Category Archives: Business, The Economy and The Markets

Pretty self-explanatory, isn’t it?

Goalposts

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Joe Doakes from Como Park emails:

The number of Americans filing for unemployment dropped.  The headline makes this sound good but it’s actually not.

Look at it this way: suppose there are 100 people in the economy and 7 get laid off.  That’s an unemployment rate of 7%.

Now there are 93 people working.  If 7% get laid off again, that’s 6 more people out of work.  True – fewer people are getting laid off (only 6 instead of 7) but that’s because there are fewer people working to GET laid off.  The measure of a healthy economy is not how many people are out of work, it’s how many people who want to work, can find work.

The Labor Force Participation Rate has dropped so low that fewer than 63 people are working out of every 100 living in America.  The other 38 are out of work, out of unemployment benefits and have quit looking for work.  That’s the lowest percentage of working Americans since Jimmy Carter was in office.  That’s the tax base we’re expecting to pay for Social Security, Medicaid, Medicare, Obama-care, student financial aid, foreign aid, farm aid, light rail and oh, yes, fighting wars in a dozen countries.

Joe Doakes

It is not necessary for people to return to work. It is necessary that the media make people think people are returning to work.

Thus racism.

The Left Hand Doesn’t Know What The Farther-Left Hand Is Doing

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It was one of the stories that got no play last session, in spite of the fact because it highlights the bizarre schizophrenia of using politics to allocate human capital, but while on the one hand AFSCME was working to unionize home-child-care providers – who are independent contractors and don’t have “management” – it was instituting full-day kindergarten, reducing the number of kids who’d be in daycare at all.

Which wasn’t entirely incongruous, if you think about it; to the DFL, racket money from daycare providers and union dues from a doubling of Kindergarten teachers are both just revenue streams.

But this?

The final rule, for the most part, confirmed a proposed rule, issued in July, which will cut the Medicare home health benefit by $22 billion over the next four years.

“Congress asked [Center for Medicaid Services],” Halamandaris said, “to do a comprehensive evaluation of the home health benefit, to isolate what works and what needs improvement, how to increase access and efficiency, and how to reduce costs while improving the quality of care. CMS did none of this. Instead, all they did was look to impose the largest possible cut —3.5 percent a year — on the Medicare home health benefit. This adds up to 14 percent over the next four years, or a total of $22 billion.”

The National Association for Home Care & Hospice has produced studies showing that the Medicare home health benefit has already endured more than its fair share of cuts. The benefit has been cut a disproportionate $78 billion since 2009. Add in the newly imposed cut and $100 billion in cuts will have been taken from the most popular and most-needed Medicare program. And as a result of these cuts by the end of 2017, 75 percent of Medicare-certified agencies will be forced under water with profit margins of zero or less.

“The clear conclusion is that saving money is more important to CMS than serving those who are so sick they cannot leave home without assistance,” Halamandaris pointed out. “It is obvious that they turned a deaf ear to our pleas on behalf of aged, infirm, disabled, and dying Americans.”

In other words, while the SEIU was working calling in markers with the DFL to unionize home-care workers, President Obama was working to shut the industry down completely.

Good job, guys.

Occupy Vatican

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Lighten up, Francis.

Most observers, Catholic or not, recognized the sea-change brought about by Pope Francis I.  An Argentinian Cardinal, Francis supposed a move left for the Catholic Church from the days of Pope Benedict XVI and John Paul II.  While Francis hasn’t shocked many with his bending on social issues, his most boisterous attacks have been on economic issues – a move leftward he restated by declaring “unfettered capitalism” a “new tyranny.”

The move isn’t exactly unprecedented.  Pope Benedict XVI voiced deep reservations about modern capitalism. In his encyclical Caritas in Veritate, Benedict reiterated “progressive” stances in areas of public unions and economic redistribution; areas often overshadowed within the media by Benedict’s undoubted commitment to baroque liturgies and traditional moral norms.  The election of Pope Francis caused everyone from full-time Vaticanologists to the average Catholic in the pew to recognize a shift, a change of emphasis and style, and a laser-like focus on poverty from the new pope.  Continue reading →

Today’s News, Seven Years Ago

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When I left  North Dakota in the eighties, it seemed like rural America was on the verge of drying up and blowing away.

Of course, it was a historically lousy time for farmers and farming – and a time when there just wasn’t much more than that to draw people to a small town, unless one specifically sought out the small-town life.

Which I, for one, certainly did not.

Anyway – times have changed.  Not just in NoDak – perhaps you’ve heard, they found oil – but also in rural Minnesota:

Amid what has been described as a new “golden age” for farm profits and land wealth, the list of the 50 Minnesota counties with the fastest-growing incomes since 2005 includes only one big Twin Cities county. The state’s net farm income has nearly doubled, from $4.5 billion in 2010 to $8.2 billion in 2012.

The town of Jackson, in southwest Minnesota, was one of only four rural cities over 2,500 to suffer significant losses in numbers during this century’s first decade — then it landed a new employer from Europe offering 1,400 jobs.

Studying trends in retail, Craig and a colleague uncovered what they called “astounding” growth in consumer sales in regional centers such as Mankato and Brainerd, and “remarkable” increases in economic activity in many smaller communities — stiff reproofs to the “myth of rural decline and ghost towns.”

The spread of technology helps, of course. One of the worst things about small-town life, if you weren’t wired to appreciate it or didn’t live to spend your days in deer stands or on fishing boats, was the stultifying isolation. That’s much less a factor these days.

Oh, yeah – and I wrote about this almost seven years ago. Joel Kotkin’s been predicting this for a long time; as technology makes small towns, especially the exurbs, less isolated, growth will shift there.  Cities will become playgrounds of the wealthy and warehouses for the poor; everyone else will be living in Watertown.

Worse Than The Problem

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Minnesota – the state of 10,000 “progressive” advocacy groups.

And some of those advocacy groups run some very slick, polished, professional PR efforts.  Or - like the Alliance for a “Better” Minnesota, or “Protect” Minnesota –  at least loud and well-funded ones.

And then there’s the Douglas County DFL. 

The DugCo DFL runs a twitter feed that’s always a useful barometer for whatever the left end of the DFL’s intellectual bell curve is “thinking” has been told by the people paid to do their thinking for them. . 

This went out on Twitter the other day:

@dc4DFL: Australia has a Minimum Wage of $16.88 per hour. Minnesota needs to seriously raise ours. #mnleg #stribpol

Wow.  “Seriously”.  That sounds like quite the imperative.

So let’s compare and contrast.

The unemployment rate for Minnesotans aged 16-24 is 11 percent.  Note that in Minnesota (and most of the US), full-time students aren’t considered “in the labor market” in the same sense as someone working for a full-time living. 

And in Australia?   It’s 19% “not fully engaged” (neither working nor studying full-time).  And if you compare apples to apples – drop full-time students from the “work force” – then close to a third of Australians between the ages of 15-24 are neither working nor studying full time. It’s a little under a third if you count only Australians from 20-24. 

Bear in mind (and I say this more for the benefit of people who’d read what the DugCo DFL says seriously than for most of this blog’s audience) Australia’s economy isn’t currently mired in one of the most dismal recessions in their history.  Their growth was hit by the global financial crisis over the past six years – but not like ours. 

So – even in a relatively healthy economy, Australia’s unemployment and underemployment among younger, lower-skilled workers is much higher than in Minnesota. 

Of course, Australia’s high minimum wage is one of the products of the Labour government…

…that was just tossed at the polls two months ago.  While I saw no evidence that the minimum wage was a pivotal issue, an artificially high minimum wage is part and parcel of the whole raft of “progressive” policies that stagnate economies. 

Uncle Ryan Winkler might want to find himself some smarter stenographers.

Blight of Day

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Is Detroit’s new-found cause célèbre ignoring the past to cloud the future?

George Clooney had the Sudan.  Bono has Africa.  Anthony Bourdain – and much of the American media - apparently has Detroit.

Michigan’s So Not Grand Central Station: built in 1912 and on the national registry of historic places. It was closed in 1988 and is one of Detroit’s estimated 78,000 abandoned buildings.

In recent months, the city of Detroit has witnessed two narratives arise in Phoenix-like fashion from the economic ashes of the city, often in conjecture with themselves.  One is the purported economic revitalization of the city that gave birth to Motown and the American automotive industry.  It is a narrative fostered by Quicken Loans founder (and Cleveland Cavs owners) Dan Gilbert who, among others, has put millions into Detroit to try and restore its grandeur.  The other narrative, the so-called “ruin porn” seen in picture form below, depicts Detroit as a third-world ghetto.  A Somalia on the St. Clair River.

The former delights the denizens of Detroit with hopes of a better future.  The latter rankles them.  Gilbert himself expressed outrage when 60 Minutes balance their report on the Motor City between Gilbert’s altruism and the destruction of the out-lying portions of the city, comparing it to Dresden after the Allied bombing of World War II.  Gilbert tweeted a defiant message, stating “a city’s soul that will not die was the story & they missed it.”  But even a sympathetic, blue-collar soul as Bourdain, whose CNN show Parts Unknown highlighted the city last night, saw the need to balance Detroit’s attempts to pick itself up off the ground with the stark realities of a city undone.

The Fisher Body Plant: once part of the GM empire

Both narratives ignore the Chrysler in the room – how Detroit got to where it is today.

If the “ruin porn” industry renders pity without judgement, the acts of Dan Gilbert and others, as well-intended as they obviously are, seek a future for Detroit without acknowledging its past or present.  Not once in 60 Minutes‘ coverage did the story’s telejournalism deal with the political causes for Detroit’s decay - a corrupt, one-party institution burrowed like a tick into City Hall.  Equally, if differently, ignorant are the views of Gilbert et al who believe that once their plans to remove all of Detroit’s blight (78,000 buildings), capital will come easily rushing back into the city:

Gilbert is no fan of urban farming, though. When he envisions land cleared of  blight, he sees developers rushing in to build anew…

“When that blight is gone, maybe we don’t have to be talking about shrinking cities because it will be such a rush of people who want to get into low-value housing — when all the utilities are there and the land is pretty much close to free— not exactly free, but close to it — and all the utilities are there, it becomes very cheap for a builder/developer to develop a residential unit, and they are going to develop them and develop them in mass as soon as we get the structures down and maybe we don’t have to worry about raising peas or corn or whatever it is you do in the farm.”

The Highland Park Police Station: even Detroit’s police stations no longer want anything to do with the city

And what will cause developers (yet alone individuals or businesses) to return to a city with the highest property tax rate in the country?  What will encourage retail industries when Michigan’s sales tax is 6% on top of that?  Detroit’s backers can honestly claim that the city ranks no where near the top of the tax chain (Detroit ranks 92nd nationally; Minneapolis is 52nd by comparison).  But the tax climate is far from ideal, especially the dubbed ”most dangerous city in America” with a murder rate 10-times the national average.  Throw in a 58-minute response time for police, to attract businesses back, Detroit may literally need the fictional hero RoboCop (to whom a statue is being built - seriously).

There isn’t much evidence that Detroit is about to change its ways.

The Merrill Fountain at Palmer Park: has sat empty for 50 years since being moved from the Opera House. Vandals have stolen much of it.

The Merrill Fountain at Palmer Park: has sat empty for 50 years since being moved from the Opera House. Vandals have stolen much of it.

Since Governor Rick Snyder’s decision to appoint emergency manager Kevyn Orr last spring, Detroit’s journey to bankruptcy has been managed with minimal (some would say no) input from City Hall.  As the case has headed to court, where Orr has testified about Detroit’s long-term debts of $18 billion, city officials have fought the measure almost every step of the way.  The election of Mike Duggan as mayor, the former head of the Detroit Medical Center, has been advertised as the promotion of a turnaround artist.  But while Duggan had success revitalizing the city’s Medical Center, Duggan also ran on opposing Orr’s decisions and comes as a political protégé of former Wayne County Executive Edward McNamara – an official who backed the cartoonishly corrupt Kwame Kilpatrick and had FBI agents and state police raid his own office in November 2002, over alleged corruption in airport contracts and campaign fundraising.  Meet the new boss.

The American Hotel: built in 1926, the hotel is 11 stories high with over 300 rooms. It has remained vacant since the early 90′s.

Oh, there have been the requisite platitudes.  Duggan and Orr have broken bread in what was described as a “very good first meeting.”  And Duggan has said all the right things that a reformer would state, such as being “a huge believer in lean processing. If you are not excellent at making systems work, you cannot survive…”

But the inertia of the status quo has been apparent even after only one week from the election.  The Michigan House Appropriations Committee ranking Democrat Rep. Fred Durhal, Jr. is angry that Duggan hasn’t called him yet.  Metro Detroit AFL-CIO President Chris Michalakis essentially threw down a polite ultimatum that Duggan must “honor” his commitment to working families, while suggesting the labor doesn’t trust the new mayor.  Duggan claims he just wants a seat at the table as Detroit’s debts are solved, and if Synder and Orr are smart, they’ll allow it.

Wilbur Wright High School: closed in 2005, this building actually is among the few on this list that has been demolished. 10,000 buildings have been torn down in Detroit since 2010.

The decision to abrogate Detroit’s city government in the bankruptcy process may have been politically necessary (Detroit certainly hasn’t come to grips with its position despite many, many, many opportunities), but doing so has allowed Snyder and Orr to play the villain while the usual suspects who caused this economic disaster play the victim.  However, it’s also allowed Snyder to take all the credit too.  67% of Michigan voters approved the move back in March (including 41% of Detroit), and the decision has given Snyder a welcome bump in his approval rating.  That’s a short term political fix to a long-term structural problem.

Mike Duggan may be a product of the system that failed Detroit, but he’s viewed warily by both it.  Orr’s contract expires in the fall of 2014; Duggan and the City Council can vote whether or not to renew it – almost literally the only voice they have in the process.  If that’s the first time Duggan has to impact the process, he’ll have likely caved by then to labor, vote to end Orr’s tenure and – more importantly – work to undo reforms set in place.  Should Rick Snyder not return in 2015, an opportunity to address Detroit’s deeper fundamental problems will have passed and a new administration will slap a band-aid bailout on the city, and hope more journalists write about Dan Gilbert than urban hunters who live off of raccoon to supplement their meals.

Boing

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Joe Doakes from Como Park writes:

“College Enrollment Falls As Economy Recovers.”

Sounds as if young people are opting to skip college to go straight into the workforce, snapping up all those outstanding jobs at great pay and benefits.

Except the article doesn’t say that.  The article talks about sky-high tuition and student loans, it talks about demographics, it talks about colleges that overbuilt, but the notion people are working instead of studying is handled with this line:

“But the number of Americans turning 18 hit its recent peak in 2009, and will continue to decline through 2016. High school graduation rates appear to have leveled off, and job prospects have improved, making school a less attractive option.”

Really?  Where are all these great jobs?  Why isn’t Obama getting more credit for creating them?

Joe Doakes

I think it qualifies as a “Dead Skunk Bounce”.

Chanting Points Memo: We’re Number Eight!

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The DFL chanting-point bots were out in force yesterday; a Forbes survey put Minnesota at number eight nationwide in terms of “Best States for Business“.

So look at the rankings.  And read Forbes‘ blurb:

Minnesota’s overall rank jumped 12 spots on the strength of an improved economic outlook. The Minneapolis-St. Paul metro area is home to 62% of the state’s population. It also serves as the state’s economic hub, with companies such as Target, U.S. Bancorp, General Mills, 3M and Medtronic headquartered there. Minnesota has the second highest percentage of adults with a high school degree at 92.5%. With its good schools, low poverty rate and healthy populous, the state also scores well on quality of life measurements.

We’re reminded that the state jumped from #20 in last years’ rankings.

Two things to say about this article.

For starters:  everything the article measures about state business climate is directly related to changes made under GOP control of the legislature.  Everything.  What – you think Minnesota’s business climate is going to have a radical jump in business climate in the eight months since the DFL got the keys to the car?

Business climate changes slowly.  It improved under GOP control – for two years.  It was imperfect, but it was an improvement over 2006-2010.

And what’s the other thing this study tells you?

Look at the factors it measures:

  • Business Costs (Minnesota is 34th)
  • Labor Supply (18th)
  • Regulatory Environment (22nd)
  • Economic Climate (9th)
  • Growth Prospects (13th)
  • Quality Of Life (5th)

What do these factors tell you?

Labor Supply and “Quality of Life” are primarily issues for big businesses – the Targets and Best Buys and Medtronics, the big Fortune list titles that have their headquarters in Minnesota.  And we know – it’s a great place to be a CEO!

But how about small business?  What are the important measures?  A good economic climate is useful – but business costs and regulation are life and death.

And they were merely adequate over the past year – and have gotten much, much worse.

But we know that, since Minnesota has become the worst state in the nation for entrepreneurship measured in small business starts per capita since the DFL took control.

Which is not something the Forbes study visibly measures (or at least gives much weight to), and has little effect on the big Fortune 1000 companies that the DFL is most concerned with.

The big test will be how the state ranks next year and the following year.

Any bets?

http://onforb.es/1dM1Fz3

Woebetide

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Joe Doakes from Como Park emails:

Part of my job is signing cover sheets attached to batches of documents submitted for recording.  This morning I’m busy.  I have to write my name on, like, ten separate sheets of paper.

If I were a pro ball player, my autographs would be worth $100 each.  Of course, our office charges $100 each for approvals.  But do I see any of that money?  NO!  It goes to the County Treasurer.

Oh sure, they claim it’s used to pay my salary and insurance and benefits but I’m not buying it.  I think management is getting rich off the backs of labor and stealing the fruits of my toils for their own greed, just like it says in this Public Employee’s Union Poster.

I need a union to protect me from being ground under the iron heel of management making me work indoors, in air conditioning, risking paper cuts every moment of an entire 40-hour week with only a few breaks for lunch, coffee and cigarettes.  I’m a slave, that’s all I am, just an indentured servant.  I am being cheated, I deserve a raise, I demand a raise and a bigger pension and better insurance, if I don’t get them, I’m going on strike and bring the entire system to its . . . . . .

///slap///

Thanks, I needed that.

So do these people.

Joe Doakes

 Ain’t nothing selling but victimization.

This Hard Land

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Note to all you folks thinking of moving to North Dakota to start cashing in on the oil boom:  North Dakota is cold.  

There aren’t a lot of trees.  And outside of the eight or nine significant-sized cities (Fargo, Grand Forks, Jamestown, Devil’s Lake, Bismark/Mandan, Minot, Williston, Dickinson, and maybe Valley City), there just aren’t a whole lot of people. 

More below the jump, so the rest of the page can load…

Continue reading →

A Matter Of Degrees

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Joe Doakes from Como Park emails:

For SITD Junior Members needing college career advice, best and worst paid majors

Joe Doakes

The graph at the link is the usual link you see on the subject this time of year; engineering good, social “sciences” and humanities bad, at least in terms of money earned right after graduation.

Of course, there are some questions:  the graph counts people with degrees in a field who get jobs in that field.  Not all engineering majors get jobs directly in their fields (as we talked about a few weeks ago) – and not everyone with a degree in technology or engineering has a degree in the field (many of the best software engineers I’ve worked with had degrees in music).

And not everyone who goes into social “science”, humanities or even arts works in those fields after graduation, and fewer still do it for an entire career.  How many history majors do you know who became managers?   Most of us Twin Cities beer drinkers know the example of the CEO of Summit Brewing, who started out as a psych major.  And in my own field – which is a bastard child of engineering and psychology – I’ve worked with people who graduated with degrees in music, computer science, folklore, math, graphic design, education, and not a few English majors like me. 

Not a few very successful lawyers majored in theatre.

And the Elizabethan Poetry major who goes to work selling insurance, cars, real estate, institutional software, drilling equipment or a raft of other things can, with talent and hard work, make a ton of money – and never recite a single couplet. 

The mania for matching degrees with post-graduate salaries is completely understandable, as education costs are hitting a peak even as the higher ed bubble starts to implode with all the grace of a whoopie cushion. 

But it’s a little misleading, too. 

How many of you are working in the field in which you got your BA?

How many of you could have even predicted where you’d be now, given your undergraduate degree?

Our Innumerate Overlords

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When Representative Ryan Winkler talks, people listen.

And then the smart people snicker.

He tweeted this yesterday:

Of course, he had the point of the op-ed all wrong.  Read it for yourself.

The point is that low wages aren’t the sole cause of poverty.  In the great scheme of things, they aren’t even especially important, in and of themselves.

Much more important?  When there is no opportunity to earn higher wages.

How does that happen?

To further address the point, though, I’d like to ask Rep. Winkler (or his defenders) this question:  at what minimum wage hourly rate will poverty disappear?

Put a number on it.

That’s the question I’d like to ask.  In fact, I asked it.

Hopefully we’ll see an answer.

I’m sure we will.

Continue reading →

Chart Your Own Recovery!

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How many jobs a month do we have to add to bring the level of employment back to pre-recession levels?

How long will it take to get back to pre-recession employment at current – or any – rate of job “creation?”

Check it out for yourself!

Hint – at the current rate (169,000 a month, before adjustments), we’re ten years away.  Although the calculator doesn’t distinguish between full-time and part-time jobs – although under the Obama notion of “recovery” the same number of jobs doesn’t mean the same kind of prosperity.

This Is Your Obama Recovery

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Unemployment down to 7.3% – almost entirely due to people leaving the workforce; the Labor Force participation rate is down to 63.2%, the lowest since the depths of the Carter Malaise. 

That means the percentage of the workforce actually working is down to 58.5864%. 

  • When President Obama was inaugurated in January of 2009, it was 60.58%
  • In October of 2009, when the top-line unemployment rate was 10%, the rate was…58.5%.  Statistically the same as today, even though the “unemployment rate” has theoretically dropped by a quarter.
  • At the bottom of the recession – December of 2010 – it was 58.2%. 
  • A year ago, it was 58.36%.  It’s been in the 58% range ever since – a time when, NPR assures us, we’ve been “recovering”. 
  • And ten years ago last month – as the economy was getting out of the DotBomb and 9/11 slowdowns, but before the mortgage bubble really inflated – it was 62.07%. 

America’s work force is still in full recession mode.

Democrats were pleased to call the recoveries of 2003 and 1983 “jobless recoveries”.  Especially if you’re one of the Afrian American voters who turned out for Obama twice now.

This one seems to be a “recoveryless recovery”.

Chanting Points Memo: Our Spunky, Cute, White Underclass

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The fact is, I have a lot of questions about the minimum wage debate.

Of course, the uncountably vast majority of people who are earning minimum wage are kids, or others who are just entering the workforce.  People who haven’t yet developed even the most rudimentary work skills – like showing up on time, much less running the shake machine or the deep fryer with authority.

But there are people earning the minimum wage who do, in fact, have themselves and others depending on their income.

If you’re a conservative, you no doubt suspect that that sad state is because of poor choices; partying too much in high school and not getting an education; having children out of wedlock; working on the easy crime career before developing the boring straight career.

Of course, not every person is affected by their own choices.  When you party you way into your twenties, do jail time, get knocked up and wind up having to raise a family on a wage that wouldn’t support a single person, you are very likely passing a lot of problems on to the next generation; you’re passing your bad, shortsighted, immature and/or stupid choices on to them.  ”Personal Responsibility” is great when it’s just your own choices affecting you – but when your parents, and grandparents, were idiots or drunks or screw-ups, what’s a kid to do?

(And if you’re the progeny of a couple of generations of people who made good choices, worked hard, got good jobs and dedicated themselves to helping you make good choices, too, then thank whatever it is you believe in.  It’s a major leg up in life).

Now, I’m not sure how many of Jessica English’s choices were her ancestors, and how many were hers.  But the media certainly is playing up the results – the state of Ms. English’s life today:

Jessica English is the face of a newly revived effort to raise Minnesota’s minimum wage.

Ms. English, speaking at the Minnesota State Fair, illustrating the dangers of poverty to cute, white women from Wayzata who choose to work in art.

She earned minimum wage while working in rural western Minnesota, places such as Fergus Falls, Ortonville and Kerkhoven. A case worker called it the “land of the minimum wage.”

Now, the 35-year-old divorced mother said she faces losing custody of her four daughters, ages 6 to 15, because she earned so little, even though her finances improved a bit since moving to St. Paul.

On the one hand?  That sounds scary – being 35 and up against it like that.   Now, I have no idea what got Ms. English to this point in her life – single, four kids, job skills worth $6.15 an hour.

(As to the “losing custody” bit, though?  Er, if she was a single father - presuming that’s who Ms. English would be contesting for custody - would the media even care?  What if the father is better able to provide a decent life for the kids?  The double standard is nothing new).

But the fact is, one does make choices in one’s life.  I’ve made a few; I left radio, my first career, when I was married and had two kids and another on the way, and was making $6.50/hour, and painstakingly taught myself how to convince managers I was a competent technical writer.  I adapted.  I did what it took to develop a skill that would get me and my family out of poverty.  I don’t want, or deserve, a cookie for that - that’s what you do when you have a family; you take care of them.  I had some blessings, of course; I’d gotten a passable education when I had the chance, I’d avoided doing any jail time, that sort of thing. Perhaps my greatest blessing?  Growing up in a place and time when “not being ready to raise a family when I had one” still had some moral weight.

And it’d seem Ms. English has learned that lesson, at least in part.  The article notes that her financial situation has “improved a bit since moving to St. Paul”.

Where she works – for an inadequate wage, perhaps, although we don’t know – as a “community organizer” for “The Coffee Party”, the beyond-astroturf liberal-plutocrat-funded “response” to the Tea Party. 

In other words, one of the liberal-plutocrat-supported non-profits that’s agitating for a “living wage” apparently won’t provide one. 

Judging by Ms. English’s rap sheet, she spent the last several years working in the public/non-profit art business – a famously penurious racket, usually the province of trust fund babies, bored housewives and young, no-strings-attached arts majors.

I don’t know Ms. English.  But how much weight should the media give the testimony of a person who has apparently dedicated herself to finding and remaining in poverty?

And how much should Minnesota’s real working poor – the 20 year olds scrambling for their first jobs at Burger King, who will be the first to get laid off when the robots do finally take over the fast food business, the immigrants who are working as many minimum wage jobs as they can while they learn English and develop other skills, the poor kids who need to some some reassurance that there’s a future in working the straight and narrow rather than turning to crime - have to pay for such dilettantism?

Because it’s their jobs – not the “Community Organizer” jobs for fashionable lefty non-profits – that’ll be disappearing.

UPDATE:  Someone emailed “aren’t you being a bit condescending?”

Me?  Not a bit.  There’s a reason that the poverty pimps are trotting out an attractive white woman instead of a 30 year old Somali immigrant.  Put another way – the proponents of the minimum wage hike are doing the condescending, here.

STEM: The Scam?

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Since the end of World War II, the mantra of government and business is that “we need more kids to grow up to study Science, Technology, Engineering and Math” – aka “STEM”. 

And yet if you work in technology, you know that in vast swathes of the field, there’s no real shortage of people.  Especially in IT; even as baby boomers retire, there is plenty of unemployment among IT people; even as demand for IT workers booms, the supply seems to more than keep pace.  Have you checked out the contract rate for web coders or support analysts lately? 

And yet the government keeps cajoling our “best and brightest” to go into STEM. 

Why?  

To keep the costs down, perhaps?

As this piece in the IEEE Spectrum notes, not only is there no shortage of STEM professionals, there’s an apparent skills mismatch, with many “STEM” careers being held by non-STEM degree-holders (I’d be one of them, by the way), and many STEM degree-holders working outside science and technology.

And yet the establishment keeps driving more people into STEM, and importing more programmers, engineers and technicians from overseas. 

Why?

Clearly, powerful forces must be at work to perpetuate the cycle. One is obvious: the bottom line. Companies would rather not pay STEM professionals high salaries with lavish benefits, offer them training on the job, or guarantee them decades of stable employment. So having an oversupply of workers, whether domestically educated or imported, is to their benefit. It gives employers a larger pool from which they can pick the “best and the brightest,” and it helps keep wages in check. No less an authority than Alan Greenspan, former chairman of the Federal Reserve, said as much when in 2007 he advocated boosting the number of skilled immigrants entering the United States so as to “suppress” the wages of their U.S. counterparts, which he considered too high.

And it helps inflate the higher-ed bubble, too:

And the perception of a STEM crisis benefits higher education, says Ron Hira, because as “taxpayers subsidize more STEM education, that works in the interest of the universities” by allowing them to expand their enrollments.

An oversupply of STEM workers may also have a beneficial effect on the economy, says Georgetown’s Nicole Smith, one of the coauthors of the 2011 STEM study. If STEM graduates can’t find traditional STEM jobs, she says, “they will end up in other sectors of the economy and be productive.”

The problem with proclaiming a STEM shortage when one doesn’t exist is that such claims can actually create a shortage down the road, Teitelbaum says. When previous STEM cycles hit their “bust” phase, up-and-coming students took note and steered clear of those fields, as happened in computer science after the dot-com bubble burst in 2001.

Emphasizing STEM at the expense of other disciplines carries other risks. Without a good grounding in the arts, literature, and history, STEM students narrow their worldview—and their career options. In a 2011 op-ed in The Wall Street Journal, Norman Augustine, former chairman and CEO of Lockheed Martin, argued that point. “In my position as CEO of a firm employing over 80 000 engineers, I can testify that most were excellent engineers,” he wrote. “But the factor that most distinguished those who advanced in the organization was the ability to think broadly and read and write clearly.”

For all the sneering people are doing at humanities these days – and I have a BA in English with minors in History and German – the selling of the STEM “crisis” seems to be a move to commoditize technical skill.  Communications is no commodity, though – and it seems to be what still what separates a bench engineer and their supervisors. 

So is the education system short-changing students by preaching STEM as the be-all and end-all of opportunities?

Patched

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Half of the Minnesota “Patch” “hyperlocal news” sites are going to be closing or consolidating in the next few months:

Kevira Voegele, associate regional editor for Minnesota, emailed staffers over the weekend to inform them that 13 of the state’s 25 Patches would need to land a partner — a media organization that would assume some responsibility for their operations — or face closure within 60 days.

It’s a nationwide problem for AOL-owned Patch, which is closing or consolidating 300 of its 900 local websites coast to coast. 

In Minnesota, the Patches slated for closure or consolidation failing a partnership are Apple Valley-Rosemount, Burnsville, Eden Prairie, Fridley, Golden Valley, Hopkins, Inver Grove Heights, Lake Minnetonka, Mendota Heights, Plymouth, Roseville, Shakopee and Southwest Minneapolis.

Sites that will continue to operate as usual include Eagan, Edina, Lakeville, Maple Grove, Minnetonka, Northfield, Oakdale, Richfield, Stillwater, St. Louis Park, St. Michael and Woodbury.

In my experience, the Patch chain – at least in Minnesota – was just as sclerotic and left-biased as of the local newspapers that they couldn’t quite replace.

This Is Your Obama Recovery, Part MMMLCIX

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The dip in unemployment…wasn’t. 

Jobless rates dropped in only eight states in July from the previous month and rose in 28, the Labor Department said on Monday, as employment gains sputtered.

The slight improvement in employment last month came after jobless rates fell in only 11 states in June from May.

From July 2012, unemployment rates decreased in 36 states and the District of Columbia and increased in nine, the department said.

And in many of the states where unemployment “dropped”, it happened because the number of people in the workforce shrank.

And it’s getting worse, as employers increasingly ditch full-time employees for part-timers.  Forever21 is the first company to explicitly do away with full-time non-management employees in their stores, but they won’t be the last:

Although the ethical nature of Forever 21’s decision is debatable, it is both rational and understandable. A company that boasts regularly low prices and frequent, sensational sales, Forever 21′s competitive success is largely dependent upon its ability to maintain low manufacturing and operational costs. The ACA is an undeniable burden on this principle, and Forever 21’s management has the prerogative to take any legal measures necessary to avoid raising the costs of its products.

It is a decision that will pose moderate public-relations consequences for the company and it is an unfortunate result for its employees, but it is a pragmatic choice for any profit-driven company to make. Forever 21 will subsequently be just one of many others to take such an action if the ACA isn’t revised or repealed.

Chanting Points Memo: Why Yes – We Did Build It

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“You didn’t build that”.

President Obama said it to America’s entrepreneurs during the campaign; the not-remotely-muted message was that “private sector innovation follows public sector investment” – that without roads, there’d be no car company; without airports, there’d be no aircraft. 

On the state level, one of Governor Messinger’s budget czars made essentially the same statement at a meeting of government and business leaders in Thief River Falls last year; without government to build the infrastructure, entrepreneurship would be doomed to failure. 

On the one level, it’s wrong – unless the entrepreneurs and their employees not only weren’t paying plenty of taxes, but hadn’t already paid their taxesforall that infrastructure all of their lives, and their parents, and grandparents, back to statehood. 

But even beyond that – and I can’t believe I and many other conservative pundits didn’t note this at the time?   It’s just not true; infrastructure tends to follow innovation.

A great example – which came first, the car or the road?

Henry Ford and dozens of other auto makers put a car in almost every garage decades before the National Interstate and Defense Highways Act in 1956. The success of the car created a demand for roads. The government didn’t build highways, and then Ford decided to create the Model T. Instead, the highways came as a byproduct of the entrepreneurial genius of Ford and others.

Read a little about the history of the automobile.  When cars were expensive, handmade playthings of the wealthy, roads, were few, far between, and largely wretched outside the cities, where they existed at all.  The normal “road” in the greater US in 1900 was a cow path or a wagon trail.  Early cars were as likely to be found driving along railroad tracks as anywhere else. 

And what happened next?  A huge federal road-building initiative? 

No!  Ford mass-produced the Model T, which brought the car financially into reasonable reach for working-class Americans.  Other auto makers followed suit. 

And then the roads got built: 

 

Moreover, the makers of autos, tires and headlights began building roads privately long before any state or the federal government got involved. The Lincoln Highway, the first transcontinental highway for cars, pieced together from new and existing roads in 1913, was conceived and partly built by entrepreneurs—Henry Joy of Packard Motor Car Co., Frank Seiberling of Goodyear and Carl Fisher, a maker of headlights and founder of the Indy 500.

And this was the pattern for advance after advance in industry and “infrastructure”; the canal boat led to the government canal; the burgeoning steamship industry led to everything from seaports to the taming of the Mississippi; commerce, not Algore or even the Department of Defense, built the Internet. 

And the business in Thief River Falls which Governor Messinger’s budget apparatchik owed its existence to infrastructure?   Not only had they paid their fair share for the infrastructure that exists (more than their fair share, actually, given Minnesota’s business taxes) over the past 40 years, but it was the company’s existence that gave Thief River Falls the need for significant infrastructure in the first place. 

It’s time government – especially the arrogant, preening, narcissistic variety practiced by the DFL – learn its place.

Open Letter To Ryan Winkler

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To: Representative Ryan “Beavis” Winkler”
From:  Mitch Berg, Uppity Peasant
Re:  Your Minimum Wage Thing

Rep. Winkler,

Here’s what technology has to say about your minimum wage hike.  Read it and think. 

That is all.

PS:  No, it’s not.  I know you’re not paid to think about these things; yours is not to reason why.  But those who support you?  Maybe not in your stu-foresaken district, but in the rest of Minnesota?  There might be hope.  And so I write.

Tech Vendors: “Thanks, Representative Winkler!”

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The inevitable result of across-the-board minimum wage hikes?  Fewer minimum wage jobs.

Case in point; as minimum wages around the country rose during the 2000s, McDonalds started pre-cooking its hamburger patties, so they’d only need to be reheated in the stores.  This got rid of most of the traditional “burger-flipper” jobs, the ones that liberals sneered at but provided hundreds of thousands of opportunities for teens and others entering and re-entering the workforce to learn how to show up for work on time and do a good job at something. 

But there was always the front counter.  Right?

Maybe not; McDonalds is testing thousands of touch-screen kiosks in France:

The move is designed to boost efficiency and make ordering more convenient for customers. In an interview with the Financial Times, McDonald’s Europe President Steve Easterbrook notes that the new system will also open up a goldmine of data. McDonald’s could potentially track every Big Mac, McNugget, and large shake you order. A calorie account tally at the end of the year could be a real shocker.
The touch screens will only accept debit or credit cards, adding to the slow death knell of cash and coins. This all goes along with an overall revamp of McDonald’s restaurants worldwide aimed at projecting a modern image as opposed to the old-fashioned golden arches…

Winkler is spending his between-session time agitating for a minimum wage hike bill. 

Minnesota’s young and poor should ask him to stop doing them any more favors.

Maybe if there was a touch-screen kiosk of some kind…

They’re Going To Need A New Chanting Point

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Two months ago, Wisconsin (along with, ahem, North Dakota) came in 49th out of 50 states in a Philadephia Fed report on economic growth.

Liberals chortled with glee, declaring Scott Walker a dead issue. 

Then last month the Philly Fed uprated Sconnie to 20th.

And now?

And with new numbers out today for June, Wisconsin is now ranked 5th in new rankings among states on their six month economic outlook. For those keeping track, that’s 40th, to 20th, to 5th in just a couple months.

 

And in another leading economic indicator, the coincidence index, Wisconsin ranks 2nd.

These numbers are not the be-all and end-all of economic reporting.  I’m  not presenting them as such.

But some people sure did. Two months ago, anyway.

The Pollyanna President

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Sometime today, The One will be giving his second speech (in Chattanooga) of his tenth attempt, give or take, to “pivot to the economy” in the past five years.

I’ll invite you to read this short but deep piece by Richard Epstein at the Hoover Institution, about the shallowness of Obama’s understanding – he’s more of a sloganeer, really – of how economies actually work, and how it’s manifested itself in a middle class that’s been largely bludgeoned into submission.

Read the whole thing, but here’s the conclusion:

Indeed [President Obama] constantly thinks of his greatest regulatory failures as his great successes. No other president has “saved the auto industry,” albeit by a corrupt bankruptcy process, or “taken on a broken health care system,” only to introduce a set of unworkable mandates that are already falling apart, or “investing in new technologies,” which tries to pick winners and ends up with losers like Solyndra. The great advances in energy have come from private developments, most notably fracking, and not from the vagaries of wind and solar energy, which no one has yet figured out how to store for future use when needed.

The President seems utterly incapable of seeing the downside to any of his policy choices. They are announced from on-high as all gain and no pain. In the face of stagnant growth, weak corporate earnings, and continued high unemployment, he shows not the slightest recognition that some of his programs might have gone amiss.

It is easy to see, therefore, why people have tuned out the President’s recent remarks. They have heard it all countless times before. So long as the President is trapped in his intellectual wonderland that puts redistribution first and regards deregulation and lower taxation as off limits, we as a nation will be trapped in the uneasy recovery that will continue to dog us no matter who is chosen to head the Federal Reserve.

If there were ever a time for someone to come onto the scene – or re-emerge, perhaps – with something on the order of “A Time For Choosing”, this would be it.