Archive for Capitalism

What You Call a Win-Win

Unless you are an American worker:

The evidence continues to roll in: Broad increases in the minimum wage destroy jobs and hurt the working-class Americans that they are supposed to help. The latest evidence is an announcement that Wal-Mart, America’s largest employer, will close more than 150 U.S. stores, a move that will affect 10,000 employees.

Having to pay increased wages obviously diminishes a business’s financial performance. Wal-Mart voluntarily raised its base wage to $9 an hour last April, then announced in November that this resulted in a 10% reduction in earnings per share for the third quarter. This year Wal-Mart will raise its base wage to $10 an hour and is forecasting as much as a 12% decline in earnings per share.

Every retailer has locations that are profitable, but only marginally. Increased labor costs can push these stores over the line and into the loss column. When that happens, companies that want to stay competitive will close them. That’s one of the reasons that substantially increasing the minimum wage poses real risks for working-class Americans.

Let’s look at Oakland, Calif., where the minimum wage is $12.55. When Wal-Mart opened there in 2005, about 11,000 people applied for the 400 positions. Those jobs will soon be gone, as the Oakland store is on the closure list. While Wal-Mart declined to address the details of its decision, City Councilman Larry Reid told the San Francisco Chronicle that Oakland’s minimum wage “was one of the factors they considered in closing the store.”

Councilman Noel Gallo, who supported efforts to submit the minimum-wage increase to voters, bemoaned the closure, saying that “losing a Wal-Mart is a blow to the city of Oakland” and adding that “what Oakland needs more of is jobs.”

Oakland…Oakland…isn’t that a “dog whistle” of some sort?

There’s a lot more at the link—Andy Purzer writes regularly on such issues at the WSJ—but we have enough to work with. In pursuit of a misguided perception of “fairness”, private enterprise is targeted—Alinsky-ized, if you will—and the working stiff takes the hit. There’s no argument; that’s fact. It’s also intentional.

Grandstanding to the mob, liberal government imposes rules injurious to business; business reacts as a living being, recoiling, retrenching; people are put out of work; they land on welfare; they blame business, while government takes credit (a second time) for looking out for them. Why wouldn’t liberal government do that? Why would they do anything else, Oakland—all two-thirds non-white of it—be damned?

This is not cynicism. This is stated Democrat Party policy. A few people inside the welfare gerbil wheel—a very, very few—have figured this out, and call out the Democrats for their decades of failure. The rest are reliable Democrat voters, year after year, benefit check after benefit check. It’s a wonder any conservative can win a national election, and almost a certainty that he or she won’t, ever again.

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Your ObamaCare Funnies of the Day

And quite a day it was!

No one’s signing up:

ObamaCare will enroll significantly fewer people than expected in 2016, ending the year with about 13 million customers, the Congressional Budget Office (CBO) said Monday.

The figure, which was included in an expansive budget report, is a decline of about 40 percent from last year’s enrollment prediction of about 20 million people.

The latest projections confirm the Obama administration’s previous assessment that fewer people are signing up as the marketplace closes in on its third enrollment season — the final one under President Obama.

The new report also underscores the challenges facing the incoming administration in reducing the uninsured rate after 2017. While the healthcare law has led to a historic low in the uninsured population, officials have struggled to further reduce that figure this year.

Thirteen million people is a lot of people—but not compared to 20 million. Then it’s minus-seven million people.

I repeat myself, but no one’s signing up:

Most uninsured Americans are sitting on the sidelines as the Obamacare sign-up season under the federal health law comes to a close, according to a new poll that signals the nation’s historic gains in coverage are slowing.

“What this survey does suggest is that it will get harder and harder to continue to make gains in the share of people getting health insurance,” said Mollyann Brodie, Kaiser’s polling director. “I think we will be in a period where we will see slower and slower gains in that number.”

No one’s better off under ObamaCare. Not subscribers:

Out-of-pocket costs for health care premiums will skyrocket in 2016, especially for low-income earners under Obamacare, according to a Wednesday report released by the National Center for Policy Analysis.

Since Obamacare tax credits are determined by enrollees’ use of the second-least expensive silver plan and their income levels, a “harmful leverage” is introduced into most consumer renewals – which could increase net premiums.

“Depending on an enrollee’s income and choice of plan in the previous year, the way tax credits are structured will actually ratchet up the out-of-pocket cost of premiums even higher than the rate increases insurers have requested,” the report reads. “Furthermore, the ratchet effect is greatest for the lowest earning enrollees, only slightly above the federal poverty level — some of them will see hikes of 50 percent or more.”

Not insurers:

Health insurer Anthem Inc, which is in the process of buying smaller rival Cigna Corp, said on Wednesday its individual Obamacare exchange health plans weighed on fourth-quarter profit, causing it to miss analysts’ expectations.

Anthem said that it had nearly 800,000 people enrolled in plans through the exchanges, which were created under President Barack Obama’s national healthcare reform law, about 30 percent below its expectations. Without the membership it had planned for, costs of running the business were too high, Anthem said.

Many insurers have reported losing money on the exchanges, in part because total enrollment has been sharply lower than initially anticipated and because some patients costs have been higher than expected. In November, UnitedHealth Group Inc said it may completely exit the business.

But let’s not leave you bummed out. Someone’s doing better under Obama’s “signature achievement”. [Cue Bernie Sander’s voice:] Millionaihes and billionaihes:

A number of wealthy individuals, some of whom were “disgusted” with Obamacare when it first went into effect, nonetheless are now taking advantage of federal financial aid available under that health-care law to help significantly reduce their monthly insurance premiums.

Carolyn McClanahan, a Jacksonville, Florida-based financial advisor and medical doctor, told CNBC that she’s steered at least five such clients, whose individual net worths range between $1 million and $3 million, toward buying Obamacare health plans because of the federal subsidies available due to their taxable income levels.

Those clients are saving between $4,600 and $8,800 in annual premium payments as a result of subsidies. On top of that, McClanahan said, they are getting extra financial help to pay their out-of-pocket health expenses — the copayments, coinsurance and deductibles that aren’t covered by their insurance plan.

And it’s legal as well, because the Affordable Care Act focuses on income rather than net worth to establish eligibility for Obamacare aid.

“The law was set up that way, so I’m going to help them take advantage of it.”

The ACA was enacted primarily to help uninsured people get health coverage at a price they could afford. To help do that, the ACA authorized the federal government to issue tax credits, or subsidies, to people with low or moderate incomes who buy health plans sold on government-run Obamacare exchanges.

McClanahan’s Obamacare customer clients were all retirees who stopped working before they were 65 years old. They no longer had the option of getting health insurance through their jobs, and were too young to qualify for Medicare, the federal health insurance program for senior citizens.

Those people, while having relatively high net worths due to investments and real estate, also were in a position to have taxable income that was low enough to qualify for Obamacare subsidies.

But that income could still be high enough to keep them above 100 percent of the poverty level. If their incomes fell below that, they would not qualify for the subsidies to help buy private plans, and also would not qualify for government-run Medicaid because Florida rejected expanding that program to cover more low-income people.

McClanahan said she helped the clients structure their income stream — and the taxable component of it — “just right.”

I don’t know if Carolyn McClanahan is single, or even digs dudes, but if she wouldn’t mind being the second Mrs. BTL (and if the first-and-so-far-only Mrs. BTL wouldn’t mind), I’m down on bended knee. What a gal. What a great American.

Governmental programs don’t impress me. How clever is it to confiscate money from those who have earned a modicum of it, and redistribute it to those who haven’t (keeping a reasonable finder’s fee for oneself)? Hardly the stuff of Henry Ford or Mark Zuckerberg; nothing is created. But show “the market” (in this case, the lovely and scheming Ms. McClanahan) the lay of the land, the rules of the road, and it—she—will figure out how to profit. For all Obama’s college degrees and teaching certificates (the transcripts of which are a bigger secret than the Kabbalah), he’s not smart enough to get that. Carolyn McClanahan and her fabulously wealthy clients have given him an atomic wedgie on the playground. I couldn’t be happier for them, the rich bastards.

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Doing Well By Doing You

When I saw this story, I thought “at least someone is doing well under Obama”.

This guy thought a little harder:

In their attempt to shame the rich and powerful into mouthing some platitudes on behalf of the poor at the upcoming Davos meeting, Oxfam announced last week that the 60 richest men in the world have as much wealth as the bottom 50 percent of the world’s denizens.

How cool would it be to wear a t-shirt that reads “I Am The 0.00000008%”?

The reality is that this is a bogus theme that reflects the fact that a goodly portion of people across the planet in fact have no wealth to speak of. This dearth has nothing to do with the Koch brothers and everything to do with the fact that many, many people live in places with no functioning market economy. The one third of Chinese citizens who live as subsistence farmers in their country’s hinterlands, 99 percent of the residents of North Korea, the vast majority of people who reside in Sub-Saharan Africa or the Middle East, and a few hundred million residents of Latin America have virtually no wealth to speak of. My daughter, with her $5,000 college savings account, has more wealth than the bottom 3 billion people; let’s take her money and give it to the poor while we’re at it.

These P.R. campaigns dressed up as “studies” do more harm than good to the quest to reduce global poverty because they leave readers the impression that if we simply figure out a way to get more money from the rich and hand it to the poor we can alleviate poverty.

Nothing could be further from the truth. What we really need is to figure out a way to address the various failed states that have left their citizens bereft. It’s facile to suggest that we merely need more market capitalism when so many of these people live in war zones, or kleptocracies, or places where a functioning society has to somehow be created before we dare hope to address the endemic poverty these people suffer. But in places that have avoided these curses, market capitalism has done a decent job bringing people out of poverty: What else can we attribute the half-billion Chinese or 200 million Indians who enjoy something approaching a middle class lifestyle today when such a thing was unheard of in their country a generation or two ago? Had it been anything other than capitalism that achieved this, it would be heralded as the most important innovation of all time, of course.

What Oxfam clearly implies–but can’t be bothered to explain–is that the growth of income at the top harms those at the bottom. They conclude that the wealthy are getting wealthier because of tax havens and that if this money were taxed we’d have enough to pull everyone out of poverty. It’s a pretty tenuous and incomplete argument and even if there were $7.6 trillion in ill-gotten gains sitting in tax havens that governments could confiscate to distribute to the poor, it wouldn’t come close to permanently solving the problem.

Are you kidding? David Koch’s (et al) $7,600,000,000,000 would barely cover four months of Bernie Sanders’s proposed new spending! (See Margaret Thatcher on socialism.)

But let’s not skip his most important point: it is capitalism that lifts people out of poverty. Not socialism, not communism, not even Catholicism. The 700,000,000 new middle class Chinese and Indians alone would make for the world’s third-largest country, well over double the population of the US. I’m not fond of the Chinese government, but there’s no way I would wish half a billion of their people to starve to death. Especially after the tens of millions who starved under Mao.

Grown-ups would get this. But we are hardly a nation of grown-ups, as our developmentally-arrested commander-in-chief proves. Who, by the way, has been president for the past seven years. Just sayin’.

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Doing Good By Doing Obscenely Well

The new, kinder, gentler BTL doesn’t just point out the manifest and myriad ways the world sucks.

He offers solutions:

Did you know that someone dies of malaria every 60 seconds? You may do, if you’ve seen one of the latest Christian Aid posters picturing an African girl staring fearfully at the camera, or a young boy lying on what seems to be his deathbed. They send a powerful Christmas message: while we celebrate in comfort, children are dying for want of a £3 mosquito net. And we could change this, if only we chose to help.

What these adverts don’t tell you, though, is the remarkable extent to which we are helping – and, more importantly, the way in which Africans are helping themselves. Malaria, mankind’s biggest killer, is now retreating faster than at any time since records began.

Earlier this month, the United Nations announced that malaria’s global death toll has more than halved since the turn of the century, saving six million lives. It’s the greatest success story of modern times, yet no one seems interested in telling it.

Save the Children’s winter appeal features a sad-looking boy from Congo and warns that “thousands of children like Kabeya will wake up sick with hunger” this Christmas.

This is quite true, but the world over, malnutrition rates stand at an all-time low and are falling fast. The stunning truth about Congo is that it has almost halved its extreme poverty rate in 10 years. In fact, across the world, poverty rates and child mortality rates have halved since 1990.

Back then, only 52 per cent of children in sub-Saharan Africa went to primary school. Now, 80 per cent do – and the number is rising.

This has been a landmark year for Africa. It’s the first year in history, for example, that no wild polio cases have been reported in the continent; a disease that used to strike and often paralyse 350,000 children a year is now almost extinct. Aids infections have halved over the past 15 years. The recent eradication of Ebola in Sierra Leone is only the latest triumph in Africa’s war against the kinds of diseases that have kept so many countries on their knees for so long.

How, you ask?

While overseas support has been crucial and highly effective in the struggle, the strongest force pushing back disease in the continent is capitalism; trade still brings in far more money than aid. Indoor smoke, dirty water and hunger still kill more Africans than malaria, so when a villager can afford rudimentary sanitation and healthcare, the effect on disease is profound.

A recent African Union conference set a two-year deadline to turn the whole continent into a free-trade area. This is no mere fantasy: since the beginning of the century, the value of trade between African countries has risen five times over; mobile phones are now as common in Nigeria and South Africa as they are in Britain.

Charities, though, by their nature, don’t tend to spend too much time spreading good news.

As any fundraiser will tell you, the surest way of raising money is to tell tales of poverty, helplessness and desperation. Donating money to good malaria charities remains a wonderfully efficient way to save lives, so these harrowing advertising campaigns do serve a noble purpose. But they risk perpetuating the damaging stereotype of Africans living in squalor, and give a misleading impression about the true state of the world.

Bill Gates’s charitable foundation has played a full role in the battle against malaria. It does not rely on pulling heartstrings to gain support, so he is free of any need to spin a tale of Africa in meltdown. Instead, he talks about “mind-blowing” progress being made before our eyes. On current trends, he says, there will be almost no poor countries left within 20 years.

If this sounds like a wild exaggeration, it shouldn’t: all the data is pointing in this direction.

This is a story that is not told very often, but it is none the less the story of our age: globalisation is spreading ideas, medicine and wealth, forcing down inequality and bringing the world closer together.

With enough capitalism, poverty might become history after all.

The liberal mind reels. Capitalism is supposed to be the enslaver of the masses, not their liberator. They read it in Dickens. How do they square the reality of the world with their warped view of it? (Spoiler alert: they don’t even try.)

Two problems, however.

One is Africa itself:

“Corruption creates and increases poverty and exclusion. While corrupt individuals with political power enjoy a lavish life, millions of Africans are deprived of their basic needs like food, health, education, housing, access to clean water and sanitation,” said José Ugaz, chair of Transparency International, in a statement.

The NGO estimates that around 75 million people in Sub-Saharan Africa have paid a bribe in the past year. The poor fare the worst — they are twice as likely as the richest in the region to have had to make payoffs according to the report.

“This might be because poor people feel powerless to stand up against a corrupt official, or because rich people use their connections to avoid paying such bribes,” says Coralie Pring, corruption surveys research coordinator at Transparency International.

Nearly one in five Africans paid bribes to obtain official documents, and access to medical care is sometimes negotiated through an unofficial fee, gift or favor.

The survey, which polled over 43,000 people in 28 Sub-Saharan countries, also found that half or more of those who paid bribes did so multiple times a year.

“Corruption is the single biggest threat to Africa’s growth,” says Ali Mufuruki, CEO of Tanzania’s Infotech Investment Group and member of the International Monetary Fund’s Group on sub-Saharan Africa.

“The solution lies in good, ethical leadership, strong and enforceable laws against corruption, severe sanctions for corruption crimes underpinned by a national culture of promoting ethics from family to national level, “he adds.

Good luck with that.

The other problem Africa faces, besides Africa, is the rest of the world. The ROW equates free trade and capitalism with rape and child molestation—but then, given the proclivities of UN “piecekeeping” forces, what do they not equate with rape and child molestation? I didn’t follow the most recent of the climate circle-jerks in Paris, but the striped-pant crowd couldn’t have been too keen on the nose-ring crowd widening their carbon footprint. Tell me I’m wrong. The save-the-whalers think of the six million lives saved and swoon. So many more mouths to feed! So many more consumers! Where’s Margaret Sanger now that we really need her?

The thing about going back to simpler times is that those times had no sanitation, no anesthesia, no cell phones, no YouTube. Our recent generations must be unique in the history of the world to fear and curse progress. Perhaps that’s because we have made such astounding progress in the last fifty years, that our minds are overwhelmed. Or perhaps there’s something baser, nastier at work. Some of us, anyway, would appear to prefer impoverished Africans, even millions of dead Africans.

I, for one, do not. I believe that black lives matter.

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Lighten Up, Francis

Honestly, I have nothing against Pope Francis as Pope. But when he strays from the gospels into global warming, immigration, and wealth inequality, he’s fair game.

Global warming:

There are dozens of climate models. They have been run many times. The great majority of model runs, from the high-profile UK Met Office’s Barbecue Summer to Roy Spencer’s Epic Fail analysis of the tropical troposphere, have produced global temperature forecasts that later turned out to be too high. Why?

His answer is encyclopedic. Let me point out that he uses the word “know” (or known or unknown) 145 times; and “understand” (or understood) 112 times. However much we may know or understand, there is much more that we do not.

Immigration:

Untitled

The United States has historically been the world’s largest immigrant receiving country, but in terms of share, a number of countries have more immigrants relative to their total population. Use this map to quickly overview international immigration trends over time.

Two enormous oceans, and we still have the largest number of immigrants, by far. As for other countries having a greater share, how’s that working out? For the Jews of France, say, or the young girls of Rotherham, England.

Income inequality:

RUSH [today]: [I]t struck me, this is not a new realization on my part, but it just struck me I think a little bit more profoundly because it was the pope saying it. It’s almost as if in his mind and in the minds of many other people, in fact, that you have the world, and it is what it is and then there’s this one place in the world where it’s much, much, much better than anywhere else in the world. It’s richer. It has more opportunity. It has more freedom and more liberty. It’s vastly more prosperous. The standard of living is way, way higher. It’s got all kinds of weapons to protect itself and so forth. It’s just better, it’s just demonstrably better.

And then the rest of the world is kind of eating the dust of this one really special place. And it’s as though nobody ever stops to ask how did this one special place become special? They just assume that it was made that way, or that fate, or maybe in this case God, ordained it.

So it seems even from the pope, immigrants, anybody who doesn’t live here, has an automatic right to come here just because there’s no other place like it on earth. And what is never discussed is how it got so special. How did it happen? Why is it so prosperous? Why is it so free?

See, the correct thing to do would be to answer those questions and spread those answers all over the world. And that’s what, to me, if I had the ability to command the attention of the peoples of the world, that’s what I would tell them. I certainly wouldn’t stand for policies that are gonna end up destroying this special place, because once this special place is destroyed and is no longer special, then where is everybody gonna go?

And I’ve never understood why there aren’t a lot of people trying to figure out how the United States became this special place and then try to replicate it around the world, because that’s the solution to the human condition. The solution to poverty, the solution to misery, the solution to backwards living is the United States of America.

You have to go back to the Pilgrims. You have to include the Pilgrims in the founding. Why they came. What they learned on the way. What they learned after they got here. The Pilgrims, like everybody else, tried to establish a socialist collective. Bombed out. Didn’t work. We know this, the governor wrote about it himself, William Bradford.

They went capitalist. Didn’t know that that’s what it was, but that was the solution and that’s when prosperity happened. You go back and you examine the reasons the country was founded, why it worked, what was magic about it, and you find out that people wanted to come here for cultural reasons, in addition to economic. It was rooted in liberty. It was rooted in freedom. It was rooted in the recognition of the primacy of the individual, the power of the individual over government in this country.

I suppose Rush Limbaugh is as close to a pope of conservatism as there is. He can sure preach.

PS: Earlier today, I wondered why the Pope telling us what we were doing wrong was to be celebrated, while Netanyahu’s plea for his country and his people was hooted as bad form.

Why, they even both cited Moses:

Pope Francis:

Yours is a work which makes me reflect in two ways on the figure of Moses. On the one hand, the patriarch and lawgiver of the people of Israel symbolizes the need of peoples to keep alive their sense of unity by means of just legislation. On the other, the figure of Moses leads us directly to God and thus to the transcendent dignity of the human being. Moses provides us with a good synthesis of your work: you are asked to protect, by means of the law, the image and likeness fashioned by God on every human face.

Prime Minister Netanyahu:

Facing me right up there in the gallery, overlooking all of us in this (inaudible) chamber is the image of Moses. Moses led our people from slavery to the gates of the Promised Land.

And before the people of Israel entered the land of Israel, Moses gave us a message that has steeled our resolve for thousands of years. I leave you with his message today, (SPEAKING IN HEBREW), “Be strong and resolute, neither fear nor dread them.”

My friends, may Israel and America always stand together, strong and resolute. May we neither fear nor dread the challenges ahead. May we face the future with confidence, strength and hope.

May God bless the state of Israel and may God bless the United States of America.

Don’t those words already sound like they’re from another time?

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Dumb Or Dumbfounded?

Can’t figure Trump

Polling experts agree on one thing when it comes to Donald Trump’s presidential run: They’ve never seen anything like it.

The businessman’s dominance of the Republican presidential race is forcing experienced political hands to question whether everything they know about winning the White House is wrong.

The shocks have come in quick succession, with the businessman first rocketing to the top of national polls, and then taking double-digit leads in the early voting states of Iowa, New Hampshire and South Carolina.
In another act of political magic, Trump managed to flip his favorability rating from negative to positive in one poll during the span of a month — a feat that Monmouth University’s Patrick Murray called “astounding.”

“That defies any rule in presidential politics that I’ve ever seen,” Murray, the director Monmouth’s Polling Institute, told The Hill.

Trump’s favorability rose from 20 percent to 52 percent among Republican voters between July and August, Monmouth found.
..
“Throw out the rulebook when it comes to Trump, that’s not even in the parameters of what we see as unusual,” Murray said.
..
But as the attacks on Trump have intensified, so has his level of support.

Polls released Tuesday show Trump lapping the field in New Hampshire, where he leads his nearest Republican rival by 24 percentage points. The story is the same in South Carolina, where the latest poll gave him a 15-point edge.

While political scientists and other experts continue to insist Trump will not win the Republican nomination, he’s converted at least one high-profile skeptic.

GOP pollster Frank Luntz had dismissed Trump from the start, and declared after the first presidential debate that his campaign was doomed.

But after convening a focus group Monday evening where Trump supporters showed an unflappable allegiance, Luntz changed his tune.

“This is real. I’m having trouble processing,” he said, according to Time.

“I want to put the Republican leadership behind this mirror and let them see. They need to wake up. They don’t realize how the grassroots have abandoned them,” he added.

Absolutely for free, I, Aggie, will attempt to explain this to pollsters, journalists, and other politicians. Here goes:

1. ObamaCare was shoved down our throats. Not a single Republican voted for it, but, when the public turned over both the House and Senate to the Repulicans, they sat on their thumbs. They didn’t get rid of it or alter it. Consequently, we have some “folks,” typically self-employed, tiny businesses who now pay nearly 1/3rd of their gross for health care coverage. Think about the one-man shop that does small carpentry or repair or removes tree stumps – or even the therapist with a very small private practice. Hardworking, independent individuals who have taken care of themselves their entire lives have been screwed. Completely screwed. And, Republicans just talk. Most of them end up taking jobs that they don’t want in order to get health care. The braver ones just pay the penalty ObamaCare tax. In other words, people have shut down businesses that they spent years, even decades, building due to this law.

2. The Unclenched Fist did not work with Mr. Putin.

3. The Arab Spring led to tens of thousands of deaths and frightening instability.

4. The Iran Deal will lead to terrorism and a nuclear arms race.

5. People who disagree with Obama’s policies are sick of being called racists.

6. People perceive some of their economic suffering to have been caused by people crossing the borders, and putting stress on our economy. They are also angry about welfare benefits going to non-citizens.

7. People are tired of the condescending, arrogant attitude they have endured by Obama, the democrats, and their proxies.

8. People are sick and tired of the lies.

9. Trump, blow-hard that he is, talks back forcefully, and has managed to convince many “folks” who have been victimized by Obama’s Leftist policies, that he will turn things around.

I am sure that the list could be lengthened. Feel free to write suggestions and I will add them.

– Aggie

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Maybe Rename Detroit Phoenix?

As in risen from its own ashes?

One by one, 61 entrepreneurs marched onto the stage at Wayne State University’s St. Andrews Hall, where they were greeted with a standing ovation by relatives, friends and colleagues.

It was second graduation for the Goldman Sachs 10,000 Small Businesses initiative in Detroit, more intimate than the first, which featured a long list of high-profile business leaders, including billionaire Warren Buffett.

But, the atmosphere this morning, was just as uplifting.

“There is momentum building in this great city,” Wayne State University President M. Roy Wilson said. “It’s happening right now. You can feel it and see it. Opportunity and will power and creativity are converging in Detroit, and entrepreneurs are at the heart of it. Programs like this that support small businesses fuel this reinvention and are our top priority.”

The $500-million Goldman Sachs program is designed to help entrepreneurs boost revenues and create jobs. The program began in 2010 and has spread to 26 cities. The goal is to graduate at least 10,000 entrepreneurs. Goldman’s commitment to the Detroit program is $15 million.

We’ve been pretty hard on Detroit over the years, all deserved. But once Detroit declared bankruptcy, it didn’t seem sporting. And, anyway, the damage was done, the money gone; no use going on anymore about six decades of ruinous mismanagement.

Besides, having declared unconditional surrender, maybe Detroit was ready to follow a different model.

Call it the pickles and slime model:

Hamtramck-based McClure’s Pickles and Plymouth-based Algal Scientific Corp. have been named the first Endeavor Entrepreneurs by the nonprofit Endeavor Detroit, a designation that means they will be able to boost their businesses by meeting local and international business mentors and volunteers from Fortune 500 consulting firms.

The two companies are among the 34 “high-impact entrepreneurs representing 23 companies from 15 countries,” according to an announcement on the Endeavor website. Endeavor is a New York-based nonprofit that helps support companies on the brink of rapid growth; it opened an office in Detroit earlier this year. Endeavor also has a Miami office.

“The amazing entrepreneurs and high-impact businesses we saw this week demonstrate all of the entrepreneurial potential still waiting to be uncovered around the world,” Linda Rottenberg, co-founder and CEO of Endeavor, said in the announcement.

McClure’s produces pickled products, salty snacks, adult beverages and mixers for drinks such as Bloody Marys from locally sourced ingredients. “McClure’s is at the forefront of the movement to redefine food from a commodity to an experience,” the announcement said.

Algal Scientific is a manufacturer of algae-based chemicals for the food and beverage industries. It uses the immune-boosting power of algae to support animal health and growth without the use of antibiotics. Earlier this year, it closed on a Series B funding round of $7 million.

Gone are my posts about the death of Detroit. That’s reserved for Chicago, California, and other sloughs of Democrat despond. Detroit is either dead already or on life support; either way, no place to speak ill of. When I think of Motown in the future, I’ll look for stories like these.

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The Problem With Socialism…

Is that eventually you run out of other people’s money.

Or your own:

The Seattle CEO who reaped a publicity bonanza when he boosted the salaries of his employees to a minimum of $70,000 a year says he has fallen on hard times.

Dan Price, 31, tells the New York Times that things have gotten so bad he’s been forced to rent out his house.

Only three months ago Price was generating headlines—and accusations of being a socialist — when he announced the new salary minimum for all 120 employees at his Gravity Payments credit card processing firm. Price said he was doing it, and slashing his $1 million pay package to pay for it, to address the wealth gap.

What a guy. Why can’t more CEOs be like that?

What, are you nuts? Do you want a job?

Do you want an economy?

The Times article said Price’s decision ended up costing him a few customers and two of his “most valued” employees, who quit after newer employees ended up with bigger salary hikes than older ones.

“He gave raises to people who have the least skills and are the least equipped to do the job, and the ones who were taking on the most didn’t get much of a bump,” Gravity financial manager Maisey McMaster, 26, told the paper.

She said when she talked to Price about it, he treated her as if she was being selfish and only thinking about herself.

“That really hurt me,” she said. “I was talking about not only me, but about everyone in my position.”

Approaching burnout, she quit.

Grant Moran, 29, also quit, saying the new pay-scale was disconcerting

“Now the people who were just clocking in and out were making the same as me,” he told the paper. “It shackles high performers to less motivated team members.”

Customers are leaving as well, some for fear of rising prices, others because they are offended by the grandstanding.

Even Price’s brother is suing him:

Lucas Price, who owns 30 percent of the company, accuses his brother of taking millions of dollars out of the company while denying him the benefits of his minority ownership.

The lawsuit has forced Gravity to pay mounting legal fees at a time when the new salary scale is being eaten up by profits.

“We don’t have a margin of error to pay those legal fees,” Dan Price said.

So, the established workers hate it because it penalizes them at the expense of know-nothing newbies; the clients hate it becaus of the upward pressure on prices; and the investors hate it beause it pi**es money away. Other than that…

Those who ignore the market are doomed to be bitten in the ass by it. I think Abraham Lincoln said that. Or Voltaire. You can say 2+2=5 and get away with it for a while, but don’t try to fly to the moon with that arithmetic. People are worth what the market determines they are worth. Someone who would earn $30,000 ($15/hr) doing the same job somewhere else isn’t “worth” $70,000 ($35/hr) just by your say so. You may get a way with it for a while—and win a Nobel Peace Prize in the bargain—but there are too many market factors dragging you back down to earth.

Speaking of $15/hr:

Some increase in the federal minimum is justified. It’s been at $7.25 since 2009. Inflation has eroded its value 10 percent since then and 24 percent since its peak year of 1968, says the left-leaning Economic Policy Institute. But raising it to $15 (a doubling), or even $12 (a two-thirds increase), would be a radical act that front-loads the benefits and back-loads the costs.

In 2014, about 3 million workers were paid the minimum or less; that’s 2 percent of 146 million workers. If the minimum had been set at $15 — and including workers just over the new minimum whose wages employers would probably raise — the number of affected workers would have been 59 million, or 40 percent.

The immediate political benefits are clear. But is the federal government smart enough to set wages for two-fifths of workers? Can it recognize the circumstances of individual industries and firms? I doubt it.

With time, job losses would mount. Some companies would become unprofitable and shrink or close. Others would automate. Some startups would be scrapped. How many jobs would be lost is guesswork. The Congressional Budget Office estimated that a $10.10 minimum (President Obama’s proposal) would cut employment by about 500,000. The American Action Forum, a right-leaning think tank that says it followed CBO’s methodology, calculates that a $12 minimum would cost 1.3 million jobs and a $15 minimum would cost 3.3 million.

More perversely, those who got the raise would come from relative “privilege”:

Moreover, the least-skilled workers might suffer the largest losses, especially if higher wages draw experienced people back into the labor market. Family incomes would rise, but about four-fifths of the gains would go to workers in households above the government’s poverty line — though often not by much — because “many low-wage workers are not members of low-income families,” says the CBO. College students with minimum-wage jobs aren’t all from poor families.

It’s a good thing Aggie and I revel in the misery of others. (Well, I do.) There’s so much misery about, and so much more to come. As misery is often self-inflicted, there’s the perverse enjoyment of watching someone suffer mixed with the satisfaction that they had it coming.

I hasten to point out that I exclude the misery suffered by those who don’t have it coming. Earthquake victims, say, or ISIS captives. Dumbasses who vote Democrat, however, only to lose their jobs to snotty college students with piercings and tattoos—as well as the snotty college students themselves, with their degrees in interpretive asexual dance—never get old.

PS:”But is the federal government smart enough to set wages for two-fifths of workers? Can it recognize the circumstances of individual industries and firms?”

You know how Obama would answer those questions: “Watch me.” (Or “I won.”)

Comments (1)

Perfect. Just Perfect.

$15 minimum wage causes problems for businesses, employees

Who could have seen this coming?

Seattle’s $15 minimum wage law is supposed to lift workers out of poverty and move them off public assistance. But there may be a hitch in the plan.

Evidence is surfacing that some workers are asking their bosses for fewer hours as their wages rise – in a bid to keep overall income down so they don’t lose public subsidies for things like food, child care and rent.

The notion that employees are intentionally working less to preserve their welfare has been a hot topic on talk radio. While the claims are difficult to track, state stats indeed suggest few are moving off welfare programs under the new wage.

Despite a booming economy throughout western Washington, the state’s welfare caseload has dropped very little since the higher wage phase began in Seattle in April. In March 130,851 people were enrolled in the Basic Food program. In April, the caseload dropped to 130,376.

At the same time, prices appear to be going up on just about everything.

Some restaurants have tacked on a 15 percent surcharge to cover the higher wages. And some managers are no longer encouraging customers to tip, leading to a redistribution of income. Workers in the back of the kitchen, such as dishwashers and cooks, are getting paid more, but servers who rely on tips are seeing a pay cut.

Some long-time Seattle restaurants have closed altogether, though none of the owners publicly blamed the minimum wage law.


Already, though, there are unintended consequences in other cities.

Comix Experience, a small book store in downtown San Francisco, has begun selling graphic novel club subscriptions in order to meet payroll. The owner, Brian Hibbs, admits members are not getting all that much for their $25 per month dues, but their “donation” is keeping him in business.

“I was looking at potentially having to close the store down and then how would I make my living?” Hibbs asked.

To date, he’s sold 228 subscriptions. He says he needs 334 to reach his goal of the $80,000 income required to cover higher labor costs. He doesn’t blame San Francisco voters for approving the $15 minimum wage, but he doesn’t think they had all the information needed to make a good decision.

Let’s see… these guys voted for the folks who implemented the minimum wage laws. Now businesses are closing and employees are seeking fewer hours… oh, and businesses are finding creative ways to charge more. Sounds like a progressive success story to me! :)

– Aggie

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Thanks, Greedy Capitalists

We may be subsisting on crumbs from your table, but they’re very tasty crumbs, and nutritious!

Untitled

In 1820, according to data compiled by Roser*, the share of the global population living in poverty was 94 percent while 84 percent lived in “extreme” poverty. By 1992, the poverty rate had dropped to 51 percent, while the “extreme” poverty rate had dropped to 24 percent. Using a different measure of international poverty, the rate has dropped from 53 percent in 1981 to 17 percent in 2011 – representing the most rapid reduction in poverty in world history.

“In the past only a small elite lived a life without poverty,” Roser explains. “Since the onset of industriali[z]ation – and as a consequence of this, economic growth — the share of people living in poverty started decreasing and kept on falling ever since.”

“In the past only a small elite lived a life without poverty,” Roser explains. “Since the onset of industriali[z]ation – and as a consequence of this, economic growth — the share of people living in poverty started decreasing and kept on falling ever since.”

*Note from Roser:

“The share of people of living in poverty and extreme poverty is taken from Bourguignon and Morrison (2002) and ‘the poverty lines were calibrated so that poverty and extreme poverty headcounts in 1992 coincided roughly with estimates from other sources.’ And in footnote they say ‘these definitions correspond to poverty lines equal to consumption per capita of $2 and $1 a day, expressed in 1985 PPP.’

To this I added the share of people living below the international poverty line which, since the revision in 2008, is $1.25 at 2005 purchasing-power parity (PPP). This data is from the World Bank and is available here – for the period 1981-2011. The revisions in the definition of the poverty line and the PPP adjustment make the poverty figures not comparable to earlier data – to illustrate this I have plotted both series for the time from 1981 to 1992. The World Bank data was downloaded in January 2015.”

I would add, because it’s true, that the decline in the poverty rate accelerated (if that’s not a form of double negative) just after the second world war. Our much-maligned times, jacked-up on technology and industrialization, have seen billions—billions—of people lifted out of a starvation existence (if that’s not an oxymoron). Those living on $1.25 a day have fallen by two-thirds (53% to 17%) in the last thirty years alone (1981-2011).

Hug a capitalist today.

PS: And the next time you hear someone longing for an agrarian, pre-industrial existence, cross the street. For you are in the presence of true evil, a genocidal monster on par with Hitler, Stalin, and Mao.

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The Last Word on Ferguson

Maybe not the literal last word, but I’m more than ass-tired of the posturing, pontificating, and pipe-bomb-throwing over a convenience store robbery gone horribly wrong (not that there’s a right way to rob a convenience store).

Kevin D. Williamson:

The American colonies must have been an unruly place, full as they were of religious fanatics and slave traders, second sons and fortune hunters, criminals and former political prisoners, and all manner of people in between. The first settlements hugged the coast, where one set of adventurers looked seaward while another looked to the interior wilderness. It was, in retrospect, almost inevitable that North America would quickly become the wealthiest place in the world by the 17th century.

Why? Because those seditionists, fanatics, and gamblers were impossible to rule. While we are counting our blessings this Thanksgiving, let’s not forget to count that one: Our ancestors did not much like being told what to do, and we — and the world — are immeasurably richer and happier for that.

British subjects and American colonists had the opportunity and the inclination to begin a finer and more robust division of labor than did their European counterparts. They were just a little bit more free — and a little bit more determined to be free — and that little bit made an incalculable difference, not only to them, but to the world.

They built something remarkable. And the idiot children of the Left are today cheering those who would literally burn it down, in Ferguson and elsewhere.

I am generally inclined toward outbreaks of orneriness, whether in Nevada or in Missouri. If the people of Ferguson believe that they are misgoverned, that their police are a problem, that the usual forms of legal and political redress have failed them, then, by all means, shake the foundations. And there may have been about five minutes at the beginning when that’s what this was about. The crowd in Ferguson is now very little more than a lynch mob. Maybe I should be ashamed of it, but there’s a little part of my heart that would leap at the sight of Americans setting fire to a tax office. But setting fire to an Autozone? Pathetic.

The most shocking act of nonconformity in Ferguson, the boldest declaration of independence, would be starting a business rather than burning one.

Outstanding.

Of course, starting a business doesn’t always go so well either:

A Missouri bakery nearly destroyed by violent protests in Ferguson this week has received more than $200,000 in donations from Good Samaritans helping to rebuild the popular cake shop.

Business owner Natalie DuBose opened “Natalie’s Cakes and More” in June about a block away from the Ferguson Police Department, according to Fox affiliate KTVI.

DuBose’s bakery saw a flow of steady customers until protesters vandalized it Monday night after the announcement that a grand jury will not indict a white police officer in the shooting death of an 18-year-old black man in Ferguson.

Windows were smashed and cooking equipment was damaged at the business — just as DuBose and her workers were preparing for Thanksgiving.

DuBose quickly set up an account on the website, GoFundMe.com, allowing strangers from around the country to donate. Actress Patricia Heaton urged her Twitter followers to contribute to DuBose’s cause.

“I LOVE TO BAKE!!! It was my dream and I’m working hard to accomplish that dream,” DuBose wrote on the website. “My main windows were smashed and bakery damaged. I’m beside myself, but with the holidays, can’t stop working.”

Dubose, 32, had set a goal of raising $20,000, but as of Thursday afternoon the site reported $226,757 in donations.

I’m placing the over/under on dollars contributed by Al Sharpton and all of his hucksters, hooligans, and hell-raisers combined at $1 out of that 226,757. Anybody want to take the over? No? Smart readers.

The Black Panthers, Muslim agitators, and professional thugs who have burned Ferguson to the ground can’t crawl back into the sewers whence they came fast enough to suit me. And Natalie DuBose can’t bake enough pies, cakes, and muffins. Make mine a pumpkin, still warm, if you’ve got one.

PS: What a threat Ms. DuBose is. She thinks she can make something of herself. No wonder they torched her shop, hardly accidentally. She requires nothing of the government but to be allowed to live and work in peace. And when the government failed her (also hardly accidentally), her fellow decent, freedom-loving citizens o’erflowed her cup with kindness. With permission of all involved, that’s how I’ll choose to honor the memory of Michael Young, the Gentle Giant. It’s no more a stretch than the nonsense peddled in the press.

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The Filthy Rich

God bless ’em:

Judging by the Forbes 400 list, the richest people in America have been getting richer very quickly. In 1982, the first year of the list, there were only 13 billionaires on it. A net worth of $75 million was enough to earn a spot. The 2013 list has nothing but billionaires, with $1.3 billion as the cutoff. Sixty-one American billionaires aren’t rich enough to make the list.

Many regard this as a serious problem, seeing the development of a plutocracy dominating the American economy through the sheer power of its wealth. The French economist Thomas Piketty, in his new book “Capital in the 21st Century,” calls for an 80% tax on incomes over $250,000 and a 2% annual tax on net worth in order to prevent an excessive concentration of wealth.

That is a monumentally bad idea.

The great growth of fortunes in recent decades is not a sinister development. Instead it is simply the inevitable result of an extraordinary technological innovation, the microprocessor, which Intel brought to market in 1971. Seven of the 10 largest fortunes in America today were built on this technology, as have been countless smaller ones. These new fortunes unavoidably result in wealth being more concentrated at the top.

But no one is poorer because Bill Gates, Larry Ellison, et al., are so much richer.

The last line bears repeating:

But no one is poorer because Bill Gates, Larry Ellison, et al., are so much richer.

The author reminds us that previous technological leaps forward—the clipper ship, the steam engine, the railroad, oil and steel—have produced their own stinkin’ rich. We lambasted them too (Robber Barons), but, monopolies aside, who was harmed by those achievements? Doesn’t the history of capitalism, warts and all, declare it the the winner and still champion of all economic systems? A show of hands, please: how many would wish no ships, trains, steam, oil, or steel because some Rockefeller or Carnegie got rich off them? Go back to the horse and buggy if you wish, but it is human nature to try to improve the buggy or breed a better horse, and to get rich doing so.

Just as the railroad, the most important secondary technology of the steam engine, produced many new fortunes, the Internet is producing enormous numbers of them, from the likes of Amazon, Facebook and Twitter. When Twitter went public last November, it created about 1,600 newly minted millionaires.

Any attempt to tax away new fortunes in the name of preventing inequality is certain to have adverse effects on further technology creation and niche exploitation by entrepreneurs—and harm job creation as a result. The reason is one of the laws of economics: Potential reward must equal the risk or the risk won’t be taken.

And the risks in any new technology are very real in the highly competitive game that is capitalism. In 1903, 57 automobile companies opened for business in this country, hoping to exploit the new technology. Only the Ford Motor Co.survived the Darwinian struggle to succeed. As Henry Ford’s fortune grew to dazzling levels, some might have decried it, but they also should have rejoiced as he made the automobile affordable for everyman.

And the fact that Henry Ford was a vile antisemite is beside the point!

Everyone benefits when someone gets unimaginably rich, and not just from their inventions or innovations. The names Ford, Rockefeller, and Carnegie—and Gates, Ellison, and Zuckerberg—are now associated as much with philanthropy as they are with capitalism.

But that’s my point: there is no difference. Even more than the church (an example of concentrated wealth that makes capitalism look like Leon Trotsky), capitalism is philanthropy. Regulate it, sure, but to eliminate it negates human nature and will lead to famines and wars like you’ve never seen.

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