“Scarcity” at Root of Political Polarization?

July 23, 2014

http://www.pbs.org/newshour/bb/politically-divided-wisconsin-little-incentive-seek-middle-ground/

The above link will take you to a story that aired on the PBS Newshour on July 18th.  It’s a story about the political divide in Wisconsin and is followed by analysis by David Brooks (conservative and Wall Street Journal columnist) and Mark Shields (liberal commentator).

Brooks’ analysis was particularly poignant.  He explained that he once believed our polarization was a top-down, Washington-based phenomenon, but now sees it as a bottom-up movement, driven by “scarcity.”

The significance of this is that “scarcity” is a term used by economists, primarily to deride those concerned with overpopulation as having a “scarcity mentality.”  It’s an alternative to “Malthusian,” lest the latter term become trite.  You see, economists don’t believe in the concept of “scarcity.”  Man is clever enough to stretch resources and always assure that there is enough for all as our population continues to grow, say economists.

So it’s significant that someone of Brooks’ gravitas sees actual scarcity in our economy that is the driving force behind our polarization.  It’s not a scarcity of natural resources but a scarcity of jobs, a scarcity of income, a dwindling of resources needed to provide adequate health care and of government resources necessary to provide a social safety net.  Such scarcity now pits Americans one against another as they compete for these ever-more-scarce financial resources.  Each side now sees the other as a threat instead of as fellow Americans working toward a common goal.  The haves see the have nots as a threat to strip them of some of their wealth through redistribution schemes.  The have nots see the wealth of the haves as ill-gotten gains that have been taken from them unfairly with the collusion of their conservative politicians.  With each side  perceiving themselves as having their backs against the wall, neither is willing to compromise.  We’ve become like an overcrowded cage full of  animals where all was peaceful until the zookeeper began cutting back on the food thrown into the cage.

This scarcity is the direct consequence of the rising unemployment and worsening poverty that’s inescapable as overcrowding drives down per capita consumption and, with it, employment.  And it’s not merely a national phenomenon, but a global one, as labor forces continue to swell and compete for ever-more-scarce manufacturing jobs just to keep themselves out of poverty.

If Brooks is right (as I believe he is) that scarcity lies at the root of our political polarization, then the polarization and gridlock in Washington is only going to get worse.


Trade Deficit in Manf’d Goods Worsens Again in May

July 9, 2014

http://www.bea.gov/newsreleases/international/trade/2014/pdf/trad0514.pdf

I’m still catching up from last week.  On Thursday the Bureau of Economic Analysis announced that the trade deficit in May moderated slightly to $44.4 billion.  (A link to the report is provided above.)  But the real news is that the deficit in manufactured goods set yet another record – $49.5 billion.  Here’s the chart:  Manf’d Goods Balance of Trade.

Manufactured exports rose slightly in May, but not enough to keep pace with the President’s goal of doubling exports by 2015.  Manufactured exports lagged that goal in May by a record margin of $45.0 billion.  In fact, manufactured exports haven’t risen in the past 26 months.  Here’s the chart:  Manf’d exports vs. goal.

Even if we give the president the benefit of the doubt and assume he meant exports of all goods and services, that figure also lagged the president’s goal by $66.3 billion.

Remember the trade deal that President Obama signed with South Korea two years ago, which he hailed as a “big win for American workers?”  Our trade deficit with South Korea set another record in May:  $2.7 billion.  In 2011, our trade deficit with South Korea was $13.2 billion.  Last year it was $20.7 billion.  So far, 2014 is on track to handily beat that record.  Thanks, Mr. President!  Please, if you’re not going to do something to restore a balance of trade, stay out of any further trade negotiations unless you hire someone competent in the subject.

We keep hearing talk of a “manufacturing renaissance” in the U.S., but the facts speak otherwise.  Our trade policy continues to drain ever more from the life of the manufacturing sector of the economy.  Trade policy is just one element of a clear pattern that has emerged over the course of the Obama presidency.  It’s a pattern of zero follow-through.  He very publicly proclaims lofty goals and draws red lines, but then sits back and does nothing toward accomplishing those goals.  He’s become the quintessential “bench-warmer,” filling the seat in the White House until he can be replaced, hopefully by someone with some drive and some competence.


“The Best and the Brightest”

July 8, 2014

http://www.reuters.com/article/2014/07/04/us-usa-obama-immigration-idUSKBN0F91LX20140704

This story (link provided above) is a couple of days old but still relevant, given the continuing and escalating anger over the illegal immigration situation that has a hundred thousand children per year pouring across our border.  As busy as things have been for me this past week, I couldn’t let it pass.

Commenting on the issue, President Obama remarked that:

It’s in our DNA. … We shouldn’t be making it harder for the best and brightest to come here.

The statement is so illogical and insulting to the American people that journalists should be ashamed for letting it pass without challenge.  First of all, what we’re talking about here is the entry of illegal immigrants.  No one is giving them IQ or aptitude tests upon crossing the border to determine whether they represent the “best and brightest.”

Secondly, the remark implies that America is short on “best and brightest” qualities – that too many Americans are among the “worst and dumbest,” making it necessary to import superior people.  It also implies that the degree of goodness and intelligence is something inherent in one’s make-up – something that can’t be developed through education and training.  It says we’d rather  import people with skills and training that may be in short supply (though the data proves that we have no such situations), rather than invest in training and education.  It says that if you’re in a disadvantaged situation in America – tough.  We’ll import someone else and give them all the advantages.

And a question that’s never asked is why the “best and brightest” want to come here in the first place.  The stated reasons are because they are fleeing this or that or, more often, because they’re seeking a better life.  What’s unsaid is that those are euphemisms for what they’re really fleeing – the effects of overpopulation in their home countries.  So how much sense does it make to pursue immigration policies that guarantee that our own country will eventually come to the same fate?

The arguments in favor of high rates of immigration are pure BS.  The president is merely caving to business interests who want to maintain downward pressure on wages through an over-supply of labor and who, secondarily, see a growing population as a growing customer base that will swell the bottom line.  Who cares that it steadily erodes the quality of life of everyone but the top 1%?

Immigrants are no magic elixir for our economy.  They are merely people, no different that the rest of us.  In the final analysis, the only effect of immigration, legal or otherwise, is to grow our population.  Any discussion of immigration policy that isn’t in that context makes no sense whatsoever.  We have to begin by asking ourselves whether it makes sense to add workers to the labor force while fifteen million Americans are still out of work.  Does it make sense to add oil consumers when we’re already heavily dependent on imported oil?  Does it make sense to add carbon emitters when the challenge of meeting commitments to reduce carbon emissions already threatens to erode our quality of life?  Does it make sense to increase the demand for social safety net services when we already can’t afford them?  Does it make sense to increase the stress and strain on our resources and environment when they’re already near the breaking point?

I voted for Obama in the first election because I thought he favored the interests of the American people over the interests of global corporations.  What a disappointment.  Contrary to outward appearances, he clearly either lacks the intelligence to connect the dots between population growth and a host of critical issues (perhaps he doesn’t represent the “best and brightest?”), or is just another politician beholden to the deep pockets who put him in office.

 


Per Capita GDP in Decline

July 3, 2014

The country is in an uproar over the immigration crisis that Obama’s refusal to enforce the laws has left us in and, at the same time, I find myself with limited time for writing posts.  You can read opinion pieces on the immigration mess anywhere and everywhere right now.  So I though a better use of my time would be to focus on the recent downward revision in GDP (gross domestic product) and use it as an example as to why America’s ridiculously high rate of legal immigration – not to mention Obama’s refusal to enforce the border and deport illegal immigrants – is so bad for the American economy.

The BEA (bureau of economic analysis) last week dramatically lowered its final reading of GDP for the 1st quarter to an annual rate of decline of 2.9%.  The harsh winter took much of the blame.  Adjusted for inflation, GDP still remains higher than it was in the 3rd quarter of 2013.  And it’s risen by nearly a trillion dollars since the 4th quarter of 2007, when the recession first began.

But you shouldn’t care about overall GDP.  What matters is each American’s slice of the pie, or per capita GDP.  When population growth is taken into account, per capita GDP fell to its lowest level since the 2nd quarter of 2013.  And it’s barely budged in the past seven years (going back to the 4th quarter of 2007 again).  Here’s the chart:  Real Per Capita GDP.

Since the end of 2007, per capita GDP has risen by only $317 per person, an annual rate of increase of only 0.09%.  That includes all Americans, and it’s been widely reported that all of the gains are concentrated in the top 1% of Americans.  Take away that top 1%, and per capita GDP has actually declined during the supposed “recovery” that has taken place since the end of the recession.  And that’s in spite of a trillion dollars in stimulus spending by the federal government and four trillion dollars of stimulus provided by the Federal Reserve.  Imagine how bad it’d be if we took away that $5 trillion that has been poured into the economy in the past seven years.

Declining per capita GDP is one of the outcomes predicted by the inverse relationship between population density and per capita consumption (which is inextricably linked to per capita employment).  As our population continues to grow beyond its optimal level (thanks entirely to both legal and illegal immigration), it’s inescapable that per capita GDP will decline, even as overall GDP continues to grow slowly.

In other words, immigration is the driving force behind a decline in Americans’ quality of life.  Yet, the deep pockets that fund our politicians continue to advocate for increased immigration and population growth.  They want more consumers to grow their bottom lines.


The Labor Shortage Hoax

June 27, 2014

I haven’t posted much lately because it’s been a tough few weeks, with the worst re-aggravation of an old back injury that I’ve experienced in 25 years.  But I’ve finally overcome it!

The following article appeared in the most recent edition of the FAIR Immigration Report.  “FAIR” is the Federation for American Immigration Reform, a lobbying group that works for tougher enforcement of the border, deportation of illegals and lower rates of legal immigration.

The article takes on the hoax perpetrated by business lobbying groups that we need more immigration because of labor shortages (both in skilled and unskilled labor).  I can’t say it better myself, so enjoy the article:  FAIR article.


Obama Directly Responsible for Immigration Mess

June 11, 2014

As reported in this CNN article (and virtually everywhere else this week), the southern U.S. border has been overrun by a tidal wave of unaccompanied, underage illegal immigrants.

Of the 1,200 or so crossing the Rio Grande in eastern Texas every day, up to 400 are unaccompanied children…

Prior to Obama’s refusal to enforce immigration laws, about 8,000 unaccompanied children entered the country illegally each year.  Now the rate is 400 per day – almost 150,000 per year – and that’s just one small section of the border in Texas.  Word has gotten out in Mexico and Central America that if you’re a minor and you can make it here, then you’re here to stay and the American Dream is yours.

The Obama administration has often complained that we don’t have the resources to deport all of these illegal immigrants.  Yet it has found the resources to bus this new wave all across the southwest and to set up housing for them.  Couldn’t it much more easily simply bus them back to the border?  At that point, they’re Mexico’s problem and if Mexico doesn’t like it, it’s time to get tough with Mexico and demand that they begin enforcing their own borders.

This situation is an outrage and the vast majority of the American people are absolutely fed up.  The media is also widely reporting the defeat of Republican Eric Cantor this morning, and his support for immigration “reform” and amnesty is being cited as the major reason why.  All congressmen and senators should sit up and take note.

This isn’t a rant against immigration, it’s a rant against a breakdown in common sense that fuels population growth at a time when that’s the very last thing that this country needs.  Of the approximately 18 million people added to our ranks in the last seven years (almost all of it through immigration), not a single one has found employment.  (The employment level is the same as it was seven years ago.)  But all are exacerbating our dependence on foreign oil, our challenge to reduce carbon emissions and our growing dependence on safety net programs to feed and house a growing population living in poverty.

Good riddance, Eric Cantor.  Too bad we have to wait three years before a similar change in president.

 


May Jobs Report Provides Further Evidence of an Economy Locked into “New Normal”

June 7, 2014

The May jobs report, released yesterday by the Bureau of Labor Statistics, was celebrated as evidence of an economy rebounding from an economically-scary first quarter in which GDP (gross domestic product) actually declined by a significant 1%.  Another quarter of decline and the economy would officially be declared in recession.  So another month of job gains that exceeded 200,000 (the total was 217,000) was a relief.  Little discussed is the fact that it’s down significantly from April (282,000).

Manufacturing managed to eke out a gain of 10,000 jobs, all in durable goods, driven mostly by auto manufacturing.  Aside from durable goods, manufacturing employment actually fell by 7,000 jobs.

Construction was worse, squeaking out only 6,000 new jobs.

Much was made of the fact that the “employment level” – a statistic from the household survey – has returned to pre-recession levels.  Well, that depends on when you consider that the recession actually began.  Officially, it began with the 4th quarter of 2008 when GDP began to decline.  But by that time, the employment level had already fallen by over a million jobs, and the employment-population ratio was already in free-fall.

The report is riddled with the word “unchanged.”  Aside from the headline number from the establishment survey, there wasn’t much to celebrate.  Per capita employment is essentially unchanged over the past four months and has actually fallen slightly in the past two months.  Here’s the chart:  Per Capita Employment.  Note that, although per capita employment rose above 45% in November of 2011 for the first time since the start of the recession, it has not managed to crack 46% yet.  When I first began tracking this data in November of 2007, per capita employment was at 48.4% and in the midst of a rapid plunge from earlier, even higher levels.

The long and short of it is welcome to the world of “new normal” – high unemployment, lots of part-time work and low wages.  It’s now accepted.  This is about as good as it gets now in an economic “recovery.”

If this is recovery, what will the next recession look like?

 


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