In what should be a satirical piece from The Onion, Reuters has an exclusive interview with former Michigan Governor Granholm who boldly proclaims that green-jobs are driving the “economic recovery” in Michigan:
Former Gov. Jennifer M. Granholm, whose second term ended in January, said in an interview that Michigan businesses are expected to create more than 150,000 clean energy jobs in the next decade from $14 billion of projects in the pipeline.
Of all places, Michigan doesn’t exactly stand out as the shining example of economic success in the United States. With a state unemployment rate of 11 percent and 12.7 percent in Detroit, the rest of the U.S. might consider looking elsewhere for examples of truly innovative economic policies that lead to recovery.
Though the job numbers are likely optimistic (as they often are, both green and fossil-fuel projects tend to oversell and under-deliver on job promises: here and here), 15,000 jobs over the next decade only amounts to 1,500 per year. The situation in Michigan is very unfortunate, but I don’t see how making the price of energy more expensive will lead to a quicker economic recovery:
Granholm began her clean energy approach with the $2 billion 21st Century Jobs Fund, a ten-year program started in 2005 to encourage venture capital investments and R&D funding for 1,500 startups or existing firms looking to transfer skills from the old economy to the cleantech industry.
Two years later, Granholm signed the state’s renewable portfolio standard requiring utilities to get 10 percent of their electricity supply from clean energy generation, renewable energy credits and energy efficiency programs by 2015.
This morning, Rep. Paul Ryan (R-Wisc.) unveiled a bold proposal to trim trillions off America’s bloated budget. It represents the only serious proposal out there to get America’s finances back in order, and as such he is to be congratulated for his courage and foresight.
However, as Margaret Thatcher found in the UK during the 1980s, spending is only half the battle. The nature of the bureaucratic beast is that it will expand again. That’s why President Reagan’s simplification of the Tax Code wore off, and we now have a far more complex tax code than we did before tax reform.
We therefore need a similarly comprehensive reform of the federal government that will address what might be termed the “supply side” of the federal bureaucracy, to prevent it getting in the way of an entrepreneur-led recovery.
This reform should include:
- Abolition of whole government departments that have no valid constitutional purpose, such as the Department of Education and the Department of Labor
- The rechartering of valid existing agencies as performance-based agencies that exist to serve the public, not hinder them
- Reform of federal pay and working conditions
- A reduction in the use of federal contracts and grants, to tackle the “shadow” public sector
- Introduction of a single, fair tax system and a new Taxpayers’ Bill of Rights
- End labor unions’ privileges that put them above the law
- Privatization of appropriate government functions
and, above all,
A genuine public sector reform package must be as sweeping and comprehensive as Rep. Ryan’s spending reform package. Only then will America be on the road to genuine, sustainable recovery.
Yesterday, AFL-CIO held nationwide events to promote the solidarity between the union protests over collective bargaining and the rights Dr. Martin Luther King, Jr., and others fought for to gain civil rights. To highlight the essence of the labor events are two quotes from AFL-CIO president, Richard Trumka:
- April 4 [is] the day on which Martin Luther King Jr. gave his life for the cause of public collective bargaining.
- Join us to make April 4, 2011, a day to stand in solidarity with working people in Wisconsin, Ohio, Indiana and dozens of other states where well-funded, right-wing corporate politicians are trying to take away the rights Dr. King gave his life for.
This message sends the implication that public employees’ strife of losing collective bargaining is the equivalent of the horrific and systematic abuse of African Americans in the United States and their fight to attain equal rights. To point out the obvious, public employees are not forced into government employment, they can choose to work in any field or industry they desire. Federal government employees do not have collective bargaining rights. Are we expected to believe that federal workers are having their basic human rights systematically violated? For a long period of time in the United States, African Americans did not have the right to choose where they would work, go to school, or any other basic American rights. For an institution like a union, where the adages typically involve “solidarity” or “equality,” they should have a more all encompassing understanding of the atrocities of the struggle of the civil rights movement. Comparing the civil rights movement to collective bargaining rights for government workers disparages the heroic actions of civil rights leaders.
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In their March 11 article, “Tobacco Money,” discussing the 1998 Master Settlement Agreement (MSA), the Tulsa World editorial writers asked the question, “so what’s the problem?” Whether that question was rhetorical or not, I intend to answer it.
The World misrepresented the facts of the MSA as well as the intentions of the lawsuit brought by the Competitive Enterprise Institute (CEI). There were two constitutional objections raised; the World only mentioned one.
First, the settlement created protections for the large tobacco companies, allowing them to pass the costs of the settlement on to the consumers — establishing a de facto national sales tax. Do not be fooled, it is a tax. The prices of consumer products are being raised and the money is ending up in the hands of governments. The fact that tobacco companies are acting as tax collectors makes it more insidious. Cartel-creating protections are illegal, and the only people authorized to levy national taxes are congress.
Second, this settlement is a contract between 46 state attorney generals and the largest tobacco companies which was entered into without the consent of congress. Named by Jonathan Rauch in the National Journal as the “constitutional crime of the [20th] century,” this action directly violates the compact clause of the constitution.
Article 1, Section 10, “No State shall, without the Consent of Congress… enter into any Agreement or Compact with another State…”
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Yesterday’s NYT cautions that “jobs are scarce” in small business as American entrepreneurship declines:
Here’s the explanation the NYT includes from the pessimistic chart’s author, Scott Shane:
68,490 more businesses closed in 2009 than in 2007, an 11.6 percent increase in the business closure rate. But in 2009, 115,795 fewer employer businesses were founded than in 2007, a 17.3 percent decline in firm formation.
How ironic; government started growing like crazy and small businesses had to shutter their doors.
In 2007 the bailouts started. Those were an awful lot of taxpayer dollars taken directly from potential-entrepreneurs’ pockets and dumped into flailing — or failing — big businesses’ bloated books.
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- Amount Democrats argue should be cut from current budget to raise debt ceiling: $33 billion.
- Amount Republicans argue should be cut: $61 billion.
- Monthly increase in publicly held U.S. debt during past year (March to March): $139 billion.
We are a spendaholic nation of people who feel entitled; we will not change. Time to reread The Grapes of Wrath — or read it for the first time.
Have a listen here.
Russ Brown, a vice president at the Labor Relations Institute and a CEI adjunct analyst, talks about recent changes made to the Railway Labor Act that make it easier for airline workers to unionize. Brown recently co-authored a CEI OnPoint paper on the reforms. Congress voted against the changes in legislation, so they were passed via regulation instead. This is another example of regulation without representation.
Too often we forget that inflation has a human cost. When I think of inflation, I am typically thinking about business cycles and Cantillon effects. But as a recent Wall Street Journal article remarks, inflation can spell doom for retirees.
As of January, the average interest rate paid on relatively safe vehicles such as short-term savings accounts, time deposits and money-market funds stood at only 0.24%. That’s one-tenth the level of late 2007 and the lowest on records dating back to 1959. Such depressed rates don’t come close to compensating for inflation, which was running at an annualized rate of 5.6% in the three months ended February.
“Americans who have done everything right, have worked hard, saved their money and stayed out of debt are the ones being punished by low interest rates,” says Richard Fisher, president of the Federal Reserve Bank of Dallas and a voting member of the Fed’s Open Market Committee. “That state of affairs is not sustainable for a long period of time.”
There is a large moral hazard here. If we want people to save for their retirement, that needs to be a realistic possibility. Thanks in part to the Bernanke and Greenspan Feds, it increasingly isn’t. People get squeezed at both ends. High inflation eats away at the buying power of retirees’ savings, and low interest rates mean those savings earn little interest. The picture looks even grimmer when you realize that only looking at “core” inflation is an obfuscation. EuroPacific’s Michael Pento remarks:
If you talk about the grand sweep of Fed policy, it’s fairly easy to fix the onset of our current monetary period with the onset of the dot.com recession of 2000. To prevent the economy from going further into recession at that time, the Fed began cutting interest rates farther and faster than at any other time in our history. During the ensuing 11 years, interest rates have been held consistently below the rate of inflation. Even when the economy was seemingly robust in the mid years of the last decade, monetary policy was widely considered accommodative.
Over that time annual headline Consumer Price Index (CPI) data has been higher than the Core CPI 9 out of 11 years, or 81% of the time. Looking at the data another way, over that time frame, the U.S. dollar has lost 20% of its purchasing power if depreciated year by year using core inflation, and 24% if depreciated annually with headline inflation. The same pattern held during the inflationary period between 1977 thru 1980, when the Fed’s massive money printing sent the headline inflation rate well above the core reading. The empirical evidence is abundantly clear. When the Fed is debasing the dollar, headline inflation rises faster than core. The reason for this is clear. Food and energy prices are closely exposed to commodity prices which have a strong negative correlation to the falling dollar that is created by expansionary policies.
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