Tag Archives: America’s Economic Future

The Economic Future For Young Americans

On May 2 Gallup had a release titled “In U.S., Optimism About Future for Youth Reaches All-Time Low.”

Although the entire release is worth reading, I found the following excerpts to be particularly notable:

Forty-four percent of Americans believe it is likely that today’s youth will have a better life than their parents, even fewer than said so amid the 2008-2009 recession, and the lowest on record for a trend dating to 1983.

also:

Gallup uses the same question other survey organizations have asked intermittently over a longer period of time. Selected trends from CBS News, New York Times, and Roper Organization polls reveal that Americans currently express greater pessimism about what the future holds for today’s youth than any of these organizations found in surveys from 1983 to 2003. The most positive result occurred in a December 2001 CBS News/New York Times poll in which 71% said American youth would have a better life than their parents.

also, from the concluding paragraphs:

Confidence in the traditional American dream — that each generation can work its way up in the world and have a better life than the previous generation — appears to be slipping away. Americans are less likely to believe this to be true today than at any time on record, including during the worst of the recent economic crisis.

Fewer than 4 in 10 high-income Americans — who presumably have the greatest access to opportunity and resources to gauge what the markets will do going forward — believe today’s youth will be better off than their parents. This level of pessimism may also reflect the massive destruction of wealth that high-income Americans experienced from the economic meltdown.

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The Special Note summarizes my overall thoughts about our economic situation

SPX at 1325.69 as this post is written

Economically Counterproductive Policies – Incandescents

In the March 28, 2011 edition of Forbes, Steve Forbes wrote an article titled “Ban Bulb Lunacy.”

An online caption of the article reads “Next year the federal government begins the phaseout of traditional incandescent lightbulbs, giving us yet another enlightening example of politicians short-circuiting free markets.”

In the article, Steve Forbes says “This prohibition of the standard lightbulb is justified on the grounds that it will save energy. Well, if that were true, don’t you think consumers would figure it out for themselves?”

The article goes on to challenge the safety and comparative longevity of the CFLs vs. that of the standard incandescents.

My comments:

In my opinion, it appears, from an “all things considered” basis, that the regulatory “phaseout” of incandescent bulbs is a prime example of not only overregulation, but also (and more importantly) economically counterproductive policy.

The purported economic and environmental benefit of CFLs over incandescents seems at best nebulous, and, at worst, dubious – which some may view as duplicitous.  As Steve Forbes alludes to in the aforementioned quote, it would seem that if CFLs were as beneficial as claimed, consumers would heavily favor CFLs and incandescents would eventually (naturally) disappear from the marketplace.  Instead, we have regulation to force incandescents from the marketplace.

Milton Friedman spoke at length on the issue of harmful regulation in his “Free to Choose” television series, especially in Volume 7, “Who Protects the Consumer.”

I am sure that many people view this incandescent bulb phaseout as inconsequential, as it may seem trivial in the larger “scheme of things.”

If this represented an isolated example of economically counterproductive regulation, it wouldn’t be of great concern.  However, when such regulation proliferates, its existence should become a major issue of concern.  This is so for a number of reasons.

In the article “America’s Economic Future – ‘Greenfield’ or ‘Brownfield’?” I mention the issue of policies that are inherently economically counterproductive.  Of these economically counterproductive policies, I wrote:

“There exist innumerable examples of these types of decisions; and their aggregate negative effect on the nation’s well-being (and strategic position) should not be underestimated.”

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The Special Note summarizes my overall thoughts about our economic situation

SPX at 1303.13 as this post is written

Economic Impact Of Policies

On May 18 The Wall Street Journal had an article on a new lead-paint law titled “New Lead-Paint Law Heavy on Budgets.”

This law serves as a good example of an important issue I wrote of in my May 2009 article “America’s Economic Future – ‘Greenfield’ or ‘Brownfield’?”

In that article I wrote of the need for policies to be thoroughly assessed with regard to overall economic impact, compared with whatever “societal good” the policy purports to accomplish.

A thorough discussion of the benefits and costs of this new lead-paint law would be exceedingly lengthy and complex.  However, I believe that this lead-paint law, if thoroughly analyzed from an “all things considered” standpoint – taking into account both “societal good” as well as economic impacts – would be found to be (far) suboptimal in many respects.  Of particular concern is that this is yet another law that disproportionately (negatively) impacts small businesses.

While one may dismiss this new law as one that is limited in nature and thus relatively insignificant, it is important to note that it is just one example among many in which inadequate overall analysis was conducted.   Cumulatively, these poorly analyzed policies are very significant in determining whether America’s economic future will be that of a “greenfield” or “brownfield.”

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SPX at 1064.88 as this post is written

Largest Employers

Crain’s recently came out with their list of the largest Chicago-area employers.  What I found notable was that the top 5 employers are various government entities (federal, state and local).

Of course, this situation is not unique to the Chicago area.  Many states have a large percentage of their total jobs as government jobs.

While many might be indifferent to this situation – assuming that a “job is a job” – from an overall economic standpoint it is troubling on various fronts.

One such front that deserves special attention is that which I discuss in the “America’s Economic Future: ‘Greenfield’ or ‘Brownfield’?” article.

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SPX at 1161.65 as this post is written

America’s Economic Future – A Comment

Those familiar with this blog know that I believe (based off of my overall analysis) that our current purported economic recovery is not sustainable.

As I have indicated in previous writings, we as a nation need to be more “strategic” in nature if we are to attain true Sustainable Prosperity.

One critical question that we should be asking, from a strategic standpoint, is what is the value of a recovery if it is not sustainable?  The answer is that there is very little if any value to such a recovery.  In fact, a very strong case can be made that there will be strong negative repercussions stemming from such an unsustainable recovery.

Another issue, from a strategic standpoint, is one of opportunity cost.  The opportunity cost of attaining a recovery that subsequently fails vs. a true sustainable recovery is enormous.  This is especially true in our current economic environment where many factors such as the national debt are at truly ominous levels.

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SPX at 1165.42 as this post is written

America’s Economic Future

As a follow-up to yesterday’s post, here is a passage from Larry Summers’ March 13, 2009 speech that speaks of the importance of economic strength in achieving broader societal goals:

“Our single most important priority is bringing about economic recovery and ensuring that the next economic expansion, unlike it’s predecessors, is fundamentally sound and not driven by financial excess.
This is essential. Without robust and sustained economic expansion, we will not achieve any other national goal. We will not be able to project strength globally or reduce poverty locally. We will not be able to expand access to higher education or affordable health care. We will not be able to raise incomes for middle class families or create opportunities for new small businesses to thrive.”

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Our national goal to achieve a sustainable recovery (or what I frequently refer to as “Sustainable Prosperity”) has been and will continue to be a challenge, given various underlying fundamentals.

In order to achieve “Sustainable Prosperity” we will need to have a solid focus on planning our economic future and its dynamics.  Toward this end, I wrote an article in May of last year titled “America’s Economic Future – ‘Greenfield’ or ‘Brownfield’?” which can be found listed along the right-hand side of the home page.  That article, as well as others I have written, explores some of what I believe are pivotal issues that lack recognition with regard to our economic future.

All of my articles are also listed and summarized at this link:

https://www.economicgreenfield.com/prosperitybypencom-directory/

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SPX at 1075.51 as this post is written

Tax Breaks And The Economic Greenfield vs. Economic Brownfield Concept

Here is a recent story from BusinessWeek, “Will Tax Breaks Boost Jobs?”

As seen in my article (with italics added for emphasis) “America’s Economic Future – ‘Greenfield’ or ‘Brownfield’ ?”

One way to determine whether an economic “greenfield” environment exists is whether businesses are thriving and multiplying naturally – with an indicator being that they are choosing and wanting to locate their operations and sales territories in a specific location without needing to be artificially induced to do so through various incentives or coercions. However, this indicator has to be viewed in the overall economic context, as there may be circumstances that can serve to override casual observations.”

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One of the reasons I started this blog is because I felt that this economic ‘greenfield’ vs. ‘brownfield’  concept is not understood; yet has massive implications for our economic future.

As seen in the BusinessWeek article, that states and regions have to engage in bidding wars to attract and/or retain businesses (and jobs) is likely a “red flag.”  While it is easy to dismiss these “bidding wars” as “the way things are,” perhaps the critical question, in the larger context, becomes “Is this the way things should be?”

SPX at 953.18 as this post is written

America’s Economic Future

A little while ago I wrote an article titled, “America’s Economic Future – ‘Greenfield’ or ‘Brownfield'”.  For those interested, it is the first article listed here:

https://www.economicgreenfield.com/prosperitybypencom-directory/

I would like to make a couple of additional comments with regard to this article.

First, in my opinion the topic of America’s Economic Future is not one that receives adequate attention.  At this point, the topic is of the utmost importance. 

Furthermore, the ‘greenfield’ vs. ‘brownfield’ classification is not well understood.  The underlying dynamics are exceedingly complex; yet if we are to have Sustainable Prosperity it is imperative that we enact policies and actions in line with the ‘greenfield’ concept. 

Second, there are no sirens or alarms that sound when a country or region slips from ‘greenfield’ to ‘brownfield.’  It often is  a process that  can go undetected.  Yet, once a ‘brownfield’ condition is attained, it can be difficult, if not very so, to reverse.  As mentioned in the article, the ‘greenfield’ vs. ‘brownfield’ should not be viewed in terms of one country’s (or region’s) condition, but in terms of one country’s condition relative to that of other countries, especially those that might be competitors.  

SPX at 888.98 as this post is written

 

Copyright 2009 by Ted Kavadas

James Hamilton’s Comment on Ben Bernanke

I found this blog post from James Hamilton to be interesting:

http://www.econbrowser.com/archives/2009/06/on_grilling_the.html

especially when he says this:

“But it is another matter to question Bernanke’s intellect or personal integrity. As someone who’s known him for 25 years, I would place him above 99.9% of those recently in power in Washington on the integrity dimension, not to mention IQ. His actions over the past two years have been guided by one and only one motive, that being to minimize the harm caused to ordinary people by the financial turmoil. Whether you agree or disagree with all the steps he’s taken, let’s start with an understanding that that’s been his overriding goal.”

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I like to think of the role of the Fed Chairman in a different light, especially with our current economic situation.  I believe that perhaps the two most pertinent questions are:

1.  Does Ben Bernanke have a full understanding of the economic situation we find ourselves in?

2.  What can (and should) he do about it?  Especially considering the concepts of Sustainable Prosperity and America’s Economic Future? (both of which have been extensively referenced on this blog)

SPX at 900.4 as this post is written