Today I am writing about the impact of a growing problem that is raging across the US. At last estimate there are 9-11 million illegal immigrant living and working in the United States. There are both direct and indirect costs to these folks living here. According to the Huddle study the cost of these immigrants to the state, local, and federal governments is around 33 billion. Some of this is earned back with the taxes that are paid. When you factor in the cost of the jobs that were taken from Americans and the lack of taxes that they would pay, the figure climbs back to around 30 billion. There is also the issue of illegal immigrants that use the health care system. Since they are not documented that costs that are incurred are passed directly to the health care system. In turn these costs are passed to the insurance companies which then pass the cost to the American taxpayer. These are a few of the financial burdens that are caused by this growing problem.
I believe there is an even bigger problem than direct immigration. You see at some point we all come from a family who came from over seas to live the American dream. Our families came here, worked hard, and made a life here in the US. The Mexican people believe that a Mexican is always a Mexican. So there are no plans to ever assimilate into our society. They intend to move here and push their culture on us. There are growing pockets within the government that embrace this. The Spanish language is becoming bigger and bigger within many cities. There are now neighborhoods in Miami where the signs are almost entirely in Spanish. Restaurants and street vendors are almost all spanish. So what is the governments position on this? Well there is a super highway that is to be built from Texas to Canada. This will bypass the teamsters union and allow Mexican trucks to drive all over the US. When you think your government will make decisions that represent your own, think again. This is not happening on this issue.
Saturday, March 1, 2008
Friday, February 29, 2008
The Economy Stupid
I believe the year was 1992 when the campaign slogan of the day between every day people was, "its the economy stupid" George Bush senior thought he had enough to win the election based on his wartime success. As we know now he was very wrong and the wretched Clinton presidency began. So todayI wanted to take a minute to share some thoughts and statistics on our economy.
I am by no means an economist. I have taken some classes in college, but I am no expert. Most of the information that I am going to include came from an analysis done by a Harvard professor that was featured on 96.9 FM WTKK. It was on the Jay Severin show which airs from 3pm-7pm Mon-Fri. This is a synopsis of his analysis that I found profound.
The economy can be broken down in two distinct sections. The first being post WW2-1975 and the second being 1976-present. In the first period you had steady wage growth. This meant that the salary that someone retired with would be at least double and then some. Also a middle class family could survive with one income comfortably. The greatest generation also had CEO's that earned on an average 20-40 times more than Joe worker. The stock market grew maybe 2-3 times what it was post WW2 by the end of 1975. This is a stark difference to what happened in the second period. Wages have been stagnant for workers. The stock market has grown about 8 times. The CEO's now earn 250-400 times more than Joe Worker. Today most families need two incomes to survive. Now there are things that stand out today that was not there during the baby boomer years. Today we have a different view on what we need to survive. This drastically alters things within todays families financially.
This was basically the focus of the hour long discussion. Of course this is a greatly shortened version of a very informative dialog. I use this as a basis for what I feel is a major problem within our economy. Which coupled with other factors is a cause of great concern.
Wall street looks at a company, any company. For an example I will use Hewlett Packard. Last year HP earned over 100 billion dollars. Wall Street looks at this and says ok great, you made your numbers. A decent boost in stock price is normally the result. Here comes the question, " What next?" Wall Street then sets the expectation, which is largely unrealistic most of the time. There are those who say, well thats capitalism and free market practices at work. As mentioned though look at the numbers and the data. Has this process been working for the US economy? Can Wall St. always expect growth out of certain companies and certain markets? If the next year HP post numbers that stay the same, what is wrong with that? Well normally there is a negative associated with that, and it usually comes in the form of a stock decrease. This constant pressure always forces companies to cut costs to make up for the stagnant growth. At this point in time the place to cut is here in the US in the form of lost jobs. The labor and now a growing portion of the design is being farmed out to third party companies. Do not get me wrong in order for a company to stay healthy you need to have an eye on expenses and cut when necessary. The data bears out though that we have cut to deep. Wall St. in my opinion has to much influence over the US economy. So much so they are creating the so called bubbles that pop from time to time.The housing bubble is a classic example of this. The current rate cuts are another example of Wall St. ability to influence the FED. According to many economists these practices will only cause more pain in the long wrong. By not letting the cycle complete naturally they introduce unpredictable variables that cause unpredictable consequences. I like to compare this process to a great big ponzi scheme. For some that do not know what it is, let me explain.
A ponzi scheme starts out with a product or service that is sold. The idea is for one person to get three, and those three to get three, etc. etc. to infinity. The problem is mathematically not everyone can make money from this scheme. The growth is unsustainable the more people get involved. The same is true for the economy. The desired growth is unrealistic, and throughout corporate america people are rewarded for the cuts that are made. The biggest cut going to the CEO at the top. As we see there is not that much left at the bottom.
I do not know the best way to approach this problem as I am not an economist. I simply state what the numbers are showing and state what I see. Hopefully we can come to the same sort of conclusions and resolve some of these issue. By no means is this the only problem today.
Tomorrow I will discuss the impact that illegal immigrants are having on the economy. Tomorrow- The Mexican Connection
I am by no means an economist. I have taken some classes in college, but I am no expert. Most of the information that I am going to include came from an analysis done by a Harvard professor that was featured on 96.9 FM WTKK. It was on the Jay Severin show which airs from 3pm-7pm Mon-Fri. This is a synopsis of his analysis that I found profound.
The economy can be broken down in two distinct sections. The first being post WW2-1975 and the second being 1976-present. In the first period you had steady wage growth. This meant that the salary that someone retired with would be at least double and then some. Also a middle class family could survive with one income comfortably. The greatest generation also had CEO's that earned on an average 20-40 times more than Joe worker. The stock market grew maybe 2-3 times what it was post WW2 by the end of 1975. This is a stark difference to what happened in the second period. Wages have been stagnant for workers. The stock market has grown about 8 times. The CEO's now earn 250-400 times more than Joe Worker. Today most families need two incomes to survive. Now there are things that stand out today that was not there during the baby boomer years. Today we have a different view on what we need to survive. This drastically alters things within todays families financially.
This was basically the focus of the hour long discussion. Of course this is a greatly shortened version of a very informative dialog. I use this as a basis for what I feel is a major problem within our economy. Which coupled with other factors is a cause of great concern.
Wall street looks at a company, any company. For an example I will use Hewlett Packard. Last year HP earned over 100 billion dollars. Wall Street looks at this and says ok great, you made your numbers. A decent boost in stock price is normally the result. Here comes the question, " What next?" Wall Street then sets the expectation, which is largely unrealistic most of the time. There are those who say, well thats capitalism and free market practices at work. As mentioned though look at the numbers and the data. Has this process been working for the US economy? Can Wall St. always expect growth out of certain companies and certain markets? If the next year HP post numbers that stay the same, what is wrong with that? Well normally there is a negative associated with that, and it usually comes in the form of a stock decrease. This constant pressure always forces companies to cut costs to make up for the stagnant growth. At this point in time the place to cut is here in the US in the form of lost jobs. The labor and now a growing portion of the design is being farmed out to third party companies. Do not get me wrong in order for a company to stay healthy you need to have an eye on expenses and cut when necessary. The data bears out though that we have cut to deep. Wall St. in my opinion has to much influence over the US economy. So much so they are creating the so called bubbles that pop from time to time.The housing bubble is a classic example of this. The current rate cuts are another example of Wall St. ability to influence the FED. According to many economists these practices will only cause more pain in the long wrong. By not letting the cycle complete naturally they introduce unpredictable variables that cause unpredictable consequences. I like to compare this process to a great big ponzi scheme. For some that do not know what it is, let me explain.
A ponzi scheme starts out with a product or service that is sold. The idea is for one person to get three, and those three to get three, etc. etc. to infinity. The problem is mathematically not everyone can make money from this scheme. The growth is unsustainable the more people get involved. The same is true for the economy. The desired growth is unrealistic, and throughout corporate america people are rewarded for the cuts that are made. The biggest cut going to the CEO at the top. As we see there is not that much left at the bottom.
I do not know the best way to approach this problem as I am not an economist. I simply state what the numbers are showing and state what I see. Hopefully we can come to the same sort of conclusions and resolve some of these issue. By no means is this the only problem today.
Tomorrow I will discuss the impact that illegal immigrants are having on the economy. Tomorrow- The Mexican Connection
Thursday, February 28, 2008
A First Step
Today after reading an e-mail from a friend and forwarding that same e-mail to another friend, I sat down to begin executing a plan. I have long dreamed of being actively involved in changing our society. I realize now that I may have waited to long. Maybe that is an overstatement as to how effective I will be at making a difference. Waiting to long then would be an indicator that what I should have done would have already produced results. At this point it does not matter. I can no longer sit by and do nothing. There are things that are wrong with our society. I think the quote that someone sent me sums up exactly what I am feeling today.
"A government big enough to give you everything you want, is strong enough to take everything you have." -Thomas Jefferson
Is this what we have today? Do we not here from the politicians that our government will take care of everything. From the cradle to the grave there are statisticians that are molding what will be our future. Like helpless cattle we are herded down a path that we have lost control of.
Sounds like gloom and doom to me, right? Well I guess it is. This is what really motivated me to take action. All it takes is a small pebble in the water to create a ripple that is felt on the other side of the pond. The job is impossible to accomplish at once, but this after all is only, a first step.
"A government big enough to give you everything you want, is strong enough to take everything you have." -Thomas Jefferson
Is this what we have today? Do we not here from the politicians that our government will take care of everything. From the cradle to the grave there are statisticians that are molding what will be our future. Like helpless cattle we are herded down a path that we have lost control of.
Sounds like gloom and doom to me, right? Well I guess it is. This is what really motivated me to take action. All it takes is a small pebble in the water to create a ripple that is felt on the other side of the pond. The job is impossible to accomplish at once, but this after all is only, a first step.
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