Dallas Fed President Richard Fisher told CNBC that he's worried the U.S. central bank is in a "Hotel California" type of monetary policy because of its "engorged balance sheet." Evoking lyrics from the famous song by The Eagles, he said he feared the Fed would be able to "check out anytime you like, but never leave."No Exit Strategy
Fisher said on "Squawk Box" that he argued against revealing the new inflation and unemployment targets set by the Fed this week, saying he's worried that the markets will become "overly concerned" with the thresholds.
Fisher would not comment on any contingency plans at the Fed should Republicans and President Barack Obama fail to strike a deal to prevent the automatic tax increases and spending cuts from taking effect in the new year.
"What you see is what you get here," Fisher said. "We have a hyper-accommodative monetary policy here ... cheap and abundant money that the Fed has made widely available."
Recall when the Fed pretended it was working on an exit strategy to reduce its balance sheet at the appropriate time?Unfortunately, the average Joe on the street has no idea what is happening at all, and one of the reasons is mainstream media is often devoid of rational thinking.
It was a lie then and it's an even bigger, more apparent lie now (which is why you no longer hear Bernanke mentioning it) . The simple fact of the matter is that every Fed asset purchase makes it more difficult to exit.
When interest rates do start to tick up (which could be a while based on Fed statements), interest on the national debt would soar if the Fed unloaded treasuries. Likewise, mortgage rates would soar if the Fed unloaded agencies at a time interest rates were creeping up.
There never was an exit strategy and there never will be one.
Gérard Depardieu, one of France’s best-known actors, has been accused by the country’s Socialist government of lacking patriotism after he moved to Belgium apparently in a bid to avoid the taxes for which France is also renowned.California vs. France
On Wednesday, Prime Minister Jean-Marc Ayrault weighed in, calling Mr. Depardieu’s choice “rather pathetic.”
“He’s a great star, everyone loves him as an artist,” Mr. Ayrault told the France 2 television channel on Wednesday, but “to pay a tax is an act of solidarity, a patriotic act.”
To reduce the budget deficit and the country’s debt, Mr. Hollande has put in place a 75 percent marginal tax rate for incomes above 1 million euros, or $1.3 million — a largely symbolic measure that will affect only a few thousand individuals, he has said — and has announced additional taxes that are expected to raise 20 billion euros next year.
Residents [in Belgium] pay no wealth tax and no capital gains tax on stock sales. In France, residents are required to pay a 0.25 percent wealth tax on assets valued at more than 1.3 million euros; those with more than 3 million euros in assets pay twice that.
Mr. Depardieu will by no means be the only Frenchman in Néchin, where he has reportedly bought a home. Néchin’s mayor, Daniel Senesael, told the French news media that 27 percent of residents are French.
Bernard Arnault, the billionaire chief executive of the luxury group LVMH, was pilloried in the news media in September when it was revealed that he had requested Belgian citizenship.
Mr. Arnault said the request was not for tax purposes, but the left-leaning newspaper Libération featured a front-page headline that read, in polite translation, “Beat it, rich jerk!” (LVMH promptly pulled its advertising from the newspaper and Mr. Arnault filed a lawsuit charging the paper with public insult.)
On Tuesday, the newspaper featured Mr. Depardieu on its front page, along with an editorial deploring his “absence of moral sense” and insisting that the flight of the rich represents “a danger for democracy and solidarity.”
Chrysler Group LLC says it was forced to reinstate 13 workers who were fired from its Jefferson North Assembly Plant two years ago after being filmed by a local television station drinking and smoking what the network suggested was a controlled substance before and during work.Questioning "Conclusive Evidence"
"The workers followed the grievance procedure process outlined in the collective bargaining agreement between Chrysler and the United Auto Workers. The company denied all of the grievances, leading us to arbitrate the matter," wrote Scott Garberding, vice president of manufacturing at Chrysler, on a company blog Monday. "After more than two years, an arbitrator decided in the workers' favor, citing insufficient conclusive evidence to uphold the dismissals. This was a decision that Chrysler Group does not agree with."
The proposed Michigan "right-to-work" law will not apply to existing union contracts, a leading sponsor of the proposal said on Friday, which may blunt its immediate impact on the huge auto industry in the state.Step in Right Direction
Michigan Republicans pushed through the state legislature on Thursday a law making the payment of union dues voluntary in the private sector. The state Senate also voted to apply this to the public sector except for police and fire unions.
Republican lawmakers, who hold majorities in both chambers of the legislature, could give final approval to the laws on Tuesday and Republican Governor Rick Snyder could immediately sign them, Amber McCann, spokeswoman for state Senate Majority Leader Richard Richardville, said on Friday.
"Right-to-work" could be signed into law within a week in the cradle of the U.S. auto industry, a stunning blow to organized labor in the United States.
The law would actually take effect at the end of March, Richardville said on Thursday.
Hello Mish,Collective Bargaining neither a Privilege nor a Right
I am a regular reader of your blog. I appreciate the candid and insightful analysis you provide concerning today's turbulent economic times.
I'm writing because I have a bit of a problem. I am a grade 8 teacher in Ontario, Canada. The ETFO (elementary teacher's federation of Ontario) will be participating in a series of one day strikes over the next few weeks to protest Bill 115 (the bill basically ends collective bargaining and public union right to strike).
I will not be participating (Bill 115 seems good to me). That means crossing the line when the strike actually happens (next week). As you can imagine, the heat is on, including threats to be fined $500 for every day I do not participate.
Some of my colleagues have come to me privately and admire the stance I'm taking, but will not admit so publicly. I was wondering, could you send me some more arguments I could use for the "discussions" I'll be having over the next few weeks?
I've already outlined how collective bargaining isn't a right, how I'd be happy to negotiate my own contract, and how our union has helped bankrupt the province.
Perhaps send me some links to earlier articles you wrote on the subject, etc.
Would greatly appreciate the help, because the flames are rising and I need more extinguishers.
Five Ways Collective Bargaining Tramples Various Unalienable RightsCollective Bargaining vs. Company Store
- Collective bargaining agreements take away the right of individuals to pursue a career of their dreams void of union affiliation
- Collective bargaining agreements force individuals into organizations against the free will of those members
- Collective bargaining agreements force union dues out of members who do not even want to belong
- Collective bargaining agreements dictate what members can and cannot do with their free time.
- Collective bargaining agreements even dictate what non-members can and cannot do with their free time!
Example of Point Number Four
Union firefighters are frequently prohibited from being volunteer fire department workers for their city.
Example of Point Number Five
Union rules prohibit volunteers from helping schools paint, trim shrubbery, answer phones, clean blackboards, etc. The absurdity of such pro-union, anti-taxpayer arrangements should be self-evident.
Right to Pursue Happiness
Unions have no right to deprive others of their "unalienable right" to pursue happiness.
If it makes people happy to volunteer time, that "unalienable right" must not be stripped away by unions or politicians and their self-serving goals.
The alleged collective bargaining "rights" of unions were attained over the years via tactics of coercion, bribery, fear-mongering, and vote-buying. Regardless of how attained, even in good-faith, politicians have no right to take away "unalienable Rights".
Unions insist they won the rights to collective bargaining through negotiation. That is as impossible as whites negotiating rights to own blacks or to tell blacks where they can sit on a bus.
There is no right or even privilege that can make people slaves. There is no right or privilege to tell people what they can or cannot do with their free time. There is no right or privilege to collect dues from members forced into an organization against their will. There is no right or privilege that can force someone into a union, otherwise stripping them of the ability to pursue the career of their dreams.
The Issue is Unalienable Rights
Rights of unions must not and cannot be allowed to interfere on the rights of others to NOT belong to a union and to NOT pay union dues if they do not want to.
For more on the slavery aspect of public unions and collective bargaining advocates, please see Paul Krugman, Stephen Colbert, Bill Maher, others, Ignore Extortion, Bribery, Coercion, and Slavery; No One Should Own You!
Right-to-Work is an Unalienable Right
The "right-to-work" is an unalienable right. Unfortunately, Paul Krugman, Stephen Colbert, Bill Maher, Michael Moore and countless others ignore the slavery aspect of this debate because it happens to suit their political goals.
Suppose you own a profitable, legal in all 50 states, business and want to expand or reorganize your operations.Fundamental Rights
Now let's suppose that someone came up to you and said "Sorry boys, but you cannot do what you want with your business. You cannot go anywhere you please. See those balls and chains on your feet, boy? I have the key and I say you are staying right here. I am the slave master and don't you forget it."
That is exactly what President Obama said to Boeing, or rather a the labor relations board appointed by president Obama said to Boeing.
U.S. small-business owners expect to add fewer net new jobs over the next 12 months than at any time since the depths of the 2008-2009 recession, according to this November's Wells Fargo/Gallup Small Business Index survey. Small-business owners' net hiring intentions for the next 12 months plunged to -4 in November, down from +10 in July and matching the previous record low recorded by the Wells Fargo/Small Business Index of -4 in November 2008.Not Sandy, Not Fiscal Cliff
Historically, net hiring intentions have tended to be very positive, with small-business owners expecting to grow and hire more new employees than they will let go over the next 12 months. In good economic years, net hiring intentions have been in the double-digits. This has not been the case since the recession and financial crisis in 2008-2009 with net hiring intentions reaching a low of -4 in November 2008. There was considerable improvement in small-business owners' hiring expectations during much of 2012, prior to the recent November plunge, but now expectations have deteriorated to tie the low recorded in 2008.
In November, 21% of owners say they expect to decrease jobs at their companies over the next 12 months, the most recorded on this measure since the inception of the Wells Fargo/Gallup Small Business Index in August 2003. At the same time, 17% of small-business owners say they expect to increase the number of jobs or positions at their companies, down from 20% in July of this year and the lowest level measured since November 2011.
Owners' Net Hiring Down Over Past 12 Months
In addition to asking about future hiring intentions, the survey also asks small-business owners to report on hiring over the past 12 months. In November, more small-business owners reported decreasing the number of employees (26%) than increasing (14%), resulting in a net hiring score of -12. That is down from -7 in July and -9 in the prior three quarterly measurements. Net hiring over the past 12 months is about where it was in July 2011, at -11. This lack of improvement in small-business owners' self-reported hiring helps explain why too few new jobs have been created during much of 2012 to significantly lower the U.S. unemployment rate.
That net hiring expectations at the nation's small businesses have declined to levels last seen in late 2008 is reason for concern. Such low net hiring expectations were followed by massive layoffs in early 2009. While a repeat of that experience seems unlikely in 2013, there is the potential for a serious decline in jobs early next year if small-business owners' hiring intentions do not improve.
Whether the pessimism of the nation's small-business owners is due to the fiscal cliff, Superstorm Sandy, the election, or some combination of these factors, the U.S. economy remains weak and unemployment remains high from a historical perspective. A further sharp increase in small-business layoffs, resulting in higher unemployment on top of the current economic conditions, could turn today's slow growing U.S. economy into something worse.
House Speaker John Boehner’s proposal to generate $800 billion in new revenue “will destroy American jobs” and Republicans should oppose it, Senator Jim DeMint of South Carolina said today.Boehner's Plan Dead-on-Arrival
The comments from DeMint, co-founder of the Senate’s anti- tax Tea Party caucus, represent a strong indictment of Boehner’s plan from a fellow Republican lawmaker. Boehner yesterday proposed a $2.2 trillion deficit-cutting plan that seeks $800 billion in revenue in the next decade from an overhaul of the tax code that would curb some breaks.
“Speaker Boehner’s $800 billion tax hike will destroy American jobs and allow politicians in Washington to spend even more, while not reducing our $16 trillion debt by a single penny,” DeMint said in a statement. “Republicans must oppose tax increases and insist on real spending reductions that shrink the size of government and allow Americans to keep more of their hard-earned money.”
Other Republicans back Boehner’s offer including House Majority Leader Eric Cantor of Virginia, Budget Committee Chairman Paul Ryan of Wisconsin, and Senate Majority Leader Mitch McConnell of Kentucky.
The proportion of U.S. student loan balances that are in delinquency — that is, unpaid for 90 days or more — surpassed that of credit-card balances in the third quarter for the first time, according to the Federal Reserve Bank of New York. [no link provided]37.5% of Graduates Work in Jobs Requiring No Degree
Of the $956 billion in student-loan debt outstanding as of September, 11 percent was delinquent — up from less than 9 percent in the second quarter, and higher than the 10.5 percent of credit-card debt, which was delinquent in the third quarter. By comparison, delinquency rates on mortgages, home-equity lines of credit and auto loans stood at 5.9 percent, 4.9 percent, and 4.3 percent respectively as of September.
Since the NY Fed’s data began in 2003, the share of student debt which is delinquent has nearly doubled, from a starting level of 6.13 percent, while credit-card delinquency has steadily drifted lower since peaking at 13.74 percent in mid-2010 in the wake of the financial crisis.
Moreover, the actual rate of student loan delinquency is far higher than the official tally suggests. According to the New York Fed [no link provided], “these delinquency rates for student loans are likely to understate actual delinquency rates because almost half of these loans are currently in deferment, in grace periods or in forbearance and therefore temporarily not in the repayment cycle.”
In other words, the real delinquency rate for loans in the current repayment cycle is “roughly twice as high,” per the Fed — which would put it north of 20 percent.
Some People Do Not Belong in CollegeWhenever government sticks its neck into solutions, costs escalate. We saw it in housing, with hundreds of affordable home programs artificially increasing demand, and with Bush's "Ownership Society" artificially increasing demand, etc., etc. We see the same thing now in health care.
Pelletier perpetuates the myth everyone belongs in college. Many don't. Arguably at least half don't. In Portland Oregon, ACT scores show less than half of test-takers are ready for college math
Pray tell what good is a degree in English, history, PE, or political science other than teaching English, history, PE, or political science? And how many of those teaching jobs are even available?
Yet colleges churn out thousands of graduates, year after year, with perfectly useless degrees.
President Obama promotes education as the answer to the unemployment problem. Other presidents have done the same thing. However, throwing money at the problem has done nothing but raise the cost of education for everyone, leaving many graduates debt-slaves for life, with totally useless degrees.
Eighty percent of the manufacturing companies in the United States say they cannot find enough workers with the proper skills to fill open positions at their facilities. That's the number President Barack Obama cited, as he announced the Military-to-Civilian Skills Certification Program, in June 2012.Skills Don't Pay the Bills
"If you can maintain the most advanced weapons in the world, if you're an electrician on a Navy ship, well, you can manufacture the next generation of advanced technology in our factories like this one," Obama said, speaking from the floor of a Honeywell plant in Minnesota.
But the problem is that veterans have had trouble getting hired, as Obama said, "simply because they don't have the civilian licenses or certifications that a lot of companies require."
Nearly six million factory jobs, almost a third of the entire manufacturing industry, have disappeared since 2000. And while many of these jobs were lost to competition with low-wage countries, even more vanished because of computer-driven machinery that can do the work of 10, or in some cases, 100 workers. Those jobs are not coming back, but many believe that the industry’s future (and, to some extent, the future of the American economy) lies in training a new generation for highly skilled manufacturing jobs — the ones that require people who know how to run the computer that runs the machine.Situation in a Nutshell
Running these machines requires a basic understanding of metallurgy, physics, chemistry, pneumatics, electrical wiring and computer code. It also requires a worker with the ability to figure out what’s going on when the machine isn’t working properly. And aspiring workers often need to spend a considerable amount of time and money taking classes like Goldenberg’s to even be considered. Every one of Goldenberg’s students, he says, will probably have a job for as long as he or she wants one.
And yet, even as classes like Goldenberg’s are filled to capacity all over America, hundreds of thousands of U.S. factories are starving for skilled workers. Throughout the campaign, President Obama lamented the so-called skills gap and referenced a study claiming that nearly 80 percent of manufacturers have jobs they can’t fill. Mitt Romney made similar claims. The National Association of Manufacturers estimates that there are roughly 600,000 jobs available for whoever has the right set of advanced skills.
The secret behind this skills gap is that it’s not a skills gap at all. I spoke to several other factory managers who also confessed that they had a hard time recruiting in-demand workers for $10-an-hour jobs. “It’s hard not to break out laughing,” says Mark Price, a labor economist at the Keystone Research Center, referring to manufacturers complaining about the shortage of skilled workers. “If there’s a skill shortage, there has to be rises in wages,” he says. “It’s basic economics.” After all, according to supply and demand, a shortage of workers with valuable skills should push wages up. Yet according to the Bureau of Labor Statistics, the number of skilled jobs has fallen and so have their wages.
Goldenberg, who has taught for more than 20 years, is already seeing it up close. Few of his top students want to work in factories for current wages.
It’s easy to understand every perspective in this drama. Manufacturers, who face increasing competition from low-wage countries, feel they can’t afford to pay higher wages. Potential workers choose more promising career paths. “It’s individually rational,” says Howard Wial, an economist at the Brookings Institution who specializes in manufacturing employment.
(An important interview) Saving the Net from the surveillance state (And Crony Media): Glenn Greenwald speaks up (Q&A) | Nick Sorrentino