Friday, November 28, 2003

this is more science for you:>>>
Jobs oversees? Another attempt to explain
Ludwig von Mises Institute ^ | Nov 27, 2003 | Llewellyn H. Rockwell, Jr.


Posted on 11/28/2003 5:53 AM PST by Huber


The Bush administration has slapped high duties on Chinese TV sets for the alleged problem of "dumping"—which increasingly means selling at prices lower than sets sold by established firms.

Let's leave the issue of dumping for now and examine the claim that jobs are being shipped overseas, which is usually what is said when great foreign products appear in US stores. A number of people have observed that TVs are no longer made in the US. The implication is that at least the Bush administration recognizes a problem. The jobs that used to go into making TVs have effectively been shipped overseas. Why not act?

International economic historian Sudha Shenoy (University of Newcastle) has been at the offices of the Mises Institute, and this topic has come up quite often. She has found herself astounded at the lack of knowledge over trade issues in the US, and alarmed by growing protectionist sentiment. I'll offer a response to the above in a manner that follows a number of points that she has been making about trade.

Let's first watch our language. Jobs are not being shipped, and Americans are not somehow being stopped from making TVs. TVs can still be made in the US. Everyone and anyone is free to invest the money, hire the workers (bidding them away from other pursuits), buy the parts, build the sets, and put them on sale. That the same processes are undertaken in China has no bearing on anyone's freedom to do it here. If you want to make an all-American TV, no one is stopping you.

And yet, as with any other product, the US TV maker must still face the issue of persuading people to buy. The question comes down to the price people are willing to pay for your TV sets versus the prices charged by the competition. To try to sell them at a price that justifies your investment and worker salaries means they would sit on the shelves unsold because the same product or better is available at a cheaper price. You will have to lower your price to sell them, and will end up selling at a loss.

Now, you are free to continue to make losses, or produce TV sets that nobody buys, employing workers and dumping capital into the project, but you must eventually come to terms with the fact that you are not going to make a profit. That you are unique in choosing an economically unviable path would not be surprising. Investors are not so stupid that they continue to pour scarce resources into production (which is always and everywhere directed toward the final end of consumption) that makes no sense.

Now, is it a problem that American consumers (and businesses that import and sell TVs retail) have access to lower priced TVs than can be made in the US? Not at all. It is great for the buyers of TVs and it is great for the economy in general because this frees up capital and labor to be employed in better projects. To force the situation to be otherwise would imply sheer waste: deliberately raising the price of TVs by restricting supply or taxing non-US TVs. This is precisely the Bush administration policy, and it accomplishes nothing but destruction. It is only putting off the inevitable and taxing people in the process.

Then we come to the question of why it is possible to make TVs more cheaply in China than the US. It is a matter of the widening circles of the division of labor. China finds itself in a stage of economic development that allows it to specialize more and more in manufacturing at the expense of agriculture, even as the less developed nations are specializing more and more in agriculture. While this is taking place, more advanced nations are finding it economically advantageous to specialize in the production of goods and services that require more advanced labor skills and more capital expense.

In short, China (as well as South Korea, Indonesia, Malaysia, and many other booming economies) is finding itself in the position that the US was in the early 20th century, while the less developed nations are taking on tasks that used to be performed by the US in the early 19th century. It is globalism of economic processes that account for why the world, and not just the single nation, is the relevant domain to consider in understanding this.

These long-term trends of economic development are part of the blessing given to the world by the free mobility of capital. And so long as markets are free, they are also perfectly capable of adjusting. It is not only good for people around the world that prosperity is rising and the division of labor is expanding; it is good for the US. To wall ourselves off does nothing but subsidize waste.

What about workers who lack the job skills to fit into the higher and higher levels of sophisticated production in which the US is specializing? Because of the existence of scarcity, there will never be a shortage of jobs to do, so long as we live in time and not eternal bliss. The phrase "shortage of jobs" can only be colloquial; there is never a shortage of things to do. It is only a question of price, and the best way to raise the wages is to make sure that people do what they are most suited to do—which can only be known by letting markets work.

High-level production such as the US specializes in refers not to every job but only the dominant industries; within each there also exists a sophisticated division of labor. Not every employee at Microsoft designs software; the firm also provides jobs to packers, shippers, artists, gardeners, and a thousand other professions. Not every employee of the financial industry is a bond trader; rather, a profitable bond business provides jobs to ever widening circles of employment.

Now, some people have been drawing attention to the supposed uniqueness of the current moment in international trade, in the following sense. US companies are not just foregoing certain production processes in order to allow them to be done by the Chinese. Instead, US firms are moving their plants to China, not to sell to the Chinese, but in order to re-import their products into the US to sell.

Is this a uniquely troubling situation? Again, not at all. US business owners have observed a profit opportunity and seized it. The alternative is that US business not notice the opportunity and let others get there first. This would hardly be something to celebrate. It is a testament to the acumen of US businessmen that they can go anywhere in the world, take advantage of local economic conditions and then sell to anyone else in the world. It so happens that American consumers are in a great position to buy the best products from everywhere in the world (so long as their government lets them). Thus do we see the end result of American capital producing for Americans in countries especially suited to host the process, while the US itself hosts ever more sophisticated production.

In the Winter 2003 issue of the Austrian Economics Newsletter, due out soon, Professor Shenoy discusses how the US is just now coming to terms with the long-run trend toward greater levels of development around the world, and why the US had better get used to it and make the adjustment. The Bush administration has done its best to slow down economic development via tariffs and every other manner of protectionism. But this is only delaying the inevitable.

There is no surfeit of wonderful trends in our time, but the progress being made through global trade (progress at home and abroad) is certainly one of them. Leave it to government to try to rob us of the blessings of prosperity and peace that come from trade. And it is no different with trade than with every other area of life. We can permit the market to work or we can hobble it with taxes as it eventually gets its way in the long run. That is our choice. As Professor Shenoy would say, the free market is not perfect, but it is always better than the results that come from any attempt by government to make it better.

Friday, November 14, 2003

Posted on 11/14/2003 9:19 AM PST by aculeus


-The Wall Street Journal is read by the people who run the country.

-The New York Times is read by people who think they run the country.

-The Washington Post is read by people who think they should run the country.

-The Washington Times is read by people who suppose God wants them to run the country, would like to make enough money to understand the Wall Street Journal, and are comforted every morning knowing those who read the New York Times are no longer running the country.

-USA Today is read by people who think they ought to run the country but don’t really understand the Washington Post. They do, however, like their smog statistics shown in pie charts.

-The Los Angeles Times is read by people who wouldn’t mind running the country, if they could spare the time, and if they didn’t have to leave L.A. to do it.

-The Boston Globe is read by people whose parents used to run the country and they did a far superior job of it, thank you very much.

-The New York Daily News is read by people who aren’t too sure who’s running the country and don’t really care as long as they can get a seat in the subway.

-The New York Post is read by people who don’t care who’s running the country either, as long as whoever’s running the country does something really scandalous, preferably while intoxicated.

-The San Francisco Chronicle is read by people who aren’t sure there is a country, or that anyone is running it; but whoever it is, they oppose all that they stand for. There are occasional exceptions if the leaders are handicapped minority lesbian feminist atheist dwarfs, who also happen to be illegal aliens from any country or galaxy, as long as they are Democrats.

-The Miami Herald is read by people who are running another country, but need the baseball scores.

-The National Enquirer is read by people trapped in line at the supermarket.

Thursday, November 13, 2003

COWS
Email | November 13, 2003 | Me


Posted on 11/13/2003 8:26 AM PST by GYPSY286


I just received this via email and thought it was pretty funny.

DEMOCRAT-You have two cows. Your neighbor has none. You feel guilty for being successful. Barbara Streisand sings for you.

REPUBLICAN - You have two cows. Your neighbor has none. So?

SOCIALIST-You have two cows. The government takes one and gives it to your neighbor. You form a cooperative to tell him how to manage his cow.

COMMUNIST-You have two cows. The government seizes both and provides you with milk. You wait in line for hours to get it. It is expensive and sour.

CAPITALISM, AMERICAN STYLE- You have two cows. You sell one, buy a bull, and build a herd of cows.

DEMOCRACY, AMERICAN STYLE- You have two cows. The government taxes you to the point you have to sell both to support a man in a foreign country who has only one cow, which was a gift from your government.

BUREAUCRACY, AMERICAN STYLE- You have two cows. The government takes them both, shoots one, milks the other, pays you for the milk, and then pours the milk down the drain.

AMERICAN CORPORATION- You have two cows. You sell one, lease it back to yourself and do an IPO on the 2nd one. You force the two cows to produce the milk of four cows. You are surprised when one cow drops dead. You spin an announcement to the analysts stating you have downsized and are reducing expenses. Your stock goes up.

FRENCH CORPORATION-You have two cows. You go on strike because you want three cows. You go to lunch and drink wine. Life is good.

JAPANESE CORPORATION-You have two cows. You redesign them so they are one-tenth the size of an ordinary cow and produce twenty times the milk. They learn to travel on unbelievably crowded trains. Most are at the top of their class at cow school.

GERMAN CORPORATION-You have two cows. You engineer them so they are all blond, drink lots of beer, give excellent quality milk, and run a hundred miles an hour. Unfortunately they also demand 13 weeks of vacation per year.

ITALIAN CORPORATION-You have two cows but you don't know where they are. While ambling around, you see a beautiful woman. You break for lunch. Life is good.

RUSSIAN CORPORATION-You have two cows. You have some vodka. You count them and learn you have five cows. You have some more vodka. You count them again and learn you have 42 cows. The Mafia shows up and takes over however many cows you really have.

TALIBAN CORPORATION-You have all the cows in Afghanistan, which are two. You don't milk them because you cannot touch any creature's private parts. Then you kill them and claim a US bomb blew them up while they were in the hospital.

IRAQI CORPORATION-You have two cows. They go into hiding. They send radio tapes of their mooing.

POLISH CORPORATION-You have two bulls. Employees are regularly maimed and killed attempting to milk them.

FLORIDA CORPORATION-You have a black cow and a brown cow. Everyone votes for the best looking one. Some of the people who like the brown one best, vote for the black one. Some people vote for both. Some people vote for neither. Some people can't figure out how to vote at all. Finally, a bunch of guys from out-of-state tell you which is the best-looking cow.

NEW YORK CORPORATION-You have fifteen million cows. You have to choose which one will be the leader of the herd, so you pick some fat cow from Arkansas

CALIFORNIA CORPORATION-You have millions of cows Most are illegals. Arnold likes the ones with the big tits.

Wednesday, November 12, 2003

http://www.capitalism.org/
More stuff you gotta love:
Washington Times Op-Ed: The Richest 1%



Dateline: December 18, 2002
Headline: The richest 1 percent
Byline: The Washington Times

So much for Republicans being the party of the wealthy. According to a new study by the nonpartisan Center for Responsive Politics, that moniker more appropriately belongs to the Democrats. "Republicans raised more than Democrats from individuals who contributed small and medium amounts of money during the 2002 election cycle," the report notes, "but Democrats far outpaced Republicans among deep-pocketed givers." Among donors who gave more than $200 but less than $1,000, Republicans enjoyed a substantial $68 million to $44 million edge over Democrats. The margin was closer among those individuals who gave $1,000 or more: The GOP took in $317 million, compared to the Democrats' $307 million.

But among the fabulously wealthy, the Democrats cleaned house. Donors of $10,000 or more gave $140 million to Democrats, while only $111 million went to Republicans. Among those individuals who gave $100,000 or more, the Democrats raised $72 million compared to the Republicans' $34 million. And when it comes to the millionaires' club - those kicking in $1 million or more - the Democratic Party skunked the GOP, $36 million to $3 million. Needless to say, despite the near-parity in overall amounts - $384 million to the Republicans vs. $350 million to the Democrats - the number of individual donors to the GOP exceeded those to the Democratic Party by more than 40 percent.

In other words, in 2002 a select group of bigwigs dumped big money into Democratic causes, while a broad base of folks donated respectable [but not overwhelming] amounts to Republican candidates. That goes a long way toward explaining the Democrats' shallow support in the midterm elections, and should give an indication of which party's agenda has been hijacked by the big money-men.

But it also sheds light on the president's first round of tax cuts - arguably the highest-profile domestic referendum in the midterm elections. We can't help but notice that only those who are so stinking rich that money doesn't matter supported the Democrats' opposition to tax cuts. Meanwhile, the many more who form the backbone of America's economy supported the Republicans. As the White House and congressional Republicans prepare a new tax package, we hope they bear that in mind. And just to show that there are no hard feelings, we'll still support tax cuts for the limousine liberals. With all that extra change in their pockets, maybe they'll put it to more productive uses than propping up the rejected policies of the Democratic Party

Friday, November 07, 2003

Rising to the occasion
Larry Kudlow

November 6, 2003

No one seems to have hit on it yet, but there are many reasons why the current economic recovery could easily develop into an eight- or 10-year boom, much like the prosperity cycles of 1982-1990 and 1992-2000. Back at the beginning of each of those recovery waves, few saw the prosperity coming, either. The naysayers, in particular, were completely blind to the potential of a capitalist, market-based U.S. economy driven by science and technology gains.

Today, however, pessimists have little excuse not to see the potential for a multiyear, inflationless, low-tax-rate, low-interest-rate growth cycle -- the key to which is in the amazing productivity story.

In the two decades prior to the technology boom, the ravages of high inflation, skyrocketing interest rates, over-regulation and high marginal tax rates contributed to a measly 1.5 percent average annual increase in productivity, or output-per-hour. But over the past eight years, the application of innovative technologies -- spurred by a wave of capital investment -- has generated a 3.2 percent yearly gain in productivity through boom and bust. This productivity miracle has made the U.S. economy incredibly efficient. It has also enabled businesses of all sizes to slash costs and raise profits. The workforce has never been better equipped, and real wages keep rising.

Economists calculate the nation's potential to grow by adding productivity gains to average population growth rates. In the United States, population tends to rise at a 1 percent rate, so the new-era Internet economy is capable of growing in a sustained long-term fashion at roughly 4.2 percent a year (3.2 percent productivity plus 1 percent population growth). In the old-economy era, America's capacity to grow was only 2.5 percent a year.

Over the next 20 years, the difference between 4.2 percent and 2.5 percent amounts to $6.4 trillion in higher national income. In budget terms, at an average 20 percent tax rate, roughly $1.3 trillion in new revenues will turn deficits into surpluses. At the same time, more growth, investment and work will operate to hold back inflation and interest rates.

While inflation is primarily a monetary phenomenon -- a lower dollar value caused by too much money chasing too few goods -- higher productivity and faster economic growth raise the supply of available goods and services that can be purchased with the same quantity of money. Hence, the existing money supply becomes less inflationary in a growth-producing, productivity-enhanced economy.

Other contributors to economic growth have the same counter-inflationary effect. Bringing down high marginal tax rates on individual incomes and capital formation (including dividends, capital gains and faster business-depreciation write-offs for equipment purchases) also contributes to a more rapid expansion of the economic pie.

When it pays more to take the extra investment risk or work the extra hour, economic behavior rises to the occasion. Though demand-side economists seem not to recognize it, the recent Bush tax cuts are not one-time stimulants. The tax cuts on capital gains and dividends won't expire until 2008 -- personal rate cuts extend until 2010.

That means pro-growth incentive rewards for risk and work will be in place for many years, nurturing greater investment and encouraging breakthroughs in the next biotech, Internet telephony or broadband advance. This is the stuff of which powerful prosperity booms are made.

Over the next decade, the tax-cut consequences of proliferating capital formation and goods-producing business expansion virtually eliminate any threat of inflation.

Actually, the strong-dollar combination of lower tax rates, higher investment returns, more rapid technological breakthroughs and even greater productivity gains -- all promoting faster economic growth -- will maintain the pressure for lower, not higher, prices. Hence, the Fed must keep the money spigots wide open.

To a great extent, President Bush has made a supply-side bet on the next election. His Keynesian critics argue that the so-called temporary tax cuts are already wearing off. Consequently, they say, 7 percent GDP in this year's third quarter will be a one-time event -- followed by a tepid jobless economy and Bush's defeat.

But there's another doctor's opinion. Reduced marginal tax rates will sustain the new economic-incentive structure for years to come. Lower taxes will keep on spurring new wealth and higher employment levels far longer than almost anyone dreams possible.

Meanwhile, year two of President Bush's supply-side tax-cut experiment could generate 4 percent to 5 percent growth, as many as 2 million new jobs and a handsome re-election victory. But the really interesting part of this calculus is the potential of another six to eight prosperity years (at the least) following 2004.

Left-wing economic pundit Paul Krugman will be floored. The high-tax Democratic presidential field betting on continued recession will be stunned. And George W. Bush's supply-side re-election will have long coattails for federal, state and local legislatures throughout the land.
This is another friday. Im hoping that things will continue to improve in the job market. These lil 12 $ an slave gigs suck