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  • Stagnating Workforce

    George Rebane

    “New data show that fewer than 25% of 2010 graduates who took the ACT college-entrance exam possessed the academic skills necessary to pass entry-level courses, despite modest gains in college-readiness among U.S high-school students in the last few years.”  So opens a front page report in today’s (18aug10) WSJ.  ACT scores for high school graduates have been below acceptable levels for decades and have been dropping in recent years.

    I have worried RR readers extensively on the portents of this persistent spread of national “dumbth” (a la Steve Allen).  We have already transited to an information and service economy, manufacturing forms an ever shrinking part of our employment base.  But where will we get such qualified workers when our schools continue to pump out graduates 40% of whom cannot understand what is on their diploma.

    In this decade we are well on our way to half of our workforce (now over 155 million) not being able to sell their labor at wages that will maintain their quality of life.  The government continues to be the employer of last resort, and also the funder of last resort to organizations (e.g. NGOs) filled with people who will not make it in the private sector.  And this cohort of ‘workers’ is expected to enjoy robust growth in the coming decade as the planned increase of government takes effect under already passed and planned federal legislation.

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  • Selecting the Right Business Climate

    George Rebane

    There are several approaches that a region or community can adopt to build a better business climate.   Every approach is founded on a social ideology that is promoted by its backers as a belief system that has either worked in the past, or one that will work in the future if only we give it a chance.  For example, California has made its selection clear, and it is sadly both unworkable and unsustainable.

    Joseph Bast of the Heartland Institute has assembled a body of research on business climates that he summarizes into ten points of public policy for consideration by elected officials.  These are published in ‘Building a Better Business Climate’.  They all seem to be also supported by what I would call common sense.  But in today’s America common sense is no longer a common commodity in the minds of voters.

    Policy point number ten is particularly important to smaller communities like Nevada County that have so much to offer to young families whose bread winners do good work with the stuff between their ears.  It is reproduced below in its entirety with my emphasis added.

    10. Attract members of the creative class.  A final component of a good business climate is adopting policies that make cities and communities attractive to scientists, engineers, entrepreneurs, and other members of the so-called “creative class.” These individuals are sought after by companies, with the result that businesses will move to cities and regions where such individuals congregate.

    Members of the creative class are younger than the average worker and seek cities with amenities that suit their lifestyles. They change jobs frequently and consequently prefer to live in cities with lots of job opportunities to avoid having to relocate. Creative people spend more time on outdoor recreation and view their cities the way tourists do, as a collection of places to visit to have fun.

    Cities and states that keep these preferences in mind can avoid wasting millions of dollars on “economic development” schemes that target the wrong people or attempt to draw them to the wrong places.

    In California our progressives are convinced beyond debate that implementation of AB32 will create new and productive green industries by government subsidy and regulatory diktat.   History has shown this approach to be another ‘road to serfdom’.  In November voters will have an opportunity with Prop23 to ‘suspend’ the fall of this executioner’s axe.  Russ Steele of NC Media Watch has the latest doings on Prop23 going on at the state’s Regional Council of Rural Counties meeting this week in Sacramento (here).

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  • A Sackhead Saga

    George Rebane

    The comment threads of most online blogs can get pretty nasty and off the point – one part displays the person’s upbringing, and the other his ability to noodle about the subject, even if he’s a she.  Such remarks are fostered by the anonymity of online handles (or nom de screed) which commenters adopt when they really don’t want to stand behind their words, especially if these are snarky or silly.  In the past I have characterized such people as sackheads – showing up in a public forum wearing a paper sack with eyeholes to shout or shyly mumble their message.  While RR allows such comments, I and other online commentators encourage readers to engage each other civilly (churchilian repartees invited) under their own names.

    Crabb100814

    RL ‘Bob’ Crabb, Nevada County’s keen observer of life’s foibles and cartoonist extraordinaire, captured the essence of the sackhead saga above in his regular offering that appeared in the 14aug10 Union and is used here with his kind permission.

    RLCrabbcover Mr Crabb is also a published author whose latest book is Once Upon a Village.  He will be at the Nevada County Fair today 15 August from 2-5pm where you can buy your copy and get it signed.  Bob will also be at the NC California Organics outlet (behind the SPD at 135 Argall Way) on 28 August from 5–8pm to reprise the whole thing.  So you have two chances to get his newest tome of memorable cartoons immortalized.  Go ahead, make your day.

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  • Prop 23 = AB32 Relief (updated 19aug2010)

    George Rebane

    [This is the submitted form of my August Union column which appeared in the newspaper’s 14aug2010 print and online editions.]

    Almost all surveys, polls, and analyses say that California is at or near the bottom of America’s economic ladder.  Our perennially inept legislature in Sacramento has worldwide notoriety – we are the international poster child of how not to do it.  It? damned near anything related to public policy.  More and more economists and commentators see us on the threshold of a “failed state”.  Only the progressive elites, public service unions, and their local minions continue assuring us how more regulations and taxes are going to solve all of our problems.

    The latest tumor metastasizing our Golden State was the passage of AB32, the claimed cure-all to man-made global warming.  This new law is causing untold grief to our state’s businesses with reams of new regulations already in force, and new ones being discovered and enforced every day.  Many businesses are escaping elsewhere as fast as they can.  Others are cancelling plans for growth, and laying off as many workers as possible to reduce costs as the storm approaches.

    The malady has already hit Nevada County businesses like Robinson Enterprises and Hansen Brothers.  The only ones still baying for their bone from Washington are our legions of government funded NGOs and large corporations.  These have learned to play the ‘Washington game’ of preferential subsidies and competition stifling legislation that spells oligopoly.

    RegImpactCurve   

    To illustrate the general and broad-based effect of laws and regulations burdening businesses and our economy, I offer the above graphic.  It shows how piling on more reams of state mandates creates ‘friction’ in the growth of an economy.  The horizontal axis shows the amount of regulations enforced by government, and the vertical axis indicates the resulting growth rate of the economy that such regulations enable/inhibit.

    It is clear that some modicum of regulations is needed to enforce contract law, protect consumers, and maintain the environment.  Without that an orderly society could not function.  However as we witness today, once we exceed that parsimonious set of laws and regulations, economic growth rate begins to go down.  Twentieth century autocracies have shown that growth rate can go negative leading to the collapse of the state.  This is described by the illustrated Regulatory Impact Curve (RIC), which in its naming, modesty prevented my following the lead of Art Laffer.

    When we try to peg California on the RIC, the Legislative Analyst Office in Sacramento has pronounced AB32 to be a net cost to the state.  The LAO goes on to say that California Air Resources Board has done a poor job of analyzing the “economic leakage” that AB32 will cause.  This means that AB32 pushes California to the right and downward on the RIC as indicated.

    The jobs lost to this bad law are now in the thousands, and for that reason our Assemblyman Dan Logue is spearheading passage of Proposition 23 on this November’s ballot.  Prop23 would delay the implementation of AB32 until California’s unemployment rate drops from its current 12+% to 5.5%.  A YES on Prop23 appears to be the least we can do to help ourselves during this Great Recession which has been more than mishandled from Washington, and now threatens to become a double dip disaster or worse.  We don’t need to make it worse in a state that is already scraping bottom.  (Prop23 info www.suspendab32.org/resources/ab-32/)

    Of course, all this is lost on the left that continues screaming for higher taxes, more state control, and bigger government.  Their cry is loud enough to give second thoughts to established ‘middle of the road’ politicians who should know better.  It has even scared the pre-natal RINO Meg Whitman into opposing Prop23 with the caveat that once she’s governor – wink, wink – she’ll postpone AB32 for one year through an executive order.  That little ploy is designed to endear her to the left, and sweep up the innocents on the right.  Right.

    Meanwhile, CABPRO and the Tea Party Patriots are the only local organizations so far to have thrown their weight on the side of Prop23.  Our electeds remain silent to sullen on the matter.  Nevertheless, Supervisor John Spencer will soon ask the BoS to endorse Prop23.   But business development outfits like the ERC are keeping mum.  Does this mean that we in Nevada County have pretty well pulled in our horns and mortgaged our future to ‘Chinese Cash from Washington’?  Exit question – and how long will that last?

    George Rebane is a retired systems scientist and entrepreneur in Nevada County who regularly expands these and other themes on KVMR, NCTV, and Rebane’s Ruminations (www.georgerebane.com).

    [Exit question #2] – Russ Steele at NC MediaWatch asks ‘What happens if Prop 23 fails?’

    [18aug2010 update] – The future of California is clearly visible in Europe (here).

    [19aug2010 update] – To once again illuminate the substance of loud, loutish, and shameless leftwing voices which are often found in these comment streams, please examine the US government data on recent California vs national GDP growth rates that the above RIC illustrates – US 0.7%, CA 0.4%.

    BEA2007-08econgrowthmap 

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  • Unbelievable? – maybe not (updated 17aug2010)

    George Rebane

    SSponzi Progressives and their ambiguous cousins, the liberals, cannot be this ignorant.  Tonight on Fox News Neil Cavuto interviewed James Roosevelt Jr, FDR’s grandson and former associate commissioner of Social Security.  Junior, sober as a judge, claimed in front of a national audience that SS was completely solvent due to the Treasury bonds worth trillions squirreled away in its vaunted “lock box” – the one shown on PBS as a stack of computer printouts in a file cabinet.

    It is remarkable that this individual is still walking the streets on his own recognizance.  Cavuto was careful in showing him deference while successfully fighting back giggles that tend to loosen and explosively expel all the phlegm accumulated in the back cavities of your nose.  Nevertheless, it was an extraordinary interview that maintained all previously established dignities.  But the ignorance displayed does require a bit more consideration – maybe we can look under the hood and see what is there.

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  • Those Convenient Counterfactuals (updated)

    George Rebane

    Ahh, another glorious Friday, and an opportunity to continue the never-ending debate about President Obama’s series of stimulus packages that have done so much good in this recession, the good that would have gone by the board had not Congress bent to the man’s progressive instincts and Keynesian prescriptions.

    NCARRA100813 

    Here again we see the weekly update of the contribution to Nevada County afforded by the now (in)famous American Redistribution and Re-election Act of 2009 – better known as ARRA.  The monies from this national commons has drizzled down into the nooks and crannies of our country, directed to places, people, and projects where it will do the most good for the ruling class.  But the discernible effects of ARRA have been varied and very debatable.

    That ARRA has been a just-in-time blessing for America is touted by no less than the President himself.  Starting in the marbled halls beside the Potomac, the orchestrated cry has rippled down through state capitals and city halls large and small, all the way to remote mountain counties harboring gratefully funded NGOs and the occasional stretch of road or bridge in disrepair.

    ARRA’s skeptics have spent the last year or so looking for the benefits of this federal largesse.  They’ve looked at job statistics, trade balances, unemployment numbers, etc without much success in finding the blessings from this new mortgage on the country’s economy.  And as a result, you’d think ARRA’s promoters and true believers would be in shame and disarray.  Don’t let the thought enter your head.

    The benefits of ARRA are right there in front of your eyes, you just have to know where to believe.  The skeptics are tagged daily in the media as reactionary knuckledraggers to whom it must explained over and over again that if we had not stimulated with ARRA, then this, that, or the other horrible thing would have happened.  And having now spent the borrowed Asian yen and yuan, voila!, the bad stuff didn’t happen.  What more proof could a reasonable person want?

    In systems science such arguments are known as counterfactual conditionals, or simply counterfactuals.  Their use in reasoning, especially about causality, is an important part of leading edge developments in both philosophy and machine intelligence.  To understand them, consider first another kind of conditional – the indicative conditional.  The indicative could be something as bland and tautological as ‘If it did not rain this morning, we would have had some other kind of weather.’ – an obviously true statement.

    An example of a counterfactual is ‘If it had not rained this morning, then it would have snowed instead.’  Well, the fact is that it did rain this morning, and it is not certain at all that the alternative to rain would have been snow.  It could have been sleet, hail, clear skies, or … .  A counterfactual is not a reliably true statement, it is a chancy statement at best – at best there may be a measurable probability that the statement would have been true, and that’s all.

    So now we understand the blather that comes from Washington and from local jurisdictions and NGOs about the effects of ARRA – ‘If we had not passed ARRA, then two (or three or four or …) million more jobs would have been lost.’  Bull pucky is about all we can sprinkle on such arguments.  No one has made a case for such claims, especially now that we’re seeing the economy continue to struggle and sag.  With at least equal validity one could claim, ‘If we had not passed ARRA, then the recession would now be over.’   (I’ll call that the von Mises argument.)

    And claims of how much ARRA money actually has landed in the bounds of Nevada County, and what the greater tragedy would have been had Nevada County not received such stipulated funds, are somewhat beyond comedy.  And the mirth is multiplied by the serious demeanor with which Obama’s local progressives portray the “truth” of their claims, and ascribe all other representations, no matter how qualified and official their source, as “lies”.  The twilight of reason.

    [update] A correspondent and RR reader from the Washington area sent this August 2010 DOE Inspector General’s report on the progress from its distribution of ARRA funds.  Recommended reading for a dose of high government comedy.  But when you stop laughing, you might want to have your hanky ready for the tears you will then shed for our country and your wallet.

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  • Pincer Movement (updated 15aug2010)

    George Rebane

    The news outlets today are buzzing with the latest report from the Pew Hispanic Center that one out of twelve births in America are to fugitive illegal entrants.  According to the now established interpretation of the 14th Amendment, these babies automatically become bona fide American citizens upon post-partum.  Achieving 21 years of age they can start sponsoring family members from south of the border.

    Reconquista Meanwhile, the decadal census, which is supposed to determine representation in Congress, does not ask the immigration status of its respondents.  Therefore outfits like Pew and various government agencies must jump through statistical hoops to arrive at the currently accepted 12 million figure for illegals in the country.

    Hispanic birthrates are the highest in the land.  The US Census Bureau estimates that in 2050 almost one quarter of the US population will be Hispanic.  Organizations like La Raza and MALDEF are celebrating such news as a continuing vindication of Reconquista progress.  Hispanic leaders in America (some in Congress) have for years made open public statements to cheering crowds that Aztlan – the American southwest of 1848 – will be theirs again through a bloodless conquest.  And if not that, then a bloody one will do.  Given the porous borders, anti-assimilation pressures, and today’s happy news of births to illegals, these prognostications are right on schedule.  (More here and RR search ‘reconquista’)

    Then looking at the other coast, we are reminded that an even a greater invasion is being prepared from the east.  The American Muslim community has regained the temerity to plow ahead with the giant Cordoba House mosque within a few hundred feet of where Islam unequivocally declared its intention toward our civilization.  They know what they are doing, but we don’t.  We are instead practicing tolerance toward our invaders in the same spirit that we have always practiced tolerance toward welcomed minorities who come here to become part of the greater us.

    Even their chosen name for the mosque is a triumphant telling to Islamic peoples all over the world.  By the end of the eighth century, the Caliphate of Cordoba covered most of the Iberian peninsula of what today is Spain and Portugal.  The city of Cordoba itself was the jewel of Islam’s progress to conquer Europe.  Cordoba’s population achieved 500,000 while Paris had yet to reach 40,000.  To Muslim’s everywhere ‘Cordoba’ is a battle cry of the Global Caliphate renewed, and that mosque will tell all that the final thrust into the heart of ‘The Great Satan’ is beginning.

    (more…)

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  • Obsolete Obama?

    George Rebane

    ObamaChange3 Have you noticed how Democrat candidates across the land have been nowhere in sight when President Obama swings through their neighborhoods?  It may have something to do with his plummeted approval ratings, or that the nation is beginning to take a second look at the fast track to EU socialism he has laid out for us, or … .

    Fouad Ajami,  professor at the Johns Hopkins School of Advanced International Studies and a senior fellow at the Hoover Institution, is one of the most astute observers of the international scene, and has published a series of cogent and on-the-mark analyses of the American scene of the past several years.  Today he continues with the 11aug10 WSJ piece ‘The Obsolescence of Barack Obama’.

    The magic is definitely gone – “A broken link with the public, and a war in Afghanistan he neither embraces and sells to his party nor abandons—this is a time of puzzlement for President Obama. His fall from political grace has been as swift as his rise a handful of years ago. He had been hot political property in 2006 and, of course, in 2008. But now he will campaign for his party’s 2010 candidates from afar, holding fund raisers but not hitting the campaign trail in most of the contested races. Those mass rallies of Obama frenzy are surely of the past.”

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  • Duck!

    George Rebane

    SolarCME Our sun is going through a gastric upset and belching some pretty big stuff in our direction.  The belches are actually Coronal Mass Ejections (CMEs) of high densities of charged particles that are many times stronger than the normal solar wind which the sun constantly blows outward.  Most of the solar wind is deflected by earth’s magnetic field, so that only a little of it gets through now and then to impact our electro-magnetic communications.

    But currently sunspot region 1093 (yes, they number these puppies so they can track them) is belching and coming around in our direction.  On 7 August it belched a huge mass that is hurtling past earth today (like right now) with only a minor impact on our goings on.  But as the sun rotates,  ol’ 1093 is getting better aligned with us in the next couple of days, and probably getting ready to let go with another big one that could be headed straight for us.

    Spaceweather.com reports that a “major solar storm could cause 20 times more economic damage than Hurricane Katrina, warned the National Academy of Sciences in a 2008 report, ‘Severe Space Weather Events—Societal and Economic Impacts’.  Smart power grids, GPS navigation, air travel, financial services, and emergency radio communications can all be knocked out by intense solar activity.”

    Here on earth we sometimes pump ourselves up a bit too much as we take credit for causing big changes in how this magnificent system operates.  When we consider major volcanic eruptions, high energy cosmic rays, the sun’s activity, etc – what really impacts our environment – compared to our relatively minor wiggles on this planet, we should be humbled.

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  • Competition or Corrupt Coddling

    George Rebane

    Leviathan Even the left-of-center Economist, “the world’s oldest newspaper”, is beginning to see the light as governments take over huge hunks of their countries’ wealth generating capacity.  In its 7-13aug10 issue (‘Leviathan Inc’ and figure) it features a thorough analysis of governments worldwide grabbing control of industry after industry in a hopeless hope to stem the tide of red ink that paints their budgets.  The Economist concludes that the sucking sound of disappearing American jobs “comes from the tentacles of the state, reaching into more and more areas of business in an effort to get the economy moving.  It is the sound of Leviathan Inc.”

    In countries where the state owns controlling interest in large and growing companies, the Economist points out that this success is not due to any state wisdom, but merely that these autocratic governments have now started loosening their grip on industry, enterprise, and profit.  We, with dunce caps firmly in place, never see in the comparisons that we are heading south while they are heading north.

    Here we engage in both the mega-stupid and the mini-stupid.  The mortgage lending market is a poster child of the former where all the world knows the role that government guaranteed and goaded Freddie and Fannie played in getting us into the current recession.  Yet our government again evinced idiocy in its latest financial reform act – it totally ignored the devastation that Fannie and Freddie caused and continues to this day.  This “illustrates both the perils of state meddling (implicit state guarantees distorted the mortgage market with fatal consequences) and the difficulty of giving it up; having rescued the pair, the federal government lacks any plan to pull out.”

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4 comments on Stagnating Workforce