The Success of Socialism: Part 5 And here I thought that socialist governments were supposed to make things better for the common people!

We have written about Venezuela’s economic crisis previously, and things are only getting worse. From CNNMoney:

Venezuela’s currency is in ‘free fall’

Venezuela’s currency continues to collapse.

by Patrick Gillespie | @CNNMoneyInvest | November 29, 2016: 10:30 AM ET

10,000 Bolivars, worth a whopping $2.87 on November 28, 2016

10,000 Bolivars, worth a whopping $2.87 on November 28, 2016

Just in November, the bolivar has lost 55% of its value.

It’s the latest sign of Venezuela’s extreme economic, political and humanitarian crisis. Sky high food prices — or massive shortages of basic food and medicine — have plagued Venezuelans for years and have gotten worse this year. Inflation in Venezuela is expected to rise 1,660% next year, according to the IMF. The country has been in recession for three years now.

One dollar fetched 1,567 bolivars on November 1. On November 28, a dollar was worth 3,480 bolivars on the widely-used unofficial exchange rate monitored by

“It’s a currency that’s going down the toilet,” says Russ Dallen, managing partner at Caracas Capital Markets, an investing firm in Miami. “No one wants to hold on to something that’s going to be worth 50% less in a month.”

Venezuela fractured flagThere’s more at the link, including a link to an article noting that President Nicolas Maduro just increased the nation’s minimum wage by 40%, the fourth increase this year, but a 40% increase at the end of October was more than wiped out by a 55% decrease in the value of the Bolivar, and a 500% inflation rate; the International Monetary Fund forecasts 1,660% inflation in Venezuela next year.

Venezuela is sitting on the world’s largest proven petroleum reserves,1 and if a lot of that oil is very ‘heavy,’ and requires additional extraction and refining costs, the real problem has been the country’s mismanagement of its oil industry:

Venezuela’s Oil Production Plunges To 13-Year Low

By Nick Cunningham | July 14, 2016 | 3:37 PM CDT

Venezuela’s oil production plunged to a 13-year low in June as the economic crisis continues to eat into the nation’s only source of export revenue.

Venezuela’s oil production has declined by 170,000 barrels per day since the start of 2016, dipping to 2.18 million barrels per day (mb/d) in June, according to the IEA’s latest Oil Market Report. Part of that was due to electricity blackouts that cut 120,000 barrels per day from the country’s output between April and June, but even with some of those issues resolved – rain has restored some output at hydroelectric dams – the IEA says that “further losses are expected in 2016.” A year-on-year decline in oil production of 200,000 barrels per day “looks unavoidable as foreign oil service companies reduce their activity and international oil companies face repayment issues and daily operational challenges.” But 200,000 barrels per day could be just the start.

Venezuela does have some of the largest oil reserves in the world, but much of its oil production occurs at mature fields that require maintenance. But maintenance requires cash, something that is increasingly scarce in the country. Venezuela’s state-owned PDVSA was already failing to properly invest in oil production even when oil prices were in triple-digit territory several years ago. In fact, production has been gradually declining for more than a decade. The problem is that the declines are now accelerating.

In the mature oil fields around Lake Maracaibo in the west, wells are depleting as investment falls short. The IEA says that even in the Orinoco Belt in the southeast output is falling because PDVSA is struggling to process the heavy crude due to a shortage of light crude for blending. Venezuela has long predicted that it would be able to ramp up production from its heavy oil fields in the Orinoco Belt, which holds some of the largest heavy oil reserves in the world and accounts for half of the country’s output, in order to compensate for the aging fields in the Maracaibo region. The predictions were always overoptimistic, but now they are entirely off the table.

Not only did the country short-change maintenance in the state-run oil company Petroleos de Venezuela (PDVSA), then-President Hugo Chavez inserted politics into the workforce:

In 2002, nearly a half of PDVSA workers went on strike to pressure Chavez to call early elections. This virtually halted oil production for two months before the government gradually reestablished control over PDVSA. It then promptly fired 18,000 of its workers – approximately 40% of the workforce. The country’s oil industry was then further hindered when the government, in an attempt to replace the fired employees, hired less skilled — yet pro-Chavez — workers.

And every time a foreign oil company makes investments in Venezuela’s oil production, the country lets them proceed, and then nationalizes the assets. At this point, only an economic idiot would invest private dollars into Venezuela’s oil industry.

The promises made by socialists have always been that the economy would be run for the good of the people, and that the fat-cat capitalists would be brought to heel, and those promises have seduced many, man people. But not even one attempt at socialism has had any success at achieving those promises, and socialist countries have always devolved into authoritarian states.

  1. Robert Rapier, writing in Forbes, noted that the definition of ‘proven oil reserves’ is dependent upon recoverability under given economic conditions, and holds that the dramatic drop in oil prices means that Venezuela’s proven oil reserves are not as large as commonly stated.

The death of Fidel Castro Major media talking mostly about Donald Trump's policies, demonstrating just how lame a duck Barack Obama is

From The Wall Street Journal:

Death of Fidel Castro May Pressure Donald Trump on Cuba Promises

President-elect could face pushback from some companies regarding his Cuba policies

By Carol E. Lee and Felicia Schwartz | November 27, 2016 6:48 p.m. ET

WASHINGTON—The death of Fidel Castro is putting unexpected pressure on President-elect Donald Trump to follow through on earlier promises to reverse the recent openings to Cuba made by President Barack Obama.

While Mr. Trump could undo Mr. Obama’s efforts, which were implemented using executive authority, he could face pushback from U.S. companies now deeply invested in Cuba under the current administration’s policy. Those companies include major airlines, hotel operators and technology providers, while big U.S. phone carriers have signed roaming agreements on the island.

Mr. Trump’s top aides said Sunday that he would demand the release of political prisoners held in Cuba and push the government to allow more religious and economic freedoms. Reince Priebus, Mr. Trump’s incoming White House chief of staff, said the president-elect “absolutely” would reverse Mr. Obama’s policies if he didn’t get what he wanted from Cuba.

“We’re not going to have a unilateral deal coming from Cuba back to the United States without some changes in their government,” Mr. Priebus said Sunday on Fox News. “Repression, open markets, freedom of religion, political prisoners—these things need to change in order to have open and free relationships, and that’s what president-elect Trump believes, and that’s where he’s going to head.”

Sen. Marco Rubio (R., Fla.), a critic of Mr. Obama’s opening, said Sunday on CBS that he hopes Mr. Trump will examine Mr. Obama’s changes to U.S.-Cuba policy and consider whether they foster democracy.

There’s more at the original.

There are already American media stories telling us how the younger Castro, President of the Council of State Raúl Castro, has been a moderating influence since he assumed power as his older brother’s health deteriorated:

Raúl Castro is less ideological and more disciplined than his charismatic brother, who was renowned for fiery speeches and would often hold forth with journalists or visiting dignitaries for hours on a range of subjects.

Raúl was with Fidel from the revolution’s earliest days, but he is not as beholden to the revolutionary ideology that brought Fidel to international prominence and whose policies frustrated a succession of U.S. presidents.

Since Fidel became ill, Raúl has taken modest steps to liberalize Cuba’s economy and engaged in historic talks with the Obama administration, announced two years ago, to normalize relationships with the two countries.

The younger Castro has pursued policies to shrink the size of government employment and has made efforts to expand entrepreneurship and create more small businesses. He also allowed people to leave the island without requiring an exit visa.

Raúl Castro is seen as someone who will not make wholesale changes but will try to make enough reforms to prevent widespread dissatisfaction that might lead to the collapse of the regime.

Yeah, uh huh, right.

We have had full relations with other Communist countries, countries which were or are hostile enemies of the United States. We had relations with the Soviet Union, and happily enough, the USSR is now just a sad memory in the dustbin of history. And President Vladimir Vladimirovich Putin of Russia, formerly a KGB agent and later head of the Federal Security Service, a successor to the KGB after the fall of Communism, has been verbally admired by incoming President Trump for his leadership skills, so there’s no particular reason why Mr Trump should reverse President Obama’s opening to Cuba, at least not beyond something symbolic. Raúl Castro is 85½ years old, and cannot remain in power that much longer; it won’t be long before he must be succeeded by someone younger, someone younger than the revolutionary generation. Our formal relations with the People’s Republic of China might not have been the cause of China’s shift to capitalism, but they certainly didn’t hurt.

The question isn’t whether Cuba will shift to capitalism; such is already starting, and will accelerate, because Communist/socialism is the continued path to poverty, as Venezuela is so dramatically demonstrating. The question is whether Cuba can remain a one-party dictatorship, as China has managed, under a (somewhat) free market economy, open travel and the existence of the internet. President Castro will almost certainly try to keep the Partido Comunista de Cuba in control, but one has to wonder how successful his successor can be. Again, the lessons of Venezuela are instructive: Nicolás Maduro Moros has not had the success of his predecessor, Hugo Chávez, not only because socialism has destroyed the Venezuelan economy, but because he lacks Mr Chávez’s charisma and personality. Raúl Castro is but a shadow of his dead brother, and his successors are likely to be not charismatic politicians but dreary Communist Party functionaries, men unlikely to be able to retain firm one-party control.

Cuba’s greatest economic potential is in it’s agricultural trade and tourism, the very industries which could more closely tie it with the United States, and thus increase the pressures for freedom. I will admit that I did not like the way President Obama opened relations with Cuba — he should have at least tried to consult with congressional leaders first, because he had a chance to get consensus there — but the policy is actually the wiser one. Incoming President Trump ought to leave well enough alone here, simply putting diplomatic pressure for the release of political prisoners and a more open political system, but not try to close the door again.

Why Communication Strategies are Important in Politics

Developing Communications Skills for Use in Politics

Whether you love or hate President-elect Trump, there is no denying that he excels in a few areas. Communication is one. He distrusts the media and has leveraged Twitter to speak directly to millions of people in his own words. No twisting of verbiage, no warping of messages. He has a handle on effective communication, and that’s something many politicians (and their staffers!) don’t.

If you’re thinking about a career in politics at some point, either as an actual politician or as someone behind the scenes, say, a public relations guru, please do everyone a favor and develop genuine communication skills. Here are a few things to keep in mind as you move along your journey.

1. Social Media/Viral PR Matters More Than Ever in Campaigns

If you were not convinced of the importance of social media before Trump’s political rise, you should be now. He took to Twitter during his campaign to deliver messages straight from his heart and that tapped into voters’ emotions.

Facebook “fake news” has also made headlines for apparently playing a role in the election. The theories go that people in other countries wrote clickbait stories that largely favored Trump rather than Hillary Clinton. Lots of readers only saw the headlines, took them to be true, and spread the news. Other readers clicked on the stories and believed them.

No matter what, it is obvious that social media can be leveraged to benefit you or your candidate. Get on offense first.

2. Direct Your Education

A formal education that includes communication is great. Necessary, even. For example, at GW, you’ll learn about listening skills, rhetoric and communication with people who agree and disagree with you. You can’t stop at that formal education, though. Keep learning. Direct your education. Take charge of it.

Meet with people who fit in the audience segments you want to reach. How do the people they admire talk? What modes of communication do people in that segment use? What words or messages might resonate most with them? Spend time with them to understand them.

3. Welcome Competition

All too often, competition is seen as a bad thing, but how else are you supposed to learn? To grow as a person, to sharpen your skills? With no competition, people would become stagnant and not try very hard. So, welcome and embrace your competition for what it is, as GW Online explains. Don’t skirt around these people or issues in your communications. Anticipate them, and address them head on. The best defense is a good offense.

4. Know Who You Are

Perhaps most importantly, know who you are. That’s how you avoid mistakes. That’s how you play to your strengths (or your politician’s). Trump got away with a lot of things that ordinary politicians would never dream of doing. Why? Because he knows exactly who he is, and he shows people that every day. When you are inauthentic, you are more at risk of slipping up and committing errors.

Naturally, there’s a lot more that goes into communication and politics, but the basics are above. Don’t limit your education; take charge of it. Don’t shy away from competition. Seize the opportunities that social media provides for viral PR. Last but not least, understand what makes you tick.

Hiring a Lawyer to Handle Your Tax Issues

Hiring a Lawyer to Handle Your Tax Issues

Are you in need of a California tax firm? If this is the case, you need to be very careful about who you hire. There are many lawyers out there who specialize in handling tax cases. However, you should never make the mistake of thinking that all of these lawyers have basically the same level of skill. This is quite simply not the case. You will discover that the quality of services that various tax lawyers can provide you with will vary quite dramatically. Here is some advice you can use when you are searching for a good tax lawyer to hire.

1. How much experience does the lawyer have handing cases that are related to tax issues?

Tax issues can tend to be very complicated. Therefore, experience is a critical issue to consider when you are hiring a lawyer to get involved with any situation involving your taxes. Ideally, you should only hire a lawyer for this type of job who has at least six years of experience handling tax law cases. This will help to ensure that he or she does not make any serious mistakes that could jeopardize the outcome of your case. You should also try to find a lawyer who only deals with tax cases. Always look for tax controversy attorneys who have consistently provided great results for their clients.

2. What sort of reputation does the lawyer have?

Experience is obviously an important detail. However, you should also do some digging to find out about the reputation and the character of the lawyer you are hiring. You should never assume what type of background that a lawyer has. You owe it so yourself to find out if the lawyer has ever been officially reprimanded for unethical behavior in the past. Has he or she ever had their license to practice law temporarily revoked? Needless to say, you should avoid a lawyer who has experienced these types of problems in the past. You need to have your tax case handled by a lawyer with an impeccable track record.

3. Are the fees reasonable?

The fees you will pay for the lawyer’s services will obviously be a major consideration. This is why you should talk to several lawyers and compare the fees they charge to find out for yourself how much money you will be able to save.

Never count out your opponent until he is actually defeated

I’m visiting family and friends in the Bluegrass State for Thanksgiving week, and my best friend had this old article from the Louisville Courier-Journal on his office desk:

The damage is done

Matt Erwin, Contributing Columnist | 3:35 p.m. EDT October 26, 2016

Election Day is right around the corner and most Americans are begging for it to be over. While every presidential election brings fatigue the offensiveness, the grossness – the ick – Republican nominee Donald Trump has brought to this race has the nation reeling.

There’s one group ready for this campaign will to be over above all others – Republican Party leaders and elected officials. As Donald Trump continues to dig his own grave one slimy insult at a time all signs point to a crushing victory for Hillary Clinton which could produce electoral coattails that didn’t even exist three weeks ago. Like a team watching the clock tick away during a lopsided victory, they must be hoping the end comes mercifully and swift.

But November 9th won’t end the problems Trump poses for Republicans. The stain of his campaign will last a generation, at least, and shackle Republican’s ability to build a coalition that can realistically take back the White House. Donald Trump isn’t going anywhere.

Actually, he is going somewhere: he’s going to the White House!

Now, I’ll admit it: I was wrong on Mr Trump’s electoral prospects. I read the polls, and I thought that he was going to lose, too. I saw the polls in Pennsylvania, the polls which forecast a victory for Democratic candidate Katie McGinty over incumbent Senator Pat Toomey (R-PA), and never thought that Mr Trump would carry the Keystone State, a state which hadn’t been carried by a Republican since the elder George Bush did it in 1988. Mr Trump carried Pennsylvania, and had the coattails to help pull Mr Toomey to re-election. But while I guessed wrong about the election, I was never as wrong as Mr Erwin!

But outside of the Republican Party is where the real damage has been done by Donald Trump and while it may not by permanent it’s not going to heal itself anytime soon.

After the 2012 reelection of Barack Obama the GOP did some serious soul searching and issued a document, commonly described as an autopsy, called the “Growth & Opportunity.” In it, longtime Republican leaders took a sober look at their loss in 2012 and put forward recommendations they saw as necessary if their party was to thrive and grow in the future.

To view these recommendations at the near conclusion of Donald Trump’s presidential campaign is comedy at its highest level. Lines like “The RNC cannot and will not write off any demographic or community or region of this country” or “If Hispanic Americans perceive that a GOP nominee or candidate does not want them in the United States, they will not pay attention to our next sentence” leap off the page as if these warnings were purposefully ignored as Trump insulted large swaths of America, one demographic at a time.

Instead of embracing the Latino community, the fastest growing racial demographic in America, Donald Trump decided to offend them horribly and constantly. His words, and the silence from GOP leaders at the sound of them, could hobble Republican’s attempts to win them over for decades to come.

Then, following election day, it was the Democrats doing the soul-searching, wondering how on God’s earth they lost an election they thought was in the bag. Back in 2013, Michael Hirsh wrote this piece:

Hillary Clinton, Welcome to the White House

She has no Democratic challenger, and the Republican Party is no longer a credible opposition force.

By Michael Hirsh | October 17, 2013

In the innermost sanctum of Clintonland, it is difficult to imagine that Hillary and Bill, two of the savviest politicians in the country, are not pinching themselves to make sure that it’s all real. Perhaps they’re dancing a jig together, or knocking back shots and howling at the moon out of sheer, giddy joy at their good luck. (OK, Hillary’s not howling, but Bill might be.) Or maybe they are just quietly kvelling over the latest turn of events.

cBecause the trend lines are unmistakable, and they’re looking better all the time: If she wants to run in 2016, Hillary Rodham Clinton could have the easiest walk into the White House of any candidate in either party since, well, one has to go back a very long way. Maybe to Reagan in ’84. LBJ in ’64, or Eisenhower in ’52, or even FDR in 1932, 1936 and 1940. The presidency is looking like it’s hers to lose, more than ever.

The reasons are becoming more obvious with each passing crisis of Republicanism, but are even starker now in the wake of the GOP’s embarrassing implosion over the shutdown and debt-ceiling fight. This is an opposition party in such a state of extreme dysfunction that talk of a third-party split in 2016 is almost irrelevant. Why would you need a third-party split to win—as Bill did, recall, cheating George H.W. Bush out of a second term in 1992 thanks to the Ross Perot candidacy—when the base and establishment of the GOP are no longer on speaking terms?

Now remember: in October of 2013, President Obama was eleven months beyond his re-election victory of 2012, and while the Democrats still had control of the Senate, the Republicans had retained control of the House of Representatives, and, thanks to the heavy concentration of Democratic votes in large urban areas, looked likely to retain control of the House at least through the redistricting following the 2020 census. It was somewhat optimistic of Mr Hirsh to think that “the Republican Party is no longer a credible opposition force.” The GOP controlled a majority of state legislative chambers and gubernatorial seats when Mr Hirsh wrote his article, and added to those totals in the 2014 elections.

And it should be pointed out that Mr Hirsh wrote his article well before anyone knew that the very unconventional candidate, Donald Trump, would throw his hat in the ring. Still, Mr Hirsh had enough sense to throw in one caveat:

So, the Republican party is fractured, and in disarray. Virginia, a bellwether state, is going blue. The “best” candidate (as in most electable) the right has is the guy they don’t like very much, Chris Christie. The “do-whacka-do” caucus (Tea Party) is likely to produce the, usual, clown car load of alternative candidates to Christie (thereby forcing him to try to out-Cruz Ted Cruz). All these things being equal, however, 2016 is a long way off, in election terms. It’s a bit premature for anyone to be cracking the champagne or picking out new drapes for the White House. Right now, Hillary has the best shot at the White House, but one should never underestimate the ability of politicians to snatch defeat out of the jaws of victory.

Perhaps the problem was Mr Hirsh’s conception that Bill and Hillary Clinton were “two of the savviest politicians in the country.” No, while Bill Clinton is certainly one of the savviest politicians in the country, it has always been clear that Hillary Clinton was not. She had a huge lead over a very junior senator from Illinois going into the 2008 primaries, and she lost. She had a great deal of surreptitious help from Democratic Party officials in rigging the 2016 primaries for her, and against Senator Bernie Sanders (I-VT), and he still presented a huge challenge to her; had it not been for Mrs Clinton’s huge lead amongst the “super delegates,” and the increasing perception that he simply couldn’t overcome that, Mr Sanders might have won enough delegates in the primaries to have won the nomination. Mr Clinton’s absurd “you get two for the price of one” meme in 1992, as though his wife was somehow just as good as he was, led a huge number of Democrats to simply assume that Mrs Clinton was just as savvy a politician as her husband. Instead, Mrs Clinton and her campaign mostly ignored the advice of her husband, a man who had won two presidential campaigns.

Who is Matt Erwin, the author of the first article cited here? He “is a Louisville-based communications consultant. A former staffer in the Kentucky and Illinois House of Representatives, he also has been communications director and spokesman of the Kentucky Democratic Party. His column appears every third Thursday in the Courier-Journal.” I suppose it’s not a surprise that such a loyal Democrat would have seen what he wanted to see, a generations-long destruction of the Republican Party. That the voters wiped the smug look off of his face is very satisfying, but his article points to one truth: the losing party in each presidential election for the past several cycles has been written off as moribund, ready to die. That was written about the GOP after the 2008 and 2012 elections, but the Republicans not only survived, but seized the initiative in state government races, as well as taking control of the House of Representatives in the 2010 election, and the United States Senate in 2014 contests. The Democrats were counted out as dying following the 2004 elections, but came back to take control of both Houses of Congress following teh 2006 elections, and increasing their margins in Congress as well as electing Barack Obama in 2008. The lesson is simple: never count out either party, despite one electoral setback.

There is no good reason for the Federal Reserve to raise interest rates right now

From The Wall Street Journal:

Fed Rate Rise Could Come ‘Relatively Soon’ as Data Point to Stronger Economy

Fed Chairwoman Janet Yellen tells Congress the economy is making ‘very good progress’ amid some of the best government data in decades on housing, jobless claims and inflation

By Kate Davidson | Updated Nov. 17, 2016 9:57 p.m. ET

The U.S. dollar steamed to a level not seen since 2003 and yields on the 10-year Treasury note reached a high for the year Thursday, as Federal Reserve Chairwoman Janet Yellen confirmed investors’ view that the U.S. economy is strong enough to withstand an interest-rate rise soon.

Ms. Yellen told lawmakers in testimony Thursday that the Fed could move “relatively soon,” after the government released a grab bag of economic data all pointing to a stronger economy: an improving housing market, rising consumer prices and a more robust labor market.

“At this stage, I do think that the economy is making very good progress toward our goals, and that the judgment the [Fed policy] committee reached in November still pertains,” she told Congress’s Joint Economic Committee.

Her comments bolstered expectations that the Fed will lift its benchmark federal-funds rate at its next meeting on Dec. 13-14.

Ms. Yellen said the results of the U.S. presidential election hadn’t altered the central bank’s assessment, following its meeting earlier this month, that the case for a rate increase had grown. And Thursday’s data suggest President-elect Donald Trump is poised to take office in January at the helm of an economy that is gathering pace.

There’s more at the original, but I find the case for increasing interest rates ridiculous. The Congressional Budget Office projects real Gross Domestic Product growth of just 2.0% for the fourth quarter of this year over Q4 for 2016, and to average just 2.0% per year for the next ten years. The Federal Reserve’s own estimate, published in September, downgraded it’s estimate for real GDP growth for 2016 from 2.0% (the July estimate) to 1.8%. Dr Yellen:

warned that holding off on a rate increase for too long could force the Fed to raise rates relatively abruptly in the future to keep the economy from overheating. But she said the near-term risk of “falling behind the curve” soon is limited, and reiterated that the bank expects to raise rates gradually over the next few years.

Overheating? Since when is real growth around 2.0% “overheating?” With the U-6 unemployment rate standing at 9.5%,1 we are nowhere close to full labor utilization — I do not accept the official U-3 unemployment numbers as realistic, and, as we noted previously, the public don’t seem to either — and new business start-ups are still depressed:

  • The Start Up Activity Index rose to 0.38 in 2016 — continuing an upward trend started in 2015. After falling with the recession and reaching its lowest
    point in the last twenty years just two years ago, startup activity rebounded, going up for the second year in a row.
  • Despite the recent positive trend, startup activity is still below the levels seen before the Great Recession drop, and startups with employees are still on a long term decline compared to historical levels — from the 1970s to now.

Economic overheating just doesn’t seem to be much of a concern to me at the moment.

There were some supposedly hopeful signs for the economy in October:

But those were just October signs. October was also unusually warm through much of the United States, which could only help most businesses, and the data from just one month seem pretty insufficient on which to take judgements such as Dr Yellen has implied were taken. Dr Yellen noted, in February of last year, that the demand for small business credit was low, and that trend continued since then, into this year. Raising interest rates isn’t going to do anything to help encourage investment at a time when demand isn’t high enough anyway. If the demand for credit was higher, interest rates would be rising on their own, without any impetus from the Fed. That they aren’t2 tells you that the interest rates the Fed controls aren’t too low.

There is, of course, one downside: while Dr Yellen has said, repeatedly, that the Fed do not take politics into consideration,3 raising interest rates also means raising debt service costs for the federal government. Incoming President Trump’s stated plans call for increased deficit spending — something I have stated I oppose — and a rate increase will increase the costs of borrowing money. Dr Yellen is firing a waning shot for Donald Trump to hear.

There’s simply no reason to raise rates right now.

  1. This reference is updated monthly by the Bureau of Labor Statistics, and may not return the same number as I have given if searched after the December update. It was accurate at the time of writing this article.
  2. There has been a quick spike in interest rates in reaction to Mr Trump’s unexpected victory in the presidential election, but that was only eleven days ago, and not enough to state that it is a continuing trend.
  3. If you believe her, I’d like to talk to you about the purchase of a bridge.

Democrisy: the man who wanted to be President says that the next President shouldn’t take unilateral decisions

Secretary of State John F Kerry said:

No one has a right to make decisions that affect billions of people based solely on ideology or without proper input.

Hat tip to William Teach.

Translation: no one has a right to take decisions that affect billions of people unless they take those decisions in the way Mr Kerry approves. The Secretary certainly approved of it when the Democrats took the decision that everyone had to buy health insurance; he even voted for it when he was in the Senate. When President Obama, on his own, formulated regulations as part of the horrible Affordable Care Act which requires Catholic organizations to violate their First Amendment rights to the free exercise of religion, by requiring them to pay for artificial contraception, Mr Kerry — who claims to be Catholic, but supports an unlimited abortion right — was perfectly fine with that.

The Secretary made his statement at the United Nations’ annual climate change meeting, in Marrakesh, Morocco. How did he get there? By flying in a carbon-spewing, fossil-fueled jet. A whole host of world leaders were meeting in Marrakesh, and they all got there via fossil-fueled conveyances. This is the 21st century; every world leader has videoconferencing technology available; if they were truly concerned about spewing more carbon dioxide into the atmosphere, they could have demonstrated it by foregoing the vacation in Morocco, and using modern communication technology to meet without traveling at all. But when the patricians say that we must dramatically reduce carbon emissions, they mean that the plebeians must reduce their carbon emissions; they don’t mean that they should be inconvenienced themselves.

And they wonder why Donald Trump won the election!

Mr Kerry would be perfectly fine with the President taking decisions that affect billions of people if those decisions were taken differently. Indeed, in 2004, he wanted to be the person taking those decisions, and we can thank the Lord — and President Bush — that he didn’t get his way.

If the left didn’t have double standards, they’d have no standards at all.

The Wall Street Journal and a poor story on immigration

It was the last line that caught my eye:

Grinning, (Yves Nzosaba) said he was about to purchase a Ford Mustang, the iconic American car. Ms. Caplice scrunched up her face. “That’s not good in the snow!” she said.

Don’t I know it! My darling bride (of 37 years, 5 months and 28 days) used to have a 2002 Mustang. One winter’s day, when there was snow on the roads, I decided to let her take my 4-wheel drive F-150 to work — she has a 32 mile commute — and I would take the Mustang, for my 6.8 mile drive. I tried to make it up Mansion House Hill, on US 209, but tried is the operative word. It’s a good thing nothing was coming toward me, because I slipped and slid, and had to turn back around, park at the bottom of the hill, and walk back home (about a mile).

But, I digress. From The Wall Street Journal:

In Maine’s Tight Job Market, Businesses Look to Immigrants

Owners try to attract refugees and other foreign newcomers, amid some political resistance

By Jennifer Levitz | November 16, 2016 1:00 p.m. ET

PORTLAND, Maine—Hiring manager Cindy Caplice didn’t rely on job postings to fill 100-plus vacancies over the past year at Sigco Inc., a metal and glass fabricator outside Maine’s largest city.1 Instead, she took a recruiting outing to the Portland Adult Education center, where refugees and asylum-seekers from several African nations polish their English.

“We cannot grow our company without the immigrant population. We simply can’t do it,” said Ms. Caplice, who now bustles around the 130,000-square-foot factory waving to hard-hatted workers from Burundi, Uganda, Egypt, Sudan, the Democratic Republic of Congo and beyond.

While refugee resettlement and immigration more broadly is a divisive issue in some states and cities, Maine business leaders are sending a different message: Please, take our jobs.

The New England state, best known for supplying most of the nation’s domestic lobsters, faces a demographic conundrum. It has the oldest median age in the nation and was one of only two states, the other being West Virginia, where deaths outnumbered births between July 2014 and July 2015. State economists forecast that by 2024, employers could wrestle with a net decrease of 28% of people in the prime working ages of 35 to 64.

And with Maine’s unemployment at 4.1%, employers already talk about trouble finding workers. A September report co-authored by the Maine State Chamber of Commerce recommended that new and engaged legal immigrants be a “key component” of the state’s economic strategy. Only 3.5% of Mainers are foreign-born, versus 13.1% for the U.S., according to the U.S. Census. Unauthorized immigrants were less than 0.3% of Maine’s population in 2014, according to Pew Research Center.

There’s more at the original, but while the article is positive toward immigrants, immigrants here legally, filling jobs in a tight job market. Most Americans, including most of the voters who supported Donald Trump, don’t have a problem with legal immigration, with people coming here to become American citizens, and to work. The problem has been the illegal immigrants, those who break the law to get here, and continue breaking the law, either by getting jobs they cannot legally take, or living on welfare, fraudulently obtained, because they cannot qualify for assistance.

This was poor journalism on the part of the Journal, to publish a story very sympathetic to immigration without noting the very real differences between the legal and illegal immigrants. Immigration is, in the end, good for the United States, but only when it is controlled immigration, and the immigration of people who want to assimilate and become Americans.

  1. My mother was from Portland, and I did have the tremendous pleasure of living there through one winter, when I was in the third grade. I (too vaguely) remember stories of her family wintering over in Old Orchard Beach.

The French presidential elections, and possibly a “Frexit”

From The Wall Street Journal:

French Presidential Election Turns on Question of Identity Ahead of Key Primary

From countryside rallies to televised debates, the campaign rhetoric has focused on whether France’s secular values are compatible with its Muslim population—one of Europe’s biggest

By William Horobin | November 16, 2016 5:57 a.m. ET

PARIS—The race to become the next president of France is becoming a referendum on what it means to be French.

As voters prepare to head to the polls Sunday for the Républicains’ primary—which could ultimately determine the next president—the rhetoric at rallies and debates has increasingly focused on whether France’s secular values are compatible with its Muslim population—one of Europe’s biggest.

The election of Donald Trump has emboldened far-right presidential contender Marine Le Pen, who is campaigning against France’s socialists and conservatives on an anti-immigrant, antitrade platform similar to the U.S. president-elect’s. That message has helped keep her near the top of the polls after two years of blistering terror attacks carried out by foreign and French citizens, as well as a huge wave of migrants from the Middle East.

The cascade of events has left France’s political establishment at a crossroads: Reject Ms. Le Pen’s rhetoric or co-opt it. The divide is especially striking within the conservative Républicains. Polls show the winner would be the strongest contender—and likely win—against Ms. Le Pen in the spring election. Socialist President François Hollande’s unpopularity, meanwhile, would make him unlikely get past the first round of voting if he runs again. The outgoing president would also face his former Economy Minister Emmanuel Macron, who declared Wednesday he will run for president on a pledge to break apart France’s political system.

There’s more at the original, but the primary contenders are Bordeaux Mayor Alain Juppé, supposedly the frontrunner, who is, in American terms, the multiculturalist, the one promoting a “happy identity” for Frenchmen consisting of respect for ethnic and religious differences, and former President Nicolas Sarkozy, who has been attacking the non-assimilation of many immigrants, a move he had been taking even before Donald Trump’s electoral victory.

The Journal noted that the current polls have Monsieur Juppé ahead, and that if he wins the primary, he would be the top vote getter in the first round of presidential balloting,1 from which he would advance to the second round, and face Marine Le Pen of the National Front. M Sarkozy would, in the first round, finish second to Madame Le Pen. Polls indicate that either M Juppé or M Sarkozy would defeat Mme Le Pen in the final round, but if M Sarkozy wins the primary, the final round of balloting will be between two more conservative candidates.

In the wake of the historic Brexit vote, Mme Le Pen has been advocating a “Frexit,” calling for French independence from rule from Brussels, and “more than 60% of French people view the EU unfavourably, according to the latest research by US think tank Pew Research Center.” France is more closely enmeshed in the European Union, due to having adopted the euro, while the British retained the pound Sterling all along. If M Juppé wins the primary, the possibility exists that the second round of voting could be a Frexit referendum, between Mme Le Pan and him. But a French exit would pretty much destroy the EU as much more than a free-trade zone.

We have already wondered whether the European Union was an ultimately unworkable idea, noting that the Europeans are geographically segregated by different cultures and languages and ethnic groups, in ways that the United States is not. If Mme Le Pen should ultimately become President of France, it just might indicate that the EU is doomed. She is well behind, but, then again, so was Donald Trump.

  1. Unless one candidate achieves a majority in he first round, the top two finishers advance to the second round of voting.

The brilliant economist who designed the failed 2009 stimulus plan tells us that Donald Trump’s economic plans are going to fail

From The Washington Post:

Trump can’t repeal the laws of economics

By Lawrence Summers1 | November 14 at 1:00 PM

Following a brief market plunge, the president-elect’s speech last Tuesday night was more conciliatory than many expected and emphasized his commitment to infrastructure investment. Investors have, on balance, concluded that the combination of a shift to very expansionary fiscal policy and major reductions in regulation in sectors ranging from energy to finance to drug pricing will raise demand and reflate the U.S. economy.

The result has been a rise in real interest rates and inflation expectations, along with a strong stock market and a strong dollar. Experience suggests, however, that initial market responses to major political events are poor predictors of their ultimate impact.

The late MIT economist Rudiger Dornbusch made an extensive study of the results of populist economic programs around the world, finding that while they sometimes had immediate positive results, over the medium- and long-term they were catastrophic for the working class in whose name they were launched. This could be the fate of the Trump program given its design errors, implausible assumptions and reckless disregard for global economics.

I have long been a strong advocate of debt-financed public investment in the context of low interest rates and a decaying U.S. infrastructure, so I was glad to see Trump emphasize it. Unfortunately, the plan presented by his advisers, Peter Navarro and Wilbur Ross, suggests an approach based on tax credits for equity investment and total private-sector participation that will not cover the most important projects, not reach many of the most important investors and involve substantial mis-targeting of public resources.

You can follow the link to the original and read the rest of Dr Summers’ Oped piece, but I have to quote this paragraph:

I am optimistic regarding the efficacy of fiscal expansion. But any responsible economist has to recognize that, past a point, it can lead to some combination of excessive foreign borrowing, inflation and even financial crisis. As Dornbusch showed, in emerging markets this can happen quite quickly. In the United States the process would take longer.

Excessive foreign borrowing? At this point, we have to note that the esteemed Dr Summers was the architect of President Obama’s 2009 stimulus program, the American Recovery and Reinvestment Act of 2009, an $831 billion boondoggle which was promised to hold unemployment to a maximum of 8%; it reached 10.0% in October of 2009, and stood at 9.2% in June of 2011, when it was projected to be below 7%.2 There are many economists who still justify the stimulus bill by saying that while the effects of the recession were worse than estimated, they’d have been worse yet without the ARRA. That, of course, is unprovable, but when the designer of such a huge, failed program tells me that someone else’s economic plans won’t work, I have to look at his statements with a jaundiced eye.

Personally, I have problems with the incoming President’s economic plans myself. In particular, his plans on increasing spending, regardless of how worthy the spending plans are, along with a large tax cut, I find irresponsible. Let the next President and Congress cut spending first, and then they can talk about cutting taxes.

  1. Lawrence Summers is a professor at and past president of Harvard University. He was treasury secretary from 1999 to 2001 and an economic adviser to President Obama from 2009 through 2010.
  2. Those are the ‘official’ U-3 unemployment numbers, not the more realistic U-6 figures.