The Conversation

Economy: Issues related to the economy and economics

Who Will a Higher Minimum Wage Actually Help?

Nov 18, 2014 8:01 AM PT

The Daily Signal put up this video of comments from federal workers who are on strike because they want a higher minimum wage.  Rep. Hank Johnson (D-GA) says that it isn't fair for the top 1% to have so much income and that it should be redistributed.  The current minimum wage for federal workers is $10.10 (thanks to an executive order from the President).  Perhaps I could get on this redistribution bandwagon if we applied it to the top 1% of federal workers.  I'm sure they're all overpaid, so let's redistribute it to those who risk their lives for their country rather than those who work at the National Zoo (which has a pretty dismal record).  

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Is it still 'the economy, stupid?'

Nov 6, 2014 1:41 PM PT

Dan Henninger at the Wall Street Journal thinks Obama's weaksauce economy cooked Democrat geese during the midterm elections: "Low economic growth in the modern U.S. economy is a total, across-the-board, top-to-bottom political loser."

Normally “economic growth” is an economist’s term of measurement. But during these six lost years, that bad data was physically felt. Barack Obama kept calling it the Great Recession. He got that right. Even the government’s statisticians felt it. Read between the lines of this paragraph in the federal government’s October employment report, on the eve of the election:

“In September, 2.2 million persons were marginally attached to the labor force, essentially unchanged from a year earlier. (The data are not seasonally adjusted.) These individuals were not in the labor force, wanted and were available for work, and had looked for a job sometime in the prior 12 months.”

That reality killed the Democrats. If there’s one economist’s term of art the average person learned in the Obama era, it is“labor force participation rate.” It’s not good.

For decades after World War II, the U.S. economy had an annual average growth rate of 3.3%. Here are the growth rates for each year of the Obama presidency (World Bank data):

2009: -2.8%; 2010: 2.5%; 2011: 1.8%; 2012: 2.8%; 2013: 1.9%

You preside over that performance, you lose. The 2014 growth uptick arrived too late to save the Democrats. The economy was a spent political force for them.

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Help wanted, but we're not hiring

Oct 7, 2014 8:26 AM PT

Unemployment reports are complicated, and it really takes an extra two months to process all the data and nail the figures down - that's why significant "adjustments" to the last two reports are so often announced by the Bureau of Labor Statistics when each monthly report is issued.  Naturally, the media completely lost interest in the nuances of unemployment reports when its primary mission became spinning Barack Obama's awful economy for years on end.  The reason most people are familiar with the derogatory term "burger-flipper job" is because the press made a huge deal about diving deep into solid Bush-era job reports and hunting for dark clouds among the silver lining... but these days they can scarcely be bothered to mention that a major, and often the sole, reason for the headline unemployment rate holding steady or dipping slightly is because huge numbers of job-seekers gave up and abandoned the workforce entirely.  

They also cheerfully report job-creation numbers without mentioning that a large percentage of them are part-time jobs, often producing net "positive" job creation in a month when full-time jobs were lost.  That's what I've called The Greatest Story Never Told since 2009, the steady conversion of America into a part-time workforce, which is extremely desirable for the Left, since it produces their idea of the model citizen: Takers who are also Makers.  That is, people who work hard for a living, but still require significant government assistance (including the imposition of a higher minimum wage) to make ends meet.  Only by creating a large number of hybrid Taker/Makers can the Left's long-term project of subduing their great enemy, the Middle Class, be completed.  

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Obama-conomy Wreaking Havoc on Middle Class

Oct 5, 2014 1:32 PM PT

While the media has been quick to carry Barack Obama's mid-term water in pushing the notion that unemployment is down to "5.9% ... its lowest level since 2008," what they aren't pointing out is how disastrous the Obama economy has been for the middle class.

In essence, real wages continue to shrink and any gap with a so called 1%, many of whom support Democrat policies, has only continued to grow during Obama's time in office.

The number of people collecting paychecks rose more than had been expected and the tally of people counted as jobless fell, placing the unemployment rate — 5.9% — at its lowest level since 2008.

While the trends are positive, they offer only distant hope to a middle class that is taking home less pay than it used to and can only watch as the wealthy enjoy ever greater prosperity.

It wasn’t supposed to be this way under President Obama, tribune of ordinary folks who, as he likes to say, play by the rules.

Six years into his administration, five years after the end of the Great Recession, the President is out talking up his economic record to bolster Democrats’ chances in the November congressional elections.

He stresses that U.S. businesses have created 10 million jobs since 2009 in “the longest uninterrupted stretch of private-sector job creation in our history.” All of which is true — and far less than the full story.

If you’ve been looking for low-wage, part-time work, for example, you’ve been a winner during Obama’s recovery.

The Clintons torpedo Obama's 'corporate inversion' campaign

Sep 24, 2014 1:27 PM PT

Even those who have a heaping helping of disapproval for Bill Clinton have to admit the old boy can make them laugh.  After all the work President Obama and certain congressional Democrats have put into their dopey War on Corporate Inversions (aka "kneecap everyone who tries to climb over the wall to escape our nutty tax system,") Slick Willie comes along to "express sympathy" for Obama's designated targets.  From the New York Times:

Like it or not, this inversion, this is their money,” Mr. Clinton said in an interview during the Clinton Global Initiative in New York.

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Bill Clinton Defends Corporate Inversions

Sep 23, 2014 3:45 PM PT

Former President Bill Clinton offered a defense of corporate inversions today during an event at the Clinton Global Initiative.

The NY Times reports that Clinton defended the practice saying, "Like it or not, this inversion, this is their money." Clinton went on to explain, "We have the highest overall corporate tax rates in the world, and we are now the only O.E.C.D. country that also taxes overseas earnings."

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The War on Poverty; Failure redefined as success

Sep 21, 2014 12:37 PM PT

We just hit the 50th anniversary of the War on Poverty, and the numbers are grim: $22 trillion spent, but according to the Census Bureau, a slightly greater percentage of Americans fall below the poverty line.

On the other hand, some people say the numbers look great, and the War on Poverty was a smashing success... because the official definition of poverty doesn't include the value of the extensive benefits bestowed by that $22 trillion bureaucracy.  If you count those benefits, virtually no one in America is actually impoverished.  Nearly everyone has food and shelter.  In fact, in some states, unemployed welfare families have more disposable income than working middle-class families.

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Michael Bloomberg: Economy in "Very Good Shape"

Sep 18, 2014 4:41 PM PT

rrecent polls have demonstrated that the vast majority of Americans are not thrilled with the Obama economy. In fact, it's increasingly becoming a key issue in some mid-term races.

In an interview on Bloomberg TV, Michael Bloomberg's economy, on the other hand, appears to be in "very good shape"

The fed just yesterday ratcheted back its expectations for 2016. i think the economy is in very good shape. There is a lot of optimism.

Long-Term Unemployment Remains At Historic High

Sep 11, 2014 8:27 AM PT

The White House may call it a recovery, and the media may mostly chirp along, but that doesn't appear to be the case for many Americans still victim to ObamaNomics. The "number and share of people out of work for more than six months, the so-called long-term unemployed, remain at historically high levels."

One has to wonder how hiring trends might be different were businesses not having to contend with the new financial burdens imposed by Obamacare, for example. And certainly any influx of cheap labor through a lax immigration policy can't help in this situation.

Of the 3 million long-term jobless today, about one-third have been unemployed for more than two years, Labor Department data show. A small minority — roughly 100,000 Americans like Perry — have been actively looking for at least five years. They might be called the super long-term unemployed. While others have quit looking, taken early retirement or entered disability rolls, these workers have pressed on year after year despite the increasingly long odds of finding a new job.

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Inversion, competition, and captive politics

Aug 26, 2014 8:16 AM PT

Until now, the left-wing hyperventilating over corporate "inversions" has been out of proportion to the number and size of corporations actually doing it.  This is partly because Democrats are looking forward to using the issue in a populist anti-corporate crusade.  They're practically salivating over the chance to scream about "unpatriotic" companies re-incorporating in Canada or Europe to get out of paying American taxes.

The other reason inversions became a big deal over the past year or so is that a lot of companies were thinking about it.  The political class has a lousy track record of predicting the future, but their antennae tend to be quite sensitive when it comes to the impending loss of tax revenue.  And they're right to be worried.  Every time I discuss the impending systemic crash of American government, which I think is now a decade away at most, I make the point that the Great Crash will begin some months before insolvency causes Big Government systems to fall apart, because the smart people - who also tend to be the rich people with lots of assets - will see it coming and get out of Dodge, hastening the onset of the very crisis they seek to avoid.  Sharp investors and business tycoons have both options for escape, and the prescience to exploit them.

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The real lesson of Ferguson: we need more Big Government stimulus bills

Aug 21, 2014 1:23 PM PT

Leftists believe one should never let a crisis go to waste.  Socialist Senator Bernie Sanders of Vermont certainly isn't going to let the Ferguson riots pass by without using them as theater to push a big "jobs" bill - you know, the kind of "stimulus" spending that has been conspicuously failing to stimulate healthy job growth for years.  The Hill has details of Sanders' spend-a-palooza:

“If we are going to address the issue of crime in low-income areas and in African-American communities, it might be a good idea that instead of putting military style equipment into police departments in those areas, we start investing in jobs for the young people there who desperately need them,” Sanders said.

His comments came after an unarmed black teen, Michael Brown, was shot and killed by a police officer in Ferguson, Mo. Sanders said, in the St. Louis area, almost half of young black men are unemployed. 

“Not only do we have to take a stand to end the violence that is being committed against young Americans, we also must recognize that there is an economic crisis facing our nation’s youth, particularly young African-Americans,” Sanders wrote in a letter to colleagues asking for co-sponsors of his new bill, the Employ Young Americans Now Act.

Sanders’s bill would authorize the Department of Labor to immediately give $4 billion to states and localities to employ 1 million young Americans between the ages of 16 and 24. The youth unemployment rate is currently more than 20 percent and nearly 35 percent for young African Americans.

The bill would also award $1.5 billion in competitive grants to provide work-based training to low- and moderate-income youth and disadvantaged young adults.

“If we are going to reduce youth violence and instill hope and a bright future for the young people in this country, we have got to provide them with the jobs and the skills they need to move up the economic ladder,” Sanders wrote.

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Oops, Obama Administration Spported Delphi Inversion

Aug 6, 2014 10:31 AM PT

Apparently corporate patriotism only matters when President Obama is on the political attack. Otherwise, it's DC insider business as usual.

Reported by Bloomberg

As part of the bailout of the auto industry in 2009, Obama’s Treasury Department authorized spending $1.7 billion of government funds to get a bankrupt Michigan parts-maker back on its feet -- as a British company. While executives continue to run Delphi Automotive Plc from a Detroit suburb, the paper headquarters in England potentially reduces the company’s U.S. tax bill by as much as $110 million a year.

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Obama Claims His Policies Have Been Friendly Towards Businesses

Aug 4, 2014 10:29 AM PT

In an interview published in The Economist, Saturday, the president claimed that his policies have generally been friendly towards business, adding that he understands why they might be a little frustrated with his onerous regulations.

Via The Hill:

“They always complain about regulation,” Obama said of business leaders. “That’s their job.

“I would take the complaints of the corporate community with a grain of salt,” he adds. “If you look at what our policies have been, they have generally been friendly towards business.”

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The great inflation debate

Jul 23, 2014 8:31 AM PT

The argument over whether inflation is a big problem, whose extent has been concealed by government agencies and the media, has been growing more vigorous over the past few weeks.  Not everyone who thinks inflation fears are exaggerated is a big-government leftist or Obama defender.  James Pethokoukis of the American Enterprise Institute, writing at The Week, goes so far as to dismiss inflation fears as "doomsday prepper economics" and a "weird obsession that's ruining the GOP."

Riffing off former Rep. Ron Paul's warnings of impending inflation apocalypse in 2009, Pethokoukis argues that "the Next Great Inflation never happened":

The Consumer Price Index, including food and energy, has risen by an annual average of just 1.6 percent since 2008, below the Fed's 2 percent inflation target. During the Great Inflation of the 1970s and early 1980s, by contrast, prices rose five times faster.

This information isn't a secret. The Labor Department releases inflation data monthly on its website. Yet inflation fears still rage on the right. Those concerns are a big reason why Republicans continue to push for a balanced budget ASAP. They're why the GOP wants to saddle the Fed with restrictive new rules.

Regardless of the potential merits of those policy ideas, the inflation alarmism driving them is taking a weird turn. Some Republicans and conservatives now argue that Washington is figuring inflation all wrong, maybe even intentionally. Better, they say, to trust independent outside sources such as the website ShadowStats, which "exposes and analyzes flaws" in government economic data. According to one set of ShadowStats calculations, the true inflation rate is nearly 10 percent today. The inflation truth is out there.

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Salon: Let's Nationalize Amazon and Google

Jul 8, 2014 11:50 AM PT

Salon is not quite beyond parody as this excellent parody Twitter account demonstrates. On the other hand it gets harder every day to distinguish the real site from the jokes. Case in point, an article published today proposing that Google and Amazon be turned into public utilities.

Beneath a Photoshopped image of Jeff Bezos standing in front of an avalanche of money lies an article heavy on paranoia. Author Richard Eskow opens his piece on this note, "They’re huge, they’re ruthless, and they touch every aspect of our daily lives. Corporations like Amazon and Google keep expanding their reach and their power."

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Part-time America: Makers who are also Takers

Jul 7, 2014 8:03 AM PT

I thought I'd grown numb to the media's relentless efforts to manufacture good news for Barack Obama, but the June unemployment report really takes the cake.  It was almost universally reported as phenomenal good news, with caveats brusquely related 10 paragraphs into print stories, if at all.  Almost 300,000 jobs created!  Recovery Summer is here at last, five years after Obama promised it!  Pop the champagne corks, America is back in business!

In reality, this was a horrific unemployment report, and there is nothing ambiguous about why.  The headlines should have read "Full-time employment crash: Half a million careers disappear in June."  Quite simply, and to use round numbers, we got to the headline "300k jobs created" because the economy created 800,000 part-time jobs, while losing 500,000 full-time positions.    

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Sad News for Dems: Americans Not Interested in Talking About Income Inequality

Jul 5, 2014 10:36 AM PT

The White House has all but abandoned a message of income inequality it had focused on last year. It turns out Americans are not moved by the topic and prefer a message based on opportunity.

The Washington Post reported yesterday that President Obama had to be pulled away from the message by aides who realized it was not connecting with voters in the run up to 2014.

Last year, Obama personally felt the pull of these arguments. White House political research showed that income inequality was a wonky term that did not always resonate with voters, but he insisted on speaking about it anyway.

That focus culminated in a December speech in a low-income neighborhood in Southeast Washington, where he referenced inequality 26 times and discussed academic findings on the gap between the wealthy and the poor.

“He wasn’t particularly interested in knowing whether that was a good economic message,” said one person familiar with the process, who spoke on the condition of anonymity in order to discuss private conversations. “He wanted to sound alarm and put voice behind that.”

But as 2014 loomed, White House strategists concluded that inequality was not registering with voters on its own.

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Obama Poster Mom Blasts Obama Economy

Jun 27, 2014 10:06 AM PT

A funny thing got left out of this Star Tribune report and much of the other coverage involving mother and accountant Rebekah Erler, whose letter to the White House Barack Obama used in his ongoing push to raise the minimum wage.

White House Press Secretary Josh Earnest told the Star Tribune on Wednesday that the letter from Rebekah Erler inspired the president to launch a series of conversations around the country with regular middle-class Americans. 

The accountant and 36-year-old mother of two wrote to the president about the ongoing financial struggles that she and her husband face despite the economic recovery. Her note made its way into the pile of 10 letters from Americans that Obama reads each night.

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Tipping your waitress is the latest sacrilege against union power

Jun 20, 2014 8:30 AM PT

Writing at the Washington Times, Mike Paranzino chronicles the latest Big Labor crusade, this time against tipping.  When I first saw the headline, I spent a few moments frowning and trying to remember what arcane business or high-finance practice might have become known by the nickname "tipping."  I even briefly considered the possibility that unionized agricultural workers were going after the old drunken prank of cow-tipping.  

But no, Paranzino is talking about the simple and time-honored practice of tipping waiters and waitresses, not some Wall Street maneuver.  Here's a fun little exercise: take a moment before reading on, and try to guess why labor unions would have a problem with tipping - a major source of income for hard-working people, including a lot of young people trying to pay their way through college.  

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Chicago teeters on the edge of financial oblivion

Jun 18, 2014 1:57 PM PT

Sure, I could write that headline about any number of cities, and you could say Detroit is doing a lot more than just "teetering on the edge of oblivion."  But it's going to be a huge deal when Chicago goes down... and I think "when" is the appropriate word to use, not "if."  The lovely state surrounding Chicago isn't in very good shape either, and the nation surrounding that isn't exactly rolling in dough.

Tell me you can't see a story like the one written by the Chicago Sun-Times yesterday being written about the U.S. government, the day after tomorrow, especially after Chicago mayor Rahm Emanuel's old boss Barack Obama has been running the joint for eight long years:

Already facing a host of financial worries, Mayor Rahm Emanuel’s administration could be stuck with a nearly $200 million tab as a result of betting heavily on risky interest-rate “swaps” under former Mayor Richard M. Daley.

The deals required the city to maintain a certain credit rating, but the rating has fallen since the Daley administration made them, putting the city at risk. 

The financial institutions involved could terminate the deals and demand immediate payment if the ratings agency Moody’s Investor Service drops the city’s credit rating again — which it has warned it will do unless Chicago’s underfunded pensions are dramatically reformed.

Taxpayers could end up owing bankers and other financial institutions, including Wells Fargo and Loop Capital Markets, $110.4 million if Moody’s drops its rating for Chicago by one notch, according to documents reviewed by the Chicago Sun-Times. Falling two more levels could cost the city another $88.5 million.

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A flight of subsidized fancy

Jun 9, 2014 7:57 AM PT

J.D. Tuccille has a terrific article over at Reason that illustrates the lunacy of government subsidies mixing with madcap regulatory excess.  Flying into Los Angeles on a small commuter shuttle, Tuccille couldn't help noticing that half the seats on the damn plane had been ripped out.  

That's because the flight was part of a heavily regulated, heavily subsidized program called Essential Air Service, which basically forces airlines to provide travel routes that don't make economic sense.  This particular airfield gets over $2 million a year in taxpayer subsidies.  Of course, the vast majority of people paying the subsidy will never take a single flight on the service they're paying for.  Heck, the vast majority of them will never set foot in California.

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52% of Americans Can't Afford Housing Costs

Jun 3, 2014 6:54 PM PT

Over half of Americans (52%) have had to take a second job, stop saving, cut back on health care, move or take on debt to cover their rent or mortgage thanks to the Obama economy. 

That according to “How Housing Matters Survey,” a survey commissioned by the nonprofit John D. and Catherine T. MacArthur Foundation. The survey was conducted by Hart Research Associates. 

“Affordability issues are real and a major hurdle,” says Lawrence Yun, chief economist at the National Association of Realtors, an industry group. Home prices have increased 20% over the past two years while wages have barely gone up, he says. “Only by adding more new supply, via housing starts, can home prices be tamed,” Yun adds. In fact, construction of housing units has averaged around 1.5 million a year for the past five decades, he says, but it’s likely to be less than 1 million in 2014.

What’s more, at least 15% of American homeowners (or residents of 78 counties across the country) were living in housing markets where the monthly mortgage payment on a median-priced home requires more than 30% of the monthly median household income — long considered the maximum for rent/mortgage repayments. Housing costs above that threshold are “unaffordable by historic standards,” says Daren Blomquist, vice president at real estate data firm RealtyTrac. In New York county/Manhattan, mortgage payments represent 77% of the median income and in San Francisco County represents 70%.

Where the Piketty vs. Financial Times Debate Finally Landed

Jun 2, 2014 3:20 PM PT

The debate between French economist Thomas Piketty and the Financial Times continued to play out last week, though it was overshadowed by VA news and the resignation of two administration figures. Here's what you may have missed.

Last Wednesday, FT wrote another long blog post criticizing Piketty's use of data. The critique was mostly focused on two areas, Piketty's U.S. data and his U.K. data. With regard to the U.S. data, FT points out that Piketty is defends himself by referring to new research published after his book came out. While Piketty argues that this proves he was right (and may even have underestimated wealth of the top 1%) it doesn't explain how he arrived at his conclusions using the data he did use.

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Thomas Piketty: Critique of His Work Is 'Just Ridiculous'

May 26, 2014 6:52 PM PT

In an email to Bloomberg News, French economist Thomas Piketty called the criticism of his work "just ridiculous."

Piketty had earlier offered a longer but somewhat nebulous response to Financial Times. The gist of it was that his argument was on solid footing even if the details of his data needed adjustment. Speaking of the historical wealth data he used to create his charts he wrote, "For the time being, we have to do with what we have."

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Hoof-in-mouth economics

May 25, 2014 6:34 AM PT

In response to Piketty's Pickle: Undercut His Thesis or Defend Use of Inappropriate Data:

There may not be any direct accusations of academic fraud against Thomas Piketty yet, but it's pretty obvious his work is false and disingenuous - the Left gets suckered by another fast-talking con man with hockey-stick numbers, just like the global warming scam.  Of course, they want to get suckered.  They deeply want to have something resembling empirical scientific evidence to back up the centralization of power.

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Piketty's Pickle: Undercut His Thesis or Defend Use of Inappropriate Data

May 23, 2014 9:15 PM PT

The Financial Times takedown of Thomas Piketty's inequality data demonstrates a range of errors from the trivial all the way up to errors which seem inexplicable apart from their importance in bolstering his thesis. As Business Insider pointed out late Friday, FT isn't just saying Piketty made mistakes, they are also suggesting he may have "exaggerated" his results.

In his long blog post on the subject, FT's Chris Giles' identifies 7 different classes of errors in Piketty's data. Some of these are as simple as reading the wrong figure from a chart of source data. This is certainly an error but it's correction is unlikely to do any harm to Piketty's thesis or his reputation. Simple mistakes happen.

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Financial Times Outlines Problems with Piketty's Inequality Data

May 23, 2014 11:55 AM PT

Thomas Piketty's  "Capital in the Twenty-First Century" has been widely praised by the left for its conclusion that capitalism is driving wealth inequality to levels not seen in over 100 years.

Financial Times did some checking on the underlying data which French economist Thomas Piketty used to under-gird his bestselling book. What FT found was a series of errors and unexplained data selections which, taken together, seem to undercut Piketty's main thesis.

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Competition doesn't mean beans when you've got government regulators on your side

May 23, 2014 10:32 AM PT

Tim Carney at the Washington Examiner offers a neat little case study in the power of government-dispensed anti-competition, as hummus maker Sabra pushes for regulations that will block many of its competitors out of the market:

Sabra in February filed a petition with the Food & Drug Administration for stricter rules on what can be labelled "Hummus" -- or, "Hommus," "Hommos," "Humos," or "Houmous."

It must be predominantly chick peas, and at least five percent sesame seed paste. Options allowed include vegetable oil, garlic, acidifying agents, salt, sodium benzoate, spices, sodium bicarbonate, texturizers, buffering agents, and a handful of others.

Sabra is apparently pushing back on the trend of competitors making hummus with so many other beans that the garbanzos get drowned out. "From black beans and white beans to lentils, soybeans, and navy beans," a top Sabra official said in a statement quoted by the Jewish Telegraph Agency, "everyone wants to call their dip 'hummus.'"

This is how to think of much regulation: the tool the dominant incumbent businesses use to keep competition on their terms.

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Obama's America: Pfizer getting ready to skedaddle?

May 2, 2014 4:47 AM PT

Margaret Thatcher famously observed that the problem with socialism is that eventually you run out of other people's money to spend.  Before things reach that point, the other people start running out on socialism.  Get ready to bid farewell to one of America's great companies, Pfizer, which is working on a deal that will help it escape America's economy-crushing corporate tax burden - the highest in the world.

Pfizer is trying to buy the British drug company AstraZeneca.  Some tough bargaining is currently in process, with Pfizer making a few lowball offers that AstraZeneca rebuffed.  Sooner or later, they'll hit on an agreeable price.  And when that happens, Obamanomics will ensure there is absolutely zero chance the new mega-company will remain based in America.

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May Day reflections on capitalism, liberty, and human dignity

May 1, 2014 2:06 PM PT

What better time than May Day to reflect on the indispensable role of capitalism in liberty and human dignity?  The private ownership of capital is intimately tied to both.

If the people do not own capital, they have no meaningful independence.  It is the great lie of the Left that they can build a world where money doesn't matter.  It always does.  Owning capital allows groups of people to voluntarily cooperate in ways that defy the agenda of the State.  That's why the Left is constantly chipping away at the value of private assets, taxing them and restricting the ways in which they can be used.  Some citizens end up as the nominal owners of assets that fall almost entirely under the control of government.

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New Poll Has Obama and Democrats Running For The Toilet

Apr 29, 2014 8:19 AM PT

Just when you thought it couldn't get any worse for Presidente Baracko Obama, a new WaPo/ABC News poll shows that Obama's approval ratings at 41%, far less than where his ratings were at the same time in 2010.

We all saw how Republicans trounced the Democrats in the mid-term election. I can't even imagine how bad this year's election be for the donkey party.

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Saving over spending: consumers are still nervous

Apr 21, 2014 11:05 AM PT

Economic growth is shaped heavily by perception; there's an old chestnut that says recessions wouldn't be so bad, if people just refused to participate in them.  The past few years have seen a number of obvious - not to say clumsy - efforts to kick-start economic growth by changing what people think about the economy.  Some of this has been rather comical, such as President Obama and his allies perpetually claiming the economy is "poised for growth" and "Recovery Summer" is upon us.  It's not merely political spin - it's an effort to manipulate the virtual economy, made by people who believe that the real economy is powerfully shaped by what the American people think of it.

It's grim news for these opinion-shapers to learn from a new Gallup poll that people are much more interested in saving money than spending it:

The majority of Americans continue to enjoy saving money more than spending it, by 62% to 34%. The 2014 saving-spending gap is the one of the widest since Gallup began tracking Americans' preferences in 2001.

It may be surprising that the gap between self-reported enjoyment of saving and enjoyment is as wide as it is in 2014, considering the recent signs of positive momentum in the U.S. economy. Prior to the Great Recession, the saving-spending enjoyment gap was much smaller than it is now. After the onset of the economic downturn, the divergence widened considerably over the next couple of years, including 2010, when the gap stretched as wide as 27 percentage points. But then there was a short-lived narrowing of the gap to 19 points in 2012 before it increased again in 2013 and 2014.

While this question does not measure actual spending or saving, it provides important insight into the psychology of the American consumer's approach to money. At this point, the trend suggests that Americans have shifted their mindset significantly more toward the view that saving is the more enjoyable behavior, not spending.

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'Living wage,' unaffordable products

Apr 4, 2014 1:13 PM PT

When President Obama took to mocking Republican budget proposals (which, unlike Democrat proposals, exist) in front of a college audience by calling them "stinkburgers" and "meanwiches," I was struck by how the media lets him get away with being as nasty and divisive as he wants to be.  No Republican would be allowed to get away with insinuating that Democrats are motivated primarily by greed, lust for power, or some inhuman joy they take from watching people suffer... let alone stating it outright, with the language of a third-grader.  Not only would the divisiveness and mean spirit of the rhetoric draw a firestorm of criticism, but such a hypothetical Republican would be excoriated for talking down to his audience.

Andrew Johnson at National Review made a different point about the President's outburst, by focusing on the delicatessen anecdote he told, right before veering into talk of stinkburgers and meanwiches:

The president paid a visit to Zingerman’s Deli in Ann Arbor, Mich., today as part of his push to increase the minimum wage.

Zingerman’s, he says, pays its employees “fair wages.” Whether they’re fair enough to afford the lunch the president had isn’t clear: He ordered a small Reuben for $13.99; larges go for nearly $17.

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Bankrupt Detroit Beats L.A. in Job Growth

Apr 2, 2014 6:27 AM PT

The Los Angeles Times reports Wednesday that a UCLA study showed that "Los Angeles has gone 23 years without job growth," losing 3.1% of the jobs it had in 1990--dead last among U.S. cities, even behind Detroit.

"Among problems plaguing the city: the high cost of housing, congestion, lack of skilled workers and an unfriendly environment for businesses, said William Yu, an economist at the UCLA Anderson Forecast," notes the Times' Shan Li. Much of Li's article is devoted to the finding that California's current drought could lower job growth even more, which is a more convenient explanation for the left than the city's anti-business policies.

Stop Detroit's Shell Game on Assets

Mar 24, 2014 10:40 AM PT

For months now I've been shouting Greg Gutfeld's sentiments on paying Detroit's creditors and pensioners -- "Sell the damn art!"

Next month the city's emergency city manager, Kevyn Orr, will present yet another plan on digging Detriot out of its financial hole.  Despite liberal elitists calls to protect the art -- one of Detroit's largest assets -- from the auctioning block, the calls to "sell the damn art" continue.  From an op-ed in today's Detroit News:

Detroit is unique among major cities in having funded directly huge portions of its signature art museum’s existence, including its building, operations and many of its works. 

The precise value of the collection isn’t known, but the auction house Christie’s appraised 2,800 city-purchased pieces – just five percent of the collection – at more than $800 million. 

In other words, contained within the walls of 5200 Woodward Ave. are billions of dollars in assets that can be used to repay the city’s debts, both to pensioners and to bondholders, many of whom are retirees themselves. 

Officials from the city, state, DIA and private foundations instead have offered a plan that would spin off the institute into an independent non-profit trust, in exchange for some $815 million in funding from state taxpayers and private interests. 

Those proceeds would be earmarked solely for the General Retirement System and Police and Fire Retirement System pension plans. This would turn bankruptcy law on its head, using an asset sale to pay off only one class of unsecured debt. 

Louisiana Puts Its Foot Down: No More Food Stamp Tattoos

Mar 23, 2014 11:30 AM PT

The Associated Press reports on the latest act of unspeakable cruelty from heartless, tightwad red-state officials:

Louisiana welfare recipients will be prohibited from spending the federal assistance at lingerie shops, tattoo parlors, nail salons and jewelry stores, under new limits enacted by state social services officials.

The Department of Children and Family Services announced the emergency regulations late Thursday. They cover the Family Independence Temporary Assistance Program — commonly known as welfare benefits — and the Kinship Care Subsidy Program.

Both programs pay cash assistance to low-income families for items like food, clothing and housing.

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Report: Weak White House Sanctions Rally Russian Market

Mar 17, 2014 7:51 AM PT

As I write this, President Obama is announcing a list of limited sanctions against specific individuals in the Russian government meant to punish them for "violating Ukraine's sovereignty." The idea is to go after the personal finances of top Russian and Ukraine officials, including the former president of Ukraine and members of Putin's inner-circle. Putin, though, is not on the list.

Greg White, the Moscow Bureau Chief for the Wall Street Journal reports that news of the White House sanctions did not have the intended effect. Relieved over how limited they are, the Russian market enjoyed a rally:

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Dereliction of Duty in Detroit

Mar 11, 2014 7:13 AM PT

I've had my eye on Detroit's bankruptcy proceedings because it is indicative of what's to come for a lot of cities.  How Detroit deals with its bankruptcy could also set a precedent for other cities forced to deal with the decisions of bankruptcy, satisfying pensions and debtors.  Unfortunately, Detroit's Emergency Manager Kevin Orr is shirking his responsibilities to the city and creditors by not making the hard choices to put Detroit on sound financial footing.

As I wrote a few months ago, the key is the art.  

If you or I were to file for bankruptcy, we would be forced to sell our assets before defaulting to our creditors and other contractual obligations.  That Warhol passed down from your crazy aunt who partied at Studio 54?  Gone in 15 minutes.  And that's exactly what should happen in Detroit.

The Detroit Institute for Art (DIA) has billions of dollars in art, but elitists in Detroit suburbs are conspiring to keep the art so the collection can't be split off and sold.  A few foundations attempted to raise money to secure and "own" the art through a private fund of $300-500 million, just a fraction of what it is worth.  Basically, this fund was trying to buy the art at a deep discount so it was off-limits and Detroit's entire debt would fall on taxpayers and pensioners.  Pensioners that include firemen and police officers.  We may not agree with public sector unions and their tactics, but promises were made to these workers and the city must put all options on the table before sticking pensioners with the bill.

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Michelle Obama Offers Relief for Nation's 'Confused' and 'Bewildered' Shoppers

Feb 28, 2014 2:02 PM PT

Gotta give a quick shout out to "everywoman" Michelle Obama, who yesterday was kind enough to introduce the administration's new, improved nutrition labels for food packages. The new labels are designed to make shopping less difficult for easily confused moms who are flummoxed by nutrition labels.

The "bewildering" dilemma women have been experiencing in grocery stores, was described by Michelle Obama, thus:

"So there you stood, alone in some aisle in a store, the clock ticking away at the precious little time remaining to complete your weekly grocery shopping, and all you could do was scratch your head, confused and bewildered, and wonder, is there too much sugar in this product? Is 50 percent of the daily allowance of riboflavin a good thing or a bad thing? And how on Earth could this teeny little package contain five whole servings?

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Obama's Highly Touted List Of Pro-Minimum Wage Economists Includes A Few Crackpots

Feb 27, 2014 9:30 PM PT

As part of their election year strategy of steering the public's attention as far away from ObamaCare as humanly possible, Democrats have been pushing for a vote on a minimum wage hike in the Republican-led House - which they know, is not going to happen.

Not that it matters. Because Democrats want to put Republicans on the defensive for failing to care as much about the poor as they do. Throwing a wrench into their plans last week, however, was the CBO with a study that showed a minimum wage hike to $10.10  an hour would lead to a reduction in employment of anywhere from 500,000 to 1 million workers. Thursday, Federal Reserve Chairwoman, Janet Yellen backed the CBO's analysis. 

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California Couple Finds $10 Million in Gold Coins in Back Yard

Feb 26, 2014 6:11 AM PT

A couple in California stumbled across the most valuable buried treasure find in U.S. history, the Los Angeles Times reported Tuesday, when they discovered rusting cans on their property that contained 19th-century gold coins with a face value of over $28,000 and a market value of more than $10 million. 

The coins include several rare finds, including an “1866-S No Motto Double Eagle,” which the Times’ Ruben Vives reports is worth more than $1 million.

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40 hour work weeks: too much, or not enough?

Feb 21, 2014 7:01 AM PT

If you noodle around liberal web sites a bit, you'll come across a talking point designed to cushion the blow of ObamaCare job losses: a lot of those cuts, such as the 2.5 million "job equivalent" losses predicted by the CBO in their bombshell forecast, are more about reduced hours than outright termination.  The old-and-busted O-bot talking point was that business owners would never cut hours to get under the 30-hour threshold needed to escape the worst Affordable Care Act mandates, and any executive who explicitly stated he was carrying out such plans was a lying Republican hack.  Presumably the hundreds of thousands of employees who said their hours were indeed trimmed to 29 or less were also lying Republican hacks.  

But that talking point is dead now, especially since the government is one of the employers that has explicitly stated hours are getting shaved to evade the mandates.  So the new brainstorm bubbling up from the fever swamps of the Left is that working less is a good thing.  If you can get by on working 29 hours, with subsidies looted from other taxpayers to support your food, housing, and medical needs, what's the problem?  That's paradise, right?  We should celebrate the dawn of a new age in which everyone gets to be a "child" until they turn 27, then work 25 hours a week, have their EBT card automatically refilled with digital food stamps every month, and have their health needs covered by heavily subsidized ObamaCare policies!

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The Obama Economy and Lingering Effects of Long-Term Unemployment

Feb 20, 2014 9:08 AM PT

A recent survey done by shows the effects of unemployment on job seekers.  For many, it's not just the loss of income. 

According to a new CareerBuilder survey, the loss of a regular income has affected the long-term unemployed in various ways, such as not having enough money for food (25 percent), strained relationships with family and friends (25 percent) and maxing out credit cards to pay other bills (12 percent). 


Challenges of finding work

One of the main concerns job seekers often have when they've been out of the workforce for a while is that they'll lose valuable skills. In fact, 45 percent of long-term unemployed say they're worried that their skills have depreciated. Of these respondents, more than half say their technology skills declined.  

When asked to share some of the major challenges they encounter when looking for a job, the long-term unemployed point to:

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CBO Director Fires Back at White House Claims He is Wrong on Minimum Wage

Feb 19, 2014 10:00 AM PT

Congressional Budget Office Director Douglas Elmendorf fired back Wednesday morning at criticism from the White House over his most recent economic report. The White House and CBO disagree over the effect raising the minimum wage would have on employment.

The argument is much more than an academic disagreement. Having the President's signature economic proposal labeled a job killer would be another political blow to Democrats already facing an uphill climb in 2014.

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Happy 5th Anniversary Porkulus Act

Feb 17, 2014 9:47 AM PT

Five years ago, Presidente Obama saw his failed Recovery Act sail through the Congress and give birth to that crazy like a fox Tea Party.  The Act cost some 40 billion more than originally expected, and helped catapult Mike Lee and Marco Rubio into the Senate, as well as help Republicans retake the U.S. House of Representatives.

As expected, Rubio and others in the Senate, have come out swinging against the Obama's Porkulus Act.

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