Friday, March 8, 2013
Well, the sequester has occurred and the nation didn't implode, even though our Tax and Spender in Chief had hoped that it would. Life has gone on without so much as a bump in the road. Unless you want to tour the White House. In a fit of pique, Obama cancelled all White House tours because supposedly there weren't funds to allow the people's house to be open to the people. The fact is that the total annual cost of White House tours is less than 1 hour of operation for Air Force One. Here is a thought, Mr. President: how about laying off a couple of the White House chefs, or the guy that is paid to do nothing but walk your dog, or most of the staff of White House calligraphers? The waste, mismanagement, and out-right fraud that occurs with our tax dollars that go to the federal government is beyond appalling. One other little snippet about the sequester: Obama wants to make it as painful as possible so that he can get what he wants out of Congress. It is interesting to me that life for most Americans went on as usual even though the federal government was forced to trim $85 billion out of its budget. That should point out to all of us that the bloated and rapacious federal government can be safely scaled back. And life will go on. As usual.
My wife and I laugh at how competitive we are. But I laugh more.
The Dow Jones Industrial Average climbed to a new high this week, and there were huzzahs and high fives from the investing public. So why doesn't it feel so good to see the stock market at this level? To answer that question, let's take a look back at 2007 when the Dow hit its then all time high of 14,164.50 and see how it compares to today.
Average price of gas then: $2.75 Now: $3.73
Americans unemployed then: 6.7 million Now: 13.2 million
Americans on food stamps then 26.9 million Now: 47.69 million
U.S debt then: $9.008 trillion Now: $16.43 trillion
U.S. deficit then: $97 billion Now: $975.6 billion
GDP growth then: 2.5% Now: 1.6%
Notice the trend? We have spent more, created more debt, slowed the growth of the economy, and put more Americans out of work and onto government assistance. And we continue on the same path. What is that definition of insanity...?
I have a female friend that became a vegetarian, and boy, did she really change. It's like I had never seen herbivore.
One of the fallacies of economic thinking in government circles is that individuals and companies do not respond to tax policy and rates. In fact, the Congressional Budget Office still uses "static" scoring for their projections, which simply means that the CBO does not take into account the effect of higher or lower rates on behavior. We all know that in real life, there are a number of variables that affect our decisions, and taxes can and often do have an impact on our financial decisions. California is a wonderful real life, real time laboratory to see exactly how this works. California has a staggering amount of regulations and taxes on individuals and businesses. Labor, energy, and housing costs are some of the highest in the nation because of the amount of zoning restrictions, business regulations, and taxes. All to make this state "fair" and promote a progressive view of how the world should be. So how is that working out? Here are a few examples: in September, Campbell Soup announced they were closing a 65 year old facility and moving 700 jobs from Sacramento to North Carolina, Texas, and Ohio; Chevron moved 800 jobs from Los Angeles to Houston; Comcast moved 1,000 jobs out of a call center because "the high cost of doing business there" had made it financial unprofitable; PayPal, Yelp, and Maxwell Technologies have all moved to Phoenix; and the list goes on. States like Texas, Tennessee, and Florida, all of which have no state income tax, have been the beneficiaries of California's misguided tax and spend policies. Much like the Okies that fled to California during the Great Depression in search of opportunity and a better way of life, many Californians are fleeing the state in a reverse migration, searching for a better way of life and economic freedom that has disappeared in their state.
Right now, my apathy is at an all time whatever.
And that, my friends, is my view.