Coyote Blog

Eugene Volokh is writing about a case against an attorney who defrauded his firm.  The details are not important, what caught my eye is what is highlighted below:

Once again, this case does not turn on the bare fact that Attorney Siderits wrote-down his time; this case is about Attorney Siderits abusing his write-down discretion and lying to his law partners in order to collect almost $47,000 in bonuses to which he was not entitled. Attorney Siderits cannot seriously contend that firms must have a written policy forbidding stealing and lying before a misconduct charge for one of these actions can be sustained.

That certainly makes sense, but it does not apply at the California EDD, which administers (among other things) the state unemployment insurance program.  We terminated an employee for accepting money from a customer to provide a service, then pocketing the money and not providing the service.  I call this "theft", and had assumed all would understand that stealing from customers is a firing offense.   When California sent out its unemployment paperwork, we said this employee had been fired "for cause", which in many states means that they are ineligeable for full unemployment payments.

However, after some back and forth, I was eventually informed by the EDD that since I did not have an explicit policy in the employee manual that said "employees may not steal money from customers", then they could not recognize that she was fired for cause.  Even if I had put that in the manual, it probably would not have counted because the next thing EDD asked for is something in writing proving, with the employee's signature, that she had read that passage.   And from past experience with the EDD, my guess is that they likely would not have accepted firing on the first offense, but would have insisted we needed to have her steal from multiple customers, with written warnings each time, before we terminated her.

Basically, what this all means is that while the law technically says people can't be paid unemployment if fired for cause, California has made the standards of proof so absurd that this requirement is meaningless.  Everyone is going to get unemployment.

As it turns out, there is a silver lining from this lack of diligence by the state.  My business is seasonal and I can only offer summer work.   Most of my employees are happy with this, as they like to take the winter off (many are retired).  One is not supposed to collect unemployment if he or she is not actively seeking work, but my employees have discovered that California does zero dilligence to check this.  So some of them lie and say they are looking for work over the winter when they are not, and collect unemployment.  I know of two couples who spend their winter in Mexico but still collect their California unemployment like clockwork.   Not only is California not dilligent about it, but when I tried to report someone I knew who was collecting unemployment but not even in the country, I was threatened by the EDD official that I was risking substantial personal liability by submitting such a claim and opening my self up to civil suits and even prosecution for harassing the worker.  So of course I dropped it.

So what is the silver lining?  California is so eager to hand money in the off-season to support my employees' seasonal vacations that my unemployment insurance premium rate is already the worst possible.  My rates can't go any higher.  So if they insist on giving state money to a thief, it's not coming out of my pocket.

Apparently Swedish unions are demanding a looser monetary policy

Forget Chuck Schumer's cat-out-of-the-bag 'get back to work' comments to Bernanke, now it is union-leaders who are advising the world's central bankers. "There is a not a single reason not to lower rates" exclaims Sweden's trade union confederation to the central bank as he begins negotiations with employers on wage deals for next year. His demands (for lower rates) are "far from excessive" and he adds "should not cause inflation" as Swedish organized labor have "never called for levels that ... could not be supported economically."

Inflation and monetary debasement have always been Progressive favorites -- until, of course, they were not.  Consider the plight of the worker in Weimar Germany

By mid-1923 workers were being paid as often as three times a day. Their wives would meet them, take the money and rush to the shops to exchange it for goods. However, by this time, more and more often, shops were empty. Storekeepers could not obtain goods or could not do business fast enough to protect their cash receipts. Farmers refused to bring produce into the city in return for worthless paper. Food riots broke out. Parties of workers marched into the countryside to dig up vegetables and to loot the farms. Businesses started to close down and unemployment suddenly soared. The economy was collapsing.

It was total hell.  If a worker's family member could not find something to buy in the morning with the worker's morning pay packet, the money was worthless by dinner time.  Not to mention the incredible lost productivity of all those man-hours spent running around trying to find goods on shelves (of which we got a small taste post-Sandy, as people spent hundreds of dollars of their own time waiting in queues because the government would not let gas station owners charge them an extra $20 for scarce gasoline).

I always suspected government jobs programs and job training programs were a waste of time.  I never imagined they were total vaporware:

"There are no jobs!" That is what people told me outside a government "jobs center" in New York City.

To check this out, I sent four researchers around the area. They quickly found 40job openings. Twenty-four were entry-level positions. One restaurant owner told me he would hire 12 people if workers would just apply.

It made me wonder what my government does in buildings called "job centers." So I asked a college intern, Zoelle Mallenbaum, to find out. Here's what she found:

"First I went to the Manhattan Jobs Center and asked, "Can I get help finding a job?" They told me they don't do that. 'We sign people up for food stamps.' I tried another jobs center. They told me to enroll for unemployment benefits."

So the "jobs" centers help people get handouts. Neither center suggested people try the 40 job openings in the neighborhood.

From John Stossel, who has a lot more at the source link.

I got a call today from the National Conference of Mayors.  They wanted to send somebody by to talk to me about just how committed these great folks were to small business success.

The call began poorly, as their representative tried to use a tactic I mostly only get from penny-stock boiler rooms - pretending that she and I had talked some time in the past and that I had committed to meeting with her.  I suppose this tactic might have worked with a frazzled exec, but it is one sure fire way to immediately get me pissed off in a phone call.  After telling her that she and I had no such call and that I did not appreciate the cheap telemarketing tactic, I said that I had absolutely no desire to help the mayors put some fake pro-business patina on their activities that are generally hostile to commerce and free markets.   I told them that I did not want a subsidy, handout, any special access, training programs, etc., I just wanted to be left alone.  I was not going to participate in some program where I get my picture taken shaking some politicians right hand while he is whacking me with a stick with his left.  The representative, to her credit before she hung up, admitted she gets this reaction a lot.

One only has to look at their "plan" (pdf)  to see what their vision entails for "helping" small business.  Here is a summary of the planks:

1. More Federal spending on local infrastructure
2. More Federal unemployment spending and lower Federal payroll taxes
3. Create new Federal subsidy and loan programs and job training programs for businesses in favored, sexy-sounding industries (e.g. "manufacturing" or "high-tech").  I presume someone starting a restaurant or hair salon or without any political clout need not apply.  To their credit they also advocate free trade agreements and visa reform, though they then lose that credit by also advocating failed ideas like "trade adjustment assistance" and "metropolitan export plans"
4. More Federal spending in urban areas (police, job training, affordable housing, community development).

As will not be surprising, absolutely nothing in the Mayor's plans dealt with actual issues under their control, such as business, occupational, and occupancy licencing reform.   Also not surprisingly, the mayors call for hundreds of billions of dollars in new Federal spending narrowly aimed at urban areas without once explaining why these can't or shouldn't be funded locally.  If Los Angeles wants more money for its police, or trains, or schools, and if that spending has real demonstrable value to the city, then why can't they sell the new taxes and spending to their own citizens?  Why do they need the money from the Feds (ie from the rest of us)?

But you can just see the corporate state a work.  A few companies will cynically climb on board, knowing this is all BS, but also knowing that they will get a nice subsidy or sweetheart project in exchange for letting the majors check their "pro-business" box  (pro-business used here as distinct from pro-market).

European economic problems must be due to the "austerity" (which means, in popular Leftist use, not growing government spending faster than the rate of inflation).  I am sure this kind of thing has nothing to do with high unemployment rates.  I would certainly be really excited to hire more employees under these conditions:

For most Europeans, almost nothing is more prized than their four to six weeks of guaranteed annual vacation leave. But it was not clear just how sacrosanct that time off was until Thursday, when Europe’s highest court ruled that workers who happened to get sick on vacation were legally entitled to take another [paid] vacation.

“The purpose of entitlement to paid annual leave is to enable the worker to rest and enjoy a period of relaxation and leisure,” the Court of Justice of the European Union, based in Luxembourg, ruled in a case involving department store workers in Spain. “The purpose of entitlement to sick leave is different, since it enables a worker to recover from an illness that has caused him to be unfit for work.

Breaking news from California:

The Workers' Compensation Insurance Rating Bureau (WCIRB) made it official and submitted a mid-year filing for a 9.1% increase in the pure premium advisory rate that Insurance Commissioner Dave Jones approved less than six months ago. The proposed July 1 increase follows the 37% increase that Jones approved for January 1 that was hidden by the change in benchmarks for pure premium rates that was made at his request....

The Bureau insists that an increase of this magnitude is necessary to combat the continued deterioration in the claims experience, as well as an uptick in claim frequency in the 2010 accident year. Much of the increase will also go to pay for the higher loss adjustment expenses carriers are incurring fighting liens and litigating permanent disability claims. Projected ALAE costs are up to $11,403 per indemnity claim for the 2011 accident year compared to $10,698 the year before.

A 9.1% increase a half year after a 37% increase is just crazy.  This tends to confirm three issues I have written about before:

1. People are filing workers comp claims as a substitute for or a supplement to unemployment.  Our company has seen a significant increase in people "coincidentally" suffering an injury on one of the last few days, and particularly the very last day, before they are to be laid off.  Only such fraud explains an increase in claims when economic activity is way down, particularly when more dangerous professions like construction employment fell much more than office employment in the recession.  We have also seen, by the way, an increase in frivolous labor lawsuits in CA coincident with the economic decline.  A year ago I had an employee in CA tell me that she had attended a brainstorming session the night before among several of my ex-employees trying to generate ideas for ways to sue our company.  I can't wait for an improvement in the economy when the returns of working are higher than the returns of brainstorming ways to extract money from our company via the legal system.
2. California in general does a bad job of policing workers comp. fraud.  Woe to the employer that actually attempts to question an outrageously suspicious claim.  Last time I tried to do so in CA I got slapped with a lawsuit.
3. All states do a terrible job policing permanent disability claims.  I hire a lot of older workers.  I can't tell you how many people show up at my door trying to be paid under the table because they don't want to endanger their permanent disability by having a record of getting paid for doing very physical outdoor work for us.  They assure me they are 100% capable to do heavy physical labor.  Since I don't pay anyone off the books, they end up finding work elsewhere.   Many of you may not believe such people exist, but I have met a number of folks who consider getting a permanent disability, or at least something a doctor will testify is a permanent disability, the equivalent of hitting the lotto.  I have even been sued by a woman for submitting testimony to the social security administration that might have harmed her chances of getting a permanent disability ruling.  The lawsuit stated that if she was denied the disability payment after I testified that I had seen no evidence of any limitations in what she could do on the job,  that I should be liable for paying her the lifetime amount she would have gotten.  So I wimped out and withdrew my testimony and let the taxpayers pay her rather than farting around with a lawsuit.

As I wrote previously, I am entering business in Tennessee, trying to reopen some closed TVA campgrounds.  I was initially pissed off that Tennessee is one of the few states that double taxes S-corp earnings.  I expect this kind of BS in California, but I keep finding more Tennessee taxes I have to pay.  Here is what I have so far:

• Pay annual Secretary of State registration fee (Fixed $)
• Must collect state sales tax (% of revenue)
• Must collect county sales tax (% of revenue)
• Must collect a county lodging tax (% of lodging revenue)
• Pay state Franchise tax (% of net worth)
• Pay state Excise tax (% of corporate earnings, even for S-corp)
• Pay something called a county business tax (% of revenues)
• Pay annual registration fee for county business tax (fixed $)
• Withhold employee state income taxes (% of wages)
• Pay state unemployment taxes (% of wages)
• Pay state individual income tax (% of pass-through corporate earnings)
• Pay county property tax (% of assessed asset value)

I am sure I am missing a few.  Except for #2 and #3 which are collected together, every single one of these requires a separate registration and separate monthly or annual filing.

Even more interesting than the soft consensus in favor of government intervention was a strong undercurrent that those who disagreed with it were guilty of denying basic truths. One of the questions from an audience full of Senate staffers, policy wonks, and journalists was how can we even have a rational policy discussion with all these denialist Republicans who disregarded Daniel Patrick Moynihan’s famous maxim that “Everyone is entitled to his own opinion, but not his own facts”? Jared Bernstein couldn’t have been more pleased.

“I feel like we’re in a climate in which facts just aren’t welcome,” he said. “I think the facts of the case are that we know what we can do to nudge the unemployment rate down.…I think the consensus among economists is that this is a good time to implement fiscal stimulus that would help create jobs and make the unemployment rate go down. I consider that a fact.”

In science, you insist most loudly on a fact based on how much it has withstood independent peer review. In politics, it’s closer to the opposite—the more debatable a point is, the more it becomes necessary to insist (often in the face of contrary evidence) that the conclusion is backed by scientific consensus

Every time we enter business in a new state, it is a constant challenge to figure out all the taxes we owe.  In Alabama, for a single campground, we file and pay

• Alabama lodging tax
• Alabama sales tax
• Alabama boat rental tax
• Marshall County lodging tax
• Marshall County property tax
• Marshall County sales tax
• Marshall County occupancy tax
• Marshall County health certification
• Alabama unemployment tax
• Alabama withholding tax
• Alabama personal and corporate income tax

So of course we got billed for a new one today, for the Alabama Business Privilege Tax, apparently a corporate net worth tax.  No forms or notices are sent for this tax until after it is due, when one owes about 80% in penalties.

By the way, pay the government for the "privilege" to conduct commerce is one of those government euphemisms that drive me up a tree.

From Zero Hedge

 in 2011 initial and continuing [unemployment] claims have been revised higher the week following [their initial release] 91% and 100% of the time, respectively. A purely statistical explanation for this phenomenon is "impossible."

Wow.  Something like 50 out of 50 times, the Administration has under-estimated the economic bad news in its statistics.  Just bad luck, I guess.

I barf when politicians take credit for private job creation.  At best, they stay out of the way.  At worst, they erect barriers to make growth and job formation more difficult.  So I am not ready to credit Rick Perry with Texas' economic performance over the last several years.

But despite enormous work on the left to try minimize the Texas performance, it does appear to be very impressive.  The author observes that merely comparing unemployment rates across states masks the huge job growth advantage in Texas.  Texas has higher relative unemployment compared to states like CA not because it is doing poorly, but because hundreds of thousands of people have given up on states like CA and moved to Texas looking for work.

Here is a portion of Kevin Drum's argument against lowering the minimum wage to stimulate employment

Is this really what we've come to? That we should provide a (probably very small) boost to the job market by allowing businesses to hire people for $9,500 per year instead of $14,500? Seriously? I mean, this is the ultimate safety net program, aimed squarely at working people at the very bottom of the income ladder. If we're willing to throw them under the bus, who aren't we willing to throw under the bus?

Part of the problem is that Drum is absolutely convinced that our intuition (and, oh, 200 years of experience) that demand curves slope downward is flawed in the case of low-skill labor.  He has read the two studies out of a zillion that, contrary to all the others, suggests that minimum wage increases may not affect employment and has convinced himself that these are the last word in the science.    As an employer who has laid people off and made larger and larger investments in automation with each successive minimum wage increase, I will continue to trust my intuition that higher minimum wages makes hiring less desirable.

I will say, though, that there are a number of reasons why a change in the minimum wage may have a smaller overall effect nowadays than one might expect.  That is because the minimum wage vastly understates the cost of taking on an unskilled worker.  Even with a lower minimum wage, these government costs will remain:

• Soon, the employer will have to pay for the employees health care, a very expensive proposition
• Workers comp and other labor taxes add as much as 20% to the cost of labor
• In states like California, bad employees have an increasing number of avenues to prevent employers from firing them, from appeal to an ADA law stretched out of recognition to any number of other legal presumptions that employers have to just live with hiring mistakes

Hiring employees used to be a joyous occasion.  Now I cringe and wonder what kind of liabilities I am taking on.

But back to Drum's statement, how sick is it that allowing people off the dole to actually get a job is called "throwing them under the bus?" Drum, for someone so fired up to make decisions based on academic work, sure is willing to put on blinders to all the academic work that actually characterizes who works for minimum wage and how long they stay on it.  He who argues against making policy based on flawed intuition is operating here entirely from a flawed perception of who minimum wage workers are.  He seems to want to picture families of eight supported for decades by someone trapped in the same minimum wage job, for whom a raise only comes when Congress grants it, but that is simply not the reality.

Just as one metric, for example, the percentage of all wage and salaried workers making minimum wage or less fell from 8.8% in 1980 to 1.7% in 2008.  In fact, the actual absolute number of people making the minimum wage fell by over 2/3 during these years.    I would argue that this number is probably too low.  A dynamic labor market needs to bring people in at the bottom, and raising the minimum wage makes this harder, and so traps people into unemployment.  In fact, the number of unemployed in this country is at least 6 times larger than the number of minimum wage workers.

If we dropped the minimum wage, only a fraction of the 2 million or so who make the minimum wage would see their wages go down, but lets assume a quarter of them would.  We are therefore trying to prop up wages for 500,000 but at the same time creating barriers for 13.9 million people who are unemployed and are looking for work.  And it is low-skilled workers who we are most particularly throwing under the bus by keeping minimum wages high.

Other than the demand among the status-conscious for Chanel handbags, the demand for a product or service generally decreases as its price decreases.  This is an observation so trivial it is almost stupid to write down. But I guess the point is still not understood in Washington.

"The Center for American Progress, often called the think tank for the Obama White House, recentlyrecommended another increase in the minimum wage to $8.25 an hour. Though the U.S. unemployment rate is 9.1%, the thinkers assert that a rising wage would "stimulate economic growth to the tune of 50,000 new jobs." So if the government orders employers to pay more to hire workers when they're already not hiring, they'll somehow hire more workers. By this logic, if we raised the minimum wage to $25 an hour we'd have full employment."

I find it absolutely unsurprising that Paul Krugman was enthralled by the vision of a science that can be used by a few people to control the actions and futures of all humanity.  He said “I want to be one of those guys!”  I was captivated by the vision in the book as well, but my thought was always "how do we avoid these guys?"  The second two books were about how government planners used mind control to deal with humanity whenever individuals had the gall to circumvent their plans.  Lovely.

If I remember right, Asimov wrote the Foundation after reading the Rise and Fall of the Roman Empire.  The notion of how much of history is inevitable due to large forces (e.g. economics) vs. how much is due to the actions of individuals and what historians now call contingency (e.g. luck) is an endlessly fascinating thing to debate, and I found the Foundation books to be interesting thought exercises along these lines.  But it certainly didn't inspire my life's goals, any more than Dune made me wish for a religious jihad.

I can see the secret Second Foundation scratching their heads now in their secret lair (which turns out to be in the New York Times building in the middle of New York City but that's a spoiler from the third book).  The equations show right here that a trillion dollar stimulus should have kept unemployment below 8%....

Scene 1, History AP:  My son asked me how WWII ended the Depression.  I said that the draft soaked up a lot of excess workers, which reduced unemployment, and British buying for the war helped our economy but that the war generally destroyed rather than created wealth.  He said, "Dad, you can't tell it to me that way.  The guy grading the AP is going to be a Keynesian."  So we talked multipliers and aggregate demand.

Scene 2, Spanish AP:  My son hands me a list of Spanish words he is trying to learn.  They are the Spanish words for things like "social justice,"  "poverty", "exploitation", etc.  I told him it was an odd selection of words.  He said that nearly every Spanish essay in every Spanish textbook he had ever had were about revolution and stopping the rich from exploiting the poor and fighting global warming.  So he wanted to be prepared for a similar topic on the AP.    After the test, I remembered this conversation and asked him what the essay was.  He said the topic was "show why the government of poor countries should give free bicycles to the poor to fight global warming."

My column this week in Forbes is a response to yesterday's Presidential budget speech.  An excerpt:

President Obama is working from the assumption that the political leader who suggests painful but necessary budget cuts first, loses.   He had every opportunity to propose and pass a budget when he had Democratic majorities in Congress.   But Democrats feared that showing leadership on the hard budget choices they faced would hurt them in the November election, so they punted.

Even when Obama did produce a budget, it was the closest thing to a non-entity as could be imagined.   A budget that doubles government debt over 10 years and raises interest costs (under optimistic assumptions) to a trillion dollars a year would likely be controversial in any year, but is a non-starter given fresh memories of debt crises in Greece, Ireland and a number of other countries.

Of course there is an 800-lb gorilla in the room that no one wants to acknowledge:  Three programs —  Social Security, Medicare, and Medicaid — grow in the next 10 years under current rules to at least $2.7 trillion dollars a year.  Recognize that this figure excludes all the other so-called non-discretionary payments (unemployment, food stamps, etc.) as well as everything else the government does including the military and Obamacare. The 2021 spending on just those three programs is 25% higher than the total revenue of the federal government from all sources in 2011.

Later in the article, I suggest ten principles that should be the foundation of a budget deal.

Many of you may know that my business is engaged in private management of public recreation.  We get a lot of pushback from certain sectors who believe access to government lands or services should be free -- ie already paid for by their income taxes.

I often argue that this notion of discretionary services (like parks and campgrounds) being run with high cost government labor and funded by general revenue taxes is a dead one - in fact it has been dead for at least 10 years.  Just look around at public parks organizations.  Odds are that your state is facing parks closures and is very likely not fully funding park maintenance. I wrote about this failed model here.

In the future, anything discretionary government program that can charge use fees or be privatized or both will do so.  Or else it will be provided at terrible quality with long queues and frequent closures.  Don't believe me?  Lets look at the US government budget data from last year. This chart has been making the rounds -- I have not checked the data source but I presume it is correct (as usual click for larger version)

I have some interest in the science of chartmanship.  McKinsey & Company did a great job teaching me how to make a presentation, a skill I have honed somewhat in way too many planning and strategy jobs that seemed to revolve around Powerpoint  (one of the criteria for my current job is that it did not involve Powerpoint).

This chart is a case where the author used the wrong chart type.  The pie chart is not appropriate to show a changing total (as the author does with the size of the pie).  The eye has trouble assessing volumes.  I have taken the same data and put it in a slightly different form.  I did not take time to make it pretty, but I think it works better in this format:

Now do you see my point about discretionary spending?  Last year government taxes just about covered entitlements and interest on the debt.  Had we not borrowed, there was no money left over for any discretionary spending, including all of the Defense budget!  Now, even without action, the picture will improve in 2011 as taxes go up with a rising economy and some of the unemployment spending goes down.  But this might just get us to still having a defense department.  Either large swaths of discretionary spending is going to have to be zeroed out, or some sort of entitlement restructuring is necessary.

Of course, tax increases will likely be part of the mix as well, but look at the individual income tax bar.  Even doubling it would not close the budget gap!

I continue to be fascinated by the similarity between climate science and macro-economics.  Both study unbelievably complex multi-variable systems where we would really like to isolate the effect of one variable.  Because we only have one each of climates and economies  (we can define smaller subsets, but they are always going to be subject to boundary effects from the larger system) it is really hard to define good controlled experiments to isolate single variables.  And all of this is done in a highly charged political environment where certain groups are predisposed to believe their variable is the key element.

In this post by Russ Roberts, one could easily substitute "climate" for "economy" and "temperature" for "unemployment."

Suppose the economy does well this year–growth is robust and unemployment falls. What is the reason for the improvement? Will it be because of the natural rebound of an economy after a downturn that has lasted longer than people thought? The impact of the stimulus finally kicking in? The psychological or real impact of extending the Bush tax cuts? The psychological or real impact of the November election results? The steady hand of Obama at the tiller? All of the above? Can any model of the economy pass the test and answer these questions?

The reason macroeconomics is not a science and not even scientific is that the question I pose above is not answerable. If the economy improves, there will be much talk about the reason. Data and evidence will be trotted out in support of the speaker’s viewpoint. But that is not science. We don’t have a way of distinguishing between those different theories or of giving them weights to measure their independent contribution.

I’m with Arnold Kling. This is a time for humility. It should be at the heart of our discipline. The people who yell the loudest and with the most certainty are the least trustworthy. And the reason for that goes back to Hayek. We can’t measure many of the things we would have to measure to have any reasonable amount of certainty about the chains of connection and causation.

I have heard it said that the only way nowadays to advance pure science is to be working on arcana like the first microsecond of the universe or behavior of the 9th dimension in string theory.   There is still room for a ton of useful work on the analysis, solution, and forecasting of complex multi-variable systems, even if it is just a Goedel-like proof of where the boundaries of our potential understanding can be drawn.

By the way, I wrote my own piece about the limits of macroeconomics here.

Paul Krugman has become pretty famous for being able to peer into the complex economy and find something to justify whatever he is promoting.  Higher interest rates, lower interest rates, more growth, less growth, unemployment, or boom times all simultaneously are proof of whatever theory he currently holds (which, in turn, is generally exactly the theory required to support actions by the Democratic leadership).

In the same way -- hot weather, cold weather, drought, wet weather, mild weather, lost of hurricanes, a lack of hurricanes -- are all simultaneously the proof for man-made global warming.  Whatever the weather currently is, someone can use a government grant to build a model to prove that it is due to anthropogenic global warming.  Thus this story -- Global warming causing freezing.

My Forbes post this week is on progressives and capitalism:

Progressives are often as overwhelmed by the world economy as primitive man was by his natural environment.  Just as the primitive man was confused by and fearful of storms and earthquakes and drought and disease, progressives are befuddled by the rise and fall of industries, booms and recessions, wealth and poverty.  And just as primitive men invented gods and myths to help bring order and a sense of controllability to events they didn't understand, progressives create governments in the hopes of imposing top-down order on a chaotic economy....

The children of the 1960's had a number of catch phrases, among them "power to the people."  The irony is that no system in history has ever empowered individuals as much as has capitalism.  Capitalism is the only way to organize economic activity without the use of force, the only approach that does not require that a few human beings be given power over us to guide our activity from above.  This results in an order that is emergent and bottom-up, as beautiful in its complexity as anything in nature.  And, and order that is as terrifying to progressives as nature was to primitive man.  As a result, progressives would trade it all away, would accept a master, would accept impoverishment and stagnation, in order to attain predictability.

I am sure, if asked, most  progressives would profess to desire iPod's and cures for cancer.  But they want these without the incentives that drive men to invent them, and the disruption to current markets and competitors and employees that their introduction entails.  They want to end poverty without wealth creation, they want jobs without employers, they want cars without unemployment for buggy whip makers.  When it comes to actual, real-world legislation, progressives will nearly always embrace predictability and egalitarianism over innovation and growth.

Radley Balko tells his frustrating stories about dealing with the IRS.  These stories seemed totally familiar to me because in my business life, I deal with very similar problems nearly every day.  Doing business in 12 states, I don't just deal with the IRS but 12 sales tax agencies, 12 employment tax agencies, 12 unemployment insurance agencies... you get the idea.   Multiply this story times 100 and that is what I spend most of my time on running my business.

Just as one example, 8 years ago Florida switched our company from quarterly to monthly reporting  for sales taxes.  They did this in the middle of a quarter, so the reporting for that quarter was a funny mix of a partial quarter plus one monthly report.  The next year a letter was triggered automatically from their system saying I hadn't submitted two months of reports.  It took me several hours and multiple phone calls and two faxed letters to get them to understand the situation and promise to update their system.  Frustrating but case closed.  Or not.  Their system again triggered a threatening letter to me over the same issue in December 2004.  And then 2005.  And 2006.  2007.  2008.  2009.  This comes up again every dang year.  Every year after hours of work someone swears I have finally found the right person and I would never hear about it again.  But the next year it pops up yet again.  In 2009 they actually sent a sheriff to our Florida location to start attaching assets over the non-issue.

This is an analysis from Denmark's Labor Market Commission. There are many people who simply stay on unemployment as long as they can.

I got a press purportedly from a group of Latino political groups that included this:

National Latino organizations representing over 2 million people have united for the first time to urge for the approval of clean energy and climate legislation. As part of the effort, the coalition delivered a letter to Senate Majority Leader Harry Reid, members of the US Senate and the White House calling on them to pass comprehensive clean energy and climate legislation this year.Citing the economic and health benefits such legislation would bring to the Latino community, the letter urged swift action.  Across the country Latino communities, organizations and businesses are raising their voices in support of clean energy and climate change legislation. The Latino coalition is also launching an ad campaign, titled "Estamos listos" or "We're Ready," to urge the federal Government and Congress to act.

Action on climate and clean energy this year is critical to the Latino community and the country as a whole.  Latinos face an unemployment rate higher than the national average at 13%, and a clean energy and climate bill could create thousands of new jobs in a green economy benefitting not only Latinos but the rest of the country, as well.

I was fairly amazed to see a group that represents a lot of low-skilled workers and poorer families support a new, quite regressive tax.  I wrote them

I'm curious if your organization honestly believes that Latinos would be helped by higher energy prices that are the inevitable result of the bill, or is support for this legislation a quid pro quo to get Democrats in Congress to support legislation that you care about more?  Even if a thousand of your members get a new job building windmills, and even assuming none of them are working in energy-intensive industries that might have layoffs due to higher electricity prices, I still count 1000 who have a better job and 1,999,000 who just have a higher electricity bill.  Given the tragic hostility of my state (Arizona) right now to the Latino community, I just can't believe you don't have something better to work on right now.

Via the USAToday

Paychecks from private business shrank to their smallest share of personal income in U.S. history during the first quarter of this year, a USA TODAY analysis of government data finds.

At the same time, government-provided benefits "” from Social Security, unemployment insurance, food stamps and other programs "” rose to a record high during the first three months of 2010.

Those records reflect a long-term trend accelerated by the recession and the federal stimulus program to counteract the downturn. The result is a major shift in the source of personal income from private wages to government programs.

Buried in the ariticle is a quote that I have to cite as perhaps the worst analysis I have ever seen:

The shift in incomeshows that the federal government's stimulus efforts have been effective, says Paul Van de Water, an economist at the liberal Center on Budget and Policy Priorities.

"It's the system working as it should," Van de Water says. Government is stimulating growth and helping people in need, he says. As the economy recovers, private wages will rebound, he says.

How does the income shift prove the stimulus worked?  The problem is, as usual, a difficult one of evaluating what the economy would have done without the stimulus.  The mere shift in income is a necesary outcome of the stimulus -- all it means is that we have succesfully robbed Peter to pay Paul -- it says nothing about whether Peter and Paul are more wealthy in aggregate had we not moved money around by force.  In fact, proponents of the stimulus never, ever address a very simple fact - someone was using the money to run a business or invest or buy things or employ people before the government took it for stimulus programs.  And it is really, really hard to look at the body of stimulus programs and come to the conclusion that the private sector was investing the money worse, which is the only way stimulus would occur.

That's the headline from the Arizona Republic today.  Do editors realize this is becoming a national running joke?

The number of people filing new claims for unemployment benefits unexpectedly rose last week by the largest amount in three months. The surge is evidence of how volatile the job market remains, even as the economy grows.