Archive for November, 2012

Globalization *IS* Austerity

Monday, November 26th, 2012

What’s worse, sending a man’s $50,000 job to China, or cutting off his $1,600 per year food stamp card? Offshoring his job is obviously the much-larger financial blow.

Today, we are witnessing perfectly good jobs being sent to China for no other reason than to increase the profits of companies like Bain Capital. Perfectly good factories, making record profits, are sent out of the country (example: Sensata).

There is no other way to explain that than the austerity is being imposed upon the American workers in order to redistribute their income to management.

So, what people like Paul Ryan want to do is not the austerity part of the plan. Rather, it is the next phase: the mopping-up of the vast impoverished class that globalization-fueled austerity has already created. The suicides that we see as a result of European austerity are not taken as a cautionary tale here. They are taken as inspiration.

President Obama needs to reverse this entire process. And that can’t be done with any sort of compromise on a “Grand Bargain.”

I Am a Protectionist

Thursday, November 22nd, 2012

And you will be one too. It’s only a matter of time. Trust me. It’s coming. You will eventually agree with me. And for a very simple reason: it’s the only way out. It’s the only way to prevent China from superseding our superpower status.

In the 1840s, Great Britain adopted free trade. In the 1860s, we here in the USA slapped on a huge tariff, kept out British industrial goods, grew up our own industrial economy, and dethroned the British Empire a few decades later.

Today, we are repeating the strategic blunder of the British. We have thrown our borders wide open to Chinese products, and are in the process of being overtaken.

However, there is a crucial difference: we have seen this movie before.

The British didn’t know what they were in for by adopting their foolish new ideology. We have the benefit of hindsight. We know exactly what is going to happen, and because of that we have an excellent chance of pulling out before it is too late.

So, my advice to you is to declare yourself a protectionist now, for the bragging rights, before all the cool kids are doing it.

Note: After being a life-long, “free trade” knucklehead Libertarian, I turned protectionist back in 2009. I have written this post just to make my position unambiguous and emphatic.

Nailed It: Windows 8 Flops

Sunday, November 18th, 2012

Way, way back on March 5, 2012 I posted: “Microsoft Poised to Commit Suicide” in which I concluded:

“I wouldn’t hold MSFT if you put a gun to my head.”

On that day, MSFT closed at $31.80. On Friday, it closed at $26.55 – down 16.5% since my call. See the red arrows on the chart (click to enlarge):

Not only that, but Steven Sinofsky, president of the Windows Division has been booted out of Microsoft.

Did I totally nail that, or what?

The Republicans are Getting Immigration Religion?

Sunday, November 11th, 2012

In the wake of the Romney defeat, Republicans like Sean Hannity and Larry Kudlow are totally freaked-out over the immigration issue. They are baffled by the fact that the horrific level of Latino unemployment did not hurt Obama. Why didn’t the 2.5 million unemployed Latinos switch sides? Click chart to enlarge:

And it’s not as if the Republicans have been keeping immigrants out. Do you see any difference between Bush and Obama on this chart of legal immigration?:

Not much, right? In fact, both Bush and Obama admitted immigrants at a rate more than double our historical average of 403,445 per year:

1,040,951 – Bush Average
1,078,494 – Obama Average

As we learned from the exit polls, voters still blame George Bush for the weak economy. However, Romney’s 27% share of the Latino vote declined by 4% from that of John McCain’s 31% in 2008. Perhaps there is another factor at work, like the Republicans’ attitude toward the unemployed.

Imagine that you are a young Latino, just back from serving in Afghanistan. You go to the Toledo, Ohio auto-parts factory where you used to work only to discover that it has been sent to China by Bain Capital. And so have many more plants, so you head to the unemployment office.

As you are standing in the long line, Mitt Romney’s limo speeds by splashing water on you. Mitt is on his way to the airport to take delivery of the new jet he bought with his share of the Bain profits.

Then, Rush Limbaugh rolls by and scolds you for being a lazy freeloader. “Get a job, loser!” he shouts from his limo.

Then, Larry Kudlow rolls by and shouts “free-market capitalism demands that all factories must be offshored!”

Then, Paul Ryan comes by and vows to implement savage austerity, cutting your “entitlements.” No more unemployment compensation, food stamps, etc. Reluctantly, he agrees to let you have some baby food so that your children won’t starve, BUT THAT’S IT!

I could go on, but you get the idea. What the Republicans don’t understand is that our policies of simultaneous mass offshoring and mass immigration have created a vast swath of poverty in the USA fifty-million strong.

That’s a lot of voters.

Larry Kudlow was a staunch defender of Mitt Romney’s “business” career. He demanded that the other Republican candidates stop criticizing Romney on offshoring. I suppose that Kudlow thought that the victims of offshoring would just somehow disappear. Well, guess what?

They didn’t.

They are still here and they are not pleased with the Republican “let them eat cake” attitude.

Food Stamps Crack 47 Million – Another Record

Friday, November 9th, 2012

The USDA reported today that the number of people on food stamps in August surged to a record 47,102,780. The USDA reports data with a two-month lag, so this total does not include the effects of Hurricane Sandy. Click chart to enlarge:

Data source: USDA.

See more charts here.