The Happy Carpenter

Who knew economics could be so funny

And then my economic spidey senses started tingling. For fresh in my memory was when I was stood up, not once, not twice, but thrice by a drop dead, Playboy-esque girl who had went to school for cosmotology. This observation, combined with my utter disdain for fluffy majors got me thinking;

Was there a correlation???

Do Playboy Playmates pursue easy degrees?

Funny enough to recommend you read the whole thing.  Plus, it ends with two important yet contradictory moral lessons.

In 2004 alone, 60,000 more people left New Jersey than moved in.

They think it might have something to do with taxes:

The Garden State has raised taxes nearly every year since 2000 and nearly twice as much per resident as the next highest tax state. Yet, no surprise, Trenton still has the biggest budget crisis outside of the states ruined by Hurricane Katrina. This taxing binge hasn’t balanced the budget because state expenditures have ballooned by $8 billion, or about 45%, in six years. Mr. Corzine is nonetheless sticking to his story that state schools and services are underfunded.

...This outmigration led to a loss of $1 billion per year in the state’s personal income, according to IRS statistics analyzed by the Manhattan Institute. Thus New Jersey finds itself in a spiral down: Taxes are raised, more taxpayers flee so the tax base shrinks, the politicians raise taxes again, and the cycle repeats itself.

Guess where they're moving to.  Every time the northeastern liberals raise taxes my property values go up 1%.  Go Democrats!  Go!

Another reason to be against very high tax rates for the wealthy and very low rates for the not-so-much

The deficit for '06 is projected to be about 2.1% of the GNP, down from 2.6% and 3.1% in '05 and '04 respectively, because tax receipts have gone up alot.

While gains are broad, those at higher-income levels are enjoying bigger salary hikes. Because they pay higher rates, federal tax revenues soar when they do well.

When I read that line from Investor's Business Daily, it occurred to me that this is a problem for people in lower tax brackets because the Federal Government is structuring the tax code so that they are incentivized to make things better for the wealthy.  It would be better if taxes were flat or flatter so the Feds would try to make things better for us all.  Many on the right have bemoaned the political influence of those who pay little or not tax; I'm just saying it might be bad for everybody.

Jobs looking for people

Interesting and very good news from National Review via BizzyBlog:

This week the federal government released the Job Openings and Labor Turnover Survey...  In it we saw job openings hit the highest level since the recession. Before the president’s tax cut of 2003, there were slightly more than 2.5 million unfilled jobs in the country. Now there are over 5 million. According to Economy.com’s analysis of this new survey, “The high rate of openings combined with declining hiring suggests that employers are unable to find qualified workers for the open positions.”

Commentators have consistently underrated the dynamic effect of marginal and investment tax cuts. This has caused them to miss the fact that since 2003, millions of people have entered the work force. Some are immigrants, some new high school or college grads, and some are people who had given up on finding work and decided to try again. The economy absorbed 4.5 million of these new entrants, and then found room for enough of the existing unemployed to drive the unemployment rate down from 6.1 percent to 4.7 percent.

….. It’s time to change the discussion away from the alleged weaknesses of the labor market to how our educational, welfare, and immigration systems can more efficiently get larger numbers of qualified people into the marketplace to do the jobs that currently are not getting done.

Lots of interesting things could be done with immigration to solve this problem -- and it is a problem, one of the reasons I got out of general contracting.  Lots of important and interesting things could be done with our education system, too.  Being 4 million workers short of what we need right now is bad.  If we had those 4 million tomorrow, our enemployment rate, already incredibly low, would actually drop a bit (bigger denominator).  We should also be talking about ways to replace workers with productivity gains.

1. Immigration:  Bring in a one-time huge slug of folks from all over the world who already have the skills we need, rather than unskilled uneducated folks from Central America.
2. Education:  Bring back technical education, but tailor it to today's world.  Wood shop would be just a start.  For the majority who aren't and don't go on to college, would it be so bad to graduate high school with thorough grounding in a trade?
3. Productivity:  I don't know how business has been growing productivity as fast as it has been.  I'd like to see ideas of how to make it even better.  Obviously # 1 & #2 above would help.  No doubt there are tax policies that could also help, and energy policies and environmental policies.

Man, isn't it great living in a golden age?  And it's just going to keep getting better, folks.

The Death Tax -- an interesting take

Check out this argument from the EconoPundit:

The theory is simple. Once we lived in an America with a bewildering array of corner lunch counters, interesting bookstores, individualistic neighborhood clothiers, tailors, dressmakers, appliance shops each with its own unique spin on what the owner thought you wanted -- lots of small individualistic enterprises that, like family farms, got passed down through the family from one generation to the next.

The estate tax replaced all these with McDonalds, Borders, The Gap, the ubiquitous extended warrantee, and ADM.

So the theory is simple: the basic method of passing business expertise from one generation to the next -- the family business enterprise -- has been replaced by the franchise operation, all thanks to your friendly neighborhood death tax.

And the next time some smart social reformer demands you watch his heart bleed for all the small local businesses Wal-Mart is killing, just ask him -- "so what do you think the inheritance tax is doing?"

I'm going to pass this along to my favorite Lefty Rob to see what he can do with it.  He's no fan of WalMart, and to think his beloved death tax may be partly responsible for killing off small family businesses will set him back.  You know what Rob called the accumulated savings of a lifetime of nose-to-the-grindstone work?  "An extraordinary privilege."  My ass.  Just why dieing should give your fellow citizens any right to the assets you've accumulated and already paid income taxes on is beyond me.  I think it's nothing but envy.  That, and the Left's general reluctance to give up any method of grabbing other people's stuff once they've got it (the method, that is).  Perhaps the idea that death tax begets Wal-Mart will give him a fresh start.

I think EconoPundit is onto something here:  because the corporation never dies, it never pays the inheritance death tax.  The death tax is a BIG bite.  It kills many firms it touches, and corrupts the lives of those involved for decades.  And it's wrong. 

So you Senators who failed to chuck it, screw you.

Banking

DAMN CHECKING ACCOUNT
An old man walks into a bank and says to the woman at the window, "I want to open a damn checking account."
The astonished woman replies, "I beg your pardon, sir. I must have misunderstood you. What did you say?"

"Listen up, damn it. I said I want to open a damn checking account now!"

"I'm very sorry sir, but that kind of language is not tolerated in this bank."

The teller leaves the window and goes over to the bank manager to inform him of her situation. The manager agrees that the teller does not have to listen to that foul language.

They both return to the window and the manager asks the old geezer,
"Sir, what seems to be the problem here?"

"There is no damn problem," the man says. I just won $200 million bucks in the damn lottery and I want to put my damn money in this damn bank."

"I see," says the manager", and is this Bitch giving you a hard time?"

For Sale: 609 North Mayo Street, Crystal Beach, Florida

Spectacular Crystal Beach Gulf-front paradise with sweeping water views

Can you envision your custom built dream home here in highly sought after Crystal Beach?  Highly acclaimed architects and custom home builders would be honored to work on this open canvas with its magnificent possibilities --   a Mediterranean Estate with Guest house or a Tropical Oasis Key West style with board walks everywhere. Let your imagination follow your dreams.

The property also has a grandfathered-in studio built right at the seawall and dock.  It could be a guest house, a kids retreat, an artist’s studio, pool cabana, boathouse, whatever.  There are endless possibilities for this bonus that could not be built today.

Lot size is 75 x 228 complete with Dock & Pool

The existing home is a 2/1 with 2 car garage, mid 50's Old Florida style vacation bungalow of approx 1200 sq ft. with central A/C.

This property has uncommon benefits because the house’s elevation is 13.1 feet in an A Zone with 14 feet minimum floor elevation. Unlike most waterfront homes in the V (velocity) zone, you can use your imagination and have ground level living with a ground floor livable space, insurable and code-compliant. 

The home and guest house are being sold AS IS.

Crystal Beach is located on a peninsula in one of the oldest little towns in Florida that time has luckily forgotten. No large high-rise condos here, just laid-back living in one of the most desirable areas on Florida’s west coast. 

Mayo Street North is a long cul-de-sac of Gulf and bayou front homes, off the beaten path but still just 35 minutes to the Tampa Airport .

When you purchase a home in Crystal Beach you’re not just buying a house but the Crystal Beach lifestyle, strolling to the local pier, to the park, or out on the trail for whatever your choice of activity. 

Crystal Beach is a designated Golf Cart Community so you can use one to go down to the post office, park, to a neighborhood friends house for Happy Hour or of course whatever you desire.

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Also, with a few minor tweaks, this home could be occupied or used as a rental until you decide what magnificent architecturally detailed home to build here.

You can find many more pictures of the home and the Crystal Beach Lifestyle at:

609 Sunsets

Summer sunsets

Wild Life at Crystal Beach

Offered on the market for $1,550,000

Systemic economic waste, bank lending practices, political patronage and the survival of a one-party state are inseparably intertwined in China.

Sometimes it takes a while to prove there is no third way.  Nor is there a second way.  There is only Capitalism, and how well you do it.  Apparently, Chinese Communists are not doing it well.  If you've been looking for an investment opportunity, you are hereby strongly reminded investing in semi-reformed Communists is a bad idea:

According to Ernst & Young, the accounting firm, bad loans in the Chinese financial system have reached a staggering $US911 billion ($1.18 trillion), including $US225 billion in potential future NPLs in the four largest state-owned banks.

This equals 40 per cent of gross domestic product and China has already spent the equivalent of 25-30 per cent of GDP in previous bank bail-outs.

The revelation shows that half-hearted reforms have addressed merely the symptoms of China's financial fragility. Poor business practices are blamed for NPLs but the real source is political. As long as the communist party relies on state-controlled banks to maintain an unreformed core of a command economy, Chinese banks will make more bad loans.

Systemic economic waste, bank lending practices, political patronage and the survival of a one-party state are inseparably intertwined in China. ...

The World Bank estimated that in the 1990s about one-third of fixed investments made in China were wasted. The Chinese central bank reported that during 2000-01 politically directed lending accounted for 60 per cent of NPLs. Such disregard for economic efficiency has bred a culture of irresponsibility and unaccountability in Chinese banks....

Banking reform of the past few years has failed to address these flaws. Its five main features - write-off of NPLs, capital injection, flotation in Hong Kong, minority stakes for Western strategic investors and improvement of corporate governance at headquarters - do not alter the defining characteristics of China's capital allocation system.

Nearly all senior bank executives are appointed by the party, which maintains an extensive organisational network within the financial system. That is why an IMF study finds no evidence that these reforms have improved risk management and credit allocation by banks.

I sincerely hope you're not one of those Western strategic investors, but I bet I know one man who is.  In the 80's he helped send a couple billion down "South of the Border" and after that tanked made eloquent arguments about why it was such a good idea.  Yeah, AFTER it tanked he thought it was still smart.  It's a cinch he thinks ChiCom's are golden.

I knew tax cuts were good for the economy, but I didn't know they were this good

Senator Frist:

Total government collections, in fact, increased more after President Bush's 2003 tax cuts than they did after President Clinton's 1994 tax hikes.

Oil graphs

I don't like filling up my tank any more than you do, but I can read a chart.

Screw the carribou -- drill Alaska!

There are a lot of the little buggers, aren't there?