GayPatriot

The Internet home for American gay conservatives.

Mr. President, enough about the stock market!

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Sorry to repeat myself, but President Trump keeps hitting the idea that the stock market is making new highs and the media should talk about it. I could post video but, just to keep it text-y, here are Twitter examples from the last couple of days:

Aug 1 – Stock Market could hit all-time high (again) 22,000 today. Was 18,000 only 6 months ago on Election Day. Mainstream media seldom mentions!

Jul 31 – Highest Stock Market EVER, best economic numbers in years, unemployment lowest in 17 years, wages raising, border secure, S.C.: No WH chaos!

Big mistake. Why?

  • Candidate Trump understood that the stock market was a Fed-inflated bubble.
  • Candidate Trump understood that the unemployment numbers are fake and disguise the ongoing suffering of Middle America.
  • If President Trump is now tying his reputation to those numbers, what happens when they reverse?

The stock market IS overvalued, and WILL go down eventually, if only for “cyclical” reasons. Maybe down a lot. What happens then?

Consider that Switzerland’s central bank is now a huge holder of U.S. stocks First…Why? Why would they be in the business of propping up the U.S. stock market? Second…What happens when they change their minds, and sell?

The real minimum wage is $0

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A week ago, Zero Hedge reported on a study that Seattle’s minimum wage law is costing workers their income and jobs.

…boosting pay in low-wage jobs by about 3 percent since 2014 but also resulting in a 9 percent reduction in hours worked in such jobs. That resulted in a 6 percent drop in what employers collectively pay…

The report also estimated that there are about 5,000 fewer low-wage jobs in the city than there would have been…

But St. Louis workers face better times. The Missouri legislature passed a pre-emption law to invalidate that city’s hike.

Preemption laws are becoming increasingly popular in GOP-controlled states as cities – typically bastions of liberal sentiment – try to raise minimum wages above statewide minimum levels…

…at least 17 states have preemption laws that stand in the way of local minimum wage legislation, according to a recent study by the National League of Cities…

Sadly, MO Governor Eric Greitens, who is a gun-toting conservative hunk of delicious beefcake, was less-than-bold about it:

Fearing the political backlash…Missouri Gov. Eric Greitens wouldn’t affix his signature to the bill; Missouri’s constitution stipulates that bills that go unsigned by the governor automatically become law.

What happens in general, when wages go up too far, too fast? China has the answer.

Manufacturers, squeezed by rising labor costs and a paucity of skilled workers, are fueling an unprecedented boom in the adoption of automated technologies to cut down on the number of workers needed on factory floors, according to the latest findings of the China Employer-Employee Survey.

Ironically, the Communist Party’s willingness to support unprofitable businesses is compounding problems for Chinese workers, as many manufacturers are barely profitable to begin with.

Remember that video of China’s parcel-sorting robots? Or, closer to home, we could talk about McDonald’s replacing its cashiers with kiosks.

OMG!

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On a fun note…Milo had a Coming Out Conservative event in New York.

YouTube Preview Image

I’m sure GP readers can relate to idea that nowadays, it is MUCH harder to come out as conservative than as gay.

All this time, we’ve been in a Great Depression

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A few weeks back, Michael Snyder at The Economic Collapse blog looked at U.S. GDP growth rates for the ten years 1930-1939 and the ten years 2007-2016. I didn’t verify his numbers but they seem plausible (referring to “real” or inflation-adjusted GDP). Snyder says:

1930: -8.5%
1931: -6.4%
1932: -12.9%
1933: -1.3%
1934: 10.8%
1935: 8.9%
1936: 12.9%
1937: 5.1%
1938: -3.3%
1939: 8.0%

When you average all of those years together, you get an average rate of economic growth of 1.33 percent.

That is really bad, but it is the kind of number that one would expect from “the Great Depression”.

So then I looked up the numbers for the last ten years…

2007: 1.8%
2008: -0.3%
2009: -2.8%
2010: 2.5%
2011: 1.6%
2012: 2.2%
2013: 1.7%
2014: 2.4%
2015: 2.6%
2016: 1.6%

When you average these years together, you get an average rate of economic growth of 1.33 percent.

The same! But wait, averaging them isn’t quite right. For math-y reasons, it’s better to take a starting index value like 100, then apply the growth rates year by year. I did that, and

  • Real GDP grew 10% from 1930-1939.
  • Real GDP grew 14% from 2007-2016.

Still not much difference! The point remains that the last 10 years have been super lame. President Obama was perhaps the first in U.S. history to never have a single year of real GDP growth over 3%.

And it’s possible that Obama’s record was yet worse. Remember, in recent years they’ve been padding the GDP numbers. They directly added nonsense to GDP. They also under-estimate inflation, which artificially boosts the growth estimates.

But for now, let’s stick with official numbers (where Obama’s overall record is nearly as bad as a Great Depression), and pivot to look at unemployment.

You may wonder: if we’ve been in a depression, how could the unemployment rate be down at 5%? The difference from the 1930s is that, in our time, the Establishment (or Political-Financial Complex) has been determined to fool people – to boil the frog (us) slowly, so to speak – and to cover for President Lightworker. Thus,

  • They let him jack the national debt from $10 trillion to $20 trillion. Even a monkey could make GDP seem halfway-OK for 8 years, if you gave him a $10 trillion credit card.
  • They had the central bank (Federal Reserve) conjure trillions of new money from thin air and inject it into the financial markets. It’s chicanery, but people say “At least my home and 401k are up.”
  • And they baked the unemployment statistics. Remember, the official 5% number hides a huge decline in Labor Force Participation, plus full-time jobs being replaced with crappy part-time jobs.
    • If you add back the people who left the labor force in despair these last ten years, real unemployment is 11-12%.
    • And if you add the extra part-timers (assuming they would rather be full-time), it’s even worse.

Depression 2.0 has been with us, all this time. It’s part of why people were so unhappy with Queen Cersei in 2016 (who ran as the Establishment’s poster child).

What does all this bode for President Trump? Probably not well.

  • He’s trimmed back some of Obama’s growth-killing regulations. That will help.
  • And his infrastructure spending may go to productive works (unlike Obama’s 2009 “Porkulus” package), if he can get it passed. He wants to revive American manufacturing, which would be good.
  • BUT, with so much debt on the books and so many Americans expecting handouts, our underlying economic problems are worse than ever.

Trump has inherited a sinking ship. The next recession should be a roller-coaster. If the American Left is krazy and violent now, just you wait.

Then again, maybe our leadership will hit on the solution quickly (a Free Enterprise system with smaller government, Rule of Law, sound money, cutting the Welfare-Warfare State, letting Washington and Wall Street fail, letting Main Street pick up the pieces). And maybe our leadership will use the media skillfully (plus a few well-placed arrests) to transition people’s minds to all that. Don’t tell me I’m dreaming.

OK, I’m dreaming. Time to buy more ammo.

Serving them right

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On certain issues, leftist harping is especially odious. One is the minimum wage.

Anyone who has met a payroll knows that, when higher wages are simply dictated from on high, then employees (or hours or salaries) must be cut back elsewhere – assuming the business can survive at all. It’s math. We’ve seen it before,

Leftists like to deny math and other facts of business and economics. What makes it odious is, they’re also smug about it. It isn’t just their ignorance; it’s their aggressive pride in staying ignorant.

Via HotAir, now a study confirms that San Francisco’s minimum wage does indeed injure the businesses and workers of that city.

San Francisco’s higher minimum wage is causing an increasing number of restaurants to go out of business even before it is fully phased in, a new study by the Harvard Business School found.

The closings were concentrated among struggling, lower-rated restaurants. The higher minimum also caused fewer new restaurants to open, it found.

“We provide suggestive evidence that higher minimum wage increases overall exit rates among restaurants, where a $1 increase in the minimum wage leads to approximately a 4 to 10 percent increase in the likelihood of exit,” report Dara Lee and Michael Luca, authors of “Survival of the Fittest: The Impact of the Minimum Wage on Firm Exit.” The study used as a case study San Francisco, which has an estimated 6,000 restaurants in the Bay Area and is ratcheting up its minimum wage.

So, Nancy Pelosi and her fellow limousine-socialists are looking at fewer restaurant selections for themselves – and more unemployed people. Do they understand that? Or even notice it?

There is only one time when the minimum wage doesn’t hurt employment: When it’s low enough, in real terms, to be ineffectual. For example, if we have a period of inflation – and no minimum wage increases – then its real value will go down, and employers can afford to hire the low-end workers again. But the higher the minimum wage is, in real terms: the more low-end workers can’t get work.

Post-Trump

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Good article from David Harsanyi, Democrats Have Only Themselves To Blame For Trump. A taste:

In all their vast coverage of agitated right-wingers, it may have escaped the attention of many in the media that over the past eight years the Democratic Party has moved dramatically to the left on an array of issues. It’s now a party of cultural imperialists and economic technocrats who want to rule through fiat. It is a party more comfortable coercing Americans who see the world differently than in convincing them. It is a movement propelled by a liberal punditry that’s stopped debating and resorted to smearing millions they disagree with.

And now, I’ll venture two predictions.

First, Hillary is done. You could say she’s young enough to run again. I say that she’s been hiding serious health issues (perhaps a contributing reason for the 10-hour delay in her concession speech). And under President Trump, she’ll be facing investigation for her long-standing corruption. Her balance of incentives will have shifted: it will be better for her to try to gain public sympathy, by playing the Brave Victim of Harrowing Illness. Which, shock of shocks, might even be somewhat truthful of her.

Next, media coverage of the economy will turn very negative. The economy has been quite poor for the last 8 years. The real unemployment rate, for example, is over 11%; not 4.9% as reported officially. The discrepancy arises from the MASSIVE drop in “labor force participation”, under President Obama. During his 8 years, tens of millions of Americans have given up even looking for a job. And once they stop looking, yup, they no longer count as unemployed.

That’s a scandal. And the media had zero interest in looking into it, because the answers would have reflected badly on Obama and Hillary. But, because (and only because) Trump will be President, the media will now discover this scandal and change their tune.

Another example: The economists and statisticians, I predict, will discover that the U.S. economy is in a recession. Not because the economy gets so much worse under Trump (although it might at first, if the current market-bubbles pop). Rather, because the economy has already been in a recession or close to it; and in order to nail President Trump, government-funded statisticians and talkers will now want to emphasize the bad. (Where before, they wanted to mask it.)

Mind you, these predictions might not happen tomorrow. Give me, say, up to a year.

Your predictions?

UPDATE – Made me laugh: John Ziegler of Mediaite thinks the reason Hillary lost is… because the media wasn’t enough on her side as they should have been. Yup. That’s what his stupid non-argument boils down to.

The Obamacomony

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The size of the U.S. deficit isn’t the only thing they lie about. Unemployment is another.

Last week, The New York Times trumpeted, Jobs Roar Back With Gain of 287,000 in June, Easing Worry, with the official unemployment rate at 4.9%. Isn’t it wonderful?

“Wow, this one takes my breath away,” said Diane Swonk, an independent economist in Chicago.

Ooh, she’s “independent” – that makes her reaction valid! But here’s the real story.

  • The same jobs report has downward-revised the previous months’ numbers (from bad to horrible).
  • In the Bush years, the media would treat a jobs number in the 200k range as a crisis.
  • The Obama so-called “recovery” is the Weakest. On. Record.
  • Most of the jobs created in the Obama years, including the recent jobs report, are part-time and low-paying.
  • In the Obama years, tens of millions of Americans have given up even hoping for a job. “Labor force participation” has plummeted to lows not seen since the 1970s.
  • If we use the participation rate from early 2009 when Obama took office, the unemployment rate is 11%. (And that’s ignoring under-employment / the part-time jobs.)
  • And no, the declining participation isn’t because “the Baby Boomers are retiring”. They’re not retiring. Under Obama, they can’t afford it. They’ve been coming out of retirement, to take those low-paying, part-time Obamajobs from young people.
  • Young people face a crisis; many can’t get an entry-level job.

Perhaps this is why President Obama has the highest U.S. suicide rate in 30 years.

Newsflash: Higher wages don’t come for free

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Business 101: When paying an employee, you have to pay in line with their productivity.

  • If you underpay, you lose the employee.
  • If you overpay, you run up losses and lose your business.
  • If you raise the hourly wage, you must get more from each employee hour – and you must cut the hours/employees that won’t or can’t rise to the new, higher bar.

You may have seen the following last week, but I didn’t want to let it pass without comment. After raising wages over the last 18 months, Starbucks and its employees have been learning some lessons the hard way:

An online petition accus[es] Starbucks Corp of “extreme” cutbacks in work hours at its U.S. cafes…

[Starbucks] recently introduced technology that allows customers to order and pay from mobile devices. That service aims to…reduce bottlenecks in stores. [ed: reducing the number of employees needed per shift]

Starbucks has a software system that determines labor needs based on business trends…
Comments on the petition painted a picture of broad discontent at the company…
…many signers say they noticed cutbacks in U.S. staffing hours…
One central California store has seen its labor allotment shrunk by about 10 percent, even though sales are up…
“No matter what we do to save on labor at my store, the system tells us EVERY SINGLE DAY that we are at least 8 hours over in labor for the day and have to cut even more,” wrote [a petition] signer…

Like other restaurants and retail companies, Starbucks is wrestling with the effects of local minimum wage increases…tipping has fallen substantially amid broad customer adoption of the “Starbucks Rewards” program, which allows customers to pay with a loyalty card or mobile phones.

Suppose Starbucks gives in and boosts employee hours (arbitrarily; without a matching, widespread sales & productivity gain). What happens then? Operating budget overruns and closing stores. And/or price increases, declining sales, and closing stores. Perhaps eventually, a closing company. Thanks, Blue State lefties!

UPDATE: This oldie from The Guardian in 2014 may help us to see the problem:

[Read more…]

Because we can’t let Seattle beat us

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Follow-up to V’s post on Seattle, last week the California Senate voted to destroy entry-level jobs:

The state Senate on Thursday approved a measure that would gradually raise the minimum wage in California from the current $8 an hour to $13 in 2017, despite warnings from the California Chamber of Commerce that the bill is a “job killer.”

Warning: Gay Left politicians at work!

Sen. Mark Leno (D-San Francisco) said his bill is necessary to help lift many of the 7.9 million Californians being paid minimum wage out of poverty. “Income inequality has been spoken of by our president as the defining challenge of our time,” Leno told his colleagues.

He said the current minimum wage is so low it allows many who receive it to get public assistance. “It is our tax dollars that are subsidizing the largest corporations paying these poverty wages.” Leno said. No other state has a minimum wage of $13 an hour…

Related: Calif. Senate votes to reduce penalties for sale of crack cocaine

The “Related” was added by the LA Times (when I pasted the text). Fitting, isn’t it? Because the measure would actually keep poor Californians in poverty, increase inequality, and push more people onto public assistance. Is that Leno’s real goal?

And Chicago also wants a $15/hr minimum wage. It’s trendy.

But not trendy enough for the Swiss: in May, they rejected a high minimum wage by a huge margin. (The Swiss proposal would have been $25/hr by exchange rates, or $14 by PPP adjustment.)

Obama’s daily lawlessness

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On Wednesday, V noted how President Obama set aside his own Obamacare law and decreed a delay to the “individual mandate”. (The mandate that he previously told the Supreme Court was an absolutely essential part of Obamacare.)

Thursday’s example was Obama’s plan to decree overtime pay for some 10 million who had willingly been working without it, because they are salaried employees.

It’s not a good thing. First of all, anytime the government mandates pay increases, it costs real people their jobs. While some people might get more pay, others’ pay goes to part-time, or to zero. When Obama proposed his minimum wage hike last month, even the Congressional Budget Office (CBO) agreed that it would cost 500,000 jobs.

But the deeper problem is that, in Barack H. Obama, we have a President who increasingly abandons constitutional, legislative and democratic processes. Throughout his administration, in issue after issue, he has declared that the rules are now different because he says so. Whether it’s ripping off honest GM bondholders, Fast and Furious, hiding information about corrupt federal prosecutors, Obamacare or countless other issues, you never can tell when this President will suddenly decide on different rules.

With this overtime change, there is serious debate about whether the President has the legal authority to do it. Some say he doesn’t; some say he does. But that means his move is dubious. And however that might be – and I say, even worse – Obama’s move makes the government interfere, once again, in arrangements that freely consenting adults had agreed on. (Liberals may want government out of the bedroom, but boy, do they want government in everything, everyone and everywhere else.)

This is one more, little thread in the tapestry of America’s decline: we have become a nation ruled by “men, not laws.” And if you think that arbitrary government doesn’t make for an atmosphere of fear and uncertainty that stifles the economy, think again.

UPDATE: Allahpundit has video, as he puts it, of Obama “in 2008 promising to roll back Bush’s executive overreach because he was a law professor and knew the Constitution ‘n stuff.”.

Rep. Trey Gowdy gives an appropriate response.