Category: Journal

Why Jobs Are Created

There is, late­ly, lots of noise from var­i­ous Repub­li­can politi­cians blam­ing Oba­ma’s poli­cies for the slow job growth. They think less gov­ern­ment spend­ing, few­er reg­u­la­tions would lead to more jobs.

Imag­ine you own a busi­ness. Let us imag­ine that your prod­uct is such that one employ­ee can pro­duce 100 units of your prod­uct per year. At the end of the reces­sion, you have 100 employ­ees and turn out 10,000 units of your prod­uct a year. This num­ber was arrived at because it is the num­ber that you are selling.

Now, if the gov­ern­ment offers you a tax cred­it if you hire some­one, are you going to hire some­one? No. You are still only sell­ing the 10,000 units that your exist­ing staff can produce.

If the demand for your prod­uct increas­es and now you can sell 11,000 units a year, then you are going to hire ten more employ­ees to meet that demand.

There are employ­ers who are man­ag­ing to meet the demand by work­ing their staff over­time (cheap­er than the ben­e­fit costs of anoth­er hire) and in a few instances a tax cred­it of some kind might tilt the equa­tion towards hir­ing. But an increase in demand will also.

Jobs are cre­at­ed by demand. Demand is the spend­ing of mon­ey. When the gov­ern­ment is cut­ting spend­ing it is cut­ting demand. Since the Repub­li­cans won the House, fed­er­al spend­ing has been cut. More impor­tant­ly, there has been no more stim­u­lus to the states, so state and local spend­ing has been cut includ­ing the lay­off of many employ­ees. This is what has been hurt­ing job creation.

July 18, 2011 Update: Here is the Wall Street Jour­nal in appar­ent agree­ment with me. Appar­ent since one must be a sub­scriber to read the entire arti­cle, but the first para­graph says:

The main rea­son U.S. com­pa­nies are reluc­tant to step up hir­ing is scant demand.

The Bonus Army

I have been read­ing The Glo­ry and the Dream; A Nar­ra­tive His­to­ry of Amer­i­ca 1932 — 1972 by William Man­ches­ter. It pret­ty much begins with the sto­ry of the Bonus Army. The Bonus Army was com­prised of about 20,000 World War I vet­er­ans along with their fam­i­lies and oth­er sup­port­ers. They had come to Wash­ing­ton to claim the bonus that Con­gress had promised them at the end of WWI. Con­gress had said the bonus would be paid in 1945, but it was now 1932 and in the depths of the Great Depres­sion. The vet­er­ans had no jobs, no homes, no food and felt that get­ting the bonus was their only hope for relief of any kind. So they came to Wash­ing­ton and set­tled in to wait for their bonuses.

Brigadier Gen­er­al George Mose­ley proposed

to arrest the bonus marchers and oth­ers “of infe­ri­or blood,” and then put them in con­cen­tra­tion camps on “one of the sparse­ly inhab­it­ed islands of the Hawai­ian group not suit­able for grow­ing sug­ar. There, he sug­gest­ed, “they could stew in their own filth.” He added dark­ly, “We would not wor­ry about the delays in the process of law in the set­tle­ment of their indi­vid­ual cases.” *

For­tu­nate­ly, that pro­pos­al was not tak­en up.

Although the bonus army behaved well, even­tu­al­ly the police tried to clear them from a build­ing and some bricks were thrown and some police weapons fired and a cou­ple of marchers killed. News of this arrived at Pres­i­dent Hoover’s desk and the Pres­i­dent ordered in the army.

The Bonus Army was rout­ed with Cal­vary and tear gas, backed by infantry and tanks. The camp

was a jum­ble of pack­ing crates, fruit crates, chick­en coops, burlap-and-tarpa­per shacks, tents, lean-tos, wrecked tour­ing cars, and dun-col­ored, tepee-like shelters **

and was burned.

These were World War I vet­er­ans!! The House of Rep­re­sen­ta­tives had vot­ed to give them their bonus, but the Sen­ate vot­ed against it. The Pres­i­dent of the Unit­ed States ordered the mil­i­tary to clear out the peace­ful camp of vet­er­ans. And the mil­i­tary did it. It is dif­fi­cult for me to get my mind around the idea that there could be Amer­i­cans so heart­less, but there it is.

This was 1932. Just 79 years ago.

A sec­ond, small­er Bonus March in 1933 at the start of the Roo­sevelt Admin­is­tra­tion was defused with promis­es instead of mil­i­tary action.

In 1936, a Demo­c­ra­t­ic-led Con­gress over­rode Pres­i­dent Franklin D. Roo­sevelt’s veto to pay the vet­er­ans their bonus years early.

Even FDR was not will­ing to pay the bonus­es early!!

As var­i­ous con­ser­v­a­tive politi­cians offer up pol­i­cy pro­pos­als such as elim­i­nat­ing min­i­mum wage or unem­ploy­ment insur­ance, they always cloak them in lan­guage that sounds as if they believe every­one will be bet­ter off. Some of these politi­cians might actu­al­ly believe that is so, but I doubt all of them do so. The fact of the mat­ter is, there are plen­ty of peo­ple in the coun­try today who sim­ply are not con­cerned with what does or does not hap­pen to the low­er class.

The polit­i­cal debate in Amer­i­ca today pre­tends oth­er­wise. It is, sup­pos­ed­ly, a debate about what is best for the coun­try. The dirty secret is one side sim­ply does not fac­tor the well being of the low­er class into it’s cal­cu­lus of what is best for the “coun­try”.

Hey, it’s not like they are advo­cat­ing a cav­al­ry charge into an unarmed army of vet­er­ans who only want what they have been promised.

* The Glo­ry and the Dream, page 11

** ibid, page 16

What Pence and Daniels Have in Common?

Back when Indi­ana Gov­er­nor Mitch Daniels was still a poten­tial can­di­date for the pres­i­den­cy, there was a sto­ry some­where about how his rela­tion­ship with his wife might be con­strued by some to reveal him as weak. As I remem­ber it, he had got­ten mar­ried and after a time his wife left him and moved to Cal­i­for­nia. Lat­er, she came back and they rec­on­ciled and remarried.

Why that his­to­ry reveals Daniels to be weak, I can­not explain. But appar­ent­ly it did, at least for a few people.

If that was actu­al­ly a prob­lem for Daniels polit­i­cal­ly, then Mike Pence, Repub­li­can can­di­date for gov­er­nor of Indi­ana, may have a sim­i­lar problem.

At the end of an arti­cle in the Fort Wayne Jour­nal Gazette, there is a short dis­cus­sion of how Pence will be trav­el­ing the state dur­ing his cam­paign. First it men­tions that Pence’s wife is a pilot but that Pence says he will “be spend­ing more time in a pick­up truck than an airplane.”

The arti­cle ends with :

His pre­ferred vehi­cle would be a motor­cy­cle, but Karen Pence has blocked that dream.

“I grew up on ’em, and I haven’t been able to close that sale since I got mar­ried,” Pence said.

Now, I would argue that this is Pence respect­ing his wife’s fears out of love for his wife. But I know there are plen­ty of peo­ple who would see this differently.

Who’s to Be Blamed?

The most impor­tant fac­tor influ­enc­ing who wins the pres­i­den­cy in 2012 is the econ­o­my. If the econ­o­my is show­ing improve­ment, then Oba­ma wins. If the econ­o­my has dou­ble dipped into anoth­er reces­sion, things look bad for Oba­ma. And if the econ­o­my is sim­i­lar to today’s, limp­ing along in a slow recov­ery, then it will be a close race.

There is anoth­er fac­tor that in cer­tain sce­nar­ios is more impor­tant than the econ­o­my. That fac­tor is where the vot­ers lay the blame if the econ­o­my is poor.

I have read a lot about Oba­ma’s (and the Democ­rats) poor mes­sag­ing and posi­tion­ing. But we have arrived at a point where Oba­ma has man­aged to be on the cor­rect side of the mes­sag­ing and positioning.

The Repub­li­cans are hold­ing the econ­o­my hostage. They refuse to raise the debt ceil­ing unless it is accom­pa­nied with huge amounts of spend­ing cuts and no increas­es in rev­enue. The prob­lem for the Repub­li­cans is that they are using the lan­guage of a hostage tak­er. Oba­ma ini­tial­ly asked for a clean bill, but quick­ly “caved” and entered nego­ti­a­tions. Since then, it is the Repub­li­cans who have repeat­ed­ly insist­ed that it is their way or the econ­o­my gets it.

If Oba­ma had stuck to his guns for a clean bill, he would have been just as much a hostage tak­er as the Repub­li­cans. He did not and the Repub­li­cans are now look­ing at the pos­si­bil­i­ty of tak­ing the blame for a bad economy.

Those Damn Socialists!

I am cur­rent­ly hav­ing to spend a few min­utes each day dri­ving my van which lacks an FM radio. The pick­ings on AM radio are rather slim, so I some­times end up lis­ten­ing to con­ser­v­a­tive talk radio (or “con­ver­sa­tion radio” as the host called it today). I have no idea whose pro­gram I was lis­ten­ing to today (but not Rush or Beck…does Beck still have a show?).

Any­ways, the guy was going on at great length about how the Oba­ma social­ists were set­ting things up in the Afford­able Care Act. He was key­ing in on the busi­ness man­date. Any busi­ness that has more than 50 employ­ees is going to have to include health insur­ance in the employ­ee ben­e­fit pack­age. If the busi­ness fails to do this, the fine will be $2,000 per employee.

The host makes the point that any busi­ness (includ­ing ones that already offer health insur­ance) would look at the choice and choose to pay the fine. After all, it is much cheap­er! This will force all the employ­ees into the Social­ist Health Care that Oba­ma set up…and then “they” (the Social­ists) will have “them” and come elec­tion time the Democ­rats will say of the Repub­li­cans “They want to take away your health care!”

Where to begin. Well, in the first place, if a busi­ness is today offer­ing health care to its employ­ees, why would it sud­den­ly stop when there is a fine added to the costs of stop­ping? Why not just stop now? There is no fine today! Hmm­mm, could it be that there are rea­sons beyond gov­ern­ment man­dates why busi­ness­es sup­ply health insurance?

But some busi­ness­es will not offer insur­ance. Most of these are prob­a­bly not offer­ing insur­ance today. So none of the employ­ees will be forced into the Social­ist Health Care that is Oba­maCare. No, they will be buy­ing insur­ance from a pri­vate com­pa­ny just as they are doing today! Only they will get a sub­sidy if they do not make enough money.

And if the indi­vid­u­als do not buy a pol­i­cy? They will be fined:

Impose an annu­al penal­ty of $95, or up to 1% of income, whichev­er is greater, on indi­vid­u­als who do not secure insur­ance; this will rise to $695, or 2.5% of income, by 2016. This is an indi­vid­ual lim­it; fam­i­lies have a lim­it of $2,085.[44][45] Exemp­tions to the fine in cas­es of finan­cial hard­ship or reli­gious beliefs are permitted

and they will not have insur­ance. They will have to rely on char­i­ty and emer­gency rooms just like today! (at least, I think that’s what happens.)

But wait! What about the Social­ist Health Care that is Oba­maCare? Peo­ple have to buy pri­vate insur­ance with a sub­sidy if they qual­i­fy. Jeep­ers, how much more social­is­tic can you get?

Final­ly, there is the host’s point about how the Democ­rats will use the Health Care to retain/​gain pow­er. How DARE they try and use the poli­cies they favor to cur­ry favor with the vot­ers! This would be like a Repub­li­can say­ing he or she will cut your tax­es to retain/​gain power!

Remem­ber, “the Repub­li­cans want to take away your Health Care!”

This is an admis­sion that peo­ple will like the Afford­able Care Act once it is ful­ly imple­ment­ed in the same way Tea Partiers protest­ed with signs that read “Keep your gov­ern­ment hands off my Medicare!” Damn those Social­ists cre­at­ing Medicare! Oh wait! The Tea Partiers are vot­ing for Republicans!

Well, it was on the radio. It must be true.

Cause and Effect?

Of course the recent job num­bers now reveal that Oba­ma has destroyed the econ­o­my (at least accord­ing to some con­ser­v­a­tive voic­es). Here is a reveal­ing chart:

This chart shows pri­vate sec­tor job growth. Red is dur­ing the last year of the Bush admin­is­tra­tion and blue is the Oba­ma admin­is­tra­tion. The blue line to the far right is May of 2011. April 15 was when the 2011 bud­get was final­ly passed. The bud­get that cut spend­ing. What is the fal­la­cy? Post hoc ergo propter hoc. And, let us admit, the bud­get did not cut all that much spend­ing. But there is this:

About $8 bil­lion in imme­di­ate cuts to domes­tic pro­grams and for­eign aid were off­set by near­ly equal increas­es in defense spending

But cuts in gov­ern­ment spend­ing are not the only thing the Repub­li­cans have man­aged to do that might influ­ence eco­nom­ic and job growth.

There is the dread­ed “uncer­tain­ty”. This con­cept is a favorite of Repub­li­cans when, for exam­ple, there is a pos­si­bil­i­ty that the top tax rate might or might not go from 35% to 38% and job cre­ators sit on their mon­ey instead of cre­ate jobs with it since they do not know what the tax rate will be. I think that “uncer­tain­ty” is bunk, but…

What of the uncer­tain­ty of whether the US is going to pay its debt or not? Ever since the 2011 bud­get passed, the Repub­li­cans have made all kinds of noise that they will let the gov­ern­ment go into default if they do not get their way. Does this not cre­ate uncer­tain­ty? I sug­gest this cre­ates a hell of a lot more uncer­tain­ty than the pos­si­bil­i­ty that the top tax rate might go up!

Cause and effect? Ithink things were going along pret­ty good there until the Repub­li­can house final­ly start­ed influ­enc­ing what was happening.

Indoctrination Camps

Steve Benen at the Wash­ing­ton Month­ly has a post up about the Repub­li­cans who want to do away with pub­lic schools. He quotes Rick San­to­rum talk­ing about Mussolini’s Fas­cist Italy. His uncle

used to get up in a brown shirt and march and be told how to be a good lit­tle fascist.…I don’t know, maybe they called it ear­ly pre‑K or some­thing like that, that the gov­ern­ment spon­sored to get your chil­dren in there so they can indoc­tri­nate them.

The upshot here is that there are sev­er­al Repub­li­cans who are increas­ing­ly will­ing to talk about doing away with pub­lic schools alto­geth­er. This amounts to a will­ing­ness to do away with uni­ver­sal edu­ca­tion (since they would even­tu­al­ly want to cut the vouch­ers to less than what schools charge).

What’s fun­ny here is when have the schools not been about indoc­tri­na­tion as well as edu­ca­tion? When I was in school, we said the Pledge of Alle­giance (“under God”) every day. What is that if not indoctrination?

Con­ser­v­a­tives have lost the bat­tle over con­trol of the indoc­tri­na­tion mes­sage and their final last ditch effort is to do away with pub­lic edu­ca­tion alto­geth­er in hopes that the vast major­i­ty of pri­vate schools will indoc­tri­nate the way the Con­ser­v­a­tives want.

To recap: when the com­plaint is that the schools are indoc­tri­nat­ing, they mean the schools are indoc­tri­nat­ing the wrong thing.

When they want to do away with pub­lic schools, they want to do away with uni­ver­sal education.

Not a Matter of Choice

A few days ago a school teacher told me that she tells her stu­dents that the state requires her to teach evo­lu­tion but it was up to them to decide if they believed it or cre­ation­ism. I am sure she is not the only teacher to make such a statement.

The prob­lem here is a mis­un­der­stand­ing of what is the goal of science.

Sci­ence seeks an under­stand­ing of the phys­i­cal uni­verse we live in. It seeks to explain how a giv­en event comes to pass. It seeks an abil­i­ty to be able to pre­dict what will hap­pen giv­en a par­tic­u­lar set of circumstances.

Evo­lu­tion is the under­ly­ing frame­work for biol­o­gy. If one stud­ies biol­o­gy, one is study­ing evo­lu­tion. Evo­lu­tion as a con­cept explains biol­o­gy. It explains how a giv­en bio­log­i­cal event comes to pass. It is capa­ble of pre­dict­ing future bio­log­i­cal events (even if the future event is an as yet undis­cov­ered past event).

Is our present under­stand­ing of evo­lu­tion com­plete? No, there are still unan­swered ques­tions. Are there details in our present under­stand­ing that will turn out to be wrong? Yes, in all like­ly­hood. But the over­all frame­work of evo­lu­tion is quite sol­id at this point. It is extreme­ly unlike­ly that it will some­day be shown to not apply.

When one stud­ies evo­lu­tion one gains an under­stand­ing of how the world works.

When one stud­ies cre­ation­ism, one gains an under­stand­ing of how God works (or an under­stand­ing of how some long ago (or present day) “prophet” thinks God works.) There is no pre­dic­tive pow­er when one invokes the will of God. Noth­ing about the phys­i­cal uni­verse is explained when one invokes the will of God.

The choice the teacher gives the stu­dents is wrong. There is no choice between believ­ing in evo­lu­tion or cre­ation­ism. Evo­lu­tion is the way the phys­i­cal bio­log­i­cal world works. But this does NOT mean that cre­ation­ism can­not be true.

If God cre­at­ed the world, she cre­at­ed a world in which evo­lu­tion is the frame­work biol­o­gy oper­ates on. The evi­dence of past evo­lu­tion is in our phys­i­cal uni­verse. If God cre­at­ed the uni­verse recent­ly, then God put that evi­dence there.

Cre­ation­ism is not sci­ence, it is reli­gion. It does not explain the phys­i­cal uni­verse we live in, it explains some­thing about God.

No “choice” needs to be made.

Would it not be nice if our teach­ers under­stood that?

Memories Are Long

“When I was a child, my fam­i­ly would trav­el” around the coun­try in the sta­tion wag­on a few sum­mers in a row, two weeks at a time. I know Mom fret­ted some that I was too young and the trips would be wast­ed on me, but I have a con­sid­er­able num­ber of spe­cif­ic mem­o­ries about those trips.

I am not all that clear about which year we went where, or even where all we got to on a giv­en trip. I know there was a trip east/​northeast, and a trip west, and a trip south. Each trip cov­ered a whole lot of ground.

I remem­ber vis­it­ing a south­ern town on the Mis­sis­sip­pi Riv­er some­time between 1958 and 1963 I would guess. I believe it was Vicks­burg. We took a tour of a beau­ti­ful, fine south­ern man­sion. I remem­ber the tour guide point­ing out the nev­er repaired holes in the exte­ri­or walls put there by North­ern gun­boats on the riv­er. I remem­ber that I, being a very young child, felt fear because there seemed to be so much anger/​hatred/​resentment/​some­thing in her voice that indi­cat­ed she was still hold­ing a grudge against that North­ern aggression.

That was just under 100 years after the Civ­il War. From my per­spec­tive at the time, the Civ­il War was for­ev­er ago!!! That the woman would still har­bor antag­o­nism against North­ern­ers was aston­ish­ing to me. Today I under­stand that 100 years is just not that long. If you are speak­ing to a per­son over the age of 50, he or she was raised by some­one who is almost cer­tain­ly over the age of 70, and that per­son was raised by some­one over the age of 90, well, you see where this is going. And those num­bers are conservative.

You could eas­i­ly be speak­ing to some­one who spent many hours talk­ing to a grand­par­ent about times that are 100 years pri­or to your conversation.

Mem­o­ries are long. Want proof?

Respon­dents were asked, “When you think about the Civ­il War, if you had to choose, would you say that you sym­pa­thize more with the north­ern states that were part of the Union or the south­ern states that were part of the Con­fed­er­a­cy?” Sup­port for the Union was over­whelm­ing in the Mid­west (68%), North­east (79%), and West (84%), but in the South, only 48% said they were more inclined to sym­pa­thize with the Union.

What Were They Thinking?!?

My nor­mal response to the ques­tion “What was he think­ing?” (or a vari­a­tion there­of) is that there was no think­ing involved. But is it pos­si­ble there was no think­ing involved on the part of the Repub­li­can House mem­bers when they passed the Ryan bud­get? If there was think­ing, what could it be?

All but four of them vot­ed to destroy Medicare, slash lots of spend­ing that peo­ple like, and low­er tax­es on the wealthy! They did this even though there was not a chance in hell of the bud­get becom­ing law. Next year they have to run for reelec­tion while defend­ing this vote. I assume the pri­ma­ry defense will be “There was no way it would become law, so it was safe to vote for it” which, I am sure, will make every­one feel bet­ter about it.

The inter­est­ing thing about the Ryan bud­get is that if it actu­al­ly passed the Sen­ate and the Pres­i­dent signed it, it would make the deficit worse. Why? Because there is no way the “end medicare as we know it” por­tion would remain intact. The spend­ing cuts the bud­get lays out would not remain intact. But you can bet your boots the tax cut for the wealthy would stay.

And the deficit would explode.

The deficit is a seri­ous issue, but it can not be solved by pre­tend­ing that polit­i­cal real­i­ties no longer exist.