Come On WSJ

In today’s WSJ:

To try to resolve this mismatch between potential workers and the businesses that want to hire them, Mr. Owens and Pastor Smith last year started a partnership called the Joseph Project that has already seen some early notable successes. They’ve also got an unlikely partner— Ron Johnson, Wisconsin’s Republican senator.

Seriously, it is unlikely that the GOP will support private charity?  Is a thousand points of light too old school?  Is the GOP looking to ban low paying jobs?  Is the the GOP responsible for the Obama outburst of job killing regulation?  Which party encourages private initiative?  At least they give Johnson a chance to explain why such a comment is so silly:

“It is a joy, being able to participate in that, seeing people’s lives be turned around. That’s true conservative values and they work. You [folks other than conservatives] outsource compassion to the federal government, that doesn’t work so good. You show your compassion here in your community, one person at a time.”

Rather than trying to send everybody to college and have the taxpayers support it, let’s try things like this:

Economically speaking, the Joseph Project removes friction from the labor market and solves a human-capital problem for employers. Since the best type of skills training happens on the job, for workers the program helps break “the cycle of cycle of poverty and despair,” as Mr. Johnson puts it.

Let’s be serious about helping people rather than try to see how much taxpayer money can be thrown at the problem.  On-the-job training (OJT) is a big part of the jobs solution.  The challenge is how to connect firms and folks.  The Joseph project is one way.   Another is happening at local hospital where they have created a training program for medical assistants (the first person you see in your doctor visit) that they pay for.  We need to keep a balance between academic training, mostly in college, and OJT.

Opportunity Costs

We have much to celebrate as we recently noted but we have incurred substantial opportunity costs as a country.  We have missed many benefits that were easily available.  Signs are that we will continue to miss benefits.

John Taylor details the lack of productivity in the US for most of this century.  Some have argued it is a secular thing.  We are with John and think it is a result of economic policy.  To us it is a missed opportunity for the current president.  All he needed was a little restraint.  That, however, was not in the cards.

There has been much complaining and carrying on about our two major party candidates for president and rightly so.  The opportunity lost was Mitt.  If we were enjoying the reelection campaign of Mitt and Paul there would be lots of complaints (go back and check out the commentary during the Reagan years) but it would be less bitter and less comprehensive and John Tayor would have happier news.

Our thesis: sensible economic policies do not have a direct immediate effect but they change likelihoods.  Thus, Taylor’s chart stops its free fall under more sensible economic policies but the ability to reach old maximums every year is questionable.  What are more sensible economic policies?  They would start with less regulation, less regulation, and less regulation.  We realized we were redundant but it is the easy way.  There are also important issues about taxes, spending, and the deficit.  Reducing regulation is the easy solution as we work on the others.

The probability of Herself becoming the next president is high.  Presidents are not all powerful and Herself will be less worse the the current president.  Still she is a treasure trove full of bad ideas and ethical lapses.  We hope for a single term.

The success of The Bernie and the revival of socialism in the US and particularly among the young is potentially the biggest opportunity cost of all as shown by his continuing impact on the Democrat platform and the positions of Herself.  We should be clear to distinguish between The Bernie’s adoration of Denmark and socialism.  A big welfare state like the US or Denmark is much different from a socialistic state.  As Kevin Williamson correctly noted (and we have often referred to the Heritage Index of Economic Freedom):

Welfare states are welfare states and socialism is socialism, and, in spite of the Bernie Sanders gang and the Right’s talk-radio ranters, they are not the same thing. Welfare states use taxes and transfer payments to enable higher levels of consumption among certain groups, usually vulnerable ones: the poor, the sick, the elderly, children….

Socialism, as I have written at some length, is a different beast entirely. Like the welfare state, it involves the public provision of non-public goods, but it achieves this in a different way. Rather than levying taxes and distributing checks or vouchers, the socialist government owns and operates the means of production, or, in the corporatist variant, puts the means of production under political discipline effectively indistinguishable from government ownership of them.

To summarize: We are not in favor of big government but can understand its adherents. Neither are we a small government absolutist.  We are OK with government being larger than two centuries ago.   Socialism is different and we cannot understand those folks. They cannot be convinced that socialism is that unlucky.  There are, to be realistic, a few things that fall on cusp between big government and socialism.  As Kevin says, putting the means of production under political discipline is socialism.  The VA is socialism (oh, and a failure).  Is Obamacare?  Still, there is generally a fairly clean cut line between the two.  We can see the opportunity cost in China and India where years of stagnation under socialism has led to them joining the Great Enrichment.  Why would the US choose to leave?

By Land or By Sea?

Mike Tighe writes on Wisconsin Shows Potential As A Storage Spot Of Nation and it brings up an interesting measurement point.  Mike says Wisconsin is 65,496 square miles and the 23rd largest state.  Wikipedia has a similar answer that adds a couple of square miles and notes that it includes water.  My atlas lists Wisconsin’s land area as 54,310 square miles and a rank of 25th.  There are lots of lakes (over 14,000 including two Greats) in Wisconsin.

Sidebar: this list in Wikipedia puts Wisconsin total area at 59,425 but the land and water on that list add to more than the total.  On the other hand, Georgia’s total is more than the sum of its water and land areas.  Go ahead and check it out we have all the time in the world.  End Sidebar

Our take is we see land area as a better measure.  Where that line is on Lake Michigan is really doesn’t tell us much about which state is bigger.  Still there is the issue of having the states and the USA total.  And there is Mike’s storage problem.

We don’t want to be on Jeopardy and see the answer The Second Biggest State East of the Mississippi.  It might be Wisconsin.  And there is, as always, reason to be nervous about Wikipedia.

Celebrate

Don’t worry, we will follow this post with another with more pessimism.

Celebrate because in less than three months we will elect a better president and vice-president then we currently have.  No, we don’t know who is going to win.

Celebrate because we will replace the current unfit president with a simple election in the ordinary course of business.  It won’t happen soon enough but it will happen soon.

Celebrate that despite our current governing woes or perhaps because changes are on the horizon the stock market is moving merrily along:

On Thursday, the Dow Jones Industrial Average, the S&P 500 and the Nasdaq Composite all rose to highs on the same day, an alignment that hasn’t occurred since Dec. 31, 1999.

There is, as has been said, there there is a lot of ruin in a country.  Venezuela is our more recent proof that it can be done.

Funding Sports

Those of us that remember when a $100,000 ball player was a big deal are accustomed to sports salaries and prices increasing at phenomenal rates.  Clay Travis has a thoughtful column on why it may end soon.

Sidebar: According to Travis every cable/satellite subscriber, like MWG, is paying $30 a year for the NBA.  Since we watch no basketball of any kind in the house ( we know it exists because we see it elsewhere) we are interested in a different pricing model.  If we could trade handball for basketball it would be a deal.  End Sidebar.

The cause of the shortfall is that ESPN has gone from 101 million to 89 million subscribers over the past five year.  Travis uses an idea from Sports TV Ratings that identifies the losses in three area: death (us old folk are likely to subscribe), cord cutters, and cord nevers.  The demographics make sense to us.  Therefore, the extrapolating the drop in ESPN revenues is not as unreasonable as most extrapolation is.  ESPN’s Monday Night Football contract expires in 2021 when they are estimated to be down to 73 million subscribers.  Something will have to give at that point.  We don’t have the price elasticity data on subscriptions but we are of the belief that a sharp increase in prices will lose lots of subscribers.  So the reckoning on sports revenue will could come in the next five years.  It will be ugly if it happens.  Nobody wants less.

We think Travis’ vision is pretty likely but there are a couple of reasons to think it won’t happen.  We could go to a world-wide model where the numbers in emerging countries like China and India allow for a cord solution. ESPN could have many channels if it had a billion subscribers.  Rational economic policies cannot be taken for granted (see USA).  Another alternative is that teams will find a new revenue source that is not tied to the cord.  It is not our area of expertise but it is certain the teams will find new sources of revenue.  One issue is the amount.  Will the additional revenue make up for losses to the cord?  The other issue is control.  If you have the cord you have seen the Real Madrid advertisement.  Will teams control the revenue or will leagues control the revenue.  We might end up with three or four real teams and a bunch of teams that provide competition.  Travis is right big changes are ahead.  They might be the ones he envisions or they might be very different.

 

Williamson On Venezuela

A nice summary of socialism’s history from Kevin Williamson at NRO:

Weird thing: That feckless and authoritarian kind of socialism is the only kind of socialism anybody has ever seen or heard of outside of a college dorm room. Either socialism is the unluckiest political idea in the history of political ideas and it just happens to have coincided with government by monsters, caudillos, and incompetents every place it has been tried, or there is in fact something wrong with socialism qua socialism.

As he points out folks often confuse welfare states with socialism.  The Heritage Rankings of economic freedom show that the US is eleventh (of 178 plus eight are not ranked) and Denmark is 12th.  Venezuela is 176, Cuba is 177, and North Korea is 178.  Denmark is the country closest to the US in economic freedom.  Every country has a slightly different portfolio but some are pretty close.

We know we’ve been over this before but it is worth reiteration because Venezuela is not near the front pages every day.  It should be as instruction.  Socialism is unlucky.  Pick another system.