Archives For Economics

I have been (slowly) working my way through a book titled “Changing Texas – Implications of Addressing or Ignoring the Texas Challenge.” It’s a pretty dry read.

I came across this part that I wanted to share with you [brackets] mine:

1. The U.S. workforce is becoming more racially and ethnically diverse;

2. The racial and ethnic groups that are less well educated (e.g., Hispanics) are the fastest growing due to higher rates of natural increase and [illegal?] immigration;

3. The increasing rate of retirement of “baby boomers”–the most highly educated generation in United States history–is expected to lead to a drop in the average level of education of the U.S. workforce now and for the next two decades;

4. If these current population trends continue and states do not improve the education levels and graduation rates from high school and college for all racial and ethnic groups, the knowledge and skill levels of the U.S. workforce will decline;

5. If the knowledge and skill levels of the workforce decline, occupational achievement will be lower;

6. If occupational achievement declines, the income of the U.S. residents will decline;

7. If the levels of knowledge and skills of the U.S. workforce decline, more jobs will be exported off-shore;

8. As jobs are exported off-shore and U.S. residents’ incomes decline, the taxes paid by U.S. residents will decline; and

9. As taxes decline, revenue for state and federal support of state and federal of state and federal services will decline, including support for education.

This chain of interrelationships is dependent on the validity of three key demographic and socioeconomic trends:

1. The rate of increase in minority populations with reduced socioeconomic resource bases;

2. The relationship between the demographic characteristics of populations and the education level of the population; and

3. The relationships between education and income (both personal and household) and between education and poverty and other types of socioeconomic change.

Will jobs be exported or will people from other countries come to live and work in the U.S.? I have also read that basby boomers will most likely work longer because so many of them haven’t saved enough for retirement.

Either way, I do not like the sound of a less education society. I cannot see this as being a good thing.

This is just comical to me.

Venezuela Moves to Cap Prices, Profits

The cause for the inflation?

“The amount of bolívares in circulation rose 70% over the past year, a clear sign the government is printing ever larger amounts of money to stoke a slowing economy.”

So, the government floods the economy with new money, prices rise, and the government moves to cap prices. Pretty crazy, isn’t it?

From today’s WSJ (How Government is Making Solar Billionaires):

Welcome to SolarCity, SCTY -0.59% the latest booming green company that has never recorded a profit. The startup’s stock price has soared by 600% since its IPO last December—it closed on Monday at $57 a share—and spiked after the company announced a couple of weeks ago that it expects business to grow by 70% to 90% next year. Yet the company, based in San Mateo, Calif., and specializing in deploying rooftop panels, ended the first six months this year $61 million in the red.

Ordinarily, that sort of number might disconcert investors. But SolarCity’s business model is powered by government subsidies, which also fueled the 500% stock run-up and turn to profit this year of the electric-car maker Tesla. Steering both companies is Elon Musk.

In addition to being the chairman of SolarCity and CEO of Tesla, Mr. Musk is the largest shareholder in both companies. The increase in their stock prices has raised his net worth by more than $5 billion over the past year.

Isn’t that lovely?

Yes, I am aware that the government also helps other industries. The point is the government really should get out of all business creation and promotion. The government should not be deciding who is or is not successful. If your idea cannot succeed in the market place on its own, then you need a different idea. Mr. Musk has the U.S. taxpayers to thank for his wealth.

Discuss among yourselves while I go paint the master bedroom…

PS – If you can’t read the link, email me (JLP – at – and I’ll get you a copy.

Big surprise:

Forever 21 Caught in Obamacare Controversy

President Obama creates Obamacare. He makes 30 hours a week “full time” and forces employers to provide health insurance for “full time” employees. Employers respond by slashing hours below 30 hours per week.


What did the Obama Administration expect would happen?

People can gripe all they want but businesses and people operate on incentives. Politicians tend to forget this.


Perhaps the Obama administration expected exactly this would happen in order to pave the way for…

A single-payer system.

From Money Magazine:

Since 2003, there’s been a 29% jump in Americans with little or no work experience getting disability payments, according to the Social Security Administration. Over the same time, there’s been a 44% increase in disability claims by people formerly in the workplace.

Disability claims among veterans are up 28% since 2008, according to the Department of Veterans Affairs.

All told, the federal government spent nearly $250 billion in 2011 paying more than 23 million Americans some type of disability claim. That’s about 7% of the overall population, and 16% of the workforce.

The reasons?

• The recession – not sure how the recession disabled people.

• Aging population – older people tend to have more disability issues.

• Welfare reform – welfare centers are actually screening people to see if they have some sort of disability in order to get them off the welfare rolls. Wow.

• Medical advances – keeping soldiers alive (but disabled) who would have probably died in the past.

This can’t continue. The disability program is projected to run out of money in 2016.

Let me just say, ALL politicians do this. I’m not just poking fun of President Obama. That said, check out the meaning of President Obama’s proposed savings as laid out in the graphic via the Cato Institute (yes, Cato is a conservative think tank but numbers are numbers):

Obama's Proposed Savings

Better than nothing, I suppose.

From the WSJ: Food Stamp Use Swells As Economy Improves.

The economy is improving. Food stamp usage is increasing. The reason? Loosened standards for qualification, allowing people with more income and even savings to use the program.