Business

Carol Roth: Calling socialism ‘democratic’ is like putting lipstick on a pig

When asked in a recent townhall by a Harvard student whose family fled Soviet Russia why he embraced the same type of socialist policies that had failed there and worldwide, presidential candidate Sen. Bernie Sanders, I-Vt., did what he always does. He deflected. According to Sanders, he isn’t advocating for that kind of socialism. No, he has dressed his philosophy up with a fancy moniker called “democratic socialism.” It’s a phrase that many on the far left have embraced as they push anti-free market propaganda and policies that seek to concentrate more power within the hands of a few political elites. They can call it “democratic socialism,” but socialism is so awful and flawed that no modifier can make it palatable — garbage by any other name still stinks. In fact, adding “democratic” to socialism is basically the equivalent of putting lipstick on a pig. Socialism is a system set up for failure by design. The true definition of socialism is the government owning the means of production and having a few people — those aforementioned political elite- decide what’s in everyone else’s best interest. It stands in stark contrast to free markets, which give everyone individual choice and free choice to make those decisions for themselves. Supposing you had the smartest people around (which is not usually something associated with politicians) with perfect and trustworthy moral intent (also not something associated with politicians), the structure of having a small number of people decide how to allocate resources is still an impossible task. Even with the assistance of AI models or other technology, no group of people have the right incentives and knowledge to replicate the complex yet elegant work of the free market to efficiently and effectively allocate resources. With hundreds of thousands or even millions of products and services in the U.S., the task of allocating the right amount of resources and deciding how much of each good or service to create at any one time, who should create them, how they should be created, how they should reach potential consumers, pricing and other market factors is impossible for any group of planners. It’s why countries like India have seen famines during times where they had plenty of food in the country; they lacked the right incentives to get the product to the people who needed it. It’s also why pure socialism has failed every single time it has been tried with horrific consequences and isn’t known for amazing innovations, either. In his quest to soften socialism, Sanders has tweeted that “Democratic Socialism means democracy.” But, the “democracy” descriptor is no picnic either. Our founding fathers intentionally created a federal republic (or constitutional republic or whatever similar phrase you prefer) and not a democracy, because of democracy’s inherent flaws. As Ben Franklin so aptly described it, “Democracy is two wolves and a lamb voting on what to have for lunch.” Mob rule doesn’t make something a good, right or moral idea. Good intentions often lead to poor outcomes. Additionally, when the democratic label is invoked, it’s often a neon sign advertising that something is amiss. What we all know as “North Korea” brands itself as the Democratic People’s Republic of Korea (which also boldly claims on its website is where “all the people are completely liberated from exploitation and oppression”). Similarly, East Germany prior to German reunification was known as the German Democratic Republic. Though I can’t speak for Sanders, hopefully, the rest of us can all agree these are not exactly the types of regimes we want to be emulating. So, if throwing “democratic” in front of socialism given the other countries who have used that over time doesn’t scare you enough, the concept of any degree of socialism should. We have let too much of that central type of planning seep into our system. And, when Sanders tweets, “My definition of democratic socialism is creating a government that works for all of us, not just a handful of people on top,” what he is advocating for is exactly that type of control where “what is in everyone’s best interests” is decided by the handful of elite politicians that comprise our government. Our country was founded on the concept of individual rights, including property rights and freedom. The government’s job was to protect those rights and our freedoms; and that’s it. Over time, that has begun to erode. The government has not only infringed upon our rights but also exceeded their powers by becoming intermediaries in markets and redistributors of wealth. From education to health care to retirement planning, whether by cronyism, nationalization or regulation, more government intervention has taken hold. And, everywhere the government has done so, costs have gone up and quality has gone down. Because whether you have a full socialist system, a mixed system or a democratic socialist system, interference by government will always produce inferior outcomes than in a free market, in whole or in part. Movement towards free markets creates prosperity and movement towards socialism thwarts it. We must come together to reject socialism by any name — in whole or in part — and work to find advocates who will undertake the difficult task of taking away power, decisions and actions from the elites in government and returning it to the people and the markets where it rightly belongs. Sanders and his ilk are dead wrong and as history demonstrates, any socialism — democratic or otherwise — will be entirely at our own loss. No amount of lipstick can make that pig of socialism attractive.

Agreed 100%!!  Well said, Carol.  Carol Roth is the creator of the Future File legacy planning system, a “recovering” investment banker, host of “The Roth Effect” podcast and the New York Times bestselling author of “The Entrepreneur Equation.”  Please consider this your Read of the Day.  If you read anything today here at The Daily Buzz, then READ THIS!!…and then forward it on to all of your liberal/Democrat friends and family members.  Excellent!!!      🙂

Fed keeps interest rates steady, citing muted inflation

Federal Reserve officials unanimously voted to leave interest rates unchanged during their two-day meeting this week, with policymakers continuing to signal that they will be patient with monetary policy moving forward. “We do think our policy stance is appropriate right now,” Chairman Jerome Powell said during a press conference following the meeting’s conclusion. “We don’t see a strong case for moving in either direction.” Economists widely expected the U.S. central bank would keep the benchmark federal funds rate at 2.25 percent to 2.5 percent as it sought to strike a balance between overarching geopolitical concerns, muted inflation and otherwise “solid” economic growth. In the first quarter of 2019, GDP increased at a better-than-expected annualized rate of 3.2 percent. Unemployment, meanwhile, remains at 3.8 percent. But Fed officials mostly looked beyond the good rate of economic growth in the three-month period from January to March, instead favoring a wait-and-see approach as they watch how certain economic and financial developments – like a global trade war, and uncertainties surrounding Brexit – play out. “In light of global economic and financial developments and muted inflation pressures, the Committee will be patient as it determines what future adjustments to the target range for the federal funds rate may be appropriate to support these outcomes,” the Fed said in a statement released after the meeting. The Fed’s decision, however, could provide additional fodder to President Trump, who’s frequently suggested that policymakers should cut interest rates Opens a New Window. by one percentage point and implement more quantitative easing because inflation is so low. “The Trump administration may point to this inflation data to accuse the Fed of having raised rates too quickly in 2018 and put even more pressure on the Fed to cut rates this year,” Cailin Birch, the global economist at the Economist Intelligence Unit, said. “We believe the Fed will successfully resist this pressure, but relations with the Trump administration will remain tense in 2019 to 2020.” At their last meeting, Fed policymakers signaled there would be no rate hikes for the remainder of 2019 in light of global economic and financial developments, as well as muted inflation. The move was a stark turn from the December meeting when Fed Chairman Jerome Powell suggested there could be as many as two hikes this year. Since then, inflation has considerably decelerated, running below the target range of 2 percent. Powell has previously emphasized the importance of the 2 percent inflation range, which he said is consistent with a healthy economy. In March, the core personal consumption expenditures index — the Fed’s favorite inflation gauge, which excludes food and energy prices — was up 1.6 percent, compared to a year earlier. That’s the lowest level of growth since January 2018. “We are strongly committed to the 2 percent inflation objective,” Powell said on Wednesday. And according to Luke Bartholomew, an investment strategist at Aberdeen Standard Investments, if inflation decreases further, the Fed will be hard-pressed to defend not cutting interest rates. ” Some policymakers have flagged core inflation of 1.5 percent as a crucial level which might justify easing policy, and we are already pretty close to these levels,” he said.

Agreed…

Manufacturing Wages See Biggest Gain in Over a Decade

The first three months of the year saw wages for manufacturing workers rise at the most in over a decade. The employment cost index, a measure of wages and benefits paid by businesses, for manufacturing workers rose by 0.9 percent in the first quarter, Labor Department data released Tuesday showed. The salary and wage component rose even more–by a full percentage point. The last time manufacturing saw quarterly wage gains that high was in 2008, when wages also rose 1.0 percent in the January through March period. Compared with a year ago, manufacturing wages were up 2.9 percent in March. That’s the biggest 12-month gain since March of 2003, when wages rose 3.2 percent. By Barack Obama’s final year in office, manufacturing wages were rising an average of just 0.625 a quarter. Very low inflation means that unlike past gains in worker pay, these have not been eaten away by higher prices. Prices in March were up just 1.5 percent compared with year-earlier levels, which makes the real wage gain 1.4 percent. Back in March 2003, prices were up 2.5 percent. So most of the paycheck growth went to higher prices. In March of 2008, the situation was even worse: 3.1 percent inflation meant workers were actually losing ground despite growing paychecks. There’s another reason to think that the first quarter of 2019 may have been better than either 2003 or 2008. In both those periods, unemployment in the manufacturing industry was quite high, 6.8 percent in 2003 and 5 percent in 2008. When unemployment is high or rising, lower paid workers with less tenure are often laid off before more experienced, higher paid workers, as a result average wages in the employment cost index can climb even when workers are losing their jobs. In fact, it usually does. But unemployment is now very low. In the manufacturing sector, it is just 2.9 percent. So there is no upward pressure being created by layoffs. In fact, it is quite the opposite. Manufacturing sector employment is expanding, and it is likely that manufacturing businesses are hiring less experienced workers who can be paid less than incumbents. So the very good numbers for the first quarter may be even better than they appear. The revival of American manufacturing was a key campaign promise of Donald Trump in the 2016 campaign. Tuesday’s data suggests that Trump is making good on that promise. When analyzing the employment cost index to see how economic conditions are affecting workers, it makes sense to focus on the wages and salaries component. The cost of benefits, which include employer-subsidized health insurance, can rise without workers seeing any actual improvement to their lives or financial situation. It is not just manufacturing employees seeing rising wages. Wages for all workers rose 1.1 percent in the first three months of 2019. Compared with a year ago, wages are up 3.0 percent. Wages in transportation, which includes truckers, rose 1.6 percent in the quarter and are up 4.6 percent for the year. The overall employment cost index climbed 0.7 percent in the first quarter, matching the fourth quarter’s growth. Both the wage and benefits component also rose 0.7 percent. Compared with a year ago, the index was up 2.8 percent. While that is slightly less than the fourth quarter’s 2.9 percent, it is an improvement in real terms because inflation was running a quarter of a percentage point higher at the end of 2018.

More great news in this Trump economy!!      🙂

Apple gets ready for life after the iPhone with services push

On Monday, Apple will do something it has never done when making a product announcement — focus largely on other companies, not itself. Apple is expected to launch two services on March 25, including its rumored video streaming service, at an event in Cupertino, Calif. that will be attended by Hollywood celebrities such as JJ Abrams and Jennifer Aniston. This is in stark contrast to past events, which have largely featured tech journalists, Wall Street and industry analysts. As part of the video streaming service, Apple is expected to place a heavy emphasis on selling others’ services for them, according to a report in Recode. It will work similar to the App Store and Amazon’s successful Amazon Channels initiative, in that it will sell the services for them and take a cut of the transaction. Apple is also likely to unveil some of its own content, some of which stars Aniston as well as Reese Witherspoon, Steve Carrell and others. On Sunday, The New York Times reported that five of the first shows that Apple has funded as part of its big content push have already been completed. Apple, which has not yet given a name to the service, is also said to be wooing other cable companies, such as HBO, Starz and Showtime ahead of the launch, according to Bloomberg. Earlier this week, Apple unveiled new iPads, new iMacs and new AirPods. They were all introduced with simple press releases and without the usual fanfare Apple has given its products in the past, a stark reminder that Apple sees itself as more than just a consumer electronics company. CEO Tim Cook, who has become increasingly active in touting the company’s business outside of its iPhone, has previously said the company would double its service revenue by 2020 from 2016 levels. Revenue attributed to its Services-related business totaled $10.9 billion in its most recent quarter, up 19 percent year-over-year. To effort this along, Apple is said to be spending at least $1 billion on content, a venture that has been marred by reports of intrusion from Apple executives wary of content that might be considered overly graphic or anti-technology. Earlier this month, The New York Post reported that Cook has been seen on the set on one of the Apple-funded shows “See,” a futuristic sci-fi drama starring “Aquaman” star Jason Momoa. Several of the company’s top brass, including Cook himself, have given notes to writers and showrunners, a process that has been deemed “intrusive,” according to the Post’s sources. Apple’s push into television and movie making is being led by two executives it hired away from Sony, Jamie Erlicht and Zack Van Amburg, who were responsible for shows such as “Breaking Bad” and “The Goldberg’s.” Monness Crespi analyst Brian White, arguably Apple’s biggest supporter on Wall Street, believes the event will kick into high-gear the mindset that Apple is trying to shape how it is viewed. Apple is no longer just about iDevices, but rather a ubiquitous and indispensable part of everyone’s lives, White believes. “In our view, Apple’s digital ecosystem remains a major differentiator, developing hardware, software and services to create a unique experience with devices working seamlessly together on Planet Apple,” White wrote in a note to investors. White added that Apple, which had more than 1.4 billion active devices at the end of its most recent quarter, will be well-positioned as more devices become a computer, allowing it to sell more services. “As more ‘things’ become a computer, we believe Apple is well positioned to benefit and unveil even more new services,” White continued.

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NY Times Admits: Tight Labor Market Raises U.S. Wages on Dairy Farms

President Trump’s crackdown on illegal immigration in the United States is producing higher wages and better working conditions on American dairy farms, the New York Times admits. Though 1.5 million legal immigrants continue to be admitted to the country every year, and illegal immigration at the U.S.-Mexico border soars to historic levels, the Immigration and Customs Enforcement (ICE) agency efforts to go after employers who hire illegal aliens are proving to be an economic surplus for lower-wage workers. The latest New York Times report on immigration details complaints from dairy farmers who argue that they needed illegal aliens to survive as a viable business. Recent ICE raids of dairy farms, they claim, have made dairy farming more difficult as they can no longer readily rely on cheaper, foreign workers. Dairy farm workers, on the other hand, are seeing the benefits of Trump’s “Hire American” tight labor market through increased wages and better working conditions: Without a legal alternative to informal migrant labor, the competition between dairy farms to retain migrant workers is so fierce that farm owners, once notorious for underpaying and mistreating workers, are now improving working conditions and wages to entice employees to stay on their farms, workers said. Victor Cortez is an immigrant who has worked on a dairy farm in western New York for 18 years. A few years ago, farm owners “wouldn’t let us leave the farm,” he said, adding, “They wouldn’t pay us as much as they promised they would.” “But the good thing about it now,” he said, “is that we get paid more and this farmer is good to me.” For decades, a flooded labor market for America’s working and middle class due to mass legal and illegal immigration has produced generations of low-wage workers, stagnant salaries, and a cheaper labor economy — a benefit to employers at the expense of American workers. Center for Immigration Studies Director Mark Krikorian said that rather than U.S. dairy farms relying on an endless flow of cheaper, foreign workers, the federal government ought to provide subsidized loans for smaller dairy farmers to invest in robots and machines that can do the work more efficiently and without Americans having to subsidize the cost of illegal alien labor. A Bloomberg report from 2015 highlighted the effectiveness of dairy farmers mechanizing: A recent analysis by Goldman Sachs revealed how Trump’s tightened labor market for America’s working and middle class helped grow wages by four percent in 12 months. ICE has played a crucial role in carrying out Trump’s “Hire American” economic nationalist agenda by indirectly reducing the foreign competition, which U.S. workers have been subjected to. Last fiscal year, for example, ICE agents deported more than a quarter of a million illegal aliens, including more than 95,000 deportations of illegal aliens who were living in the interior of the country. Currently, the nation’s Washington, DC-imposed policy on mass legal immigration — where about 1.5 million unskilled legal immigrants are admitted to the U.S. every year — is a boon to corporate executives, Wall Street, big business, and multinational conglomerates, as working and middle-class Americans have their wealth redistributed to the country’s top earners through wage stagnation. Research by the National Academies of Sciences, Engineering, and Medicine has discovered that immigration to the country shifts about $500 billion in wages away from working and middle-class Americans to new arrivals and economic elites.

From pens to notebooks, office theft on the rise

Accidentally slip some of those new office Opens a New Window. pens into your bag to save a couple bucks? Discretely tuck some of your employer’s new manilla folders into your briefcase? If so, join the club of office thieves whose numbers have been on the rise over the last 15 years. According to data from the Association of Certified Fraud Examiner, office Opens a New Window. stealing of noncash items — ranging from scissors and notebooks, to staplers and paperclips, has ballooned to 21 percent of corporate-theft losses in 2018 from 10.6 percent in 2002. The Atlantic, Opens a New Window. which was first to report the trend, added that most workers aren’t even coy about it, with more than 52 percent of workers admitting they steal company property in a survey from 2013. Hot items include scissors, notebooks, staplers and tape, especially during the gift-wrapping holidays. The uptick has even forced managers to routinely stock up on 20 percent more supplies in order to account for lost items right off the bat. Mark Doyle, the president of the loss-prevention consultancy Jack L. Hayes International, told The Atlantic that there are a few factors to blame for office ransacking. He points to the decrease in supervision and the uptick in employees working from home for the increase.

Payless to liquidate stores and wind down e-commerce arm

Payless is about to enter the graveyard of retailers Opens a New Window. The company spokesperson confirmed to FOX Business Opens a New Window. it will begin a broad liquidation in the coming days. “Payless will begin liquidation sales at its U.S. and Puerto Rico stores on February 17, 2019, and is winding down its e-commerce operations. We expect all stores to remain open until at least the end of March and the majority will remain open until May. This process does not affect the Company’s franchise operations or its Latin American stores, which remain open for business as usual” according to the statement. The discount shoe retailer, according to its website, has “nearly 3,600 stores in over 40 countries, Payless is a global brand” reads the description. It also states it is the “largest specialty family footwear retailer in the Western Hemisphere” which makes this process the largest ever for a retailer, as reported by Reuters. Payless has been dogged by liquidation rumors in recent weeks. On Thursday Reuters was first to report liquidation was imminent. Last year, it announced it would file for bankruptcy for the second time in two years, the company previously filed for bankruptcy in April 2017. Payless is hardly alone, store closures and retail bankruptcies are on the rise as e-commerce retailers such as Amazon Opens a New Window. continue to lure shoppers. While Sears avoided a massive liquidation, after CEO Eddie Lampert Opens a New Window. bid $5.2 billion for the bankrupt retailer he ran into the ground, many employees were not pleased he would still be controlling the company. Another retailer J.C. Penney Opens a New Window. is also struggling and recently outlined a new strategy to stay afloat.