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Cumulonimbus + AgI = ?? (revisited)

Posted by John Hitchcock on 2013/12/13

I’m reprinting an article I wrote 13 months ago. An article I wrote 13 months ago, I’m reprinting. An article that doesn’t even get into the most recent huge schadenfreudig spreading through the sane world. But an article I find especially prescient, given the Obama administration’s desperate efforts to prevent ObamaCare’s huge pains from actually hitting just yet…
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A dark cloud follows him wherever he goes.
Every cloud has a silver lining.

Farmers obviously need rain for their crops, so there are some who resort to cloud seeding, adding silver iodide to the clouds to try to force rain out of them. But it’s a bad idea to seed a thunderstorm cloud. Cumulonimbus clouds can produce nasty things like hail storms, massive lightning storms, micro-bursts, tornadoes.

And of course, there are those who always bring bad luck with them, like Bad Luck Schleprock, our current President.


 
So, today I am telling you about the seeding of a 3,000 mile wide thunderstorm cloud hanging over the US — and the silver lining that comes with it. It’s painfully schadenfreudig. Painfully schadenfreudig, indeed. (Multiple stacked redundancy intentional.) Barack Obama and the Democrats, very cynically aware that their grand scheme to shove the US headlong into Socialism could cause them to fall out of power, set up a series of Laws and programs that would save most of the very bad results until after the 2012 election. After having blamed Bush for all the Democrat-and-Socialist caused travails, they would have a way of avoiding responsibility for the looming mega-disaster. It works like this:

  • Set up a Socialist system with all the false positives front-loaded and all the negatives back-loaded.
  • Get possibly voted out of office before the negatives hit, so the Socialist-caused negatives would hit when Conservatives were in office.
  • Blame the Conservatives in office for the economic disaster the Socialists caused.
  • Get the Socialists re-elected to complete the evil transformation of the Free Market US into a Socialist state, with the Conservatives forever blemished by the results of Socialist actions.

But a strange thing happened along the way. The Socialists got re-elected by a completely ignorant, envious, slothful, free hand-out seeking crowd. And all the back-loaded disasters will hit while the Socialists are in power. (By the way, did you know that tornadoes are also backloaded? They are on the back end of cumulonimbus clouds, and not up front.)

ObamaCare is one such program. As most of it is set to kick in now that the election is over, total disaster is on the horizon. Businesses, who cannot pay the cost of ObamaCare and stay afloat at the same time, will be laying off massive numbers of workers nationwide. Other businesses will be cutting their low-level employees (the working poor) to under 30 hours a week so those businesses can stay in business. Very little expansion will be happening, if any at all. It’ll be full-on contraction.

A nice little poisonberry in ObamaCare — that “make health care cheaper for all” lie — is a 2.3 percent excise tax on all medical devices, such as crutches, wheelchairs, heart stents, etc, etc. And an excise tax is far worse than a profit tax or income tax. It hits the gross revenue and not the after-expenses cost. For example, suppose it costs a business 5,000 dollars for the raw materials to make a single product. Add in the labor costs, the health insurance costs, the retirement costs, the social security tax, the medicare tax, the property tax for the building itself, the electricity cost, the property insurance cost, the transportation cost, the bookkeeping cost, and all other costs associated with getting the already developed product to market and the final cost to the business is 6,800 dollars. The business sells the product for 7,000 dollars because that’s what the market will bear. The business gets a profit of 200 dollars per sale.

In comes the 2.3 percent excise tax. Another 161 dollars off the top. The new profit for the 7,000 dollar item falls from 200 dollars to a whopping 39 dollars (an effective tax rate of 80.5 percent of the profit). Not enough to make the company a going concern. Kill the Research and Development department of the company — the life-blood of all businesses that want to survive, for if a business is not growing and moving forward it is necessarily dying.

But it doesn’t stop there. No, not at all. That same company also has to pay the new, higher costs involved in providing ObamaCare to all its employees (instead of the less expensive insurance plans which were optional, which fair portions of employees did not opt into). That 39 dollars per product, which used to be 200 dollars per product goes negative. It costs more to produce than it can be sold for.

But, again, it doesn’t stop there. Obama’s declaration that electricity costs must necessarily skyrocket and he’ll bankrupt coal-fired electric plants necessarily means the energy-intensive manufacturing industry will get hit hard with skyrocketing overhead costs. Costs that cannot be reduced merely by laying people off. So instead, the companies will shutter its doors and either go off-shore or cease to exist, providing a double-whammy of forcing the products to become far more expensive than they are now and far more difficult to obtain.

Small businesses will collapse. The middle class will become working poor. The working poor will become the unemployable destitute. Products the middle class used to be able to afford will become luxury items. Items that were luxuries for the working poor will become nothing but unreachable pipe-dreams. Inflation will go into hyper-drive. Interest rates will climb, making the cost of borrowing prohibitive. And deficit spending, which has been kept artificially low (yeah, I said it), will explode.

How is 1.2 trillion dollars (or more) in deficit spending “artificially low”? That’s a good question. And I have a good answer for that. Two words: “debt” and “service”. Debt service.

Historical view of the Prime Rate from Forecast Chart.com (8 percent line added).

Above is a chart showing the historic levels for the Prime Rate, from Forecast Chart.com. I added a red line at 8 percent for reference. Below is a chart showing the historic levels for the Discount Rate, from a 2009 article on Apin Talisayon’s Weblog (data obtained from the Financial Forecast Center). I added a red line at 6 percent for reference.

US Discount Rate From 1950 as found on Apin Talisayon’s Weblog (6 percent red line added).

From Apin Talisayon:

As I said, central banks had recently been dropping interest rates, and so we cannot use the abnormally low prevailing interest rates (0.5%). I plotted the historical data of discount rates set by the US Federal Reserve since January 1950 from the Financial Forecast Center[.]

As you can see in the above two charts, the Prime Rate and the Discount Rate differ in levels, but mirror each other. And they’re not only at historic lows; they’re far below historic norms. That means the future necessarily will provide much higher rates on borrowing than today. And the Federal Government’s debt service costs absolutely must skyrocket. Couple that with the US credit rating crumbling — and will continue to crumble — and the interest on the debt will become astronomical. Even a fairly normal rate of 6 percent with our current 16,000,000,000,000 dollar deficit means 960 BILLION DOLLARS in interest payments alone. By 2015, our national debt will be 20 TRILLION DOLLARS and the interest on that debt will be 1.2 TRILLION DOLLARS. That’s before paying for roads, bridges, high speed trains to nowhere, free birth control pills for Sandra Fluck (phonetic spelling), free abortion pills for Sandra Fluck (phonetic spelling), free ObamaPhones, free health care, free foodstamps, free college tuition, free housing for the poor and forever pregnant single mothers, free Big Bird, free NPR propaganda, bailing out California, Illinois, Maryland, New York, free cowboy poetry, and oh yeah, paying for our national defense.

1.2 TRILLION DOLLARS SPENT TO PAY FOR ALREADY SPENT MONEY WE DIDN’T HAVE BEFORE PAYING FOR ANY CURRENT PROGRAMS AND EXPENSES!!!

The Socialist who ascended the throne in DC, along with the Socialists in the US Senate who have adamantly refused to produce a Federal Budget since April, 2009, in direct violation of Federal Law and the US Constitution, have successfully Cloward-Pivened the most prosperous nation in the history of the world. The most prosperous nation this world has ever seen has been successfully brought to financial ruin by the Leftists in power who have no use for a document that is “over 100 years old”. The aim? Destroy the Free Market and implement Socialism worldwide.

The silver lining? Conservatives have not been responsible for any of it. Conservatives have not been in charge for any of it. I know, little solace for the loss of a once great and mighty and FREE nation. Will there be anything left to save by 2016? And will there be any conceivable way to save it and return to prosperity from the Abyss of Destitution Obama and the Socialist Democrats have created? Or will it already be too late? I, for one, am not looking forward to the disaster these next 10 years will provide us. (UPDATE: Nice Deb performed her Karnac impression and answered my questions before seeing them. Go to her site to read her answers.)

RELATED
This medical device tax is just not going to end well
Economics 101: Schadenfreude!
Video: What free-market medicine looks like
2013: A Century Of Progress
Gee, why do you think the Obama administration waited until after November 6th to mail these letters?

Posted in ABJECT FAILURE, Character, Conservative, Culture, economics, Elections, Health, Health Care, Law, Liberal, Obama, Over-regulation, politics, Socialists, society, Tax, truth | 3 Comments »

The Rich Pay Their Fair Share

Posted by John Hitchcock on 2013/12/13

From CNBC (owned by that radical left wing NBC, which owns MSNBC) comes this nugget:

Buried inside a Congressional Budget Office report this week was this nugget: when it comes to individual income taxes, the top 40 percent of wage earners in America pay 106 percent of the taxes. The bottom 40 percent…pay negative 9 percent.

The bottom 20 percent actually pay a negative fifteen percent federal income tax rate! it’s time that the bottom 40 percent pay their fair share. It’s time the bottom 20 percent stop getting more back in income tax returns than they pay in. Because, as the lovely lady from CNBC said, “the rich aren’t only paying their fair share, they’re paying everyone’s share.”

Posted in Culture, economics, media, Personal Responsibility, society | 1 Comment »

This Christmas, Give the Gift of Shinola

Posted by DNW on 2013/11/22

 

Do you know the difference between … well, you know, and Shinola?

The difference is that Shinola, is made in America. Mostly. Or assembled here. Really, and it’s just too cool for school.

Except that it isn’t because it’s connected with school. A famous design school, The Center for Creative Studies, located in Detroit, Michigan.

Hand made bicycles, Swiss watch movements assembled in the USA and fitted with leather straps hand made in Florida; and footballs. Real honest to goodness footballs, made in America and made to be used.

Shinola Detroit

Shinola Detroit

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Well maybe you would use it. On grass, once or twice.

Bronko, is that a Shinola?

Hey Bronko! Is that a Shinola?

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Take a look for yourself ….

 

Shinola

 

Made in Detroit … more or less … by college kids and their associates, more or less.

 

This is another “neat things” posting, not commercial advertising; and neither Truth Before Dishonor nor myself receive any compensation whatsoever for these entries. Not even coal ranges. Certainly not Morgan Roadsters. The manufacturers neither solicited nor even approved these postings. Except here, where I got permission to mention, first.

Posted in American pride, Christmas, Culture, economics | Comments Off

#ObamaCare Deconstructed

Posted by John Hitchcock on 2013/11/17

HT Patterico’s Pontifications

The Truth the radical Left (Obama, Reid, Pelosi, Democrats, Mainstream Media) don’t want you to know.

Posted in ABJECT FAILURE, Character, economics, Elections, Health Care, Liberal, media, Obama, Over-regulation, politics, Socialists, Tax, truth | 3 Comments »

Will Obama Care “collapse of its own accord”?

Posted by DNW on 2013/09/27

 

 

A Question: Why is it expected by some that so-called Obama Care will collapse of its own accord, when its designers and promoters recognize no limits to their ability to coerce or draw upon you in order to fund and prop it up?

How exactly does that work?

Is there some length to which the progressives currently threatening social violence if their ill-begotten and legally bastard dream of punitive equity is not endowed, will henceforth refuse to go?

Is there some extractive limit beyond which, those who nonchalantly admit they recognize no limits, will not legislatively trespass if their spawn appears undernourished?

For those who think so, what real world evidence do they have to support this hope?

 

Posted in economics, Health Care, Law, Liberal, politics | 8 Comments »

In the matter of Obama Care

Posted by DNW on 2013/09/21

I’m working today and while doing so I’ve been accessing the Internet.

I don’t know why exactly, but possibly because after hearing about the House Republican’s courageous act of defunding Obama Care, I glanced at one of Perry Hood’s typically puling exercises in social justice pimping.

I then decided to revisit and review the fact situation premises underlying the arguments we’ve all seen concerning “national” health care costs by doing a couple of searches. Just for the sake of Auld Lang Syne …

My first search was on the topic of uncompensated emergency care. I Googled: “Percentage of US health care expenditures on uncompensated emergency room treatment”.

There, in the results window I found links that informed me that emergency room treatment accounted for only about 2 cents of every dollar expended on medical treatment in the United States.

“Main Points

Emergency care represents less than 2 percent of the nation’s $2.4 trillion in health care expenditures while covering 136 million people a year.i ii
Emergency departments are open 24 hours a day and provide “one-stop shopping” with all the hospital’s resources – such as diagnostic testing and consultation by other medical specialists – in one place.
The most pressing economic issue in emergency medicine is uncompensated care: the lack of adequate reimbursement for emergency medical care has led to the closure of hundreds of emergency departments.
The focus on preventing so-called “non-urgent” ER visits distracts policymakers from the real cost savings in reducing hospital admissions.
Emergency departments are critical to our communities and must be adequately funded.”

We also learn that,

“About half of all emergency services go uncompensated, according to Centers for Medicare & Medicaid Services (CMS).iv The typical ER treats 1 in 5 patients without insurance or a clear method for reimbursement. The CDC reported that 19 percent of all emergency patients in 2009 were uninsured.”

and

“Nearly half (44 percent) of emergency physicians responding to a poll say fear of lawsuits is the biggest challenge to cutting emergency department costs. More than half (53 percent) say this fear is the main reason for ordering the number of tests they do.viii Every additional diagnostic test adds to the overall cost of care.”

See also this American College of Emergency Physicians link

So, at first glance anyway, only about 20 percent of 2 percent of the money spent in the US on medical treatment is spent on the uninsureds’ emergency room treatment. Though, this burden is costly enough, and damaging enough, to the facilities treating these patients.

Next I began to check on structural issues related to demographics. Say for example, on the cost of behavioral problems to the US economy. But that was not really a fruitful avenue. We learn of course that fat kids are a large (pun intended) and growing (same) problem and that they will likely experience a host of chronic conditions which will eventually …

Oh. Yeah, “Chronic care”

Wonder what that costs “us” as a portion of what “we” spend?

Google: “Chronic condition expenses as a percentage of American medical costs”

And this my friends really set me back on my heels. I couldn’t believe it. Though I cannot now explain why I hadn’t known it earlier.

We debate insurance reform, and malpractice reform, and we talk of defensive medicine. But what are the real causes of this social phenomenon are we being held political hostage to? Is it really primarily due to greedy doctors and profiteering insurance companies,  inflated drug costs, scheming lawyers, and proliferating defensive medicine?

We speak in terms of “social costs”. What of social use? Is the demand itself unreal? What of actual use and spending, and of who is doing the using and spending?

Well, while,

” … Half of the population spends little or nothing on health care …”

it turns out that,

” … 5 percent of the population spends almost half of the total amount [spent]…”

What? How can this be? Feeling dizzy too? But why should we stop there when there is so much more to learn …

” … In 2002, the 5 percent of the U.S.community (civilian noninstitutionalized) population that spent the most on health care accounted for 49 percent of overall U.S. health care spending …”

” … the 50 percent of the population with the lowest expenses accounted for only 3 percent of overall U.S. medical spending, with annual medical spending below $664 per person. … those in the top 5 percent spent, on average, more than 17 times as much per personas those in the bottom 50 percent of spenders

” … The elderly (age 65 and over) made up around 13 percent of the U.S. population in 2002, but they consumed 36 percent of total U.S. personal health care expenses. The average health care expense in 2002 was $11,089 per year for elderly people but only $3,352 per year for working-age people (ages 19-64 …”

” … people in the highest 5 percent of the distribution of medical expenses were 11 times as likely to be in fair or poor physical health as people in the bottom half of that distribution (45 percent vs. 4 percent) …”

” … 21 percent of people in the top 5 percent [those with the highest medical expenses] were in fair or poor mental health, compared with 3 percent of people in the bottom 50 percent [of medical expenses]“

Chronic, crazy, (and a modest percentage of the) elderly account for half of that infamous 16 percent or so of the GDP being spent on health care. This then is half of the “crisis” that has been driving a formerly free people into the clutches of an Obama Care mandate, and toward the degraded status of “Property of the State”.

I’m going to quit writing now; before I say something really, really cruel …

You can read and judge for yourself. As for me, I am done researching for today.

Oh you can bet your bottom dollar on this though. Once the government really gets its say, and those figures are considered, as they already have been by many in the Single Payer system movement, there will be death panels.

And what will the left do? That is to say the same left that earlier mocked Palin?

They will shrug and ask, “What did you fools expect?”

Fools! I am the Lido and you will do as I command!

Fools! I am the Lido and you will do as I command!

Posted in ABJECT FAILURE, Constitution Shredded, economics, Health Care, Personal Responsibility | 1 Comment »

Gun Show Bans Guns, Kills Show

Posted by John Hitchcock on 2013/01/24

Yorkshire posted an article on The First Street Journal that discussed Reed Exhibitions’ sudden and unilateral decision to side with the anti-constitutional, Second Amendment killing gun grabbers and the aftermath of that decision. One sixth of the exhibitors and celebrities pulled out of the nation’s largest outdoor sportsman’s show in a show of solidarity with the US Constitution. You can find a large (but incomplete) list of the boycotters here. That list includes Cabelas, one of the nation’s premiere big box stores dedicated to the outdoor sportsman, muzzle loaders, knife businesses, bow organizations and businesses, turkey call companies, fishing related companies and organizations, conservationists, television shows and celebrities, and much, much more.

Reed Exhibitions tried to shrug it all off as “a small percentage of more than 1,000 exhibits” as if Cabelas was equivalent to Kokosing Backwater Beaver Traps, but decided to “stop loss” (an investment term for the first rule of holes) and cancel the show. Granted, they called it “postpone” but if Reed Exhibitions continues to side with the anti-constitutionalist gun grabbers, there will be no show. Period. Because the celebrities and exhibitors necessary for such a show will not participate and the people who go to such a show will not attend. As it is, Reed Exhibitions severely and possibly permanently harmed its reputation with the very people it depends upon for millions of dollars of profit a year.

Hey, Reed Exhibitions, spoiler alert: I watched Red Dawn and your side loses.

Constitution lovers, check out the list of boycotters and support them with your outdoor recreation dollars. You don’t have to be a hunter or even a gun owner. If you’re into boating, fishing, camping, hiking, mountain climbing, conservation or any other outdoor recreation, you can find your equipment and educational needs among that list.

Posted in Constitution, Culture, economics, politically correct, Politically Incorrect, politics, Real Life, society | Tagged: , , , , , , , | 2 Comments »

Taxes and the Pyrite State

Posted by Dana Pico on 2013/01/13

From

Jerry Brown: California Will Have Surpluses

That’s what he says:

After years of red ink, Gov. Jerry Brown said on Thursday that California’s $96.7-billion general fund is now poised to end next year with a surplus, thanks to years of deep budget cuts and billions in new taxes approved by voters last year.

“We achieved the position we’re in because of tough cuts … and then the people voted for taxes,” he said. “We broke the logjam by going to the people.”

Schools will be the big winner in the governor’s new spending plan, receiving $56.2 billion in state funds, an increase by $2.7 billion over the last year. That funding is set to jump to more than $66 billion by 2016.

The budget also dedicated an additional $350 million to the state’s public insurance program, Medi-Cal, to help implement President Obama’s healthcare law.

Brown’s budget predicts only the second budget surplus in the last decade, with an $851-million surplus projected at the end of the 2013-14 fiscal year — if all his proposals are approved by lawmakers.

Jerry Brown says we will have surpluses. I say we will not.

We’ll see who is right.

The boldfaced parts were by Patterico commenter Taney O’Haley, who said that it sounded like wishful thinking to her.

Donald Douglas referenced an article from Investor’s Business Daily which pointed out that the overwhelming majority the voters gave to the Democrats puts the restrictions under Proposition 13 at risk, and that there are already at least two proposals in the legislature to weaken it:

Already, state Sen. Mark Leno wants to put a measure on the ballot to lower the two-thirds vote threshold for school district parcel taxes to 55%. State Sen. Lois Wolk introduced a bill that would ask voters to drop the vote threshold to 55% for library parcel taxes and bond measures.

In the Assembly, Tom Ammiano plans to reintroduce a bill seeking to revise the definition of an ownership change that triggers a new business property assessment. Voters’ OK isn’t needed. Even if the bill stalls, as it has in the past, business owners fear that its goal — squeezing more tax money from commercial property — will surface in other proposals, some with better odds.

The tax increases approved by the voters in November were temporary increases, adding a 0.25% increase to the state sales tax, and creating three new brackets for the most productive Californians, lasting for seven years. For a single Californian earning $500,000 or more, the new 12.3% marginal rate, combined with the new federal top rate of 39.6%, means that 51.9% of his earnings over the thresholds will be seized just in income taxes alone. If his earning power is portable — and for many of California’s top producers, it won’t be — moving to a state like Texas or Florida, which have no state income taxes, is a completely rational economic decision.

How many will? We can’t know yet, but we’ll see in two more years, when Governor Brown’s projection of a balanced state budget is either realized, or it is not.
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Cross posted on THE FIRST STREET JOURNAL.

Posted in economics, Tax | Tagged: , , , , | Comments Off

Food Stamps

Posted by Yorkshire on 2012/12/26

Not News: Food Stamp Participation Jumped by Over 600,000 in September; Last Pre-Election Number Revised Up
By Tom Blumer | December 07, 2012 | 23:57

The U.S. Department of Agriculture released its latest report on food stamp program participation through September today. I received the email alerting me to the release at 5:17 p.m., so it seems reasonable to believe that USDA and the Barack Obama administration wanted the new data to get as little attention as possible (as will be seen later, it’s currently getting none). If so, they have two probable reasons for wishing to minimize its impact.

The first and more obvious of the two is that the food stamp rolls increased by over 607,000 in September to 47.71 million, yet another all-time record. That’s awful enough, but here’s the real kicker: the participation figure for July, the last month of data available before Election Day, was revised up by over 150,000, changing that month’s reported increase from 11,600 to just under 166,000. As will be seen after the jump, no other month’s data was revised except August, where the changes were infinitesimal

Read more: http://newsbusters.org/blogs/tom-blumer/2012/12/07/not-news-food-stamp-participation-increases-over-600000-september-last-p#ixzz2GBYVzcIv

Posted in economics, Photography, Politically Incorrect, Socialists | Tagged: , , , | Comments Off

The Democrats’ economic and taxation policies at work in Illinois

Posted by Dana Pico on 2012/12/24

Remember how our friends on the left were so appalled that the Michigan state legislature passed a right-to-work law? How about in just-across-the-lake Illinois, that liberal bastion and home of President Barack Hussein Obama?

Unions blast state on plans for underfunded pensions

By Rick Pearson, Chicago Tribune | 1:26 p.m. CST, December 19, 2012

A coalition of public employee unions issued a report today blasting state legislation to address their vastly underfunded pension systems and offering instead to make increased worker contributions if lawmakers raised $2 billion by ending tax benefits to corporations and imposing new taxes.

Appearing at the James R. Thompson Center, members of the We Are One coalition said plans backed by Gov. Pat Quinn and another proposal supported by a bipartisan group of lawmakers would violate the state constitution by reducing pension benefits already guaranteed to workers. They predicted such a change would be overturned by the courts.

Moreover, the group said the plan Quinn was advocating would “cause deep harm to working and retired state employees and teachers, negatively impact the Illinois economy and yet still not solve the state’s primary pension problem — the failure to regularly fund its annual required contributions.”

The unions said their offer to require state workers and teachers to pay 2 percent more toward their retirement was conditional upon the state making an “ironclad guarantee” in state law that government fund its pension obligations.

To help fund those obligations, the unions proposed eliminating several corporate tax benefits as well as imposing new taxes on auto trade-ins, satellite TV service and downloaded digital entertainment. The new funds also could be used to help offset cuts in other public social services, the group said.

More at the link.

Illinois is an already-highly-taxed state, with significant companies considering leaving the state due to the already-passed increases in corporate taxes. Here’s another story:

Illinois Among Nation’s Worst State Business Climates, According To CEO Survey

Illinois has been struggling to keep big companies in the state since Illinois Governor Pat Quinn approved an income tax increase in January. Quinn has been widely criticized for the move, and a new survey ranking Illinois among the worst business climates in the U.S. will likely provide fodder to the naysayers.

According to a survey released Monday, California, New York and Illinois have the “least favorable business climates” to corporate executives in the U.S. Nearly 25 percent of the 322 corporate executives surveyed said Illinois was unfavorable due to high taxes and “anti-business climate/regulation.”

“With the battle for business more intense than ever, states and their economic development organizations need to pay close attention to the results of this survey,” Development Counsellors International (DCI) President Andrew T. Levine said in a statement. “Whether accurate or misguided, perceptions about a location’s business climate often play a crucial role in site selection decisions and where companies invest money and create jobs.”

Texas, North Carolina and South Carolina had the most favorable business climates, according to the survey.

More at the link. But Illinois’ business climate is so bad that the family of an Illinois state senator is moving their business out-of-state!

Mike Frerichs is running to keep his seat in the 52nd District Senate seat from Champaign County. He clams he’s all about small businesses in Illinois. Yet, things have gotten so bad during histerm in office that his own family is moving their business out of Illinois and into Indiana.

On the main page of his Senate website, Frerichs is all proud of the “job-creation program” he had a hand in but the best “job-creation program” would be to make Illinois more business friendly and tax-hike-Mike has no desire to do that at all.

The business climate in Illinois under Frerichs and Democrat Governor Pat Quinn is so bad that even Frerichs’ own family is moving its business out of the state.

Recently The Champaign News-Gazette reported that Frerichs cousin moved his trucking business from Illinois over to Covington, Indiana.

Frerichs’ cousin admitted that it is all true and that Illinois’ horrid business climate drove him out of the state.

Readers will not be surprised to learn that Mike Frerichs is a Democrat.

Illinois is doing just what our friends on the left say government should be doing as far as taxes and the economy are concerned, and the result is a loss of businesses, a state government which cannot fund its pension system, and calls for even higher taxes. Simply put, the Democrats’ economic policies are being put into practice, and they are not working!
__________________________________

The section above the line was published on THE FIRST STREET JOURNAL on December 21st. Today, I found this on Patterico’s Pontifications:

Chevron Moves Hundreds of Employees to Texas from California

Patterico @ 10:32 pm

Interesting:

Chevron Corp. will move as many as 800 jobs to Houston from its California headquarters to support its exploration and production operations, the company told employees Thursday.

The oil giant will maintain its corporate headquarters in San Ramon – just east of San Francisco – where 6,500 employees work.

In an email to its workers, Chevron said jobs moving to Houston include employees in support groups involved with technology, procurement and business development.

“Moves in these groups are expected to take place over the next two years to support our growing upstream business,” the company email said.

I wonder how many businesses are relocating employees from Texas to California. Somehow, I suspect not many.

An interesting move. Chevron is moving support jobs to Houston, which will improve efficiency and (presumably) lower costs. “Moves in these groups are expected to take place over the next two years to support our growing upstream business,” the company e-mail stated, and it makes sense that such jobs would be closer to the physical activity involved. The corporate leadership remains in California, so most of the top executives don’t have to move.

California and Illinois are both following the Democrats’ preferred model for government: unsupportably high government spending, and a high tax regime. Now the Pyrite State is losing another 800 good jobs. Those jobs might or might not have been moved anyway, even if California were governed better, but the anti-business attitude on the Left Coast couldn’t have helped swing the decision toward keeping the jobs in San Ramon.

Posted in economics, Oil | Tagged: , , , | 1 Comment »

Cumulonimbus + AgI = ??

Posted by John Hitchcock on 2012/11/15

A dark cloud follows him wherever he goes.
Every cloud has a silver lining.

Farmers obviously need rain for their crops, so there are some who resort to cloud seeding, adding silver iodide to the clouds to try to force rain out of them. But it’s a bad idea to seed a thunderstorm cloud. Cumulonimbus clouds can produce nasty things like hail storms, massive lightning storms, micro-bursts, tornadoes.

And of course, there are those who always bring bad luck with them, like Bad Luck Schleprock, our current President.


 
So, today I am telling you about the seeding of a 3,000 mile wide thunderstorm cloud hanging over the US — and the silver lining that comes with it. It’s painfully schadenfreudig. Painfully schadenfreudig, indeed. (Multiple stacked redundancy intentional.) Barack Obama and the Democrats, very cynically aware that their grand scheme to shove the US headlong into Socialism could cause them to fall out of power, set up a series of Laws and programs that would save most of the very bad results until after the 2012 election. After having blamed Bush for all the Democrat-and-Socialist caused travails, they would have a way of avoiding responsibility for the looming mega-disaster. It works like this:

  • Set up a Socialist system with all the false positives front-loaded and all the negatives back-loaded.
  • Get possibly voted out of office before the negatives hit, so the Socialist-caused negatives would hit when Conservatives were in office.
  • Blame the Conservatives in office for the economic disaster the Socialists caused.
  • Get the Socialists re-elected to complete the evil transformation of the Free Market US into a Socialist state, with the Conservatives forever blemished by the results of Socialist actions.

But a strange thing happened along the way. The Socialists got re-elected by a completely ignorant, envious, slothful, free hand-out seeking crowd. And all the back-loaded disasters will hit while the Socialists are in power. (By the way, did you know that tornadoes are also backloaded? They are on the back end of cumulonimbus clouds, and not up front.)

ObamaCare is one such program. As most of it is set to kick in now that the election is over, total disaster is on the horizon. Businesses, who cannot pay the cost of ObamaCare and stay afloat at the same time, will be laying off massive numbers of workers nationwide. Other businesses will be cutting their low-level employees (the working poor) to under 30 hours a week so those businesses can stay in business. Very little expansion will be happening, if any at all. It’ll be full-on contraction.

A nice little poisonberry in ObamaCare — that “make health care cheaper for all” lie — is a 2.3 percent excise tax on all medical devices, such as crutches, wheelchairs, heart stents, etc, etc. And an excise tax is far worse than a profit tax or income tax. It hits the gross revenue and not the after-expenses cost. For example, suppose it costs a business 5,000 dollars for the raw materials to make a single product. Add in the labor costs, the health insurance costs, the retirement costs, the social security tax, the medicare tax, the property tax for the building itself, the electricity cost, the property insurance cost, the transportation cost, the bookkeeping cost, and all other costs associated with getting the already developed product to market and the final cost to the business is 6,800 dollars. The business sells the product for 7,000 dollars because that’s what the market will bear. The business gets a profit of 200 dollars per sale.

In comes the 2.3 percent excise tax. Another 161 dollars off the top. The new profit for the 7,000 dollar item falls from 200 dollars to a whopping 39 dollars (an effective tax rate of 80.5 percent of the profit). Not enough to make the company a going concern. Kill the Research and Development department of the company — the life-blood of all businesses that want to survive, for if a business is not growing and moving forward it is necessarily dying.

But it doesn’t stop there. No, not at all. That same company also has to pay the new, higher costs involved in providing ObamaCare to all its employees (instead of the less expensive insurance plans which were optional, which fair portions of employees did not opt into). That 39 dollars per product, which used to be 200 dollars per product goes negative. It costs more to produce than it can be sold for.

But, again, it doesn’t stop there. Obama’s declaration that electricity costs must necessarily skyrocket and he’ll bankrupt coal-fired electric plants necessarily means the energy-intensive manufacturing industry will get hit hard with skyrocketing overhead costs. Costs that cannot be reduced merely by laying people off. So instead, the companies will shutter its doors and either go off-shore or cease to exist, providing a double-whammy of forcing the products to become far more expensive than they are now and far more difficult to obtain.

Small businesses will collapse. The middle class will become working poor. The working poor will become the unemployable destitute. Products the middle class used to be able to afford will become luxury items. Items that were luxuries for the working poor will become nothing but unreachable pipe-dreams. Inflation will go into hyper-drive. Interest rates will climb, making the cost of borrowing prohibitive. And deficit spending, which has been kept artificially low (yeah, I said it), will explode.

How is 1.2 trillion dollars (or more) in deficit spending “artificially low”? That’s a good question. And I have a good answer for that. Two words: “debt” and “service”. Debt service.

Historical view of the Prime Rate from Forecast Chart.com (8 percent line added).

Above is a chart showing the historic levels for the Prime Rate, from Forecast Chart.com. I added a red line at 8 percent for reference. Below is a chart showing the historic levels for the Discount Rate, from a 2009 article on Apin Talisayon’s Weblog (data obtained from the Financial Forecast Center). I added a red line at 6 percent for reference.

US Discount Rate From 1950 as found on Apin Talisayon’s Weblog (6 percent red line added).

From Apin Talisayon:

As I said, central banks had recently been dropping interest rates, and so we cannot use the abnormally low prevailing interest rates (0.5%). I plotted the historical data of discount rates set by the US Federal Reserve since January 1950 from the Financial Forecast Center[.]

As you can see in the above two charts, the Prime Rate and the Discount Rate differ in levels, but mirror each other. And they’re not only at historic lows; they’re far below historic norms. That means the future necessarily will provide much higher rates on borrowing than today. And the Federal Government’s debt service costs absolutely must skyrocket. Couple that with the US credit rating crumbling — and will continue to crumble — and the interest on the debt will become astronomical. Even a fairly normal rate of 6 percent with our current 16,000,000,000,000 dollar deficit means 960 BILLION DOLLARS in interest payments alone. By 2015, our national debt will be 20 TRILLION DOLLARS and the interest on that debt will be 1.2 TRILLION DOLLARS. That’s before paying for roads, bridges, high speed trains to nowhere, free birth control pills for Sandra Fluck (phonetic spelling), free abortion pills for Sandra Fluck (phonetic spelling), free ObamaPhones, free health care, free foodstamps, free college tuition, free housing for the poor and forever pregnant single mothers, free Big Bird, free NPR propaganda, bailing out California, Illinois, Maryland, New York, free cowboy poetry, and oh yeah, paying for our national defense.

1.2 TRILLION DOLLARS SPENT TO PAY FOR ALREADY SPENT MONEY WE DIDN’T HAVE BEFORE PAYING FOR ANY CURRENT PROGRAMS AND EXPENSES!!!

The Socialist who ascended the throne in DC, along with the Socialists in the US Senate who have adamantly refused to produce a Federal Budget since April, 2009, in direct violation of Federal Law and the US Constitution, have successfully Cloward-Pivened the most prosperous nation in the history of the world. The most prosperous nation this world has ever seen has been successfully brought to financial ruin by the Leftists in power who have no use for a document that is “over 100 years old”. The aim? Destroy the Free Market and implement Socialism worldwide.

The silver lining? Conservatives have not been responsible for any of it. Conservatives have not been in charge for any of it. I know, little solace for the loss of a once great and mighty and FREE nation. Will there be anything left to save by 2016? And will there be any conceivable way to save it and return to prosperity from the Abyss of Destitution Obama and the Socialist Democrats have created? Or will it already be too late? I, for one, am not looking forward to the disaster these next 10 years will provide us. (UPDATE: Nice Deb performed her Karnac impression and answered my questions before seeing them. Go to her site to read her answers.)

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Gee, why do you think the Obama administration waited until after November 6th to mail these letters?

Posted in Character, Conservative, Constitution Shredded, economics, Elections, Health Care, history, Law, Liberal, Obama, Over-regulation, Personal Responsibility, Philosophy, politics, Socialists, society | Tagged: , , , , , , | 8 Comments »

How Did The Weimar Republic Collapse?

Posted by John Hitchcock on 2012/11/07

Weimar Germany had an economic crisis.
The Germans elected a bunch of politicians who scapegoated large groups of Germans, pitting Germans against each other.
German political leaders turned their backs on their Constitution, and the German people followed along, like sheep, out of a sense of expediency and crisis.
Free Germany then collapsed into a totalitarian state, which soon crumbled into total devastation, but only after tens of millions of lives were lost.

We are repeating history. But this time, there’s no gleaming beacon on the hill to come to the rescue. We are the last bastion of Freedom left in the world. And We The People are willfully letting that freedom vanish.

DO NOT GO GENTLE INTO THAT GOOD NIGHT

Posted in Constitution Shredded, economics, Elections, history, Law, Personal Responsibility, Philosophy, Poetry, politics, society, truth, war | Tagged: , , , , , | 1 Comment »

What Our Future Holds

Posted by John Hitchcock on 2012/11/07

A democracy cannot exist as a permanent form of government. It can only exist until the voters discover they can vote themselves largess from the public treasury.

From that moment on, the majority always votes for the candidates promising them the most benefits from the public treasury, with the result that a democracy always collapses over loose fiscal policy, always followed by a dictatorship.

The average age of the world’s greatest civilizations has been 200 years. These nations have progressed through this sequence:

  • From bondage to spiritual faith;
  • from spiritual faith to great courage;
  • from courage to liberty;
  • from liberty to abundance;
  • from abundance to selfishness;
  • from selfishness to apathy;
  • from apathy to dependence;
  • from dependency back again into bondage.

–Dr Alexander Tytler, Scotsman, history professor at the University of Edinborough on The Fall of The Athenian Republic around the time of the birth of the US

Having reelected a Socialist who has vowed vengeance on us and to bypass Congress and maintained a Leftist Senate which has refused to obey the US Constitution and Federal Law by refusing to write a Budget since April 2009, here are a few things I see in our future:

1. Energy inflation and food inflation (two items left off the “official” inflation rate) will continue to far outstrip the inflation rate, as the Obama administration bankrupts electricity producers and rolling black-outs become commonplace in this land of plentiful natural resources we will not be permitted to use. The inflation rate itself will necessarily heat up heavily.

2. Businesses will continue to downsize due to the undue burdens of catastrophic regulations and taxes, reducing the number of employees and turning many full-time positions into part-time positions, causing the official unemployment numbers to climb and the real unemployment numbers to skyrocket.

3. The poverty rate and dependency rate will climb higher, as fewer people work and more people hold their hands out for “ObamaMoney”, causing even greater harm to those who are the producers. The US will further cannibalize itself.

4. The National Debt will continue to skyrocket and deficit spending will once again increase year-over-year instead of decreasing, causing two more reductions in US credit ratings. The Fed, which has caused the absolutely inevitable skyrocketing inflation rate, will no longer be able to keep interest rates artificially low. The interest rates will jump 7 to 15 points in the next 4 years, causing the US debt service portion of the (unwritten) Budget to explode.

5. Social Security, Medicare, Medicaid, Welfare expenses will reach half the (unwritten) Federal Budget, and beyond, as each work to bankrupt themselves and the US.

6. Religious Liberty will be curtailed as Government forces Christians to either fund that which is immoral or dissolve their outreach programs. Churches will learn they cannot preach on certain subjects without fear of criminal sanctions.

7. Freedom of Speech, Freedom of Assembly, Freedom to peaceably protest the Government will be restricted. Our Second Amendment rights will be severely cut. Our rights against illegal searches and seizures will be infringed upon. The Ninth and Tenth Amendments, largely ignored now, will be blatantly curtailed.

In short, the “shining beacon on the hill” that was the Freedom and Liberty the US provided the world will have its 50,000 watt light removed and replaced with a half-watt red decorative light. The US has spent the last 30 years slipping from apathy into dependence. We are now sinking from dependence back into bondage. And it will take great men and women of steely resolve and moral strength to wrest this once great nation out of the entropic hands of the Socialists and the Dependent Class. And that means fighting both the Democrat leadership and the Ruling Class Republican leadership. Tooth and nail.

Are there enough of them left?

Posted in Character, Conservative, Constitution, Constitution Shredded, economics, Elections, Law, Liberal, Obama, Over-regulation, Personal Responsibility, Philosophy, politically correct, Politically Incorrect, politics, Religion, Socialists, society, Tax, TEA Party, war | Tagged: , , , , , , , , , , , | Comments Off

Dying California Cannibalizes Itself

Posted by John Hitchcock on 2012/11/07

I have written multiple articles chronicling California’s Leftism-caused death throes. Yesterday, Californians, in their great wisdom, have decided to cannibalize themselves, (HT Patterico) devouring whatever healthy parts they had left. As businesses and working families have been fleeing the state for healthier locales, Californians have just finished voting to raise income taxes on the most productive of what’s left, raise corporate tax rates for the businesses which haven’t yet fled, raise sales taxes. Californians have also voted not to curtail Public Employee Union power, that power that has already caused multiple California cities to declare bankruptcy. What does this mean for the once-great state of California? It means more business closures. It means more flight of the producers out of the state. It means less tax revenue for the state. It means higher unemployment, higher poverty rates, more personal and corporate bankruptcies. It means more cities going bankrupt.

And this time, it also means fewer places to run to. Because the next four years will be Sheol for all of the US, as Obama exacts revenge on everyone who stood in his Socialist way (meaning Conservative states and Conservative people) as he unleashes his bureaucrats to write all manner of growth-destroying laws, free of the need to even consult the US Congress.

The next four years are going to be a very bumpy ride for all of us, but never so bumpy as the ride Californians, Illinoisians, Marylanders, New Yorkers are going to take.

Welcome to the Socialist caused Sheol, folks.

Posted in economics, Liberal, Obama, Over-regulation, Personal Responsibility, politically correct, politics, Socialists, society, Tax | Tagged: , , , , , | Comments Off

When Will They Ever Learn? NEVER!

Posted by Yorkshire on 2012/10/30

In March 1962 when I was a young teenager a storm quite like Sandy came up the East Coast of the US and destroyed most of the Barrier Islands in VA, MD, DE and NJ. The storm had no name, but it probably did more damage in today’s money than most East Coast Hurricanes. The storm was simply called the Nor’easter of March, 1962. We had vacationed in Ocean City, MD several summers so I was familiar with the Boardwalk, the pier, and the beaches. At that time, Ocean City only occupied about 4 miles of the Barrier Island from the Inlet (create by the 1933 hurricane) heading north towards DE.

We did go to Ocean City well after the storm to see the damage. A large amount of the houses were gone, or severely damaged. One would think, why do they build these places so vulnerable to Momma Nature. Of course the answer is because they can. To me then I thought having a place on the beach would be great, just rebuild it every 10 to 15 years. Since 1962 there have been numerous summer and winter storms that have taken out structures, towns, small condos, and whatever else man puts up, it will eventually come down at the hands of Momma Nature. (She can be a real bitch like the last few days)

So, since we never learn, we have flood insurance for these fools. Towns, and/or the Corps of Engineer will keep pumping sand onto the beach just to watch it go back out to sea. The storm of Feb 1993 is a good example. The summer before had the beach rebuilt, and in the winter 1993 storm took it away, just to throw it back up there. Some how no one has gotten the hint Momma Nature is in charge of the sand beaches of the Barrier Islands, and not man. But Hubris says NO, we are going to beat you Momma N. No one has ever won that battle.

So Sandy, a CAT 1 hurricane got in with some other characters off VA and turned itself from the warm center hurricane to the cold center Nor’easter because of various natural ingredients (kinda like in the movie The Perfect Storm) and made its own version of I guess the Perfect Storm 2. Man has found out Momma Nature won again, and hubris will make these idiots defy nature and build again.

It was in March 1962 I decided that no matter how inviting a beach front property is, don’t invest in this fool’s gamble.

Posted in economics, history, Personal Responsibility, Real Life | Tagged: , | Comments Off

 
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