Best of the Week
Most Popular
1. Crude Oil Price Trend Forecast - Saudi's Want $100 for ARAMCO Stock IPO - Nadeem_Walayat
2.Gold Price Focusing on May Cycle Bottom - Jim_Curry
3.Silver, silver, and silver! There’s More Than Silver, People! - P_Radomski_CFA
4.Is the Malaysian Economy a Potemkin Village - Sam_Chee_Kong
5.Stock Market Study Shows Why You Shouldn’t “Sell in May and Go Away” - Troy_Bombardia
6.A Big Stock Market Shock is About to Start - Martin C
7.A Long Term Gold Very Unpopular View - Rambus_Chartology
8.Stock Market “Sell in May and go away” Study When Stocks Are Down YTD - Troy_Bombardia
9.Global Currency RESET Challenge: Ultimate Twist - Jim_Willie_CB
10.The Coming Silver Supply Crunch Is Worse Than You Know - Jeff Clark
Last 7 days
The Corruption of Capitalism - 17th Jun 18
North Korea, Trade Wars, Precious Metals and Bitcoin - 17th Jun 18
Climate Change and Fish Stocks – Burning Oxygen! - 17th Jun 18
A $1,180 Ticket to NEW Trading Opportunities, FREE! - 16th Jun 18
Gold Bullish on Fed Interest Rate Hike - 16th Jun 18
Respite for Bitcoin Traders Might Be Deceptive - 16th Jun 18
The Euro Crashed Yesterday. Bearish for Euro and Bullish for USD - 15th Jun 18
Inflation Trade, in Progress Since Gold Kicked it Off - 15th Jun 18
Can Saudi Arabia Prevent The Next Oil Shock? - 15th Jun 18
The Biggest Online Gambling Companies - 15th Jun 18
Powell's Excess Reserve Change and Gold - 15th Jun 18
Is This a Big Sign of a Big Stock Market Turn? - 15th Jun 18
Will Italy Sink the EU and Boost Gold? - 15th Jun 18
Bumper Crash! Land Rover Discovery Sport vs Audi - 15th Jun 18
Stock Market Topping Pattern or Just Pause Before Going Higher? - 14th Jun 18
Is the ECB Ending QE a Good Thing? Markets Think So - 14th Jun 18
Yield Curve Continues to Flatten. A Bullish Sign for the Stock Market - 14th Jun 18
How Online Gambling has Impacted the Economy - 14th Jun 18
Crude Oil Price Targeting $58 ppb Before Finding Support - 14th Jun 18
Stock Market Near Another Top? - 14th Jun 18
Thorpe Park REAL Walking Dead Living Nightmare Zombie Car Park Ride Experience! - 14th Jun 18
More on that Gold and Silver Ratio 'Deviant Conundrum' - 13th Jun 18
Silver Shares? Nobody Cares - 13th Jun 18
What Happens to Stocks, Forex, Commodities, and Bonds When the Fed Hikes Rates - 13th Jun 18
Gold and Silver Price Setting Up for A Sleeper Breakout - 13th Jun 18
Tesla Stock Analysis - 12th Jun 18
What Happens Next to Stocks when Russell Goes up 6 Weeks in a Row - 12th Jun 18
Gold vs. Stocks: Ratios Do Not Imply Correlation - 12th Jun 18
Silver’s Not-so-subtle Outperformance - 12th Jun 18
Why You Should Brace Yourself for Big Financial Changes - 11th Jun 18
Inflation to Skyrocket When Fed Reverts to New QE & Interest Rate Cuts - 11th Jun 18
Stock Market Topping Pattern or Just Consolidation? - 11th Jun 18
Study: What Happens Next to Stocks When the Put/Call Ratio is Very Low - 11th Jun 18
G7 Chaos, Central Banks and US Fed Will Drive Stock Prices This Week - 11th Jun 18
SPX Unshackled - 11th Jun 18
When Trump Met Fibonacci And Won - 11th Jun 18
FREE Theme Park Entry with Cadbury's Choc's! Legoland, Alton Towers, Chessington.... - 11th Jun 18
Stock Market Could Pullback for 1-2 weeks, But Medium Term Bullish - 10th Jun 18
End of the World Stock Market Chart! - 10th Jun 18
All US Homes Are Overvalued - 10th Jun 18
Thorpe Theme Park London Car Park Exit Nightmare - Drivers Beware! - 10th Jun 18
Gold Price Summer Doldrums - 9th Jun 18
How to Prepare for Economic Uncertainty with Gold and Silver - 9th Jun 18
5 "Tells" that the Stock Markets Are About to Reverse - 9th Jun 18
Billionaire Schools Teacher in NAFTA Trade Talks - 9th Jun 18
Land Rover Discovery Sport ECO Mode Real World Driving MPG Fuel Economy - 9th Jun 18
Crude Oil Bullish Weekly Reversal vs. Bearish Monthly Reversal - 8th Jun 18
Fed’s Interest Rate Hike is Short term Bearish for Stocks - 8th Jun 18
The Deviant Conundrum Called Silver - 8th Jun 18
Pleasure Island Theme Park Cleethorpes, Last Day Trip Before it Closed Down - 8th Jun 18
America’s One-sided Domestic Financial War - 8th Jun 18
Debt Consolidation Advice: When and Why to Consolidate - 8th Jun 18
Get Out Of Crypto Cannabis Bubble Before It Pops and Move Into Bargain Basement Miners - 8th Jun 18

Market Oracle FREE Newsletter

5 "Tells" that the Stock Markets Are About to Reverse

President Obama's State of the Union Address Fuzzy on Maths

Politics / US Politics Feb 14, 2013 - 02:51 PM GMT

By: Money_Morning

Politics

Martin Hutchinson writes: President Obama's State of the Union Address on Tuesday night was high on rhetoric but short on math.

As with most Obama speeches, it was beautifully delivered. However, even where I agreed with the ideas, I couldn't quell a nagging suspicion that the numbers simply didn't add up, and indeed likely missed by a lot.


And let's face it, some of the ideas in the speech were just plain bad.

The Bad Ideas
At the top of the list was the proposed increase in the minimum wage to $9 an hour. It's sounds nice, but reality is a different story.

Economists pretty much universally agree that high minimum wages have the opposite effect: They increase the ranks of the unemployed.

Now admittedly, $9 an hour isn't likely to increase unemployment in costly areas like New York City or coastal California.

New York City Comptroller John Liu has already sent me an e-mail complaining that $9/hour is equivalent to only $4.97 in his overpriced city.

But it will certainly push up joblessness in St. Louis, Houston or Cleveland, where living costs are lower than the national average.

Of course, Houston can look after itself with high oil prices and a decent local economy, but you can't tell me that a $9 an hour minimum wage won't increase unemployment in Cleveland or even St. Louis, let alone in rural areas.

It's a bad idea, which fortunately won't get far in a Republican Congress. But it wasn't the only one.

His insistence that Congress must immediately address global warming, and his threat to do so by executive action if it didn't, are deeply controversial.

The reality is that global warming "investments" have already cost U.S. taxpayers billions upon billions, with very little to show for it. In fact, the extra $12 billion of wind power subsidies tucked into the "fiscal cliff" deal-- one fifth of the first year's tax increases-- is just the latest example.

What's more, when you look at the Antarctic as well as the Arctic, and at the global climate as a whole, there's evidence that global warming has at least paused since 1998, and that even by 2100 it will be limited to the 1-2 degrees Celsius change that we can easily handle without subjecting ourselves to infinitely costly command-and-control policies.

The Good Ideas
But the President's speech wasn't all bad.

President Obama made a considerable amount of sense on education. In fact, Education Secretary Arne Duncan is one of his most impressive Cabinet members.

He does want to increase access to early childhood education, the problem with which is that studies seem to show the current program does little good.

Coming from a different education system, my main beef with U.S. K-12 education is how slowly it goes in the early years.

Without any special coaching in Great Britain, I started calculus at 11. Here in the states, my son didn't get to it until he was undergoing the tribulations of college applications as a high school senior - far too late for him to have the reliable grasp of it necessary in a modern economy.

However, Obama's better education idea is to combine high school education with community colleges, so that those graduating high school have a vocational qualification that makes them useful to local employers.

If nothing else, that makes them employable if their dream job flames out. I now regret that my son, educated within 200 yards of the giant Tyson's Corner mall, didn't get a qualification in Mall Management - something a modern economy can always use!

The Fuzzy Math
The main problem I have with the speech, however, is the cost of his proposals.

Obama said specifically "Nothing I'm proposing tonight should increase our deficit by a single dime."

Then during the speech he proposed:

■15 manufacturing innovation institutes;
■An Energy Security Trust for new energy research;
■A "fix it first" program for more infrastructure spending;
■A big expansion of early childhood education;
■Incentives to companies to hire the long-term unemployed;
■Tax credits to businesses that invest in low-income couples;
■New spending on combating cyber-attacks.

That's without counting initiatives like the minimum wage and more regulation that provide a drag on the economy but don't cost the government any money directly.

Put politely, his numbers don't add up.

Eager to find something to like, The Financial Times declared that a potential U.S.-EU free trade agreement was "the centerpiece" of the speech. But that's nonsense - it was in one sentence out of over 6,000 words. But it's still a good idea.

In the end, it was a well-delivered speech, and there were some good ideas in it I hadn't heard before.

But let's face it, the government's overall current priority must be to reduce the budget deficit, and Obama's package as a whole was a hindrance, not a help to that objective.

Source :http://moneymorning.com/2013/02/12/u-s-economy-recovery-doesnt-fool-struggling-americans/

Money Morning/The Money Map Report

©2013 Monument Street Publishing. All Rights Reserved. Protected by copyright laws of the United States and international treaties. Any reproduction, copying, or redistribution (electronic or otherwise, including on the world wide web), of content from this website, in whole or in part, is strictly prohibited without the express written permission of Monument Street Publishing. 105 West Monument Street, Baltimore MD 21201, Email: customerservice@moneymorning.com

Disclaimer: Nothing published by Money Morning should be considered personalized investment advice. Although our employees may answer your general customer service questions, they are not licensed under securities laws to address your particular investment situation. No communication by our employees to you should be deemed as personalized investent advice. We expressly forbid our writers from having a financial interest in any security recommended to our readers. All of our employees and agents must wait 24 hours after on-line publication, or after the mailing of printed-only publication prior to following an initial recommendation. Any investments recommended by Money Morning should be made only after consulting with your investment advisor and only after reviewing the prospectus or financial statements of the company.

Money Morning Archive

© 2005-2018 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules