Here is my YouTube video with audio on the Yellen’s “substantial recovery” comment. I am trying to learn how to get pictures on the YouTube video, I have been using iMovie from Apple and for some reason I am not able to get the full audio when I insert a picture. Please let me know your thoughts and have a great day.
Janet Yellen testified in front of the Joint Economic Committee on Thursday and said that the U.S economy has “recovered substantially since the great recession.” It is clear that real estate in Manhattan has improved substantially, with regard to substantial improvement for the average citizen, I am not sure if that is the case. The labor participation rate is at a 38 year low, and real median household income is down by 2% since 2009. Another interesting statistic is real median wage according to the Social Security Administration. According to the data provided by the Social Security Administration the median wage in 2008 was $26,514, in 2014 it increased slightly to $28,851. Based on the data there was clearly not a substantial recovery in wages. One would think for a substantial recovery to occur part of the criteria would be wages, apparently not for Janet Yellen.
Another economic metric that is looked at when looking at the health of the economy is the ISM Manufacturing Index. The ISM manufacturing new orders index is down 15 percent since the summer of 2009. This is happening in an environment of zero percent interest rates, and an economy which experienced years of QE. In my view the substantial recovery has occurred for owners of Manhattan real estate, and for large equity holders, not for the common person.
At the United States Capitol building a statue of Dick Cheney was recently added. When Dick Cheney left the office of Vice President he had a 13percent approval rating. Former chief of staff for Secretary of State Colin Powell Lawrence Wilkerson said about Cheney this year, “Dick Cheney ought to be in jail for war crimes.” Richard Clarke who was the top counterterrorism official under President Clinton has also stated that he believes the things Cheney authorized were probably war crimes. We know from the Downing Street Memo that “the intelligence and facts were being fixed around the policy” of invading Iraq. Cheney was one of the individuals involved in the fixing. Vice President Cheney said publicly prior to the Iraq war that there was “no doubt” that Iraq had WMDs. The United States would invade Iraq in March of 2003. Years after the war Cheney has said that he has no regrets about the invasion of Iraq. One academic study suggests that a half a million people have died as the result of the invasion, yet Cheney seems to not be concerned with this.
Cheney has stated publicly that he is fine with torture, and he actually said on Meet the Press that he has no objection to an innocent person dying from torture as long as it their objective is achieved. Waterboarding is not torture in Cheney’s mind as well. Christopher Hitchens actually experienced waterboarding and he wrote that “if waterboarding does not constitute torture, then there is no such thing as torture.”
Vice President Joe Biden was actually at the unveiling of the statue. Given all we know about Dick Cheney, Biden said at the unveiling, “The way you conducted yourself is model for anyone in high public office.” Biden voted for the Iraq war, and he considers Cheney a friend. Biden has declared that he is not running for President, many Democrats actually wanted him to run though. When reading about this it gives more justification to the term Republocrats, hopefully this election a third party can garner a significant amount of votes.
A Congressional Research Service Report found that it costs $179,750 per hour to operate Air Force One, the plane that the President flies in. In 2014 President Obama flew to a number of international destinations. He flew to Mexico, Netherlands, Belgium, Vatican City, Italy, Saudi Arabia, Japan, South Korea, Malaysia, Philippines, Afghanistan, Poland, France, Estonia, United Kingdom, China, Myanmar, and Australia. All of these countries just in 2014.
Presidential travel costs are uncertain because the data is considered confidential. I would be interested to see the reasoning behind this. Why is the receipt from a luxury hotel that the President stays in not able to be disclosed? Especially when President Obama has sent a memo to the heads of executive departments and agencies which starts of by saying “My Administration is committed to creating an unprecedented level of openness in Government.”
According to the Washington Post, when the President went to Africa in 2013 the cost of the trip totaled between $60 million and $100 million dollars. I went on Delta’s website and looked at a flight between Washington D.C. and Beijing, the flight time was 16 and a half hours with a stop in Detroit. Based upon the Congressional Research Service Report we know how much the cost per hour to operate Air Force One is. When you begin to add up all of the hours Air Force One spent in the air just in 2014, those are some very expensive flight expenditures.
When I was researching travel costs I thought of Ron Paul, and what would the travels of Ron Paul be like? My guess is he would probably skip many of the trips that President Obama took and use gotomeeting, or maybe Skype, I think it is just $13.99 for unlimited international calls. In today’s times with technology being what it is I do not see why President Obama has to fly around so much. If Ron Paul did have to fly I could see him flying commercial, probably Delta economy class, and probably using skymiles if he had them haha. He would also probably stay in Best Western type hotels, likely ones that offer a free continental breakfast, not the luxury hotels that President Obama stays at. He would do this because he understands that the government should be one that is frugal, not one that is profligate which President Obama clearly seems to advocate.
President Obama was recently in Europe at a global summit on climate change. The president stated earlier this year that climate change is the greatest threat facing future generations. Marco Rubio has said that he perceives the national debt as being a greater problem. I agree with him on this, I think being the largest debtor in the history of the world will have very detrimental consequences. I tend to side with George Carlin on the environment issue, I have posted a video on a bit he did awhile back, it is really funny and I think it offers a lot of truth.
I been following Marc Faber for a number of years and he is always very insightful. I recently watched an interview that was very interesting. Marc Faber stated in the interview, “most people come out of the universities now days and they have zero skills but lots of student debt.” There is no question many people are hindered by loads of student debt. Marketwatch reported earlier this year that the class of 2015 has the most student debt in history, “the class of 2015 will each graduate with $35,051 in student debt on average.” What makes the excessive debt even more difficult for young people is that they are entering the workforce in a time of stagnant wages or even declining in real terms, and many of the degrees they graduated with are useless.
For example I have a Political Science degree. I could have probably spent my time going to the public library to read books for free on politics as oppose to going to Political Science classes. I may have become more knowledgeable about politics in addition to saving thousands of dollars by doing this. Having a lot of knowledge about Politics as well does not really prepare you for the skills that are needed in the workforce. I do not have any hard data on this to back me up but most jobs in the United States are probably either sales or customer service related, Political Science like many other majors in the social sciences does not prepare you for these sectors of work.
Marc Faber would go on to say in the interview, “The job creation, we have now soon more barmen in the U.S. than people employed in Manufacturing.” I have written on this blog previously that real household income is actually declining, and this statement by Faber would seem to provide some evidence why this has been occurring. Nothing against bartending, I have good friends who either are or were bartenders, and good money can be made in this profession. However, jobs in manufacturing in general have higher wages. On the BLS website it says the mean annual wage for bartenders is $22,620. It also says on the BLS website that in May of 2014 there were an estimated 579,700 bartenders. When I looked at manufacturing jobs on the BLS website it seems as though the manufacturing jobs were fairly scarce. In May of 2014 there were an estimated 10,000 people employed in Aerospace Product and Parts Manufacturing, 9,030 employed in Metalworking and Machinery Manufacturing, and 16,310 in Motor Vehicle Parts Manufacturing. So I think there is some evidence that Faber is correct. So maybe we have a 5 percent unemployment rate, the question needs to be asked though, what are the quality of the jobs that people are working.
Immigration has been a hot topic for both the Republican and Democratic candidates. Donald Trump has brought much attention to the issue due to his belief that the Mexican government should pay for a wall on the United States-Mexican border. I was reading an interesting USA Today article that said “more Mexican immigrants are returning to their home country than coming to the United States.” The report was from the Pew Research Center and said that one of the primary reasons for the net loss was because of the economy.
As I have mentioned previously, real median income in the United States has declined since 2000, while the CPI has increased by over 30%. It seems to me that job opportunities in the United States are on the decline and are not what they once were. I have currently been looking for a job and have been having a lot of difficulty. I have worked for big companies like Visa and Verizon Wireless in the past. I have applied for well over a 100 positions and have only received one job offer. The only company that offered me a job was Macy’s working for $9.00 an hour. I was qualified to work all of the positions as well.
The per capita income in Mexico is less than in the United States. It seems as though this report may indicate that many Mexicans believe there is more economic opportunity in Mexico. I was recently in Guadalajara, which is the second largest city in Mexico. It was a great city to visit, and I highly recommend that people visit there if they get a chance. Almost every day I ate really good street tacos which cost 30 pesos for 4 tacos. You can barely purchase a dr pepper from a convenience store for that in the United States. I stayed at a nice hotel and it cost me $45 dollars a night. Los Angeles is the second largest city in the United States, good luck finding a nice hotel in Los Angeles for $45 dollars. I have heard that you can rent a two bedroom home in Guadalajara for $250.
When I was down there I was thinking of ways to implement geo arbitrage, which is what I believe Tim Ferris calls it. Find a way to run some kind of online business, or work from Skype somehow, while taking advantage of the low cost of living in Guadalajara. Guadalajara is just an example, there are so many other places where geo arbitrage could be implemented. Due to what I perceive as the declining economic opportunity in America, it is likely more Americans will try implementing the geo arbitrage strategy.
The Old Right was an informal group which consisted of men such as Senators Robert Taft and Kenneth Wherry, and congressman Howard Buffett. The Old Right opposed Roosevelt’s New Deal and were advocates of a non interventionist or sometimes called isolationist foreign policy. Howard Buffett would say “We cannot practice might and force abroad and retain freedom at home.” They would oppose NATO and the Marshall Plan. Robert Taft believed that the purpose of the foreign policy should be to protect the liberty of the citizens of the United States. Taft would say, “Nor do I believe we can justify war by our natural desire to bring freedom to others throughout the world.”
When listening to Republican candidates such as Marco Rubio and Carly Fiorina it is apparent that they are essentially the antithesis of the Old Right. The political right in this country will continue to lose elections in my opinion, if they ignore the foreign policy of the Old Right and continue one that is bellicose and interventionist.
Earlier this year on CNBC the Economist Stephen Roach said “We’ve been in a balance sheet recession, and we’re still in it. That’s the bottom line.” Household debt rose in the third quarter of this year to $12.07 trillion according to the New York Fed.
The United States government is the largest debtor in the history of the world and the balance sheets of the citizenry is unfortunately not in the best of positions. The equity side of the balance sheet needs to be built back up. Unfortunately though due to excess debt and falling real median household income over the years, this has bee difficult to do.
A good strategy for a politician to take which I have not heard we be a focus on building up the balance sheets of Americans. I think it may be a good idea for Donald Trump to take this position. If asked what he wants to do to improve the economy he should state, “I want to help Americans build their equity positions.” Reducing taxation would probably be the quickest way to do this. It may be a good strategy to justify the reduction of taxation as a strategy for building equity for the citizenry.
“The abhorrence of the gold standard is inspired by the superstition that omnipotent governments can create wealth out of little scraps of paper.” -Ludwig Von Mises
I reached out to John Talton of the Seattle Times and sent over my thoughts refuting his article on the gold standard that was mentioned in the previous post. He emailed me back and said he found my arguments unconvincing. He also said that he does not have time to debate readers. I kind of wonder why he took the time to even respond to my email then. One would think that an economics columnist for a large newspaper would be able easily think of a few quick reasons why he does not agree,. We will never know why he found my arguments unconvincing.