about public employee unions in politics has been focused upon the upcoming Janus v. AFSCME Supreme Court decision, which could allow public employees at all levels of government to opt out of paying dues as a First Amendment right. But these new executive orders will have a much greater impact on the federal bureaucracy, since federal employees already have the right to not join the union.

This executive order will shift about $100 million in union employee costs back onto the unions. This will force them to prioritize which cases should be fought and which ones should be settled, injecting some rationality and perhaps greater speed into the federal government firing process.

Now, the president needs to take the next step: force the public employee unions to compete for their members through an opt-in process, where the employee would have to actively decide to be a member of the union rather than being assumed to be a member unless he or she fills out the proper paperwork.

If the president takes this next bold step, the public employee union stranglehold on the federal government will be broken, giving Congress a chance to pass full-blown civil service reform.

You can almost hear the swamp draining.



Fake News: Blaming Trump for Obama's Policy

In an apparent response to President Donald Trump's call to pressure Democrats into getting serious on securing the border — specifically conceding on funding for a border wall — leftists spread an image across social media of illegal alien children sleeping in an ICE detention cell. In a bit of poetic irony, Barack Obama's former speechwriter Jon Favreau also shared the image, declaring, "Look at these pictures. This is happening right now, and the only debate that matters is how we force our government to get these kids back to their families as fast as humanly possible." The glaring problem: The photograph was from an article published by The Arizona Republic in 2014. And who was president then?

Trump responded to the fake news, writing, "Democrats mistakenly tweet 2014 pictures from Obama's term showing children from the Border in steel cages. They thought it was recent pictures in order to make us look bad, but backfires. Dems must agree to Wall and new Border Protection for good of country... Bipartisan Bill!" The whole episode sounds a lot like the recent BIG Lie about Trump supposedly calling immigrants "animals," when he was specifically referring to the violent MS-13 gang.

Aside from this latest fake news episode, the controversy over separating illegal alien children from their parents is a result of current immigration law — law that Trump is calling on Congress to change. And while the law clearly isn't an ideal means of dealing with the often confusing situations that can arise, the responsibility must ultimately lie with those illegal alien parents who are knowingly breaking U.S. immigration law. Furthermore, fault also lies with Obama and his unconstitutional implementation of DACA, which only served to encourage more illegals to bring children with them, sometimes as cover.

In an effort to dissuade families from illegally immigrating, Attorney General Jeff Sessions recently warned, "If you cross the border unlawfully ... then we will prosecute you... If you smuggle an illegal alien across the border, then we'll prosecute you. ... If you're smuggling a child, then we're going to prosecute you, and that child will be separated from you, probably, as required by law. If you don't want your child separated, then don't bring them across the border illegally. It's not our fault that somebody does that."

The truth is Trump has called for strong enforcement of the U.S. border, in part via building a wall, and has declared his desire to seek a legislative solution on DACA, both of which Democrats have resisted because they'd rather have a political wedge issue. Democrats are the ones most responsible for creating and exacerbating this problem by their continued campaign to intentionally undermine U.S. immigration law. So they can spare us their phony outrage.



Trump pardons Dinesh D'Souza — and might do the same for Rod Blagojevich and Martha Stewart

D'Souza's "offence" was to give $20,000 to a conservative politician's campaign fund

 In granting the fifth pardon of his presidency Thursday, President Trump showed that he's not afraid of political consequences of using his clemency power to correct what he perceives as unjust, politically motivated prosecutions.

On an Air Force One flight to Houston, Trump pardoned conservative commentator Dinesh D'Souza for making illegal campaign contributions — and then said he is also considering presidential clemency for others, including former Illinois governor Rod Blagojevich and lifestyle guru Martha Stewart.

He told reporters that Blagojevich's attempt to sell Barack Obama's former Senate seat after Obama became president was "a stupid thing to say" but not worth 18 years in prison. Blagojevich, a Democrat, appeared on Trump's reality television show Celebrity Apprentice in 2010.

Trump said a pardon of Stewart also crossed his mind. Stewart, the head of a publishing and television empire who hosted a spinoff of The Apprentice, was convicted of obstructing justice in an investigation into insider trading in 2004.

"I think to a certain extent, Martha Stewart was harshly and unfairly treated. And she used to be my biggest fan in the world — before I became a politician," Trump said. "But that’s OK. I don’t view it that way."

Trump said he called D'Souza, who is serving five years' probation for making illegal campaign contributions, to give him the news Wednesday night. "I’ve always felt he was very unfairly treated. And a lot of people did," he said. "What they did to him was horrible.”

Trump said no one asked him to pardon D'Souza, but D'Souza himself credited a social media campaign and the intervention of Sen. Ted Cruz, R-Texas — a family friend — in bringing the case to Trump's attention

And although D'Souza's lawyers argued that he was selectively prosecuted because of his attacks on Obama, D'Souza himself backed off the claim at his sentencing.

"I'm sorry for what I did. I have never said otherwise," he said then. "I have never even said I am being selectively prosecuted. I feared that I was being."

D'Souza pleaded guilty of making "straw donations" in the names of others to support the candidacy of Republican New York Senate candidate Wendy Long, who lost to Sen. Kirsten Gillibrand in 2012. Those straw donations allowed him to give $20,000 in illegal contributions to the campaign, exceeding the $5,000 legal limit.

Those facts provide a parallel to the federal investigation into Trump's attorney, who may also face federal charges of exceeding campaign contribution limits and failing to disclose a $130,000 payoff to Stormy Daniels, a porn star who claims she had an extramarital relationship with Trump in 2006.

Rick Hasen, a University of California-Irvine law professor who specializes in election law, said the pardon sends "yet another signal to Michael Cohen and others about the possibility of a Trump pardon."

Sixteen months into his presidency, Trump has pardoned more people than any president since George H.W. Bush in 1989.

His pardons include former Arizona sheriff Joe Arpaio, pardoned for contempt of court and former Bush White House aide Scooter Libby for lying to the FBI in a leak investigation.

Trump also pardoned Kristian Saucier, a former Navy submariner whose conviction for mishandling classified information became a conservative cause because of its comparisons to Democratic Secretary of State Hillary Clinton's use of a private email server.

And last week, Trump gave a rare posthumous pardon to Jack Johnson, the former heavyweight boxing champion convicted in 1913 of racially motivated charges related to his relationship with a white woman.

Like all of those cases, D'Souza did not apply for a pardon with the Office of the Pardon Attorney, the Justice Department unit that conducts investigations of pardon cases and sends recommendations to the president. Under Justice Department rules, D'Souza would be ineligible through that process because he's on probation.

Likewise, neither Blagojevich nor Stewart has applied for clemency.

The president's constitutional authority to pardon is not bound by those rules, so Trump has granted politically charged pardons though he denied 180 applications from people who applied through the Justice Department.

D'Souza, 57, is an Indian-born author and documentary filmmaker whose work has assailed Obama, Islam and multiculturalism. His most recent book is The Big Lie: Exposing the Nazi Roots of the American Left.

Though he was spared prison time in the campaign-finance case, D'Souza's conviction put him under court supervision. He was required to undergo weekly counseling sessions and complete an eight-hour day of community service during every week of his five-year probation. That community service: teaching English to Spanish-speaking immigrants at Catholic parishes.

White House spokeswoman Sarah Sanders said Trump determined D'Souza was "fully worthy of this pardon." "Mr. D’Souza was, in the president’s opinion, a victim of selective prosecution for violations of campaign-finance laws," she said. "Mr. D’Souza accepted responsibility for his actions and also completed community service by teaching English to citizens and immigrants seeking citizenship."



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