Timely message for Nova Scotia

It's not too late... yet.

How Unions Hijacked the Ohio Economy.

"The Occupiers are right when they say our system of wealth redistribution is broken"

"But they’re wrong about what broke it."

Margaret Wente (Globe and Mail) hits the ball out of the park and over the parking lot into freeway traffic.

The richest 1 per cent are not exactly starving out the working poor.... The problem is, our system redistributes the wealth from young to old, and from middle-class workers in the private sector to inefficient and expensive unions in the public sector.

Among the biggest beneficiaries of this redistribution is the higher-education industry. In Canada, we subsidize it directly. In the U.S., it’s subsidized by a vast system of student loans, which have allowed colleges to jack up tuition to sky-high levels. U.S. student debt has hit the trillion-dollar mark. Both systems crank out too many sociologists and too few mechanical engineers. These days, even law-school graduates are having trouble finding work. That’s because the supply has increased far faster than the demand.

The voices of Occupy Wall Street, argues Mr. Anderson and others, are the voices of the downwardly mobile who are acutely aware of their threatened social status and need someone to blame. These are people who weren’t interested in just any white-collar work. They wanted to do transformational, world-saving work – which would presumably be underwritten by taxing the rich. They now face the worst job market in a generation. But their predicament is at least in part of their own making. And none of the solutions they propose will address their problem.

Do send Wente's article to all the high school and university students you know, for economic lessons are much too painful to be learned through hindsight alone.

The coming generation(s) of potential workers must be taught the fundamental economic concept of labour value. Not all labour is of equal value, and the value of labour is variable, affected mainly by supply and demand.

The number one priority after high school is not to party and have a good time or to pip off to college or uni to get out from your parents' home. No, the number one priority is to obtain training in skills that are valuable to individuals and businesses -- aka The Market -- thus increasing the odds of finding gainful employment with an income level sufficient for sustaining oneself and (potentially) a family.

Get that single priority mixed up and you will likely wind up highly indebted and working low pay jobs, or worse, not working at all and living in a tent in downtown Toronto or Vancouver illogically complaining about how "the man" has robbed you of your future.

What does this mean in reality? It means you need to consider studying fields like mathematics, business, engineering, medicine and computer science, or pursuing specialization is particular trades, such as plumbing, construction, electrical, welding, etc. so that you have a footing of knowledge and skill that lines up with demand today and is more likely to line up with demand for the foreseeable future. It means putting educational dollars to work today to increase the odds generating income so that, should you choose to do so, you can finance a feel-good period of study that does not generate income later in life... AFTER you are earning income.

The lie at the heart of higher education is that you will be paid for effort alone, that you will earn big money because you did the work of completing a degree. The world just doesn't work that way. The world pays those whose knowledge and expertise bring value to the consumer and enable them to make money more efficiently.

H/T 

Update 15:30: "And if you have any intention of building up a political case for bailing out your bad decisions, you might start with taking even one percent responsibility for them." Burn.

The greedy anti-greedy

"Occupy Wall Street" is going global.

The irony of "anti-greed protestors" demanding that the state use policy to close the gap between the rich and the poor would be amusing, if not downright hilarious, were it not so ill-conceived, short-sighted and dangerous.

Capital, not aid

When it comes to laying groundwork for economic growth and stability, international aid (money for nothing) has "as many negative, unintended effects as positive ones."

Much of the [U.S. Afghanistan] aid effort was premised on the assumption that development would foster stability. Young men with jobs wouldn't plant roadside bombs. Communities with growing economies would reject the Taliban. This assumption was based on the modern prejudice that bad behavior has material roots. Give people money and jobs and you will improve their character and behavior.

In Afghanistan, as elsewhere, this assumption seems not to be true. A conference of experts brought together last year in Wilton Park in Britain concluded that there is a "surprisingly weak evidence base for the effectiveness of aid in promoting stabilization and security objectives" in Afghanistan.

Violence doesn't stem from poverty. It stems from grudges, tribal dynamics and religious fanaticism — none of which can be ameliorated by building new roads. The poorest parts of the country are not the most violent.

Meanwhile, the influx of aid has, in many cases, created dependency, fed corruption, contributed to insecurity and undermined the host government's capacity to oversee sustainable programs.

Yet there are glimmers of hope.

Symbiotic Parasite Host Relationship Model

The Captain breaks down Economics 101 so low even a five-year-old can understand it.

Symbiosis aside, the key thing is the SPHRM is correct in that it puts the horse before the cart. Therefore if you want job creation, guess what?

Yep, I'm sorry, that means you have to grow the private sector.

See, there is no public sector if there is no private sector because the private sector is the host the public sector needs. But if you look at how public sector has been crowding out the private sector you are seeing a parasite that has gone form just 3% the size of the host to now 40% (the chart below just shows federal spending, not state).

The host is frankly going into shock and dying. [...]

If you want jobs you have to grow the private sector. Which means doing things like;

1. ELIMINATING (not cut) ELIMINATING corporate taxes and BANNING THEM FOREVER
2. ELIMINATING (not cut) any form of capital gains or dividend taxes
3. Simplify the tax code.
4. Put limits on how large the parasite can grow as a percent of the economy
5. Scale down the size of the parasite itself so that the host may grow again