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McDonald’s Ruling Could Bring Big Labor Back from the Brink

Wednesday, July 30th, 2014 - by Bryan Preston

Obama’s National Labor Relations Board made a significant ruling against McDonald’s on Tuesday. That ruling may make it much easier for labor unions to sweep up part-time workers are franchise corporations, and upsets 30 years of corporate-franchise law, according to the New York Times.

The general counsel of the National Labor Relations Board ruled on Tuesday that McDonald’s could be held jointly liable for labor and wage violations by its franchise operators — a decision that, if upheld, would disrupt longtime practices in the fast-food industry and ease the way for unionizing nationwide.

Business groups called the decision outrageous. Some legal experts described it as a far-reaching move that could signal the labor board’s willingness to hold many other companies to the same standard of “joint employer,” making businesses that use subcontractors or temp agencies at least partly liable in cases of overtime, wage or union-organizing violations.

Big Labor instigated the case and is crowing that it is getting what it wants.

Wilma Liebman, a former chairwoman of the National Labor Relations Board under President Obama and now an occasional consultant to unions, said the decision could give fast-food workers and labor unions leverage to get the company to negotiate about steps that would make it easier to organize McDonald’s restaurants. Similarly, she said, the ruling could give the workers and unions more clout in pressing McDonald’s to have its franchisees raise wages.

The percentage of American workers who belong to unions has been in deep decline over the past few decades. States are trending away from forced union membership and toward right-to-work.

Big Labor has only maintained its viability in an unholy union with unionized government workers, whose dues pay off Democrats to keep government jobs lucrative and have contributed to making government worker pensions unsustainable. The union between Big Labor and Big Government costs taxpayers billions.

But if Big Labor can capture workers at franchise restaurants, many of which are small family-owned businesses that buy into larger corporate branding and products, it could find a new lease on life. It could also price products at those businesses out of range for lower-income Americans, and will surely cost hundreds of thousands of Americans their jobs, by forcing wage hikes that those businesses cannot sustain.

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Social Security Trustee: Unfunded Obligations At $24 Trillion

Wednesday, July 30th, 2014 - by Paula Bolyard
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At Tuesday’s Ways and Means Subcommittee on Social Security hearing, Dr. Charles Blahous of the Social Security and Medicare Boards of Trustees testified that Americans owe $24 trillion in unfunded liabilities to those already in the Social Security system.

Congressman Jim Renacci (R-OH), a CPA, asked Blahous what the impact would be on the Social Security trust fund if all unfunded liabilities needed to paid out. Blahous said that they usually highlight the 75-year “open group obligation” which is currently $10.6 trillion, but said the “actual amount of unfunded obligations within the Social Security system is actually substantially higher than that. ” According to Blahous, the reason is that the shortfall does not play out gradually over time. “It’s actually something that is on the books now. There is an excess of benefit obligations over contributions for people who are already in the system. And that’s actually about $24 trillion. And that’s about 4.4% of future wages going forward,” Blahous said.

Actually, it’s even worse to that, according to the Social Security Trustees’ 2014 Annual Report to Congress. Tucked way in the back in Table VI.F1 in the appendix we find, “The excess of the present value of cost for past and current participants over the present value of dedicated tax income for past and current participants produces an unfunded obligation for past and current participants of $26.1 trillion.” (But what’s a of couple trillion here or there?)

Asked by Renacci if Social Security taxes this year will be adequate to fund current benefit obligations, Blahous explained that there will be a shortfall of around $80 billion this year alone.

Renacci wanted to know where the money will come from to make up the difference.

“Well, when the payroll taxes fall short of benefit obligations, the difference has to be made with payments from the general fund. Right now they’d be in the form of interest payments from the general fund to the trust fund and a large share of those interest payments would go out the door immediately to pay beneficiaries,” said Blahous. He added that $80 billion would be added to the federal deficit this year as a result of the shortfall.

Renacci thought the unfunded liabilities should have received more attention in the Trustees’ report. “So we have $17 trillion in debt, we have potentially $10-20 trillion in unfunded liabilities, we could have over $50 trillion total liabilities — just in those two areas — and we have $80 billion each year, at least this year, that is going to exceed what comes in,” Renacci said.  ”I would somewhat believe we have a current problem that we need to fix and it’s something that we can’t kick down the road, as I continue to hear.”

Congressman Renacci’s office released highlights of the Trustees’ report:

  • The combined trust fund reserves are still growing and will continue to do so through 2019. Beginning with 2020, the cost of the program is projected to exceed income.
  • The projected point at which the combined trust fund reserves will become depleted, if Congress does not act before then, comes in 2033 – the same as projected last year. At that time, there will be sufficient income coming in to pay 77 percent of scheduled benefits.
  • The projected actuarial deficit over the 75-year long-range period is 2.88 percent of taxable payroll — 0.16 percentage point larger than in last year’s report.

“As a CPA and former businessman, I came to Washington to bring a business perspective to an institution that sorely lacks it. We know that we spend more than we should, but the American people do not fully know the extent of our country’s dire financial situation. This is partly due to the fact that the Treasury leaves some of the largest liabilities, including Social Security, off of its balance sheet,” said Renacci, adding that he recently introduced the bipartisan Federal Financial Statement Transparency Act.

The bill would establish a Federal Accounting Standards Advisory Board to develop Federal financial accounting concepts and standards. Renacci said the bill would lead to “a more honest depiction of our nation’s finances to ultimately allow Congress to better address our growing $17 trillion debt.” He said a clean balance sheet will serve as a benchmark for beginning to preserve Social Security programs for current seniors and for future generations.

 

 

 

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Free-Market Case Study: Who’s Entitled to a Tax Subsidy for Big Developers, and Who Benefits?

Monday, July 28th, 2014 - by Scott Ott
Neighborhood Improvement Zone Board in Allentown, Pa.

Civic leaders on this Allentown, Pennsylvania, tax-subsidy board decide which developers qualify, and which don’t, when it comes to hundreds of millions of dollars for downtown development.

Well, we’re living here in Allentown.
And they’re tearing all the old buildings down
But a guy who wants to save a hotel
Can’t get the cash from
the taxpayer well.
(with apologies to Billy Joel, and the people of Allentown, Pa.)

When funded by taxpayer money, is a developer entitled to a subsidy if he merely meets the basic requirements of the state program, or are civic leaders on the local subsidy Board compelled to apply extra scrutiny exactly because it’s public money.

That’s the fight in Allentown, Pennsylvania, right now, where a so-called “Neighborhood Improvement Zone” (NIZ) redirects tax dollars into developer projects — a hockey arena, hotels, office, retail and residential space — in the hopes that the investments in downtown will eventually pay off in bigger tax receipts for government, and in a revitalized city. This “local story” has broad implications for your community, state, nation and world. I’ll offer four reasons (below) why such arrangements, and the politicians who push them, deserve extraordinary scrutiny from taxpayers and voters.

It’s a special developer-entitlement zone for Allentown-only set up by the state legislature, thanks to the vigorous efforts of Allentown’s state senator, who counts the major developers among his top campaign donors, and whose wife got a job with a lobbying firm that has clients who benefit from the special tax-subsidy district. (Conflict of interest allegations have been denied all around.) The lead developers have just set up a political action committee to support candidates who support the NIZ, without regard to political party affiliation.*

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Stupid and Lame: Wealthy Actress Kristen Bell Begs for Minimum Wage Increase (Update: Reason Rebuttal FTW)

Friday, July 25th, 2014 - by Bryan Preston

According to CelebrityNetWorth, actress Kristen Bell is worth $16 million. It’s fair to say that she make far more than a “living wage” for pretending to be other people in movies and on TV.

The actress is lending her looks and voice to the Democrats’ campaign to increase the federal minimum wage, on Funny or Die. Bell stars as a Mary Poppins knock-off. Take a look.

Funny or Die has gone all in for the minimum wage campaign, mocking House Speaker John Boehner over the issue in this ad video starring Harry Hamlin. Is the Obama administration or the Democratic National Committee paying Funny or Die for these clearly political ads videos that border on in-kind donations?

Liberals find Bell’s video persuasive, or at least politically useful. Democrat Rep. Diana DeGette is flogging it on Facebook.

In the video, Bell slams her boss for not paying her a “living wage,” despite the fact that as a live-in nanny, Poppins got full room and board in addition to pay for caring for the boss’ kids. Bell quits, mocks her boss, and curses in front of the children she is supposed to be raising, but never seems to figure out that if she is still making minimum wage, the problem may not be with her boss, but with her and her own job performance and her ability to stand up for herself.

Bell/Poppins never mentions the CBO study that found that raising the minimum wage will cost about half a million jobs.

In short, the unfunny video that barely scrapes the surface of the minimum wage issue and works in a slam on the Tea Party deserves to die.

Update: Reason rebuts with a win.

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GM Just Issued Six More Safety Recalls

Thursday, July 24th, 2014 - by Bryan Preston

Fox reports on the latest from Government Motors.

General Motors issued six more recalls on Wednesday, bringing its annual total to 60 recalls covering almost 30 million vehicles.

The latest recalls cover nearly 823,000 cars, trucks and SUVs mostly in North America but including a small number of exports. The largest is for faulty seats in just over 475,000 cars and small SUVs. Other problems include incomplete welds on seat brackets, turn signal failures, power steering failures, loose suspension bolts and faulty roof rack bolts.

GM is conducting a companywide safety review as it tries to correct a dysfunctional corporate culture in which safety was a low priority.

So was quality.

GM has recalled 30 million of the 41.6 million cars recalled by all automakers this year so far. It sold 1.46 million cars in the first six months of 2014.

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Asia Tells Obama to Take a Hike on His Energy Schemes

Thursday, July 24th, 2014 - by Bryan Preston

Energy prices are rising for Americans because Barack Obama wants it that way. He told the San Francisco Chronicle that he would use energy prices hikes to socially engineer energy use, and that is one promise on which he is following through. His EPA’s war on coal alone stands to jack up power prices 70 to 80 percent, according to Dr. Julio Friedmann, of the US Department of Energy.

In recent remarks to the League of Conservation Voters, Obama said that he expects the rest of the world, including developing countries and the largest economies, to do what he is doing to their own energy consumers.

“[W]e’ve got to lead by example.  They’re waiting to see what America does.” Obama said on June 25. “And I’m convinced when America proves what’s possible, other countries are going to come along.”

About that.

Asia’s two largest economies are not waiting to see what America does, and they’re showing no sign of following Obama’s anti-coal lead.

China says it shares Obama’s goal, but it is following its own lead.

China’s chief climate official Xie Zhenhua said China should not be subject to the same rules for greenhouse gas emissions as the United States and other rich countries, signaling that Beijing will oppose any attempt to impose them at next year’s world climate conference.

“We are in different development stages, we have different historical responsibilities and we have different capacities,” Xie told reporters.

Japan is not only not following Obama’s war on coal, it is increasing coal use in new domestic energy projects, according to Mari Iwata in the Wall Street Journal today.

Japan said Wednesday it would step up support for coal-fired power plants in developing nations, challenging a U.S. policy that seeks to discourage such plants in an effort to fight global warming. […] The move represents a repudiation of the Obama administration’s strict stance of carbon emissions. Washington is talking to members of the Organization for Economic Cooperation and Development, a club of developed nations, about a rule that would ban national export-credit agencies from financing new overseas coal power plants.

Japan understands that coal can safely power its economy.

Under Prime Minister Shinzo Abe’s growth strategy, Tokyo seeks each year to back overseas coal power-plant projects worth about $4 billion. Typically those projects have Japanese investors and use at least some Japanese equipment. While the annual target hasn’t been reached yet, several major projects have recently gotten under way.

Japan has long supported energy efficiency. Unlike Barack Obama, who claims to support an “all-of-the-above” strategy that in reality only supports the development of expensive so-called “clean” or “green” energy, Japan actually does support all-of-the-above.

China and Japan are the world’s second and third largest economies respectively.

They’re not buying the Luddite, anti-energy radicalism that Barack Obama is selling on energy.

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Survey Says Millennials Think Socialism is a Joke

Wednesday, July 23rd, 2014 - by Susan L.M. Goldberg

The Reason Foundation just released a survey proving the failure of the American public education system. But, according to Derek Thompson in The Atlantic, we might as well just laugh at it:

3. Far less important, but entertaining nonetheless: Millennials don’t know what socialism is, but they think it sounds nice.

I predict that any readers over the age of 30 will absolutely love this fact about voters under the age of 29. Forty-two percent of Millennials think socialism is preferable to capitalism, but only 16 percent of Millennials could accurately define socialism in the survey.

Say what you want about the tenets of national socialism, dude, at least it’s an ethos that young people can define in an Internet survey.

A number of my PJMedia colleagues jumped on the survey with the usual complaint that “kids these days” want everything handed to them on a silver platter. Conservatives in general fail to address the far more creepy comedic love affair with socialism because we fail to understand the media that informs the Millennial generation.

Case in point: The “Jon Stewart takes on Gaza” debacle. Times of Israel editor David Horovitz did an excellent job ripping the comedian to shreds for his stereotypical, biased account of the meanie Israelis versus the poor Palestinians. Conservative media proceeded to join in the dissection 15 years too late. From the day he took the anchor’s chair on the set of The Daily Show, Jon Stewart has attempted to be the court jester of the hipster elite. An admitted leftist, he was a psych major turned stand-up comedian who makes no bones about being a professional satirist – nothing more. Yet, the bulk of the millennial news audience share goes to Stewart and his former Daily Show co-star, Colbert Report comic actor Stephen Colbert. Knowing this, why should we be the least bit surprised that Millennials are laughing about the real issues facing the world and our country today, including socialism?

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Sir Ian McKellen Says Struggling Actors Deserve “Living Wage”

Tuesday, July 22nd, 2014 - by Walter Hudson

If venerable film and theater actor Sir Ian McKellen has proven anything over the course of his remarkable career, he has proven that it is never too late to catch your big break. McKellen worked steadily throughout his life, achieving renown (and an Oscar) for his role as an aging Nazi war criminal in 1998’s Apt Pupil. But it wasn’t until two years later, when he reunited with director Bryan Singer to play Magneto in the first X-Men film and became Gandalf in Peter Jackson’s Lord of the Rings franchise, that McKellen became an American superstar at the age of 61.

Plenty of actors have “made it” well into their middle age. Despite playing roles in several Hollywood films, including a significant supporting bit in Jurassic Park, Samuel L. Jackson didn’t become a star until his role in Pulp Fiction at the age of 46. Another Quentin Tarantino film catapulted Christoph Waltz to fame at the age of 53.

Such success, like most all success, emerges from a commitment to develop a craft and persist through setbacks while relentlessly pursuing an individually-defined happiness. No one handed it to McKellen, Jackson, or Waltz. They earned it.

Nevertheless, McKellen recently shared his belief with Radio Times that struggling actors should be lifted up through wage controls. From The Independent:

A recent report found just one actor in 50 earned more than £20,000 a year.

“Most actors are not rich – they are very poor indeed. What keeps them going is that they just love the job,” Sir Ian told Radio Times.

He said: “I know actors who have had to turn down good roles because they just don’t pay enough. It’s hard. The one thing you can ask, I think, is that actors get paid a living wage. I would like it if all the repertory theatres that currently exist could do that. It would make a huge difference.”

The reason one actor in 50 earns more than £20,000 a year is because only one actor in 50 produces that much value. Forcing wage mandates on the industry will not change the amount of value produced. It will only increase the cost of giving struggling actors a chance, which means they will get fewer chances.

It’s precisely the same dynamic created by any minimum wage. Opportunities for those with low or developing skill dry up as they are priced out of the market. If McKellen truly cares about the struggling actors rising up in his wake, he should reconsider his position on wage controls.

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Thanks, Bill Gates: How to Keep Dictatorships Alive, Squelching Liberty on a Global Scale

Monday, July 21st, 2014 - by Scott Ott

Sounds like a simple enough way to cure poverty: Form a partnership between donors and leaders of government. Get a set of measurable goals and diligently track progress toward those goals. There’s nothing we can’t do when we put our minds to it.

It’s a technocratic solution to a human problem that plays to our sense of confidence as scientific problem solvers.

That’s been the basic approach to economic development of the so-called “third world” by the “first world” since the middle of the last century.

But not only is it a failure, it actually props up dictators and stomps the rights of the poor, while allowing wealthy donors, like Bill Gates, to feel good about themselves as they monitor the “measurable” progress.

I love the [United Nations'] Millennium Development Goals. I think they’re the best idea for focusing the world on fighting global poverty that I’ve ever seen….Thanks to these goals…the world at large knows the key measures of poverty, hunger, health and education. Some of the numbers are good and some are not. But the fact that the world is focusing on these numbers is excellent….The Millennium Development Goals can guide the search for new discoveries by showing us where innovation can bring the biggest returns. This is their genius.
– Bill Gates, speech to U.N. General Assembly, September 2008  (video below)

Sounds great. But is it true?

The Tyranny of ExpertsThe Tyranny of Experts: Economists, Dictators and the Forgotten Rights of the Poor, by William Easterly, demonstrates how a toxic stew of arrogance, altruism and racism has led “the West” to positively hinder “the Rest” from achieving the very thing we value most — equality under law. Easterly has produced a rarity among serious books — page-turning readability, with even-handed scholarship and careful documentation.

Easterly says the problem with well-meaning fellows like Bill Gates is multi-pronged.

1) We don’t have accurate data, we ignore contrary evidence, and we misinterpret the faulty data, attributing apparent growth to the activities of autocrats and bureaucrats when the evidence points to factors beyond their control.

2) We ignore history and the actual needs of the people, as if we could write our own solutions upon a blank slate, that we decide is framed by modern national boundaries.

3) We idolize strong leaders who can implement programs funded by donors, but ignore their autocratic repression of individual rights, and so we often use charity dollars to pay for pogroms via programs.

4) We think of innovation as something a few elite scholars and captains of industry bring to the poor, rather than something that springs from decentralized problem-solving by people who have freedom, property rights, equal justice under law and profit motive.

In the video below, Bill Gates speaks to the UN General Assembly — history’s greatest congregation of thugs and tyrants. For more than six minutes Gates praises the Millennium Development Goals (MDG), without even hinting that people might need more than food, medicine and education. He never mentions self-governance, liberty, or capitalism.

The best spin on this is that Gates think if we take care of health, learning and economic survival, then republican governance and its protection of person and property will come later.

The vector of history collides with, and obliterates, that notion.

The worst-case scenario is that Gates cravenly kowtows to the world’s oppressors because he needs their cooperation to reach his beloved development goals. Like a geek with an MS-Excel spreadsheet, he has lost sight of the human impact behind the columns, rows and formulae. All that matters is the data, not how you get there.

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Price Gouging Would Solve California’s Water Crisis

Thursday, July 17th, 2014 - by Walter Hudson

The state of California has persisted under drought for several years. Now, regulators have taken drastic action to combat perceived water waste. From The Los Angeles Times:

Cities throughout California will have to impose mandatory restrictions on outdoor watering under an emergency state rule approved Tuesday.

Saying that it was time to increase conservation in the midst of one of the worst droughts in decades, the State Water Resources Control Board adopted drought regulations that give local agencies the authority to fine those who waste water up to $500 a day.

Many Southern California cities, including Los Angeles, Santa Barbara and Long Beach, already have mandatory restrictions in place.

But most communities across the state are still relying on voluntary conservation, and Californians in general have fallen far short of meeting Gov. Jerry Brown’s January call for a 20% cut in water use.

In fact, statewide urban water usage has increased by 1% over the past three years. Cities have made efforts at “voluntary conservation,” which probably amounts to telling people that there’s a drought. But that hasn’t proven terribly effective.

Madelyn Glickfeld, assistant outreach director of the UCLA Institute of the Environment and Sustainability, told the board that despite the Southland’s conservation strides, residents “don’t get this drought.”

She cited lush lawns and freeway sprinklers spraying next to the electronic Caltrans signs urging water savings.

There’s a better way to handle the situation. Instead of siccing the water police on neighbors for washing their car, California could institute market-based reforms which would effectively ration water without any form of policing at all.

Residents of East Los Angeles can expect to pay between $3 and $4 per 100 cubic meters of water used. If those rates were allowed to reflect actual supply and demand, they would clearly be higher. And if the rates were higher, residents would begin to “get this drought” fairly quickly. Those lush lawns grow because their owners regard them as a higher value than the money paid for irrigation. Guaranteed, there’s a price point at which that priority would shift.

But such a market response would be considered “gouging,” something which pretty much everyone regards as wrong. Yet “gouging” would immediately solve California’s problem by incentivizing consumers to ration their water use. Higher prices would also incentivize entrepreneurs to develop new and better ways to deliver water to consumers. Instead of responding abruptly to arbitrary political mandates, individuals would respond fluidly to the price signals offered in the market. The result would be a nimble response propelled by the rational self-interest of California residents. The crisis, such as it is, would resolve sooner and cause less damage over its duration.

(Today’s Fightin Words podcast is on this topic available here. 16:19 minutes long; 15.74 MB file size. Right click here to download this show to your hard drive. Subscribe through iTunes or RSS feed.)

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50 Colleges Where You Can Pay $60K A Year to Hear Hippie Profs Rail Against Capitalism

Friday, July 11th, 2014 - by Stephen Kruiser

“Do as I say…”

The list of colleges and universities that charge more than $60,000 per year in tuition, fees, and room and board has grown to 50, as reported by Business Insider.

At the top of the 2014-2015 list is Harvey Mudd College, at $64,527, followed by Bard College and the University of Chicago, at $63,626 and $63,585, respectively.

A year ago, the $60,000-plus list stood at nine, topped by New York University’s $61,977.

The bitter irony is, of course, the fact that universities have been safe havens for hippie remnants to wax poetic about socialism all the while screaming about the evils of capitalism. If any one of these lecherous, flea-bitten idiots ever had to live under the economic circumstances they so gleefully champion they’d be hanging Koch brothers posters up in their offices in less than a week.

The leftist political approach to these rising costs is a mix of whining and demanding more taxpayer support for “free” education, never once examining why the situation is out of control.

That’s an approach they learned in college, by the way.

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Here’s What Obama Is Doing Instead of Visiting the Crisis-Stricken Border

Wednesday, July 9th, 2014 - by Bryan Preston

Branding. This president is all about the branding.

While the president goofs off, his official White House Twitter feed claims that he’s a hard-working stiff.

 

Between this and his conscious decision to avoid the disaster on the border, for which he is at least partly responsible, he’s basically daring Republicans to join Sarah Palin’s call to impeach him. “So sue me!” was yesterday’s taunt.

That would be a foolish thing to do. They should run against his policies and portray him as what he is — a slacker who doesn’t care about the damage that he is doing to the country. Run against Harry Reid, who has put the Senate in Obama’s back pocket. Running on impeaching him will blow up in the GOP’s faces.

Update: Rep. Henry Cuellar (D-TX) is not amused by the president’s pool outing.

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Wendy Davis has a Huge Problem. His Name is Barack Obama.

Wednesday, July 9th, 2014 - by Bryan Preston

President Obama is in Texas this week, for fundraisers in Dallas and Austin. One of those is a fund-raiser with Robert Rodriguez, director of the pro-illegal alien revenge flick Machete. That movie postulates that there are no non-Americans south of the border at all. They’re all just “illegal Americans.”

While he is in Texas, Obama refuses to visit the border. On Tuesday, his spokesman Josh Earnest explained the decision by telling the media that because several administration officials have visited the border, Obama doesn’t need to.

But when she was atop the Department of Homeland Security, Janet Napolitano told Obama and the rest of the country that the border is “safer than ever.” That has turned out not to be true. Not even close. Kids can get across the border, which means that drug smugglers and terrorists can too.

How can Obama be sure that his current officials are any better informed than his former one?

Obama has never been popular in Texas. Mitt Romney beat him here like a drum.

Thanks to the crisis that is unfolding on the border and around the state right now, Obama is becoming even less popular. A Rio Grande Valley Democrat is even suggesting that the border crisis is “Obama’s Katrina moment.”

Rep. Henry Cuellar, D-Texas, is worried President Obama’s decision to not visit the U.S-Mexico border while he’s in Texas this week will become his  “Katrina moment.”

“I’m sure that President Bush thought the same thing, that he could just look at everything from up in the sky, and then he owned it after a long time,” Cuellar said Monday in a Fox News interview with Neil Cavuto. “So I hope this doesn’t become the Katrina moment for President Obama, saying that he doesn’t need to come to the border. He should come down.”

Take a look at Rep. Cuellar’s district.

tx-28-cuellar

 

It slices right into the heart of the Rio Grande Valley, the Democrats’ stronghold in Texas.

Cuellar says he got an angry call from the White House after Tuesday’s remarks. But that won’t stop him from speaking out against the president’s decision not to visit the border.

If Cuellar is as worried as he seems, then the president’s disaster at the border stands to hurt Democrats there, which means they have no shot at all of winning anything statewide. None.

Wendy Davis has already had her own problems in the RGV. She has struggled to raise money there, and tried pandering to the region’s heavily Catholic vote by claiming, against all the known facts, that the late-term abortion supporter is somehow “pro-life.”

Davis has recently met with President Obama but refused to allow the media in, which means that she refuses to be seen or photographed with him.

But she cannot avoid him. Communities in the RGV are having to foot some of the bill for the massive influx of illegal aliens. The porous border presents the valley’s families and communities with serious security threats. That region is already struggling with a Democrat corruption problem in Hidalgo County. The Texas Democratic Party is a wholly owned ideological subsidiary of the Democratic National Committee, which under Obama has become beholden to the far left. Those politics just don’t fly in most of Texas. Obama’s decision not to visit the border signals to the Rio Grande Valley that he flat out does not care what is happening there.

Rep. Henry Cuellar seems to get that. He is speaking out to defend the communities in his district from President Obama’s irresponsible handling of the border crisis.

Wendy Davis lacks either the judgement or the courage, or both, to follow Cuellar’s lead. Davis will continue to run from having her picture taken with the president, but she just can’t get away from his policies. She isn’t even trying to. Her campaign has gone full Koch brothers, when Texans care about our security and our economy. Wendy Davis has offered voters nothing serious on either issue. She wants blue state economic policies, which are proven job killers, and she has come very late to the border issue. She has yet to say a word against Obama’s decisions.

As a Democrat in a conservative state with a strong Republican nominee running for governor, Wendy Davis was always destined to struggle. The decision to embrace the hard left and not criticize Obama’s border policies at all leaves Wendy Davis with no shot — none — to win in November. She’s finished.

More: Here’s what the president would rather do, than visit the border.

If there are any adults left in the Democratic Party, they’ll get with the president and tell him to knock this stuff off. Rep. Cuellar might do that. It’s clear that Wendy Davis will not.

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EPA Wants the Power to Garnish Your Wages

Wednesday, July 9th, 2014 - by Bryan Preston

This should not be allowed to happen. Ever. The Washington Times reports:

The Environmental Protection Agency has quietly floated a rule claiming authority to bypass the courts and unilaterally garnish paychecks of those accused of violating its rules, a power currently used by agencies such as the Internal Revenue Service.

The EPA has been flexing its regulatory muscle under President Obama, collecting more fines each year and hitting individuals with costly penalties for violating environmental rules, including recently slapping a $75,000 fine on Wyoming homeowner Andy Johnson for building a pond on his rural property.

This would do away with due process, at a time when the EPA is becoming the regulatory state by which the hard left assaults Americans’ property rights and the economy.

The EPA is also mired in a scandal and has lost some significant cases in court.

It does not have the power that it is grabbing. President Obama could step up and make a good name for himself by announcing that he will stop this rule change, but it’s probably happening at his behest. The regulatory state has been his weapon of choice to impose policies that have not been approved by Congress.

It’s up to Congress to stop it, and a Republican senator is stepping up.

“The EPA has a history of overreaching its authority. It seems like once again the EPA is trying to take power it doesn’t have away from American citizens,” Sen. John Barrasso, Wyoming Republican, said when he learned of the EPA’s wage garnishment scheme.

Others questioned why the EPA decided to strengthen its collection muscle at this time.

Critics said the threat of garnishing wages would be a powerful incentive for people to agree to expensive settlements rather than fight EPA charges.

The EPA rolled the plan out sneakily last week, and now it’s not answering any questions about it. Those two facts alone show that the agency can’t be trusted. Here’s one more.

Putting the collection powers on a fast track, the agency announced it in the Federal Register as a “direct final rule” that would take effect automatically Sept. 2, unless the EPA receives adverse public comments by Aug. 1.

The EPA said it deemed the action as not a “significant regulatory action” and therefore not subject to review.

Here’s a negative comment: Under no circumstances should the EPA be allowed to do this. None. Ever.

h/t JWF

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Video: Chicagoland Regulations Drive Jobs Away

Tuesday, July 8th, 2014 - by Bryan Preston

Illinois Policy produced this video about Sara Travis. She wanted to build a coffee shop in Chicago. Chicago’s stifling regulatory environment drove her not just out of the city, but out of the entire state of Illinois.

Today she is in Austin, Texas, running Brew Hub and touting how much better Texas is for business than Illinois.

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Stick around to see Travis note Mayor Rahm Emanuel’s failed attempt to come to Austin to poach jobs back for his war-torn Chicago.

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Seattle Business Group Pushing Back On $15 Minimum Wage Nonsense

Monday, July 7th, 2014 - by Stephen Kruiser

I’ll have a cup of sanity, please.

A coalition of Seattle businesses has cleared a major hurdle in its effort to repeal the city’s newly enacted $15-an-hour minimum wage, gathering enough petition signatures to put the issue to voters on the November ballot if the signatures hold up.

Forward Seattle — which represents restaurants, merchants and other businesses — submitted roughly 19,500 signatures last Wednesday to City Hall.

The group needed 16,510 signatures. City officials could complete a preliminary count by as early as Monday, then send the signatures to the King County election office for final verification.

However, the effort also faces allegations of fraud that appear backed by well-funded groups intent on preserving the wage increase, Forward Seattle Co-Chair Angela Cough said.

She also told FoxNews.com the group’s grassroots effort is under-funded in large part because members are being intimidated by opponents, who she said are compiling online boycott lists and going on members’ Facebook pages and websites like Yelp to post negative comments.

There are a couple of notable things about this fight. The most important is that the group is mad at the way the imperious Seattle City Council went about shoving this down the business community’s throat. Rabid leftists Democrats generally have no business experience or an all-out contempt for business owners, especially the successful owners. Measures like this happen because they either believe in economic fantasy (the inexperienced Dems) or are intentionally punitive (the contemptuous Dems). The measures are never in the best interest of anyone other than the politicians or activists pulling the strings of the people they will ostensibly help, but really don’t in the end.

It’s also important to note the tactics. Boycotts and social media sabotage are threatened because there isn’t a sound economic case to make. As that is the case for all progressive economic policy, they become more combative and desperate and, in the end, violent. These are the baby steps.

There is a temptation to let these socialist enclaves in America destroy themselves but the collateral damage is too high, including the fact that we often end up directly or indirectly funding bailout efforts.

The best move is probably just to focus on destroying progressivism.

I’m in.

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Republicans Should Do Whatever It Takes to Make Obama Look Good…Using Republican Principles

Monday, July 7th, 2014 - by Scott Ott

UPDATE: Upon seeing the initial comments, I’m concerned that folks read the headline, but not the story. So, I added a few words to the headline, in hopes of earning a reading. Let me know if it’s still unclear. — Scott Ott

Republicans should work hard to make President Obama look good.

Perhaps you’re thinking: “That’s not ‘work’ for Republicans. They do that effortlessly. Everything the GOP does seems to make Obama look good.”

That’s not what I mean.

Let me give you an example: Republicans fought the extension (of the extension) of unemployment benefits on the principle that when you reward something, you get more of it. They didn’t want more unemployment.

Democrats predicted that, if the benefits were not extended, America would look like the first 98% of Will Smith’s movie The Pursuit of Happyness, where he’s sleeping on the men’s room floor in the subway with his son.

Republicans, goaded by the fiscal conservatives among them, ended the president’s emergency extension of unemployment benefits. But wait. There’s more…

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Hobby Lobby, Disinformation and the Real War on Women

Thursday, July 3rd, 2014 - by Susan L.M. Goldberg

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Birth control advocates were quick to crow “War on Women” this week when the Supreme Court ruled in favor of Hobby Lobby’s ability to deny funding 4 out of 20 forms of birth control for their employees. Opponents have made a tidy disinformation campaign out of debating the merits of RFRA and hanging chad-like definitions of what is and isn’t an acceptable contraceptive. If you can concentrate past the shouting, you’ll see the gaping hole in the conversation regarding women’s health.

For all their wailing and gnashing of teeth, the anti-Hobby Lobby gang has yet to campaign against the right to restrict women to pap smears on a 3-5 year basis. Perhaps that is because pap smears aren’t being restricted by closely-held companies on the basis of religious beliefs, but by the tenets of the Affordable Healthcare Act, which follow government guidelines that have determined women no longer need PAP smears on a yearly basis.

A pap smear is a 5 second gynecological test that screens for pre-cancerous cells and cervical cancer. It also tests for HPV, the most commonly sexually transmitted infection in the United States that can lead to genital warts, and as Michael Douglas will inform you, certain types of cancer in both women and men. Despite following guidelines to the contrary, President Obama cited the importance of pap smears when justifying Planned Parenthood’s $487 million annual grant from the government, claiming the money is meant for “mammograms and cervical cancer screenings.”

With mammograms that aren’t provided for women under 50 (women over 50 qualify once every 2 years) and Pap smears that are only paid for, at a minimum once every 3 years, the real deficit in women’s healthcare has nothing to do with birth control and everything to do with women’s health beyond their supposed immediate and ceaseless need to diffuse all threats of conception. After all, cervical cancer is slower to develop than a baby in the womb.

Rep. Debbie Wasserman Schultz was quick to react to this week’s Supreme Court ruling, saying, “This is deeply troubling, because you have organized religions that oppose health care, period.” If this was an argument about health care, Pap smears and mammograms would be on the table. Wasserman Schultz’s complaint has nothing to do with health care and everything to do with a religious belief that ranks higher than a woman’s right to choose life or death for her unborn child.

Which is potentially why the public remains consumed with the compelling dead horse that is a “woman’s right to choose”. The tension over whether or not Roe v. Wade will ever be repealed is much more engaging than the stark reality of a healthcare system that is willing to let cancer go undetected. Disinformation campaign well played, and not without its irony. Obamacare supporters’ ardent trumpeting of the War on Women should come as no surprise given that they have become the generals in charge of the massacre.

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Master Salesman Barack Obama Denies He’s a Crazy, Socialist, Imperial President

Wednesday, July 2nd, 2014 - by Scott Ott

When’s the last time you heard a president of the United States attempt to sell his ideas as “not crazy…not socialism” and not a sign of “the imperial presidency.” In the video below, President Obama does just that, on the banks of the Potomac yesterday in front of a friendly audience of staffers, supporters and media (forgive the redundancy).

Watching this brief clip convinced me that when President Obama leaves office sometime in the next decade or two, he can make a smooth transition to giving sales-training seminars.

I’ve studied the video, and culled from it…

Barack Obama’s 3 Secrets of Successful Selling

Background: The president wants to make up a budget shortfall in the highway trust fund by hiking taxes on gas companies. Here’s how a master salesman goes about it.

1. Deal with Objections: You often have to deal with the prospect’s legitimate objections — and sometimes with his irrational, emotional objections.  Apparently the president felt that Americans need assurance that the highway bill is sane, capitalist and democratic. By echoing what their conscience tells them about him, Obama offers affirmation, while subtly suggesting that he might not be what their experience shows that he is.

By the way, in a one-on-one setting, the president would have used the “feel-felt-found” formula to defuse the situation, like so…

I can understand how you feel this is a socialist, imperialist plan to punish producers and reward my union cronies. In fact, others have felt that way too. In the beginning, even I felt that way. But as I studied the talking points prepared by my staff in cooperation with the AFL-CIO and Sierra Club, I found that it’s not crazy, not socialism and not the imperial presidency.

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The US Economy Shrank Even More Than Expected in 2014 Q1

Wednesday, June 25th, 2014 - by Bryan Preston

About that whole “recovery summer” thingy…

The U.S. economy contracted at a much steeper pace than previously estimated in the first quarter, but there are indications that growth has sincerebounded strongly.

The Commerce Department said on Wednesday gross domestic product fell at a 2.9 percent annual rate, the economy’s worst performance in five years, instead of the 1.0 percent pace it had reported last month.

While the economy’s woes have been largely blamed on an unusually cold winter, the magnitude of the revisions suggest other factors at play beyond the weather. Growth has now been revised down by a total of 3.0 percentage points since the government’s first estimate was published in April, which hadthe economy expanding at a 0.1 percent rate.

Yeah. A bad winter doesn’t cause the world’s largest economy to contract nearly 3% all by itself. Even the media are having a hard time keeping that excuse aloft. But Obama’s partisan bitter-enders will fight on to the end…

I want you to watch a couple of clips. A rep for the National Association of Manufacturers appeared on CNBC today. CNBC is supposedly a business-oriented channel. The NAM rep said that a majority of manufacturers are generally optimistic about their own companies, but are worried about Obamacare.

After the NAM rep says this, the CNBC host actually asks this question: “Can you just explain to me, why the provision of more affordable healthcare for wider swathes of the American population and the public, would be an impediment to growth?” Actually, he sneered the question. In a British accent. I’m not even kidding.

No clue as to how regulations, how achieving that so-called “more affordable healthcare” forces businesses into deciding whether to hire or stay under an artificial, government-imposed cap on the number of employees they can have before they run afoul of Obamacare regulations. No clue as to how much chaos Obamacare will impose on the employer-employee relationship — so much chaos that Obama delayed implementing that part of the regulation until after this year’s mid-terms. No. Clue. At. All.

On CNBC. The supposedly business oriented cable news channel.

CNBC wasn’t finished making excuses for Obama today. CNBC’s Brian Sullivan showed up on sister network MSNBC today. He blamed the economic contraction on…really horrible weather. I’m not even kidding.

“Here’s the thing: weather,” Sullivan told Morning Joe. “This quarter really actually was horrible. People didn’t go to restaurants for weeks. So we’re waiting to see what happens with the second quarter, whether we’re not gonna completely sharply rebound. That negative 2.9% is a big number,” he conceded, “but people are optimistic overall. They still are.”

Hope springs eternal! It even got Barack Obama elected president.

We have a whole generation of people, adults, who are living with their parents, not getting jobs, not getting married, not buying houses and cars. I guess we’ll blame that on the weather too?

CNBC, the business channel, really ought to look beyond the weather. The business channel published a survey of state business climates on the same day that the world learned that the US economy is contracting at an alarming rate.

The top five states — Georgia, Texas, Utah, Nebraska, and North Carolina — are all either red states or purple states trending red. They all tend to keep the regulatory environment to a minimum and keep taxes low. Blue giants California and New York did better on CNBC’s survey than they do on most — 32nd and 40th respectively. They tend to rank 49 and 50 on most business climate surveys.

It is just possible that federal and state overregulation have as much, if not more, impact on the economy than a few storms?

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Sit Down Kids-The White House Just Said No To A Tax Hike

Monday, June 23rd, 2014 - by Stephen Kruiser

Pinch me.

The White House on Monday rejected a proposal that would hike the gasoline tax in order to prevent the federal Highway Trust Fund from running out of money in August.

“That’s something that we’ve said a couple of times that we wouldn’t support,” White House spokesman Josh Earnest told reporters at a briefing.

Republican Senator Bob Corker and Democrat Chris Murphy last week suggested raising the tax 6 cents a year for two years and linking future fuel tax increases to inflation as ways to replenish the fund, which pays for about half of the country’s transportation projects.

Could Team Lightbringer be getting sensitive about public backlash about things like gas prices now? They shouldn’t. Like stories about the homeless, gas prices are only the responsibility of the president if he’s a Republican.

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Your Business Leaves Cash on the Table Every Day That You Don’t Do This One Simple Thing

Monday, June 23rd, 2014 - by Scott Ott

What if you could make one simple decision, a minor change in personnel policy, that would, according to one top expert, “pay great returns,” and make your workers happier? You’d do it in a heartbeat, wouldn’t you?

You’re always looking for a way to invest your business capital to maximize returns, and you’ve overlooked this simple adjustment — a change you could implement today.

Here is the direct quote from top expert Valerie Jarrett, about this technique:

But we also know what a good investment in our workforce it would be if they had paid leave, and that investment will pay great returns.

That’s right, President Obama’s adviser, Valerie Jarrett, recommends that you give paid leave to every mother of a newborn. At this point, you’re smiting your own forehead, and wondering how you missed this ROI opportunity, aren’t you? Talk about “things I didn’t learn in business school”! Yes, that’s right, by paying people to stay away from their jobs, your business can harvest “great returns.”

President Obama went even further in a CNN interview, noting that in 1998, when Malia was born, he took a month off. In addition to the “precious memories” he garnered from the paternal bonding time, the people of his Illinois state Senate district undoubtedly felt the surge in productivity from their senator.

Barack Obama with daughter Malia in 1998

President Obama shown with his infant daughter during his monthlong hiatus from the Illinois state Senate, a leave of absence that must have measurably increased his productivity.

If paid leave for the mother of a newborn can goose the bottom line, paid leave for the baby Daddy should double, at least, the “great returns” you’ll reap.

Some critics slam the president as out-of-touch with working Americans and ignorant of what it takes to run a business. Certainly this news will stop the mouths of those cynics, while it lines the pockets of the one-percenters (AKA small business owners) who choose to grant paid leave to parents of newborns.

Only the ignorance among businesspeople of the “great returns” available from such policies has prevented them from cashing in until now.

But don’t worry, you won’t be left out of this investment opportunity, because President Obama wants to make sure you experience those “great returns,” by mandating that you pay parents of newborns to go home for weeks of generating “precious memories.”

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Michigan Governor Snyder Nails Taxpayers So Detroit Doesn’t Have To Sell Artwork

Friday, June 20th, 2014 - by Stephen Kruiser

Compromise.

Calling it “an important milestone” in Detroit’s comeback, Gov. Rick Snyder Friday morning signed legislation that adds $195 million in state aid to a pool of $466 million in private funds to help the city emerge from bankruptcy.

Snyder signed the so-called “grand bargain” bills during a ceremony in the former Globe Trading Building, which the Michigan Department of Natural Resources is transforming into an Outdoor Adventure Center through a $13 million public-private partnership. The grand bargain is intended to limit cuts to city pensions and protect Detroit Institute of Arts masterworks from being sold.

Municipal and state governments that are run by liberals who are in the pockets of Big Labor eventually get bankrupted by the pension deals that are rammed down everyone’s throats. My home state was once the fifth largest economy in the world. Funding public employee union greed dropped it to ninth almost overnight (it has recently bounced back to eighth). It is still firmly on track to eventually be crippled by its pension liabilities, however.

Now the taxpayers of Michigan who don’t get cushy pensions are supposed to pony up for irresponsible Big Labor practices.

Those of us based in reality often have the “Why don’t governments have to behave like citizens when it comes to money?” conversation.

Regular Americans are forced to sell things that are precious to them in order to survive all the time. Houses, businesses, land, jewelry…it’s all fair game for sale when we are broke. I had to sell every valuable thing I had during a difficult post-divorce period.

The Catholic Church has been closing schools and parishes to sell the real estate in order to pay for the abuse scandal settlements.

Why do governments get a free pass? Why should a family in Grand Rapids fork over hard earned money just so Detroit can keep its art museum goodies (it should be noted that I am a huge fan and moderate patron of the arts)?

It’s a fair question.

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Minnesota Governor Regrets Minimum Wage Law After Sons Complain It Will Hurt Their Business

Wednesday, June 18th, 2014 - by Walter Hudson

From a distance, Minnesota’s Democrat governor Mark Dayton may seem like a rabidly ideological operator. His legislative agenda has included such gems as creating a new statewide bureaucracy to police students’ thoughts (even as the state struggles with one of the worst achievement gaps in the nation), the forced unionization of home-based daycare entrepreneurs who are now regarded as employees of the state, and devastating business to business taxes which have driven companies elsewhere.

However, the truth about Mark Dayton is decisively more pathetic. He’s not really ideological. Rather, he seeks the approval and adulation of those who are. A trust fund baby who shelters his wealth in neighboring South Dakota, Dayton’s life-long pursuit of public service has been more of a hobby than a philosophically-driven passion. He collects offices as one might stamps or insects. Before using his ex-wife’s money to buy the 2010 primary out from under the Democrat’s endorsed candidate, Dayton served a term a piece as Minnesota’s state auditor and its U.S. senator. Governor was just another feather to add to his cap.

Dayton’s hobbyist approach to governing can be discerned from his frequently expressed regrets regarding laws he has signed, typically when he discovers that they contain something he didn’t know about, or that they adversely affect a favored constituency. During a debate over medical marijuana earlier this year, Dayton was so conflicted between his nanny-state instincts and his heartfelt desire to help people that he advised one mother to buy marijuana illegally on the street! (He later denied doing so even in the face of corroborating witnesses.)

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The latest example of this oops-I-signed-it-again governing comes after a minimum wage hike passed earlier this year. It phases the minimum wage from its current $6.15 to a whopping $9.50 by 2016.

Raising the minimum wage remains a perennial point on the political left’s agenda which elected Democrats are expected to support. Dayton no doubt swelled with pride upon signing the legislation. But he may have recently entertained second thoughts.

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Wyden: 15 Month Window To Rewrite Tax Code

Tuesday, June 17th, 2014 - by Stephen Kruiser

And then it’ll be 2016 fever.

The U.S. Senate’s chief tax law writer on Tuesday vowed to work on overhauling the federal tax code by August 2015, citing a move by Medtronic Inc to shift its tax home base to Ireland as a spur to congressional action.

Senator Ron Wyden, the chairman of the Senate Finance Committee, said he wants to cut the corporate income tax rate to 24 percent from 35 percent, chiefly by eliminating loopholes. Wyden has advocated this proposal for years. Multinational companies have been clamoring for a tax cut.

The Oregon Democrat said there will be an opening for tax reform between now and Congress’ August 2015 break. After that, lawmakers will be consumed by 2016 presidential election-campaign politics, he said.

“There is a prime 15-month window from now until the August recess of 2015,” he said at a Wall Street Journal conference.

“We do need to go after some of these loopholes,” Wyden said. “You go in there, clean those out, and use the money to hold down the rates.”

Wyden is one of the few lawmakers in the U.S. Congress to have a comprehensive plan for rewriting the tax code. He first offered it as legislation in 2010. Congress has not thoroughly recrafted the loophole-riddled tax code since 1986.

I’m so old I remember when this kind of thing was a real priority for Republicans. They’re paying it some lip-service this year but it’s difficult to take the Debt Ceiling Punters seriously when it comes to anything having to with real fiscal responsibility.

Hey, if a Democrat can get the ball rolling maybe, just maybe, the Republicans can keep it going if they take back the Senate.

Maybe.

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Hey, Starbucks CEO: Pour Your Head Into It

Tuesday, June 17th, 2014 - by Scott Ott

Years ago, I read Howard Schultz’s book, “Pour Your Heart Into It,” about the amazing success story called Starbucks. As much as I admire his abilities as a persistent innovator and passionate dreamer, I think it’s time to say, “Hey, Howard, pour your head into it.” Here he is saying the federal government should jack the minimum wage nationwide. Then, from the other side of his spout, he predicts job-killing “traumatic effects” from the “unintended consequences” of jacking the minimum wage to $15 per hour.

Perhaps a full transcript would reveal more subtlety than this clip. He seems to suggest that some number south of $15 is a good idea. What’s that figure? Who knows?

Of course, Howard, you might also simply pour your cash into it. You are free to hike base pay for all Starbucks employees to $15/hour or beyond.

Given his great heart, perhaps Schultz is concerned that such unilateral action would drive competing coffee shops out of business by hiring away all of their best workers or forcing them to match his market-leading wages. Doubtless he’s concerned about the staffing reductions, inevitably sparked by higher wage expenses, that would leave more formerly low-wage workers languishing in unemployment. And naturally, his heart goes out to all of those folks who will have to pay even more for that essential cup of joe.

Therefore, it would be better if the federal government would mandate that which Schultz is unwilling to voluntarily initiate.

And isn’t that the heart of Progressivism?

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Labor is a Tradable Commodity

Friday, June 13th, 2014 - by Nathan D. Lichtman

walmart-jobsboard

This picture was snapped by Mark Perry, of the American Enterprise Institute, in Williston, North Dakota. It proves something I’ve been talking about with friends for a while.

Here, in Los Angeles, and in places like Seattle, the conversation about raising the minimum wage is flaring up. Seattle did indeed just raise theirs to over $15 an hour. The idea of a living wage is appealing, as is the notion that lower class workers should earn more for their labor.

But, several things are not taken into account when people make these arguments.

Firstly, wage does not equal buying power. Historically, prices have gone up as wages do. Think about it, if a company must pay their employee more, then they may also need to raise their prices in order to pass the cost of these raises onto the consumer. If I make an additional five-dollars an hour, but a value meal at McDonald’s costs over 10-percent more, I haven’t achieved as much as I figured. Not to mention, my taxes go up, my cost of everything else goes up, and rent/mortgage rates go up.

But, also, unemployment will go up. An employer is faced with three choices if any costs, including labor costs, go up—charge more for his product or service, lay off workers, or go out of business. If the cost of hiring someone becomes too high, the employer simply won’t hire someone. This is especially true given how much can now be done with technology (computer order takers at fast food restaurants, robots in manufacturing, or even robotic cleaning machines). Somebody unemployed is worse than someone making a lower wage.

And, it is important to note that the argument that businesses can simply suffer the additional costs, and take it out of their profits, is wrong. It would be one thing if most employees worked for large conglomerates, but, in fact, 55-percent of employees in this country work for small businesses. The ‘mom-and-pop’ shops can’t afford these drastic wage changes.

Secondly, labor is a commodity. An employer invests in good workers. They train them and embrace them within their corporate culture. It traditionally costs a company more to hire someone new than to keep someone who is good at their job.

My first job, during High School, was as a food service worker at Universal Studios’ theme park. They had to pay for almost a week of my time just to train me. I had to learn about the company and the policies for every employee, and I had to learn the logistics of the job. I learned to use the cash registers, and to direct people to rides and attractions using an open hand (not a point, which could offend people). That week, I was not earning Universal any money; I was being trained.

It would be more cost effective, therefore, to keep someone like me at Universal, rather than train someone new.

This is worth it to employers to a certain degree of raises and benefits going up. If I have stayed with a company for a while, they may give me a bump in my salary, so as not to lose me.

But, if wages go up, it becomes more worth it to let me go, and to hire someone new. This is because the cost of training to cost of keeping an employee ratio may equalize, or even become disproportionately swung to the other side.

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Advocating for the Devil: Obama’s Student Loan Decree

Monday, June 9th, 2014 - by Walter Hudson

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Reading this popular post from my PJM colleague Rick Moran regarding a move by President Obama to forgive a significant portion of student loan debt, I find myself torn both personally and politically. It directly affects my life because I have student loans. But I’m also sensitive to the political effect of brushing off young people’s fears regarding their economic future.

Let’s start with the personal. It’s difficult for me to approach the topic of student loans objectively. My wife and I have both racked up a tremendous amount of student loan debt obtaining educations which have proven economically worthless. Neither of us hold jobs that require the degrees we obtained, and the path to entering those careers proves elusive. That’s our fault, as Rick points out. But it’s not solely our fault.

The market works when people are free to interact by consent, dealing with each other through reason. When lots of people do that, all holding different pieces to an informational puzzle, the resulting prices signal to producers and consumers what they ought to do. I may feel like I need an Xbox One, and Microsoft may feel like selling it to me. But the market price of $399.99, considered in the broader context of my household’s financial circumstance, signals that I ought to hold off on the purchase.

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When force intrudes upon the market, whether in the form of criminal activity or state decree, that dynamic shifts. If the government decided to subsidize Xbox Ones to the tune of $300 per unit, the new sticker price of $99.99 sends a completely different signal. Now, I would buy. But the economic reality which commanded $399.99 in a free market would not have changed. That would foster long-term consequences if maintained. Supply problems would emerge. Production quality would drop. Demand would surge artificially high, and so forth.

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Your Friday Doom & Gloom

Friday, May 30th, 2014 - by Stephen Green

TWOFER

Sometimes Google News finds my stories for me. First up — er, down? — consumer sentiment:

U.S. consumer sentiment fell 2.2 points to 81.9 in the final May reading from the University of Michigan survey. That shaves off about half of the 4.1 point increase in April to 84.1, and it’s little changed versus the preliminary May reading of 81.8. Most of the weakness was in the current conditions index which fell to 94.5 from April’s 98.7.

That slip is mirrored nicely by our next story:

Personal consumption—which captures spending on goods and services—fell a seasonally adjusted 0.1% from March, the Commerce Department said Friday; that was below the 0.1% growth forecast by economists. March’s growth was revised up to 1%, the fastest rate since August 2009, from the 0.9% previously reported.

In a worrisome sign for future spending, the strong income gains of recent months slowed. Personal income—which measures income from wages, investment and government transfers—rose 0.3% in April, down from 0.5% in March. Wage growth slowed to 0.2%, is lowest rate this year.

We were promised a return to robust growth (or something not entirely unlike it) following last quarter’s GDP shrinkage. But April is the first month of the new quarter, and if consumer spending — 70% of the US economy — actually shrank, then growth is likely to be as feeble as ever.

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Pepperdine Business Grads Return to the Classroom to Help Students Succeed

Friday, May 30th, 2014 - by Bryan Preston

Pepperdine University’s business school vaulted into the national Top 25 rankings a year ago, but like the business leaders that the school develops, the Graziado School isn’t one to rest on its accomplishments. Pepperdine is now embarking on a new initiative that could prove to be a game-changer:  It is bringing distinguished alumni back into the classroom as unpaid advisers to students in the Presidential MBA program.

Noelle Nguyen went through the Presidential and Key Executives MBA program a few years back. E-commerce retailer of USA-made products, American Love Affair, was her Presidential MBA capstone project (which went live after she graduated), and has since garnered much national press attention. But she and other successful alums wanted to give back to the school that shaped them and their careers.

“What students proposed to professors, is we said ‘Look, we loved our experience so much that we want to come back and advise — for free,’” Nguyen says. “Free” isn’t a word one hears often in business or anywhere else, and when you do hear it, there is usually a catch. But there was no catch in this case.

“Our alums have always been very keen on giving back,” says Dr. Demos Vardiabasis, economics professor and former adviser to Gov. Arnold Schwarzenegger. “This is yet another display of that initiative.” Nguyen credits him and Dr. William Smith, the Presidential MBA committee chairman, for being the first at the Graziado School to embrace the initiative.

Robert Radi, one of the inaugural volunteer advisers, agrees that Pepperdine’s core values played a role in making the initiative possible: “The Pepperdine motto is cemented onto the moral value of giving back. Give back to our communities, our colleagues, our peers, and our school. It is most appropriate to contribute to the professional development of those that are joining the 43 year tradition of the Presidential MBA at Pepperdine.”

The Graziado School’s Presidential MBA programs cater to established professionals who seek to continue their education while they keep working and taking care of their families. The classes stay small, with just 15 to 20 students at a time, they meet on weekends, and the alumni advisers are available in and outside of the classroom during the 15-month schedule. They attend all classes with students and are advisers to the current crop of students, but they are not supplanting the existing faculty. They’re an add-on that both students and professors are finding to be valuable.

Mark Borao, a partner at Ernst & Young, says “Students have been taking full advantage.  I have personally had about a half dozen calls from current students wanting to bounce business ideas and concepts off of me…they see me (and the others) as an independent set of advisers who are vested in them.”

As for faculty, any initial hesitation to try out a new program has been quickly set aside as the advisers’ value has shown through, according to Associate Dean Dr. Gary Mangiofico. The faculty, he says, has been “Very supportive,” adding that “Much like we teach, in terms of how to lead change in business, we practice it ourselves here. We involve the faculty for this degree in the dialogue and the discussions. It wasn’t like the alumni demanded to do this, or the administration just created it. Everybody was involved and felt good about it.”

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‘Just the Latest Indictment’ of President’s ‘Horribly Misguided Economic Policies’

Thursday, May 29th, 2014 - by Bridget Johnson

gdp

Congressional Republicans pounced on a Commerce Department report showing the economy shrinking in the first quarter of the year, with Rep. Tom Price (R-Ga.) calling it “just the latest indictment of the Obama administration’s horribly misguided economic policies.”

Real gross domestic product — the output of goods and services produced by labor and property
located in the United States — decreased at an annual rate of 1.0 percent in the first quarter according to the “second” estimate released by the Bureau of Economic Analysis.

“The GDP estimate released today is based on more complete source data than were available for
the ‘advance’ estimate issued last month. In the advance estimate, real GDP was estimated to have
increased 0.1 percent. With this second estimate for the first quarter, the decline in private inventory investment was larger than previously estimated,” the Bureau said.

“The decrease in real GDP in the first quarter primarily reflected negative contributions from
private inventory investment, exports, nonresidential fixed investment, state and local government spending, and residential fixed investment that were partly offset by a positive contribution from personal consumption expenditures. Imports, which are a subtraction in the calculation of GDP, increased.”

House Speaker John Boehner (R-Ohio) compared President Obama’s economic plan to “a game of Chutes and Ladders: one step forward, two steps back.”

“Americans asking ‘where are the jobs?’ deserve better than this new normal of fits and starts,” Boehner added. “The House has passed dozens of bills that mean real growth and opportunity, and the president should urge Senate Democrats to take them up and put jobs first.”

Price said the report is further proof of Obama’s “horribly misguided economic policies.”

“It represents the tragic reality for so many families in cities and towns all across this great country. Folks are struggling to make ends meet, and President Obama and his allies in Washington are seemingly ambivalent to how their liberal agenda is doing real harm to real people,” he said.

“House Republicans have given our colleagues on the other side of the aisle ample opportunity to do right by the American people. We’ve sent legislation over to the Senate with a broad range of solutions that would help reinvigorate and reinforce our nation’s entrepreneurial spirit. We’ve given the president and his administration every chance to approve the Keystone XL Pipeline that would put folks to work in support of a greater American energy future,” Price continued.

“All we get is an absence of leadership from President Obama and a lack of initiative by Senate Democrats. Their inaction is inexcusable. The American people shouldn’t be asked to accept it or this dismal economic reality. House Republicans will keep fighting for a plan that offers a brighter future with more opportunity for more Americans to pursue their dreams.”

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The Saddest, Scariest Millennial Statistic You’ll See Today

Wednesday, May 28th, 2014 - by Bryan Preston

Who are the millennial generation, and what does their rise mean for the future of the country?

Everyone is trying to figure millennials out — what makes them tick, what they care about. Like previous generations, millennials aren’t monolithic. They don’t all agree with each other on society and politics anymore than previous generations did. There are some divisions among millennials that hinge on racial background — white millennials prefer less government, while non-white millennials strongly prefer more. While they are more liberal on average than previous generations, according to Pew Research’s most recent major study, we all tend to be more liberal when we’re young and don’t own anything, and haven’t yet met the iron hand of the taxman. Not all of today’s earnest young liberals will remain so.

A couple of statistics suggest that many millennials will never outgrow their youthful leftism. One stat suggests that they are bequeathing a generation that will be even more in favor of big government than their own generation.

According to Pew:

Millennials lead all generations in the share of out-of-wedlock births. In 2012, 47% of births to women in the Millennial generation were non-marital, compared with 21% among older women. … In 1996, when Gen Xers were about the same age that Millennials were in 2012, just 35% of births to that generation’s mothers were outside of marriage (compared with 15% among older women in 1996).

Millennials are slower to marry than previous generations. They have moved the median marriage age up to 29 for men and 27 for women. They are largely delaying marriage because they are loaded down with massive student debt, and because there are few jobs available to them upon which they can build their lives. The current Democratic administration’s anti-jobs policies are largely to blame for the latter. The lack of accountability in university practices and tuition is largely to blame for the former. Millennials are being squeezed by the Obama economy. Yet they remain more likely to vote for Democrats, if they vote.

I’m not here to slam single parenthood, but single parenthood has proven to be a very strong predictor of one’s economic outcome and one’s politics, meaning, one’s relationship to the government and the policies one tends to vote for. Simply put, single adults tend to vote in a certain way, and children of single adults tend to have poorer economic outcomes, which leads to a certain voting pattern. Marriage is a strong predictor of political behavior.

Currently just 26% of millennials — those between age 18 and 33 — are married. At the same age, 36% of GenX and 48% of the Baby Boomers were married. And 69% of millennials say they want to get married, but the lack of jobs is holding them back.

Children who grow up in single parent homes tend to have higher rates of incarceration, higher rates of drug use, lower academic performance, lower overall income — greater overall dependence on government, in one way or another — than children in two-parent homes. They tend to produce less for the economy and cost more taxpayer dollars.

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A 3.3 Percent Pay Raise for All Federal Workers?

Tuesday, May 27th, 2014 - by Bridget Johnson

Two Democratic senators are pushing for a pay raise for federal workers, arguing that the workforce took too hard of a hit from sequestration cuts and a three-year pay freeze.

Sens. Ben Cardin (D-Md.) and Brian Schatz (D-Hawaii) are proposing a 3.3 percent pay raise for federal workers in calendar year 2015.

“Hardworking federal employees did not cause our fiscal crises nor did they contribute to the legislative gridlock, but time and again they have been asked to pay the heaviest price toward a resolution,” Cardin said. “In Maryland and across the nation, these public servants, mostly middle class and struggling to get by like so many other Americans, deserve recognition and thanks for their hard work and dedication.”

Arguing that federal workers unfairly lost a billion dollars in salary and benefits due to sequestration and a three-year pay freeze from January 2011 to December 2013, the Dems say the bill is needed to help fill a 35 percent pay gap between public and private sector compensation.

It goes beyond the one percent pay increase proposed by the White House.

“We need to strengthen and encourage our public workforce. The knowledge, expertise, skill, and commitment of our public sector workforce are some of America’s greatest assets.  No other nation can match our public workforce’s professionalism and level of accomplishment,” Schatz said. “Our federal employees bore the brunt of the sequester, enduring furloughs and a three-year pay freeze.  Our bill would give these working families a raise they deserve.”

The text of S.2397, which should include how the across-the-board raise would be paid for, has not yet been published by the GPO.

It’s already gotten praise from employee unions, though.

“Over the past four years, federal employees have contributed over $120 billion towards deficit reduction. It’s time we thank them for their service and sacrifice, rather than continue to devalue it,” said National Active and Retired Federal Employees Association president Joseph Beaudoin.

“While private sector wages have risen 6.5 percent in the last four years, federal employees had their pay frozen for three years and only received a 1 percent raise this year,” said Federal Postal Coalition chairman Bruce Moyer. “Three years of frozen salaries caused the public-private sector pay gap to exceed 35 percent, with federal employees lagging behind. Instituting a raise of 3.3 percent, 2.3 percent higher than that proposed by the president, will allow the federal government to compete for top talent in the workplace.”

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Redefining the Class War: Earners vs. Looters

Friday, May 23rd, 2014 - by Walter Hudson

power

On today’s Fightin Words podcast: Tea Party coordinator and investment adviser Jake Duesenberg joins the program to address class warfare and the issue of income inequality.

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(9:39 minutes long; 9.34 MB file size. Want to download instead of streaming? Right click here to download this show to your hard drive. Subscribe through iTunes or RSS feed.)

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Chasing Financial Freedom in a Down Economy

Thursday, May 22nd, 2014 - by Walter Hudson

rise

On today’s Fightin Words podcast: Tea Party coordinator and investment adviser Jake Duesenberg joins the program to address the perceived difficulty of obtaining financial goals in the Obama economy.

Audio clip: Adobe Flash Player (version 9 or above) is required to play this audio clip. Download the latest version here. You also need to have JavaScript enabled in your browser.

(18:15 minutes long; 17.58 MB file size. Want to download instead of streaming? Right click here to download this show to your hard drive. Subscribe through iTunes or RSS feed.)

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