30 05 2014


In spite of some really questionable fluffy duff metrics being classified as GDP recently, and in spite of government spending being as high as ever, don’t forget that it’s counted in GDP ( = Consumption + Investment + Government Spending + Exports ), and in spite of fracking for certain fossil fuel natural resources whose crude prices are still pretty high, the American economy shrank in 1Q14 over 4Q13.

Imagine how bad it would be if they told the truth, and the kook left had its way all the time on fracking.

Ball of Confusion

17 03 2014

Washington, D.C.

Computer World headline and sub-headline:

Gates sees software replacing people; Greenspan calls for more H-1Bs
Both agree that U.S. secondary education system needs much improvement

Translation: People will be less and less necessary over time, so the solution is to import more people. And also…fix the schools.


As you can see, Sailer took this story up after a certain snarky birdie whispered in his ear.  After reading this article again, this part suddenly jumped out at me:

“We cannot manage our very complex, highly sophisticated capital structure with what’s coming out of our high schools,” said Greenspan, former chairman of the Federal Reserve.

Well pardon me, Al, but when did we ever expect the typical high school graduate to manage our complex sophisticated capital markets?  Hint:  The answer is never.  Not even in the days when a high school diploma actually meant something.

I guess Bill & Al think that the junior and senior years of high school should cram in a combination of B-school, grad school in economics and a near John Nash level math curriculum.  If that’s what they want, fine.  But realize it’ll have a disparate impact on NAMs, and just about everyone else for that matter.

Schaeffer’s Number

1 02 2014


I’m going to re-post something I wrote on AR earlier today.  Something which has been bothering me about Schaeffer’s Number and the whole concept, but I haven’t been able to get off the tip of my tongue until today.


$3 trillion for health care expenses divided by 250 billion person-hours worked, both in a year, comes to $12 an hour.

$1 trillion for all K-12 public education, and that’s another $4 an hour.

The problem with Schaeffer’s Number and the economic and policy implications that people draw for it is this: Not all economic value added goes to labor. Not all Federal revenue collection comes from personal income taxes.

It’s mawkish to say and think that if you make $15 an hour, that you’re not even pulling our own weight with regards to education and health care alone. That’s because the economic forces from which you earn your $15 an hour are themselves productive and adding to the economy. And while lots of people are under Schaeffer’s Number, there are lots of people over it, pulling their own weight and the lot of other people’s weight.

While I think the Gross Domestic Product figures are questionable because they count too much intangible snake oil as productivity, (and it gets worse all the time), let’s play along. The $15.68 trillion GDP in 2012 divided by 250 billion person-hours worked makes $62.72 an hour. The real Schaeffer Number economy-wide is $62.72, which means if you make less than that, and almost everyone does, you’re not pulling your own economic weight. That much an hour works to $130,457 a year, which puts whoever earns it at the 96.3 percentile, i.e. the top 3.7% of individual income earners. So the whole economic-philosophical basis behind Shaeffer’s Number, taken to its logical conclusion, is that 96.3% of us are slackers and aren’t pulling our weight, and therefore, in the opinion of some (cough, cough, won’t say Ron Unz, cough cough), the minimum wage should be raised to $62.72 an hour.

Who really believes that?



Supply and Demand

3 12 2013

New York

H/T V-Dare.

NYT bashes Unz’s “immigration control via minimum wage hike” proposal, mainly because Unz is motivated by trying to keep Hispanics from flooding into the country.

Except they’re both wrong.  You simply can’t hack your way around the law of supply and demand with a different price floor or price ceiling.  Without real immigration control and enforcement, all raising the MW will do is create a lot more violations of the MW, which official American will duly ignore.

With real immigration control and enforcement, you really won’t even need a MW law, because the wage and salary equilibrium will be significantly higher.

For proof of that, the effective minimum wage based on economics in oil boom towns of western North Dakota is around $15 an hour.  Why?  High demand for and low supply of employees.  What’s the official MW in the state?  No higher than the Federal MW, $7.25 an hour.

If we left the immigration laws passed in 1924 both in terms of number and national origin unchanged, equilibrium wages all over would be much higher than what they are now, and even higher in more expensive parts of the country.

Give Us This Day Our Daily Debt

18 10 2013


Front of Drudge:  Debt jumps $328B in one day

That’s because with the debt ceiling lifted, the Yankee government quit lying ended its series of extraordinary measures to hold the apparent total national debt pretty much steady for the last few months to avoid “legally” running into the debt ceiling.

Now that they’re telling the truth again extraordinary measures are no longer necessary, the national debt is officially $17,078,127,027,486.08 as of a few minutes ago, I can now figure that, since the national debt was $8,677,214,255,313.07 on the day Nancy Pelosi took over as House Speaker on January 3, 2007, as of right now, 49.2% of our national debt has been run up since Nancy Pelsoi was Speaker and/or Barack Obama has been President.

Not Equal Sign

4 09 2013




Only four states, New York, California, Texas, and  Florida, plus Washington, DC have inequality above the national average of .39, indicating both their very large populations, their very complex ethnicity, and large metropolitan economies rich in high income earners, entrenched concentrations of poverty, and high levels of immigration. Surprisingly, these states are even more unequal than the poorest states with the most difficult racial history and delayed development: Mississippi, Alabama, Arkansas, and Louisiana.

So this means income inequality in the United States is basically a four state problem.  You need an area to have one or more industries of great wealth production of some sort and a lot of low-IQ NAMs.


For an old Roosevelt Democrat, the persistence of widespread poverty and deepening inequality, even while the extremely rich capture ever higher shares of income and wealth, is outrageous. It brings the United States back to the degree of inequality last recorded in 1929. It is ironic that the lowest degree of inequality in American history was 39 years ago in 1974, during a Republican administration, and fifty years after the great March on Washington.  These new maps are not pretty, and sadly there is little prospect for improvement.

And what do “old Roosevelt Democrats” think about the immigration question?  Income inequality was at its nadir in 1974, which corresponds well to the early 1970s peaks of many positive metrics and nadirs of many negative metrics about individual economic prosperity.  What happened in the early 1970s?  Easy button:  The borders were swung wide open in 1965, and the flood of cheap labor non-white immigrants started to wreak havoc on the economy at that time.

The American Economy’s Figurative Penile Implant

1 08 2013


Stuffing the GDP numbers upward entails:

The changes involved are pretty simple. Beforehand, if a factory bought a drill press, the government would count that as an investment that would generate income over time, depreciating along the way until its value added fell to zero.

But consider the movie companies or TV studios that produce lasting hits like “Star Wars” or “Seinfeld.” They, too, spin off years of revenues. In that sense, their production is much like a capital investment, though there’s been no place in the national accounts to score that investment.

Now there is a new category in the quarterly G.D.P. reports called “intellectual property products,” including “entertainment originals.” For example, the production costs of what the B.E.A., a part of the Commerce Department, calls “long-lived TV shows” — ones that provide a steady stream of income, like “Seinfeld” reruns — will for the first time be counted as investment. That’s right — the ultimate show about nothing will now add billions to G.D.P.

Research and development spending that was previously treated as an expense to business, the same as paper clips and electricity, will also now be treated as an investment with the potential to generate future income.

The logic here is solid. Spend a few hours on Netflix and you’re happily consuming the results of considerable R & D in streaming technology, along with investments in the shows themselves. It seems clear that the intellectual property called “The Sopranos” is as valuable to its owners as the laptop and software enabling you to binge-watch it.

Still, if that sounds squishy, that’s because it kind of is. Also, most people may not react well to being told that, according to the B.E.A., we’re all about $1,800 richer on a per-capita basis — but only on paper. Your paycheck’s still your paycheck. Have a nice day.

Okay, I start a production company, make one lol cat video, and one person watches it.  The GDP has now gone up a few pennies?

Aside from padding the size of the economy, this also has the effect of making us look less taxed than we actually are.  If you artificially raise the GDP, this means that the ratio that is governments’ spending over GDP by definition will decrease, making big spending governments (such as the American Federal government in the Obama era) look smaller than it actually is.  Related news…the higher the GDP can be claimed to be, the smaller will be the percentage that Americans donate and give away relative to the GDP, ergo Americans will seem to be less generous.

N’Deshawntavious buys a hot gun from the black market for twice as much as it would cost to buy it legit (if N’Deshawntavious could buy it legit, which he probably couldn’t because he’s an underage convicted felon).  He uses that gun to protect dope territory and to threaten customers who are in arrears.  Therefore, the illegal gun is a capital investment that helped him earn money.  Do we count that as part of GDP?  Especially considering that when the gun was legally purchased some time in the past, that went into the GDP.  Therefore, you have the same gun double-stuffing the GDP because of its legal market value and its black market capital investment value.

This is getting comical.



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