Saturday, February 27, 2021

Biden's So-called Immigration Reform Another "Fig Leaf"

Biden Has Reopened A Trump-era Facility
It's starting to look like Joe Biden over-promised on how rapidly changes or reforms to an immigration system groaning under the strain of decades of neglect, abuse, and competing priorities would take place. It doesn't take a rocket scientist to understand it is a bad idea to invite bad people into your neighborhood. In this regard, the Trump administration had some success in deporting many thousands of MS 13 members. However, President Joe Biden has already ensured with his initial Executive Orders that the old open border policies of old would be restored people wishing to enter the country can flood back in again.

Ironically, because of this, The Washington Post recently reported the Biden administration has reopened a facility in Carrizo Springs, Texas, to house migrant teens who crossed the border without adults. What the Biden Administration is currently doing with immigration does not constitute real reform to a broken system. It is tweaking and sidestepping comprehensive immigration reform which has become a political football used by those wanting to swing policies in the direction they desire. Do not underestimate the ability of politicians and mainstream media to confuse this issue by claiming it is also a litmus test to measure whether a person is compassionate or cares about their fellow human beings. 

The immigration system is badly broken and fixing it is easier said than done. A huge part of the problem stems from the fact most people can not agree on exactly what kind of immigration system we should have. To many Americans, the key issue is how open the borders should be and who should be allowed to enter. The debate of what people "deserve" and whether those who have it should share is not new. To some people, it comes down to basic human rights. This turns into a wish of how things could be rather than how they are. Remember, borders are a creation of man and men set the rules as to who crosses them and on what terms. While it may seem unfair to exclude or deny individuals this right we must remember that life is unfair and this is a reality of life.

Trump's Border Proved Politically Divisive 

Many countries have "controlled" borders that limit those who wish to enter. This means, whether a person lives in a "land of plenty" by luck or worked their way in by cunning or toil it is something to be valued. The main reason countries try to keep immigrates out stems from the types of people that wish to enter. Sticking in my mind is the line, "they opened the borders so workers would come in but they got people instead." This keys onto the fact that many citizens resent people being allowed to enter the country and joining the group of people receiving government aid. To make matters worse many of these people do not follow or honor the mores and customs that allow a society to function.

While it is difficult to get numbers, it appears that between December 21, 2018, and June 11, 2019, the DHS with their "catch-and-release' system" allowed at least 190,500 border crossers and illegal aliens into the interior of the United States. These people were often given work permits which allow migrants to take jobs in the United States while awaiting their asylum claims. One federal immigration official noted that only around 12% of border crossers actually end up qualifying for asylum. This highlights that many illegals simply ignore immigration laws. ICE officials told Congress last month that around 87% of illegal aliens fail to show up to their court dates. This forces the agency to undertake the expensive task of attempting to locate each offender for deportation which is nearly impossible. If you are against immigration, this truly is a crisis. 

The phrase, "catch and release" refers to a collection of policies, court precedents, executive actions, and federal statutes spanning more than 20 years. These were cobbled together by Democratic and Republican administrations. This means many of the people apprehended by US authorities were released from detention while awaiting their immigration hearings. This was partly due to limitations in detention space and legal limits on who could be detained and for how long. For example, one court ruling prohibits detaining women and children for more than 21 days. While many of the same practices occurred during Obama's time in office, President Trump took a lot of heat over the immigration issue. In truth, the result of Trump's directives turned out to be "more show and salesmanship" than a major change in the way things were handled. This is because congressional approval was needed to pay for more detention capabilities, this is why many federal agents complained they were spending more time processing immigrants than guarding the border.

Immigration is the crux of the issue and Trump's so-called wall has become a diversion. It is little wonder much of the world appears to have lost faith in America's ability to lead when we have allowed the country to be held hostage over such the mundane issue of a wall aimed at reducing illegal immigration. The fact is walls are a barrier and barriers impede easy access. While such a barrier is not the answer or solution to immigration it is a tool that can help limit and direct how people illegally enter the country. Ironically, American citizens stand in long lines with passports in hand while long parts of our borders go unprotected. The fact is anyone who has traveled knows you can't just walk into any country without any questions asked.

America's Immigration System Is Broken

A lot more of our political attention should be focused on the broken bureaucratic apparatus that comprises our current immigration system. Immigration has been an issue for decades and not properly addressing it will not make it go away. A reasonable solution to solving our immigration problems has eluded both Republicans and Democrats time and time again and reduced those caught within the system into political pawns. The debate over immigration, processing new arrivals, and addressing millions of undocumented immigrants, receives plenty of press but most of our immigration problems lurk below the radar.

Tens of billions of dollars are wasted each year on this costly inefficient system according to an article published by the American Action Forum way back in April of 2015. The article explored the cost of a broken immigration system on American business. The fact is that when the American Action Forum (AAF) analyzed the total costs of the immigration system, they found close to $30 billion in annual regulatory compliance costs. It hardly takes a rocket scientist to determine that reducing the number of people "illegally" entering the country would save billions of dollars and allow the system to function better even in its current poorly crafted form.

Examining paperwork requirements by way of the Office of Information and Regulatory Affairs (OIRA) the AAF found 20 requirements dealing specifically with the labor implications of hiring an immigrant worker. Of this, seven paperwork burdens specifically applied to employers. AAF used agency estimates on the amount of time for each requirement, the number of forms, the length of applications, and the number of applicants. When an agency failed to provide a cost for the paperwork burden, AAF used the Department of Labor’s estimate of “Real GDP Per Hour Worked:” $60.59 and assumed $180 per hour as a reasonable cost for an immigration attorney.

Immigration also takes a toll on American employers, these burdens increase the cost of doing business and place a barrier to firms wishing to hire qualified workers. AAF found that a hypothetical firm hiring an immigrant would have to manage up to six federal forms, totaling 118 pages, and at a cost of approximately $2,200 per firm, per hire. Even small businesses in states far from the border are required to confirm a worker is legal to work. This is a bit ridiculous for small firms with only a few workers, all from their own family which they have known since birth, but that's the law. 

Another article in The New York Times from September of 2016, titled; “The Economic and Fiscal Consequences of Immigration” cites a 509-page National Academy of Sciences Study that reinforces the fact this is a very controversial issue. The report allowed interest groups on both the left and the right to claim it vindicated their positions. America’s Voice, a liberal advocacy group, declared from the pro-immigration side it "confirmed immigrants benefit America." while conservatives calling for more restrictions on immigration read the same report but had a very different interpretation saying it showed "workers and taxpayers lose, businesses benefit.”

According to a Harvard-Harris poll, around 2-in-3 American voters are opposed to catch-and-release, and according to GOP voters, conservatives, and Trump supporters, reducing overall immigration remains a priority. Little of the border wall barriers Trump promised were ever built. None of this is a solution to the Deferred Action For Childhood Arrivals (DACA) situation, and loading millions of people on buses and deporting is never going to happen. Still, those wanting more open borders should realize the current immigration is broken.  

We should step away from the "emotional" aspects of immigration such as flowery debates about the rights of people and what they "deserve" and focus on real immigration reform. In the overall scheme of things considering America's multi-trillion-dollar budget, the cost of building a wall is peanuts and it is easy to see how America will get a good economic return on money spent for a barrier that works 24/7 year after year. Again those we have sent to Washington are proving they are more interested in grandstanding and playing to their base rather than solving real problems.

 (Republishing of this article welcomed with reference to Bruce Wilds/AdvancingTime Blog)

Tuesday, February 16, 2021

Bitcoin's Future Is Far From Certain

Because of the success of Bitcoin and its soaring value, cryptocurrencies are back in the news. These "digital assets" are designed to work as a medium of exchange using cryptography to secure the transactions and to control the creation of additional units of the currency. To those of us in many areas of the world simply toiling along and concerned about getting through the day these currencies seem a bit abstract. Still, these currencies have a solid fan base. 

With the recent news that Tesla had purchased $1.5 billion in bitcoin, many of those people that follow Elon Musk have made their first foray into crypto. These new investors come in on the heels of a slew of speculators flush with cash from checks flowing from the government that have already jumped into this market causing it to soar. The question in the minds of serious investors is whether this is a safe place to put your wealth. The main driver of what could be described as a "mania" is the "fear of missing out," and it runs rampant in this market.

With wild predictions of Bitcoin surging to six figures or more, many people claim cryptocurrencies are like gold. Many people view it as a way to shelter themselves from the falling value of paper currencies and the dollar in particular. Since the dollar is the reserve currency of the world many Americans that fail to see its major competitors such as the euro and yen are even worse places to store wealth have magnified the possibility of a dollar collapse.

A big risk to investors in Bitcoin is that it could be made "Illegal" or the trading of it banned. If this happened in many countries it would drastically damage its appeal. This could be done under the claim that it protects investors from themselves or because it was not sanctioned by those in charge. The greatest reason for this is that it would protect the power of Central banks across the globe and their fiat currencies. It is rather silly to think those in control of fiat currencies would surrender their power over the financial system and go gently into the night. 

On that front, Bloomberg reports that ECB President Christine Lagarde has taken aim at Bitcoin’s role in facilitating criminal activity, saying “For those who had assumed that it might turn into a currency -- terribly sorry, but this is an asset and it’s a highly speculative asset which has conducted some funny business and some interesting and totally reprehensible money-laundering activity,” Her statement comes as German police took down what they believe was the world’s largest illegal “Darknet” marketplace. They shuttered a platform that about half a million people used to trade drugs and cryptocurrencies including Bitcoin. This shines focus on the fact Central banks, including the ECB, are increasingly focused on developing their own digital currencies as an official alternative to cash for the digital age. 

My biggest problem with bitcoin remains the old, "And Its Gone" issue. This means the possibility that it could vanish in the blink of an eye. While this can be said of almost any investment, it is particularly true of an intangible asset. Making matters worse, a major problem with an investment like Bitcoin is that when the wheels come off it could happen so quickly that there is almost no time to react.

Years ago, Jamie Dimon, CEO of JPMorgan Chase proclaimed bitcoin as a fraud, he went on further saying, "any trader trading bitcoin would be fired for being stupid." Last month, during a meeting held for thousands of JPMorgan Chase traders and sales personnel around the world, the question was increasingly being asked by the bank’s employees: When will they get involved in bitcoin? It should be noted that JPMorgan has tried several times in the last few weeks to inject its views and halt bitcoin's advance without success. 

JPMorgan is not the only big bank being forced to face up to the new reality of decentralized finance and cryptocurrencies. Recently, Goldman Sachs hosted a private virtual forum with the CEO-founder of crypto firm Galaxy Digital. During the event, he expounded on his thesis for bitcoin, ethereum, and other digital assets as well as their macroeconomic backdrop. The point being, as corporations, payment systems, and disruptors such as Tesla, MicroStrategy, and PayPal, increasingly adopt and accept cryptos, other institutions must adjust.

While many people feel that the decision of large banks and institutions to recognize Bitcoin constitutes a major stamp of legitimacy for the nascent asset class. The interpretation that this idealistic technology meant to cut banks and other intermediaries out of "the loop" and limit their ability to store wealth may only appear to have gone mainstream. It is important to remember, this vessel of value used mostly by rich people so that they can remain rich may have forced groups to accept it but that does not mean they will invest in it. 

To clarify, if someone sells you their home for a handful of diamonds, they may be doing so only because they know the diamonds can rapidly be offloaded in an active market.  This means that just because a bank will now store Bitcoin on behalf of its asset-management clients, that does not guarantee Bitcoin's value or force the bank to embrace this asset class. Simply put they are trying to accommodate clients and give the impression they are staying up with current trends. Adding to their incentive is the allure that most of the services they offer will carry a fee.

Another thing we hear about is mining Bitcoin. This process uses a lot of energy and is becoming increasingly difficult to do. Several YouTube videos on this subject confirm it is difficult to make money doing this. It is a bit ironic that so-called "'woke" companies and sociably  responsible people that claim to care about climate change would turn around and buy digital tokens that use more electricity to maintain than some countries. Well, that is all I have to say about that for now.


Footnote: The link below is to an article that tells more about Bitcoin, cryptocurrencies, ICOs, and blockchain.

(Republishing of this article welcomed with reference to Bruce Wilds/AdvancingTime Blog)

Saturday, February 13, 2021

The Dreadful "C" Word - Conserve!

An article I wrote years ago remains as relevant today as when I wrote it. The subject delved into how candidates shy away from the dreaded "C" word, conserve! It pointed out how the  Presidential candidates at the time did not even bother to mention pursuing an innovative initiative to conserve our resources. The reason for pointing this out is rooted in a very ugly weather forecast through the 20th of February. The current weather models suggest a polar vortex will continue pouring Arctic air into much of the central US which has caused natural gas prices to soar along with electricity demand. The sad fact is many Americans will respond by cranking up their thermostats while they watch Netflix shows or use energy to mine Bitcoin. 

His Thermostat At Home Is Set At?
Because of my business, over the last several years I have had reason to enter many large buildings and offices in the evenings or during weekends. Amazingly, on cold winters nights, weekends, and over holidays thermostats on many of these buildings are not set-back and these buildings are a toasty seventy degrees. Yes all over America we heat empty buildings as though they are occupied. Also, a fair number of computers and lights are often left on long after everyone is gone for the day, it seems many people don't care enough to make the slightest effort to turn down the heat or turn off a light. 

This is an awareness and an attitude problem and, without a gentle nudge to conserve, Americans will continue to damage the environment and add to climate change. Generally, Americans are a spoiled breed. The fact is a lot of energy could be saved at little or no cost. For example, it seems almost absurd that some Americans think the thermostat should be set at 68 degrees during the summer and 76 degrees during the winter, this is completely backward to what logic would dictate. By simply mandating lower heating and higher cooling settings in government offices and buildings would give the private sector the cover they need to adjust their thermostats accordingly in both offices and stores. 

While there are many new and exciting ways to recycle and cut energy waste it seems public officials are almost afraid to talk about conservation. It is as if they will offend someone or that big business and their lobbyist have made this subject taboo. Maybe they just don't care about America or the planet on which we live. A simple yearly fee on inefficient vehicles paid to the states when licenses are renewed would accomplish much in getting Americans to shed their gas guzzlers which would move America to a more fuel-efficient fleet. Halting the manufacturing of the low-end furnaces that are still being installed in many new homes, upgrading thermostats, and phasing out the sale of light fixtures, and appliances that fail to make good use of our resources are just a few ideas.

We Should Pay Far More For Dumb Choices
Each school day millions of buses hit the road across America transporting children to schools across town and past the schools near their homes. Every Saturday a massive fleet of vehicles leave post offices across the land to deliver mail that most Americans do not feel is important. The cost of policies like these go far beyond the cost of money being poorly spent, they take a toll on our planet. We need politicians who care about the hidden cost of short-term policy and have the courage to focus on long-term planning and sustainability. It is time voters demand politicians put this priority before their desire to serve big business and the lobbyist that shower Washington with money.

Needless to say, millions of homes across America still lack proper insulation or do not have programmable thermostats and these are often inhabited by those least able to pay large utility bills. Ironically public policy centers around giving these people more money to help pay their energy bills rather than helping them reduce the energy that is being wasted. We also see government mandates and rules related to the American Disability Act making buildings obsolete far before their time when the focus should be on improving their efficiency and extending their useful life. We cannot afford to continue removing and replacing buildings after only a few decades. A sensible way to create jobs and save many of these homes would be to back programs geared to making them more energy efficient.

Solid Waste & Landfill Facts

The U.S. Is The #1 Trash-Producing Country
  • About one-third of an average dump is made up of packaging material!
  • Every year, each American throws out about 1,200 pounds of organic garbage that can be composted.
  • The U.S. is the #1 trash-producing country in the world at 1,609 pounds per person per year. This means that 5% of the world's people generate 40% of the world's waste.

It is important to note that regardless of what many people think, innovation does not always involve spending huge sums of money. Innovation often means simply thinking of new ways to get the job done. While it could be argued that cutting back on waste would lower the GDP it would have many positive benefits such as improving our standing in the world community. As we conserve, pollution is reduced, America's economy will be strengthened by reducing the importation of energy, new jobs will be generated by the industries that address these needs, and damage to the climate from global warming lessened. Why are politicians so willing and eager to ask America's sons and daughters to risk life and limbs in foreign wars while unwilling to ask Americans to make such a minor sacrifice?


 (Republishing of this article welcomed with reference to Bruce Wilds/AdvancingTime Blog)

Greenwashing Turns "Ugly" Into Environmentally Friendly

Greenwashing is a term you may not be familiar with but may become used more frequently in the future. The combination of limited public access to information and seemingly unlimited advertising has enabled companies to present themselves as caring environmental stewards, even as they were engaging in environmentally unsustainable practices. This has been going on for years and I expect the effort to portray a company as "caring about the environment" is about to be ramped up to a whole new level. 
The idea of greenwashing is not new but has evolved and drastically increased with the news-waves constantly echoing concern over global warming and climate change. Many companies are now working to engage customers in their sustainability efforts, even as their core business model remains environmentally ugly. The many ways companies and people damage the environment are often their "dirty little secrets." Sometimes environmentally damaging behavior is driven by greed, sometimes ignorance, and sometimes a feeling of entitlement or indifference. It is often difficult for people to discover the truth about a company when it is hidden behind well-contrived lies. 

In "Many Cites" Buses Have Few Riders
In the same way, government diverts our attention from something that highlights its failures, companies often divert our attention from the bigger picture. Marketers create advertisements that appeal to the sensitive hearts of the consumers by making images and films that are adorable. This is also done by making green claims that are vague and ambiguous. By simply changing the color of the company logo from yellow or red to green can invoke the illusion of environmentally friendly products.
Greenwashing is not reserved for companies, even individuals use it. An example is how John Kerry, President Biden's recently appointed climate czar and envoy for climate change, tried to wash away his sin for taking a private jet to Iceland in 2019 to receive an award. When asked by a local reporter if this was an eco-conscious way to travel, the former secretary of state replied, “it’s the only choice for somebody like me who is traveling the world to win this battle.”
Like many of the global elite, Kerry doesn't see himself as guilty of abusing his position, to him, he is merely exercising his privilege. We see the same crap flowing from many of the self-absorbed global elite that attend conferences such as the World Economic Forum in Davos. For many of these people, a private jet is not the "only" choice, it is a "preferred choice." The hypocrisy of John Kerry, and people like him, should give us pause.
A major issue we now face is that putting a friendly face on ugly presents a real danger. This comes at the same time governments and central banks are rushing to fund a green agenda. Sadly, many of the ideas generated by these so-called environmentalists are akin to putting lipstick on a pig or rooted in the idea a great deal of money can be made by embracing this move. The continuing debate of whether Electric Vehicles are less damaging to the environment and indications they are not underlines the importance of plotting a clear path ahead. 
Years ago the answer was ethanol, a renewable domestically produced alcohol fuel made from plant material, today many see this as an expensive boondoggle to benefit big agriculture. The current political atmosphere is ripe for crony capitalism to flourish and boondoggles to sprout up everywhere, especially when it comes to going "green." Another troubling development is the possibility of government overreach removing many of the choices we have come to enjoy. This of course would be carried out under the idea it is being done for "the greater good." 
Falling into this category is an agenda being promoted under the Green New Deal moniker, this name is most likely used to give this vision of America a more credible image. The Green New Deal is modeled in part after Franklin D. Roosevelt’s New Deal, a large federal program designed to stabilize the economy and recover from the Great Depression. It should be noted many people give credit to World War II for pulling America out of the Great Depression rather than Roosevelt's economic policies. looked into the Green New Deal to see what it includes and doesn’t as well as to why there is confusion over the content. It calls for a massive change in society and the way we live. It focuses on tackling climate change but isn’t concerned just with reducing emissions. This was all wrapped into a resolution listing goals to be accomplished in a 10-year mobilization effort that does not stipulate how the country will reach them. The resolution is also silent on cost and how all this should be funded. Below is a list of the five goals, which the resolution says should be accomplished in a 10-year mobilization effort:
  • Achieve net-zero greenhouse gas emissions through a fair and just transition for all communities and workers
  • Create millions of good, high-wage jobs and ensure prosperity and economic security for all people of the United States
  • Invest in the infrastructure and industry of the United States to sustainably meet the challenges of the 21st century
  • Secure for all people of the United States for generations to come: clean air and water; climate and community resiliency; healthy food; access to nature; and a sustainable environment
  • Promote justice and equity by stopping current, preventing future, and repairing historic oppression of indigenous peoples, communities of color, migrant communities, deindustrialized communities, depopulated rural communities, the poor, low-income workers, women, the elderly, the unhoused, people with disabilities, and youth (“frontline and vulnerable communities”)

With the hard turn towards creating a more green economy, it should come as no surprise that now Jane Yellen as the face of the Treasury Department’s free money initiative recently addressed the G7 telling them, we "should be focused on what more we can do to provide support at this time." She went on to "emphasized the commitment of the Biden Administration to multilateralism to solve global issues, stating that the United States “places a high priority on deepening our international engagement and strengthening our alliances."

The fact Yellen also "expressed strong support for G7 efforts to tackle climate change, highlights how just a small percentage of votes can cause a 180-degree change in a country's policies. Yellen even went further expressing her strong belief that G7 countries "must work to address the challenges facing low-income countries who are struggling to respond to the pandemic." Several Central Banks have already endorsed the green agenda. This all falls into the scenario that it's time to finally fix the world and together we have the ability to create the money to do it.  In short, we will spend and you should too. 

Enough about the money and the politics behind all this, the reality is, much of the direction the world takes will have less to do with the environment than the image those in charge wish to project. If any of these people really gave a damn about the environment the first word out of their mouth would be "conserve" and then they would be talking about reducing waste. This is the low-hanging fruit that could be quickly reached and picked at little cost. Both would make a great difference. The reason nobody talks about this is that conserving and reducing waste would cause the GDP to fall like a stone.


Footnote: The two articles below explore some of the issues noted above. The first details how buses run empty across many American cities. The second delves into while there are many new and exciting ways to recycle and cut energy waste, public officials seldom talk about conservation.

 (Republishing of this article welcomed with reference to Bruce Wilds/AdvancingTime Blog)

Wednesday, February 10, 2021

Yellen's LaLa Land Prediction Of Full Employment

Biden And Yellen Serve Destructive Recursion
While the trend of automating jobs is moving along full speed U.S. Treasury Secretary, Janet Yellen recently said that the U.S. could achieve full employment recovery if President Joe Biden's COVID-19 stimulus package is passed. "I would expect that if this package is passed, we would get back to full employment next year," Yellen told host Jake Tapper on CNN's State of the Union. This is a clear signal Biden's need to urgently pass a COVID-19 relief package is being ramped higher. 

Yellen said, "We will get people back to work much sooner with this package." She went on to claim,  "There's absolutely no reason we should suffer through a long slow recovery." According to the  Treasury Secretary, the President's $1.9 trillion COVID-19 relief package could help the U.S. employment numbers recover at a faster pace. Yellen cited a report from the Congressional Budget Office (CBO), which found that the unemployment rate would reach pre-pandemic levels in 2025 without the level stimulus proposed in Biden's American Rescue Plan.

Some economists have voiced fear this relief plan will spur inflation. Even former Treasury Secretary Larry Summers has raised concern Biden's package would "flood the economy" and lead to high inflation. Yellen, however, as the former Federal Reserve chair brushed aside this issue saying she spent many years "worrying" about inflation and, "I can tell you we have the tools to deal with that risk" if it were to occur. Yellen pointed to the huge economic challenge and tremendous suffering facing the country, then indicated, "That's the biggest risk." Yellen's words indicate we have clearly entered the area of "Destructive Recursion," a term coined to refer to a system that keeps feeding power back into itself and is controlled by those who are destroying it.

Under Biden's aggressive package, which includes provisions such as a third $1,400 stimulus check; rental assistance; funding to accelerate COVID-19 vaccination efforts; and $400 additional unemployment benefits. Still, the big question before us is, how will that money be spent by those getting checks. The ugly reality is that countries like China have benefited greatly as Americans used the covid-19 money from our government to purchase foreign-made goods instead of buying food and paying rent. This dovetails with a previous article on this blog that pointed out that where and how people spend the money given to them by the American government matters and will continue to impact our economy over time. 

The package Biden laid out only came in at 1.9 trillion dollars disappointing some of his followers. This is because it does not include a great deal of what he has promised. Missing were things like spending on infrastructure and forgiving student loans. Unfortunately, it is most likely this is only the first of many packages that will be rolling through congress in an effort to halt the economy from unraveling. To be perfectly clear, the problem we face is that poorly spending even trillions of dollars does not necessarily create a strong economy. When it comes to government spending more often than not much of the money is simply squandered.

This sets in play the feel-good issuance of what is herald as free money being gifted by those in charge. The truth is more "bridges to nowhere" and wasted spending exists than the taxpayer could ever imagine. Often infrastructure spending falls short of creating real wealth for our country but merely feeds cronyism and ends up lining the pockets of those in power and their friends. In the long run, a country's economic policies and its system of taxation are far more important to the economy than government spending. Sadly, little of this type of legislation is in the pipeline and appears to be a low priority.

A major issue is those small businesses that have closed their doors forever represent jobs that won't be coming back. When we couple this with the idea the minimum wage is likely to soon increase the forces of automation we should expect a huge drop in future job opportunities. This translates into far higher government deficits going forward as many more Americans exit the workforce. It could be argued the government leaping into the role of our primary supporter and making people dependent on government programs tends to reduce our incentive to work. Considering the level of support many Americans seek it is difficult to imagine the deficit coming under-control anytime soon.  

This increases the possibility of stagflation and that we are about to slide into a multi-year economic downturn. An example of this is evident in the prediction that New York city's recovery could take two years longer than the rest of the country as the virus-induced downturn has severely damaged five key industries - restaurants, hotels, the arts, transportation, and building services, all of these rely heavily rely on travel and tourism. The focus of Washington should be getting America back to work.

The idea we are in a false economy while many Americans  remain out of work is highlighted by a fact still largely unrealized by many Americans. We are living in an economy driven by government spending. We should not forget Yellen is as responsible as any of the other recent heads of the Federal Reserve for shaping the economy in a way that drove inequality. It is difficult to ignore how wealth has rapidly flowed to the super-wealthy at the top of the economic pyramid. 

I contend that Yellen is dead wrong when she promotes this so-called relief package as capable of making a huge difference in the job market. The ranks of the unemployed are about to explode along with the deficit as the unemployed become "wards of the state." This problem will go global as robots replace human workers. Our situation in America may become much worse as people flee poor countries and enter our borders. The call for higher wages will only hasten the move to replace human workers with robots and other forms of machines designed to automate work processes.

Yellen and those in Washington better note the drop in the unemployment reflected in the recent January job numbers was due to a decline in the labor force. It shrank from 160.57 million to 160.16 million workers. This resulted in a decline in the participation rate from 61.5% to 61.4%. This indicates, workers are leaving the workforce in droves as they became discouraged about the lack of opportunities, simply fell back on government handouts, or simply gave up looking for a job. "We need a package that's big enough to address this full range of needs," Yellen said. "I believe the American Rescue Plan is up to the job." To this I reply, Janet, you don't understand the problem.

Monday, February 8, 2021

Get Ready For More "Fisker" Like Follies

A folly is a costly undertaking having an absurd or ruinous outcome. Those who are glad to see the return of the "Old Guard" to power may have forgotten the many scandals of the Obama years or how upon leaving the White House the Clintons took with them "the china." While Trump's style may not have appealed to everyone the vindictiveness and malicious calls to go after him and his supporters will do little to bring America together.

A song written and performed by American popular music singer-songwriter Jimmy Buffett titled, "Gypsies in the Palace" describes what happens when those in charge take advantage of their position. In the song, Buffett talks about how, "In days of old, when knights were bold and journeyed from their castles, they would leave what they thought were "trusty men" to watch over things. Unfortunately, it was not uncommon for these men to soon help themselves to pig and peach then drink from the King's own chalice. In short, to do a bit of plundering for their amusement and benefit.

With the above in mind, I would like to re-post an old article from this blog. The article contains all the good stuff, like villains, and theft. Some parts have now been put into bold type to highlight the irony of what could be considered an interesting coincidence. It also stands as a reminder as to the limits of big government and suggests that we be careful of what we wish for. The current political atmosphere is ripe for crony capitalism to flourish and boondoggles to sprout up everywhere, especially when it comes to going "green." Consider this a trip down memory lane, please enjoy.

Fisker Automotive Another Government Folly 

Sunday, April 28, 2013

Great Looking Car
Fisker should be renamed "fiasco", for that is what it has become. It appears that the Obama administration. was warned as early as 2010 that electric car maker Fisker Automotive Inc. was not meeting milestones set up for a half-billion-dollar government loan, nearly a year before U.S. officials froze the financing in June 2011. This was done after Fisker presented new information that called into question whether key milestones - including the launch of the company's signature, $100,000 Karma hybrid - had been achieved, according to a credit report prepared by the Energy Department.  Fisker had received a total of $192 million of the $529 million loan before it was suspended. It should be noted that the plant was never completed and never produced any Fisker cars.
The Company Failed!

In the June 2010 email, Sandra Claghorn, an official in the Energy Department loan program office, wrote that Fisker "may be in limbo due to a lack of compliance with financial covenants" set up by the department to protect taxpayers in the event of default. Another document, from April 2010, listed milestones that Fisker had not yet met. The potential loss of $171 million would be the largest loss of federal loan money since the failure of Solyndra a solar panel maker. That company's collapse, which came despite a $528 million loan from the Energy Department, has triggered criticism of the Obama administration's green energy program. The Energy Department seized $21 million from Fisker this month as it continued to seek repayment from the carmaker for the 2009 loan. A payment from Fisker was due Monday but was not made.

Rep. Jim Jordan, chairman of the Oversight subcommittee on economic growth and regulation, said it is hard to understand why the Energy Department ever thought Fisker was a viable company that should receive taxpayer money. Henrik Fisker, the company's namesake, and founder was scheduled to testify at Wednesday's hearing. Fisker, who was forced out as CEO as the company's troubles mounted, said in prepared testimony that he remained proud of the company's "cutting edge technology," which he said could "pave the way for a new generation of American car manufacturing." Fisker disputed claims by some critics that the Anaheim, Calif.-based company needed the federal loan to survive. Fisker said a high-ranking Energy Department official approached him in 2008 and asked him to apply for the loan, which is intended to boost electric cars and other advanced vehicles.

It was Vice President Joe Biden who announced in late 2009 that Fisker would reopen a shuttered former General Motors factory in Wilmington, Del., to produce plug-in, electric hybrid vehicles. What does Joe Biden have to do with Fisker Automotive? On the surface, the answer would seem to be nothing at all, or at least it did until Biden himself revealed the startup automaker's plans to introduce a new series of electric vehicles under the Project Nina banner. Not only that, Fisker just so happens to have decided to build cars in Biden's home state. Coincidence? Fisker has denied that any political influence was used to obtain the loan or in negotiations over its terms, according to Russel Datz spokesman for Fisker, coincidence is exactly what it is, a good number of reasons exist to choose the former GM plant in Wilmington, Deleware, and the fact that it's Biden's home state is not one of them. Claymont, Deleware  home of Biden is roughly eight and a half miles from Wilmington.

Nicholas Whitcomb, who directed the Energy Department’s advanced-vehicle loan program, testified that $8.4 billion in advanced-vehicle loans have been given out to five auto companies so far. While Fisker has performed poorly, he said, loans to firms like Ford, Nissan, and Tesla have helped build factories and are all scheduled to be repaid. Fisker ran into trouble from the get-go. The company’s business model was to design an attractive sports car and then purchase off-the-shelf parts from suppliers. But that unusual strategy carried risks. Fisker’s real legacy may be the damage it has done to federal support for other electric vehicles. The Energy Department hasn’t ”closed on a loan or loan guarantee or conditionally committed to doing so under either program since September 2011.” The reasons? Applicants are skittish about going through a “lengthy and burdensome” application process and facing the same pressures that faced companies like Solyndra and Fisker.

Efforts have been made to blunt other criticism of the loan by the Obama administration, by stressing that Fisker was an anomaly. Supporters of the Obama Administration's "green energy" loan program have banged away at the idea that Fisker's problems stem from a lack of demand for electric cars in general, but the government should press on because it is in their opinion the right thing to do. It was announced in August 2012 GM,  would be halting the manufacture of its infamous Chevrolet Volt for at least four weeks, few were shocked. The Volt was awarded the 2010 "car of the year" title, but As of this writing, GM has sold 10,666 Volts through July, which, luckily for the automaker, is a major improvement over the 2,870 it sold at this time a year earlier. GM had made predictions that this year, over 45,000 units of the car would be sold. In other words, even if Fisker is an outlier, it’s casting a long-shadow over electric-car policy.

Back in October of 2011 the Obama administration has defended its decision to allow Fisker Automotive to assemble its high concept electric sports sedan, the Karma, in Finland, even though U.S. taxpayers had made a major investment in the car's development, saying none of the American money was spent on the car's overseas assembly. But Republican critics this weekend challenged the administration's explanation, saying federal loans should have only supported applicants who would be building their cars on American soil. "The Department of Energy and Fisker executives are splitting hairs about where the money went," said Rep. Tim Murphy, a Pennsylvania Republican who sits on the House committee that has been investigating the Obama Administration's "green energy" loan program. "Ultimately, American taxpayer dollars went to a Finnish automaker to build high-end luxury automobiles for Hollywood."

 A report on ABC News' "Good Morning America" about Fisker Automotive, the recipient of a "green energy" loan in 2010, quoted auto industry experts who said Fisker's loan invited comparisons to the ill-fated Energy Department loan to Solyndra, a solar panel manufacturer that received $535 million in taxpayer support, declared bankruptcy earlier this year. That federal loan is now the subject of investigations by the Justice Department and by inspectors general from the Energy and Treasury departments. The Washington Post has discovered that the Energy Department quietly eased expectations for Fisker's projected car sales volume after it conditionally approved the loan, and made allowances for scaling back projections in the final loan agreement, this is not the way taxpayer money should be spent. The Fisker folly, and its failure, reeks of government cronyism and waste, someone should be held accountable.

Footnote; I wrote a post about Solyndra long after the company had bit the dust, also the post named "Electric Cars" goes into the subject of another failed company in Indiana that was part of this "government green push" below are the links.          

Sunday, February 7, 2021

A Lack Of Jobs In The Future Is A Scary Prospect

While many workers are chilling at home or working reduced hours due to covid-19 lock-downs many are paying little attention to the huge number of job opportunities that are vanishing every day. A lack of jobs in the future is a scary prospect and bad news continues to roll in concerning future employment possibilities. A higher minimum wage adds a whole new element to this situation because it encourages businesses to bring in machines that reduce the need for human workers. For a business, being able to reduce labor moves more money into the profit column or sometimes allow them to remain solvent. Sadly, it is often only larger companies that have the volume to make such purchases viable or can afford to purchase labor-saving machines. This puts even more pressure on small family businesses making it more difficult to compete.

When governments across the US and the world forced businesses to close down in response to covid-19, many people assumed the layoffs would be temporary and people would quickly return to work once the crisis passed. Unfortunately, as the pandemic stretches into a full year and mutant strains appear, millions of workers remain out of work and economists say many of those “temporary” job losses have become permanent. Also, the pandemic has set new parameters on who can work as well as where and how they must carry on. 

The current recession has been masked and papered over by massive government spending. This has created a transformation in demand rather than a shortfall in demand. This means businesses and producers must rapidly and continually shift operations to respond to a new set of realities. In order to survive, they are re-positioning and re-size accordingly. The fact is, the virus pandemic is being used as an excuse to automate millions of jobs worldwide.

Capital and labor do not adjust on a dime, time is required for producers to figure out what their new markets might be and how best to deploy their assets. As companies face the changing realities of their businesses it is all too likely we will see an expansion in the ranks of those ranked permanently unemployed. The loss of 300 jobs here and 1,800 there add up rapidly and when it continues year after year it has the potential to massively reshape society. 

For each job taken away by automation and the advancement of robotics, it means the need for fewer human workers. Over the last few months, I have been collecting examples of technological advancements that herald some of the "human replacements" about to enter the workforce. This is an ongoing issue and the advancement is gathering steam. Below are just a few of the kinds of mechanical competitors we face as competition. These will take a toll on employment over time.  Below we have an assortment of the different kinds of mechanical workers being rolled out to compete with humans in the workplace.

First, we have a "smart garbage sorting robot"  it was recently launched on the streets in eastern China. It can pick up and sort trash for an entire workday. China's national newspaper, the People's Daily, published this video showing the robot cruising down the sidewalk in the city of Hangzhou. It identifies trash, then uses a robotic arm to pick up the debris. The fact it does not get wired, bored, or take breaks makes it a good option to paying a human to perform the same task. Different versions of this sort of device are expected to also chip away at janitorial and cleaning jobs as well as sort recyclables from trash. 

This process of automation taking jobs is highlighted in an article keying in on the thousands of recently laid-off airline pilots. With travel and tourism greatly curtailed due to covid-19, many pilots have been laid off. Now it is said in coming years some planes may become fully automated. This means the need for pilots will be greatly reduced. FOX 5 New York reports a startup by the name of Xwing, is working with the FAA to certify a fleet of autonomous Cessna 208B Grand Caravan utility planes for short-haul delivery services. Xwing's Autoflight System converts small planes into autonomous aircraft that can taxi, take off, navigate a flight route, and safely land, all on its own. 

This is why the thousands of airline pilots laid-off may be pushed towards learning how to fly drones which will be used for delivering products. This is not expected to pay quite as well or have the same status as their prior job. The same situation is forming on the nation's highways where semi drivers are going to be replaced by self-driving trucks. As a matter of fact, many delivery jobs are rapidly moving in the direction of being automated.

Another place where automation is evident is in the food industry. An example of this trend is visible in China where Kentucky Fried Chicken has launched a new food truck program, using autonomous vehicles that allow customers to purchase its products without human interaction. This autonomous KFC food truck is just another example of human workers being removed from the transaction. These food trucks are manufactured by Neolix, a self-driving logistics startup based in Beijing. Customers place an order on a screen then after payment is made, the door opens and customers receive their order.

Here in the United States, White Castle recently announced it will begin automating its US kitchens. This dovetails with a story about how one company now offers the world's first-ever "robotic kitchen" for consumers that does all the cooking for you. A London-based robotics company claims, its Moley Robotic Kitchen can whip up at least 5,000 recipes at the press of a button. Not only does this expensive little gem cook complete meals, it tells you when ingredients need replacing, suggests dishes based on the items you have in stock, learns what you like, and even cleans up surfaces after itself.

The coronavirus pandemic and higher wages are acting as the catalyst to spur the restaurant industry to begin automating kitchens. Machines such as the Picnic Pizza System that was rolled out in 2019 at the CES technology conference in Las Vegas fully automates the process of making a pizza. It can make hundreds of customized pizzas, orders quickly and with consistency, each with different toppings, along with different sizes. Adding to its allure is the fact that precision automation allows for consistency in the pizza-making process and minimal food waste. While this is considered a "co-bot" where people will be working alongside the machine, the implications of job loss are still clear. It means millions of jobs will be taken over by robots in this decade. This kind of machine is about to have a huge impact all over the food-service sector where large and small concerns including pizza restaurants, corporate food services, ghost kitchens, food trucks, fast food joints, and convenience stores all struggle to keep cost under control

A recent article published on notes that a Hong Kong-based robotics company plans to mass-produce humanoid robots to replace workers across industries such as healthcare and education. Hanson Robotics is set to launch a mass rollout of human-like robots that can compete with human workers, “The world of Covid-19 is going to need more and more automation to keep people safe,” founder and chief executive David Hanson claims. 

Another robotics company, Fetch, based in California, just unveiled the PalletTransport1500. This is an autonomous mobile robot (AMR) that supports cross-docking, returns, and case picking workflows for contact-less pallet transport in distribution centers. The square-like robot capable of lifting pallets weighing up to 2,500 pounds. The robot is powered by Honeywell software designed to push  automation forward in warehouses by replacing human forklift drivers states its company press release

Amazon Is A Job-Killing Machine
Amazon's PR campaign of hiring hundreds of thousands of warehouse employees is designed to mask the proliferation of robots Amazon employs to replace human workers. These robots are designed to replace humans where ever possible. Workers have been warned over the years that a wave of automation and artificial intelligence will chip away at jobs held by humans and displace millions of workers, now it is rapidly becoming a reality.

Right in front of our eyes, the ranks of the unemployed are about to explode along with the deficit as these people become "wards of the state." This problem will go global as robots replace human workers and increase pressure for people to flee poor countries. Example after example of the jobs that are about to vanish come out every day. Those calling for higher wages are too silly not to realize higher labor costs will only hasten the move to replace human workers with robots and other forms of machines designed to automate work processes.

The drop in the unemployment in the recent January job numbers was not due to hiring but rather a decline in the labor force. It shrank from 160.57MM to 160.16MM, resulting in a decline in the participation rate from 61.5% to 61.4%. This indicates, workers are leaving the workforce in droves as they became discouraged about the lack of opportunities, simply fell back on government handouts, or simply gave up looking for a job. Those putting a friendly face on this calling it "creative destruction" may someday look back at the problems it creates. This is a major power shift from individuals to mega-companies and governments with huge ramifications.


  (Republishing of this article welcomed with reference to Bruce Wilds/AdvancingTime Blog)