Federal Government Backs Off New Limits on Child Labor on Farms

Under heavy pressure from farm groups, the Obama administration said it would drop an unpopular plan to prevent children from doing work on farms owned by anyone other than their parents.  The Labor Department said it is withdrawing proposed rules that would ban children younger than 16 from using most power-driven farm equipment, including tractors. The rules also would have prevented those younger than 18 from working in feed lots, grain bins and stockyards. 

Repatriated Dollars Without Tax Consequences

Thirty-five big U.S. multi-national companies added jobs much faster than other U.S. employers in the past two years, but nearly three-fourths of those jobs were overseas, according to a Wall Street Journal analysis.  Those companies, which include Wal-Mart, International Paper, Honeywell International, and United Parcel Service, boosted their employment at home by 3.1%, or 113,000 jobs, between 2009 and 2011, the same rate of increase as the nation's other employers.  However, these companies, also, added more than 333,000 jobs in their foreign operations.

U.S. corporations have $800 billion in cash outside the confines of America.  So, what is happening?  All this cash that lies overseas is creating jobs outside the US.  This is very apparent when one looks at those aforementioned companies, whereby the job creation overseas is 3:1 of what it is here.  Why is this happening?  Well, if that $800 billion is brought back home, it will be taxed at 35%.  Therefore, these corporation have reinvested those dollars in jobs overseas.   I firmly believe that we should allow those companies to repatriate those dollars without any tax considerations.  If so, those dollars would hopefully be invested in job creation opportunities for Americans.  Why not?  We are not collecting those tax dollars now. 

The Hallow Voice of the FED

The Federal Reserve has boosted its outlook for U.S. economic growth this year and is slightly more optimistic about the unemployment rate, reflecting improvements in recent months.  Its prediction for inflation is slightly higher but remains below its 2 percent target. (That is "core inflation," which excludes food and energy.)  And Fed officials will keep interest rates at zero through 2014. (Now, isn't that a ringing endorsement.  If the economy was vibrate, one would expect interest rates to be moving higher.  However, the Fed expects the economy to be "WEAK" through 2014!  The Fed can not have it both ways.  However, it is definitely trying to put a good spin on this economic weakness.)

Common Sense, Totally Lacking from Big Brother

A proposal from the Obama administration to prevent children from doing farm chores is just about complete.  The Department of Labor is putting its finishing touches on a rule that would apply child-labor laws to children working on family farms, prohibiting them from performing a list of jobs on their own families’ land.  The new regulations would also revoke the government’s approval of safety training and certification taught by independent groups like 4-H and FFA, replacing them instead with a 90-hour federal government training course. 

The “Judge” Speaks in the Affirmative for Your Second Amendment Right

Mr. President, Taxes Do Matter!

President Barack Obama wants us to believe that the U.S. economy can be taxed into prosperity.  This is the same logic that prosperity/wealth can be created by taking on more debt.  (How will has that worked out for Americans?  Our national debt is $15.7 trillion, which is larger than our GDP of $15.1 trillion.)  

Americans need to take a refresher course on the 1920s, 1960s, 1980s and even the 1990s, when government spending and taxes were cut and employment and incomes grew rapidly.  (Take notice of the fact that the 1930s are not part of the refresher course on economic history.  Why?  Because that was the start of the prosperity/wealth by debt paradigm under Roosevelt.  Well, it really started under Hoover, but Roosevelt took it to the next level.  It didn't work in the 1930s, just as it will not work today.  Also, it is just not about cutting taxes; it is also about cutting government spending.  See, this is the the conversation that we must have with the American people in regard to the services that they want with their tax dollars of $2.3 trillion to provide.  That is, the government has extracted $2.3 trillion from us but spend $3.6 trillion.  So, we borrow $1.3 trillion, which is added to the national debt.  No, this is not sustainable.  We only have $2.3 trillion.  However, I don't see any of our leaders willing to have this discussion with the American people.)

Ok, back to my topic of "Taxes Do Matter."  If one wants to see evidence of how taxes do matter, one can look to what's happening in our 50 states.  In a recent study entitled, "Rich States, Poor States," prepared for the American Legislative Exchange Council by Laffer and Moore, it compared the economic performance of states with no income tax to that of states with high tax rates.  Some of the findings are as follows: (1) Every year for the past 40, states without income taxes had faster output growth than states with the highest income taxes, (2) Job growth was also much higher in the zero-tax states, and (3) States with the nine highest income tax rates had no net job growth at all, and seven of those nine managed to lose jobs. (Illinois, which is one of those dubious nine states, has lost one resident every 10 minutes since hiking tax rates in January 2011.)

Holocaust: Would America, as a So-Called Christian Nation, Do Anything Different Today?

Pennies and Nickels

Economics has been referred to as a dismal science.  (Actually, I would debate if it should be a science at all; but, then again, that is a discussion for another day.)  Well, our government has just taken economics to a new level of absurdity.  You ask, how?  The U.S. Mint loses more than $100 million a year minting pennies and nickles.  Now, get this!  It cost our government 2.4 cents to make a penny and 11.2 cents to make a nickel.  However, the metal composition of the penny and nickel has not changed in more than thirty years.  So what has happened to cause this?  The value of our money has simply been debased, or destroyed by the body (Federal Reserve System) that is suppose to protect the overall stability of our money.  For instance, the dollar has lost more than 95% of its purchasing power since the creation of the Federal Reserve System in 1913.

Millions of the so-called "baby boomers" are seeing their life savings debased by the actions of the Federal Reserve System.  Each year their money purchases less and less because of the liquidity induced activities of the Federal Reserve System.  Since 2008, the Federal Reserve System has increased "reserve credit to the banking system" in excess of $2 trillion.  This manipulated action by the Federal Reserve System has kept interest rates "artificially low," which is designed to increase profitability of banks and Wall Street firms and promote consumers to take on more debt!  Also, this monetary policy has driven those most vulnerable investors (baby-boomers/retirees) into riskier financial assets such as stocks and junk bonds in an effort to make their retirement dollars last longer.  In other words, a crisis is just waiting to occur.  As a matter of fact, I believe over the next four years an economic crisis as worse, if not worse, as the Depression of the 1930s will loom before our very eyes.  Maybe then, we will all come to understand why economics is referred to as a dismal science.

Fire Them!

98,000 federal employees owed a combined $1 billion in back taxes.  U.S. Senator Scott Brown is pushing a new bill that he said would make it easier to collect back taxes from federal workers and members of Congress.  No, I would simplify the bill even further with the simple words of "Fire Them."

Geithner: A Very Poor Excuse for a Treasury Secretary

"U.S. Treasury Secretary Timothy Geithner warned Congress against repeating last year’s “very damaging” debate over the debt limit and said the economy is stronger than at any time in the past several years."  He made the above statements today on NBC's Meet the Press as reported by Bloomberg News.

I love his above statement in which he states, "the economy is stronger than at any time in the past several years."  You have got to be kidding me, Timmy!  This economy is about to drop off the face of the earth, and he continues to try to convince everyone that only good times are directly ahead of us. 

I like the way Karl Denninger, over at the Market Ticket, put it in which he said, "So exactly what is the purpose of Congress, which is supposed to initiate all bills, if the Executive Branch can just borrow as much as it wants without debate or refusal?  At exactly what point does Congress have the right to hold Obama accountable for his lies?  You know, the lie he told about cutting the deficit in half by the end of his first term -- when he instead more than doubled it!"  Do you have a response, Mr. Geithner?

Employment, What Employment?

Nonfarm Payroll Employment (NFP) rose by 120,000 in March, and the unemployment rate was little changed at 8.2 percent, the Bureau of Labor Statistics reported today.  What the BLS forgot to mention was that the unemployment rate of 8.2% was down from February's 8.3%.  Great news, isn't it?  I will respond to my rhetorical question, shortly.  First, the consensus was for NFP to print an increase of 205,000 jobs, which was a major miss!  However, the BLS numbers were even worst than reported because of the infamous "Birth/Death Ratio" added 90,000 statistical, non-real, jobs.  Therefore, the net job creation for March was not 120,000 but a lonely 30,000.  Second, how is it then that the unemployment rate went from 8.3% to 8.2%?  The answer is that the number of people not in the labor force is back to an "all-time high" of 87,879,000.  In other words, we have more people leaving, giving up looking for a job, than entering the labor force.  Therefore, the unemployment rate must go down!  Interesting, isn't it.  Another one of those statistical wonders.  For a longer-term perspective on the trend for "Not in Labor Force," see the following graph.

The "employment to population ratio" for March 2012 stood at 58.3%, which is up slightly from February's ratio of 58%.  Up slightly, but it is barely above its all-time low.  Why is this ratio is important?  Because it simply tells you the number of people employed in relation to the civilian population.  At 58.3%, it tells us that for every person in our civilian population, only .64 individuals have jobs and paying taxes. That will not sustain any effort at reducing our federal deficits.

The last graph illustrates the changes in employment for our current, so-called recovery and the previous ten postwar recessions.  To say the least, we are in really, big trouble!

What Happens When the Manipulation Ends?

What happens when our financial markets are no longer being manipulated?  We have never experienced the unwinding of an entirely manipulated financial system, so we can't predict for sure what will happen.  But at this point, a total collapse of our financial markets seems entirely plausible.  I know what many of you are saying – “Here he goes again.  The same old stuff and the market continues to go higher and higher!”  To a certain extent, you are correct in that this does not matter to anyone until it matters to everyone.  However, by then, it will be too late to take the necessary defensive measures to protect your financial assets. 

But, you ask how is it that our financial markets are being manipulated?  On October of 2011, Mr. Bernanke states that the purpose of QE1 and QE2 is to raise asset prices.  And, if I remember correctly, equities and bonds are financial assets.  Then, on March 1, 2012, Bloomberg reported that the Bank of Israel and Switzerland’s Central Bank began a pilot program to invest a portion of their foreign currency reserves in U.S. equities.  Incidentally, it is illegal for our Federal Reserve to invest in equity markets.  However, I see exactly what has been happening.  Our Fed, which cannot directly purchase equity shares, has created billions of dollar swap lines with foreign central banks.  Then, these central banks take the dollar swap lines and purchase equity shares on the New York Stock Exchange.  Therefore, our Fed has indirectly been manipulating the stock market through equity purchases of these foreign central banks.  (See my blog posting of March 3, 2012 entitled, “Manipulation of Equity Markets by Central Bankers.”)