Thursday, September 29, 2016

New Poll Puts Mayor of Cormorant, Minnesota Ahead of Hillary and Trump

For goodness sakes, people--ignore the rigged polls and vote for the candidate you believe in.
A new national poll has found that 54% of potential voters favor the mayor of Cormorant, Minnesota over either Hillary Clinton or Donald Trump. The poll surveyed a spectrum of potential voters and has a statistical margin of error of -3/+3%.
Here is the mayor of Cormorant, Minnesota: Duke, a nine-year-old Great Pyrenees. Duke has been re-elected twice, most recently at the end of August.(source: Zero Hedge)
The point being made here is polling is easily gamed. First, pick your goal: you want the poll to find Duke is favored above Hillary and Trump.
Next, select groups that are likely to vote in line with your goal. For example, start with subscribers to the BarkDog Fancy and other dog-owner magazines.
Then select leading questions:
1. If you could select a candidate other than Hillary Clinton or Donald Trump, would you do so?
2. Would you be willing to take a chance on an elected official from small-town America, despite his/her lack of national experience?
3. Given that more Americans believe in BigFoot than believe the mainstream media is fair and accurate, are you open to an "outsider" candidate for the presidency?
4. Given the choice between the twice-re-elected mayor of Cormorant, Minnesota, and either Hillary Clinton or Donald Trump, who would you likely vote for?
And that's how you rig a poll to find that more Americans would vote for Duke the mayor than for either Hillary or Trump.
Please read this 17-page PDF explanation of a recent poll carefully and tease apart how it was carefully engineered to get the desired result. OK, I didn't want to invest all the time and energy, either, but fortunately for us, correspondent Mark G. has done the heavy lifting.
Here is Mark's analysis: "This one with Hillary +6% is a good example.
First, the sample on page two is very uninformative.
Democrats 752
Republicans 570
Independents 216
Total 1538
These affiliations don't sum to the stated survey size (1705), or the number of registered voters (1411), or "likely voters" (1041). We can note the political affiliations recorded exceed the number of those registered. How you can be affiliated without registering...? If this were the case, why were all 1,705 in the survey assigned to a group?
However, of the political affiliations that are disclosed, Democrats were 48.89% (752/1538) = 0.4889. in other words, 12 to 16 points higher than actual identification in the US population.
This is the composted manure these "polls" consist of now.
I think their sole purpose at this point is to game the poll averages and thus support a predetermined narrative in the MSM."
Thank you, Mark. Dear reader, do you notice the similarity of these polls to the rigged numbers for unemployment, median household incomes and inflation that I have dismantled?
Polls engineered to manage perceptions are of a piece with statistics engineered to manage perceptions: both are designed to convince us that the status quo is unstoppable and everything is fine--really really fine.
This is what the status quo has devolved to: since it can't/ won't fix the real problems, it settles for perception management to keep the elites in power. I've laid bare this devolution in several books:
If the status quo is so very very fine, why do I envy the township of Rabbit Hash, Kentucky, which had an unmatched spectrum of choices in their mayoral race?
“In Rabbit Hash, Ky., a Border Collie named Lucy Lou defeated 10 dogs, a cat, a possum, a jackass and even one human to become the town’s third animal mayor-- all dogs--since 1998, says Bobbi Kayser, the current mayor’s owner.”
It's a tough call, but I think my vote goes to the possum. I like the way he/she makes the rounds at night, consuming all the left-over dog and cat food; you have to admit, that is a useful service to the town's cleanliness and hygiene.
For goodness sakes, people--ignore the rigged polls and vote for the candidate you believe in: Hillary, Trump, Stein, Johnson, or write in Duke or Lucy Lou, if your state allows write-ins.
As near as I can tell, Duke will not declare war on Russia or ensnare the nation in yet another "war of choice," and Lucy Lou's even willing to work with cats. What more can you ask for?
Granted, Duke and Lucy Lou are underdogs, but don't count them out just yet.


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Wednesday, September 28, 2016

You Want to Fix the Economy? Then First Fix Healthcare

We don't just deserve an affordable, sustainable healthcare system--we're doomed to bankruptcy without one.
What is blindingly obvious to employers but apparently invisible to the average zero-business-experience mainstream pundit is this: if you want to fix the economy, you must first fix healthcare. If you want to pinpoint a primary reason why U.S. enterprises shift jobs overseas, you have to start with skyrocketing healthcare costs.
According to a report by the St. Louis Federal Reserve, real (adjusted for official inflation) wages have risen a mere 3% since 1970. (No wonder wage earners don't feel wealthier; if we use a more realistic measure of inflation, we haven't gained 3%--we've lost ground.)
But if we look at total compensation costs paid by the employer (health insurance, workers' compensation, employer's share of Social Security, etc.) we find that these costs have soared 60%. In other words, if these labor overhead costs had remained stable (i.e. gone up only as much as inflation), employers could have distributed the difference as raises to employees.
These labor overhead costs are the reason why wages have been stagnant for 46 years, and the dominant overhead expense is healthcare insurance. Why has healthcare soared from 6% of GDP to 18% in four decades?
One reason is we have the worst of all possible worlds: we have a healthcare (what I call sickcare, because sickness is profitable but health is not) system in which for-profit corporations--cartels with immense political power--set the prices, and the government pays them.
If you set out to design a system that optimizes price-fixing, fraud, over-testing, questionable procedures, pharmaceutical advertising to a credulous public and opaque billing, a system with no real limits on prices, you'd end up with the American sickcare system.
If you think this system is affordable, sustainable, and a wonderful deal for employers, you need your head examined. Better yet, go out and get platinum coverage in ObamaCare and pay the entire monthly insurance cost yourself.
I have written dozens of substantial analyses of sickcare/healthcare over the years. Please start with these four:
Then move on to these:
While you're gasping for breath, check out these charts. Let's start with medical costs, which have outpaced inflation by leaps and bounds.
The costs of the federal healthcare programs, Medicare and Medicaid, are exploding: where are the trillions of dollars to fund these programs going to come from? Please don't say higher taxes (tax levels above 20% of GDP trigger recessions) or borrowing more money (federal debt is already pushing $20 trillion):
After a head-fake down, health insurance costs are soaring again.
Our developed-world competitors manage to pay for their "socialized medicine" at roughly half the cost per capita (per person) as the U.S.
So you want a solution, right? The current system is not a solution, it's a poisoned blade in the heart of the economy. Everybody knows this, just as everybody knows it's unaffordable and unsustainable.
The solution? Let a 100 flowers bloom. Give consumers as wide a choice as possible, including government-run insurance programs. Don't force anyone to join anything. Give employers and employees as broad a range of choices as possible--yes, including a government-run insurance program in which the government owns the entire operation--clinics, hospitals, drug manufacturers, etc., lock, stock and barrel.
The point here is we need real competition, but our current system guarantees there cannot be real competition. The for-profit cartels have captured the federal regulatory and funding agencies, and the last thing the cartels want is transparency and wide-open global competition.
Around 40% of the cost of the current mess is paperwork going back and forth between all the players; a one-stop shop would eliminate about 90% of those needless expenses right from the start.
Look, if the federal government offered a civilian equivalent of the Veterans Administration with its own pharmaceutical manufacturing divisions, do you really think it would cost more and be any more inefficient than the insane mess we have now? 
If it did cost more, then nobody would use it and it would go away.
In a truly competitive healthcare system, cash would be king. Please read this before passing judgment:
We don't just deserve an affordable, sustainable healthcare system--we're doomed to bankruptcy without one.


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Tuesday, September 27, 2016

Are The 'Invisible Americans' the Key Players in This Election?

Memo to the D.C. Beltway/mainstream media apologists and propagandists: the 25 million Invisible Americans are no longer buying your shuck-and-jive con job.
For the bottom 90% of American households, the "prosperity" of the "recovery" since 2009 is a bright shining lie. The phrase is from a history of the Vietnam War, A Bright Shining Lie: John Paul Vann and America in Vietnam.
Just as the Vietnam War was built on lies, propaganda, PR and rigged statistics(the infamous body counts--civilians killed as "collateral damage" counted as "enemy combatants"), so too is the "recovery" nothing but a pathetic tissue of PR, propaganda and lies. I have demolished the bogus 5.3% "increase" in median household income, the equally bogus "official inflation" body counts, oops I mean statistics, and the bogus unemployment rate:
I'm not the only one calling the "recovery" a lie: the chairman of Gallup, Jim Clifton, recently unloaded on the "recovery":
"I've been reading a lot about a "recovering" economy. It was even trumpeted on Page 1 of The New York Times and Financial Times last week. I don't think it's true.
The percentage of Americans who say they are in the middle or upper-middle class has fallen 10 percentage points, from a 61% average between 2000 and 2008 to 51% today."
Now that is a self-reported number. The reality is much worse: only 20% of American households possess the income and assets that characterize the middle class in financial terms. Granted, someone making $28,000 a year can self-identify as middle class, but if we look at basic metrics of financial security, they're not even close.
I have analyzed this in depth for years:
We got your "middle class" right here: see that little green slice of the pie? The upper middle class is the purple slice, and the top 10% is blue (most of this wealth is held by the top 1% and top 5%.)
Jim Clifton calls those who have been pushed out of the middle class Invisible Americans: here is his report:
"Ten percent of 250 million adults in the U.S. is 25 million people whose economic lives have crashed.
What the media is missing is that these 25 million people are invisible in the widely reported 4.9% official U.S. unemployment rate.
Let's say someone has a good middle-class job that pays $65,000 a year. That job goes away in a changing, disrupted world, and his new full-time job pays $14 per hour -- or about $28,000 per year. That devastated American remains counted as "full-time employed" because he still has full-time work -- although with drastically reduced pay and benefits. He has fallen out of the middle class and is invisible in current reporting.
More disastrous is the emotional toll on the person -- the sudden loss of household income can cause a crash of self-esteem and dignity, leading to an environment of desperation that we haven't seen since the Great Depression.
Millions of Americans, even if they themselves are gainfully employed in good jobs, are just one degree away from someone who is experiencing either unemployment, underemployment or falling wages. We know them all."
This is where the bright shining lies come in. The worker now earning $28,000 annually is counted as employed, but there is no official metric for the household's increasing insecurity and loss of opportunity.
Even worse, nobody tracks the erosion of benefits. Not only has nominal pay plummeted from $65,000 to $28,000, the deductions for the employee's share of healthcare insurance have skyrocketed, along with co-pays for meds, visits to a doctor, eyewear, etc.
The lucky employees may still receive the benefit of matching 401K retirement funds from the employer, but the matching sums have declined.
This is death by a thousand cuts. According to a report by the St. Louis Federal Reserve, real (adjusted for official inflation) wages have risen a mere 3% since 1970--46 years ago.
Could the 25 million Invisible Americans be the key swing demographic in the upcoming presidential election? As I noted in What If We're in a Depression But Don't Know It? (September 23, 2016), The top 5% of households that dominate government, Corporate America, finance, the Deep State and the media have been doing extraordinarily well during the past eight years of "recovery," and so they report that the economy is doing splendidly because they've done splendidly.
The gulf between reality and the official happy story of "recovery" spewed by the status quo's well-paid army of apparatchiks, flunkies, flacks, hacks, toadies, lackeys and functionaries gorging at the trough of the status quo is widening to the point of surrealism. Memo to the D.C. Beltway/mainstream media apologists and propagandists: the 25 million Invisible Americans are no longer buying your shuck-and-jive con job.


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Monday, September 26, 2016

Trump, Trade and Taxes

The best way to restart investment (and thus employment opportunities) is to make the U.S. a magnet for productive capital rather than a graveyard of tax-avoidance strategies.
Donald Trump has made trade agreements a central issue in this presidential election, declaring trade treaties such as the North American Free Trade Agreement (NAFTA) as unfair and subject to cancellation or renegotiation.
Setting aside the issue of whether presidents can cancel trade treaties via executive orders, let's look at the underlying issue: the erosion of manufacturing and entry-level job opportunities that lead to middle-class security and pay.
The question then becomes: what are the causes of this erosion of manufacturing and the middle class? Trade is relatively easy to finger because the flood of cheap goods into the U.S. coincided with the wholesale offshoring of manufacturing capacity.
But it isn't quite that simple. "Free" Trade, Jobs and Income Inequality: It's Not As Easy As We Might Think (March 22, 2016)
There are many other issues in play, including:
1. Currency manipulation, i.e. pegging one's currency (such as the Chinese RMB) to the US dollar to maintain a predictable cost advantage.
2. Technology, as automation reduces the inputs of human labor per output even in nations with few trade treaties.
3. Global wage arbitrage, as domestic corporations move production overseas to lower labor costs (exacerbated by insanely high costs of healthcare insurance for employees in the U.S.)
4. High tax rates on domestic corporations (35%) push companies overseas to lower tax nations.
5. Trade is grossly miscalculated by current metrics; if we calculate the value that actually flows to each nation that makes parts and software for the iPhone, we find that "Analysts estimate that as little as $10 of the value of every iPhone or iPad actually ends up in the Chinese economy, in the form of income paid directly to Foxconn or other contractors." Meanwhile, twenty times that sum flows directly to Apple HQ in Cupertino, California for software and profit.
"In a world dominated by mobile capital, mobile capital is the comparative advantage."
6. Triffin's paradox demands that any nation issuing the global reserve currency must run a trade deficit as a means of exporting the reserve currency into the global economy. I know this is counter-intuitive, but I've explained it many times over the years:
The Dollar and the Deep State (February 24, 2014)
In other words, if you want the Exorbitant Privilege of issuing the global reserve currency, you have to run a permanent trade deficit.
Let's look at what any president can influence/control and what is beyond their reach. Presidents can complain about currency manipulation and even threaten reprisals, but currency manipulation is not only a trade issue; it overlaps with diplomatic issues that extend far beyond trade. For example, the U.S. might tolerate some currency pegs to support key allies.
Any president's ability to limit automation, technology and "software eating the world" is essentially zero. Nations that attempt to limit or stifle technological advances end up stifling productivity and innovation, and as a result they are doomed to stagnation.
The same can be said of global wage arbitrage. There is very little any president can do to stop companies from taking advantage of the divergence of wages between states, nations and regions.
As for destroying the reserve currency (the U.S. dollar) in a quixotic quest for trade surpluses: look at Japan, which has consistently run trade surpluses while wallowing in decades of social and economic stagnation.
That said, there is one issue the president can influence: the tax rates on domestic corporations. Many nations use tax credits and the like to encourage manufacturers to maintain domestic production, but America's 35% corporate tax rate is an absolute job killer.
This high tax rate forces corporations to game the global tax system for zero benefit to the U.S. or its work force.
Trump would serve the nation and its work force best by lowering the corporate tax rate to a flat 5% for companies that maintained substantial facilities and work forces in the U.S. I submit that a flat 5% rate would actually collect more tax revenues than the 35% rate that pushes employers and employees overseas.
The corporate tax rate of 35% has perversely incentivized moving production and employees overseas. I have yet to meet anyone defending the sky-high nominal tax rates who actually employs people and pays the 35% corporate rate or operates a global corporation.
As an abstraction, the 35% rate appeals to "progressives" intent on punishing Corporate America for its many sins. But the reality is the "progressives" aiming at "evil corporations" have shot American workers in the chest.
The best way to restart investment (and thus employment opportunities) is to make the U.S. a magnet for productive capital rather than a graveyard of tax-avoidance strategies. The problem isn't trade per se; it's a perverse tax system that drives domestic employers overseas.
Of related interest:
"The truth is more complicated. Although imports have put some people out of work, trade is far from the most important factor behind the loss of manufacturing jobs. The main culprit is technology. Auto­mation and other technologies have enabled vast productivity and efficiency improvements, but they have also made many blue-collar jobs obsolete. One representative study, by the Center for Business and Economic Research at Ball State University, found that pro­ductivity growth accounted for more than 85 percent of the job loss in manufacturing between 2000 and 2010, a period when employment in that sector fell by 5.6 million. Just 13 percent of the overall job loss resulted from trade."


Join me in offering solutions by becoming a $1/month patron of my work via patreon.com.
My new book is #6 on Kindle short reads -> politics and social science: Why Our Status Quo Failed and Is Beyond Reform ($3.95 Kindle ebook, $8.95 print edition)For more, please visit the book's website.

NOTE: Contributions/subscriptions are acknowledged in the order received. Your name and email remain confidential and will not be given to any other individual, company or agency.
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