Archives For Economics

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.

today is the start of the NCAA Men’s Basketball Tournament (it actually started earlier for play-in teams but today is when the real fun begins). To clebrate, I thought I would share with you this graphic I came across today (just click on it to see the original larger version).

Oh, and…


Who Profits from the NCAA Tournament

“The whole gospel of Karl Marx can be summed up in a single sentence: Hate the man who is better off than you are. Never under any circumstances admit that his success may be due to his own efforts, to the productive contribution he has made to the whole community. Always attribute his success to the exploitation, the cheating, the more or less open robbery of others. Never under any circumstances admit that your own failure may be owing to your own weakness, or that the failure of anyone else may be due to his own defects – his laziness, incompetence, improvidence, or stupidity.”

Do you agree or disagree with Hazlitt?