Read this: Ocuppiers Right, Wrong

Source: Toronto Sun

BY LORRIE GOLDSTEIN ,

Recently I’ve been writing about some of the views I share with Occupy Wall Street protesters in New York, Toronto and elsewhere.

Today I’m going to write about my disagreements.

To review, I agree with them financial fraud on Wall St. and political corruption in Washington are largely responsible for the global economic mess we’re in today.

I agree the public justifiably feels betrayed by how stock markets were manipulated and banks and investment houses bailed out with U.S. taxpayers’ money.

I agree key regulations governing stock markets were gutted by Wall St., which bribed politicians into stacking the rules in their favour, a phenomenon known as crony capitalism.

I agree public anger at corrupt Wall St. executives and their bought-and-paid for politicians — Republicans and Democrats — is justified.

But I disagree with the Occupiers’ view capitalism itself is the problem and wealth redistribution by the state is the answer.

Wherever this has been tried, the state becomes the ultimate crony capitalist and it does to the public exactly what Wall St. and Congress did to them starting in 2008, only on steroids.

The solution is not to replace capitalism but to fix it — by restoring laws for the proper regulation of the financial services sector that arose out of the stock market crash of 1929.

Things like keeping the activities of commercial and investment banks separate, so commercial banks that accept depositors’ money can’t use it to speculate in high-risk securities in the stock market.

Things like placing limits on “leveraging,” meaning buying investments using debt, which can result in huge financial losses.

Things like regulating the use of derivatives such as collateralized debt obligations and credit default swaps.

These were the two weapons of mass destruction in the subprime mortgage securities scandal that wiped out trillions of dollars of people’s life savings and pensions world-wide, while costing tens of millions their jobs and homes.

But I disagree with the protesters who say they are against the bailout of Wall St. banks, but in favour of bailing out giant auto companies, which they’ve indicated by accepting the support of the Canadian Auto Workers.

That tells me these protesters aren’t really against the government picking economic winners and losers. They just want it to pick the winners and losers of which they approve.

I also disagree with the Occupiers’ failure to condemn the roles played by government entitlement programs and public sector greed in the ongoing global economic crisis.

Indeed, excessive entitlement programs and runaway public sector spending lie at the heart of the sovereign debt crisis in Europe, that could cause another global recession.

The problem with countries like Greece — as in much of Europe — is their economies were already basket cases before the contagion of toxic subprime mortgage securities spread around the world and sent their finances over a cliff.

As former Wall St. money trader Michael Lewis, author of The Big Short, widely considered to be one of the best and most understandable accounts of the 2008 subprime mortgage securities scandal, explains in his latest book, Boomerang, Travels In The New Third World, the Greek economy was basically a giant Ponzi scheme before it imploded.

For example, the wage bill of Greece’s public sector has doubled in real terms in the past 12 years.

The average government job pays almost three times the salary of the average private sector one.

Greece’s state-owned railway has annual revenues of 100 million euros, against an annual wage bill of 400 million euros (average salary, 65,000 euros per worker), plus 300 million for other expenses.

Greece’s public school system, among the lowest ranked in Europe, has four times as many teachers per pupil as the highest ranked, in Finland.

The retirement age under Greece’s prohibitively expensive public pension system is as early as 55 for men and 50 for women for over 600 professions classified as “arduous,” including hairdressers, radio announcers, waiters and musicians.

Finally, bribery and corruption are widespread in the public sector.

To sum up, the Occupy movement is correct to condemn the greed, fraud and corruption on Wall St. that led to the global economic mess we’re in today.

But to ignore those same things in the public sector, and their contribution to the economic tsunami we’re now experiencing, is absurd and blatantly inconsistent. 

Source:The Toronto Sun

SEIU Now Collecting Dues from Medicaid Payments Meant for Disabled Kids | The Weekly Standard

I've always had an issue with Unions and their strive to obtain as much dues as possible, but this case is sickening!

SEIU Now Collecting Dues from Medicaid Payments Meant for Disabled Kids | The Weekly Standard

There are a number of bizarre schemes unions have used to coerce dues out of public funds. For a long time, I thought the most appalling example was a Michigan scheme where the United Auto Workers and the American Federation of State, County and Municipal Employees held a sham vote-by-mail organizing election that "unionized" Michigan's home daycare providers largely against their will. This allowed them to collect union dues from state chid care subsidies.

However, it turns out there are even worse union scams happening in Michigan right now. Joel Gehrke at the Washington Examiner reports:

If you're a parent who accepts Medicaid payments from the State of Michigan to help support your mentally-disabled adult children, you qualify as a state employee for the purposes of the Service Employees International Union (SEIU). They can now claim and receive a portion of your Medicaid in the form of union dues.

Robert and Patricia Haynes live in Michigan with their two adult children, who have cerebral palsy. The state government provides the family with insurance through Medicaid, but also treats them as caregivers. For the SEIU, this makes them public employees and thus members of the union, which receives $30 out of the family's monthly Medicaid subsidy. The Michigan Quality Community Care Council (MQC3) deducts union dues on behalf of SEIU.

The SEIU takes $6 million a year that would otherwise go to helping disabled children. Unions seem to wonder why they are under attack these days, but you read reports like this and it's not exactly a mystery why more and more Americans are fed up.

Source: http://www.weeklystandard.com

Read this - Why the West is losing out to the rest

Why the West is losing out to the rest

It says it all when Europe turns to China for a bailout. That was what happened last week when the man in charge of the European Financial Stability Fund flew to Beijing to see if he could interest Chinese investors in propping up the finances of the eurozone.

How the mighty are fallen. Thirty-five years ago the average German was roughly 15 times richer than the average Chinese. Today the ratio is less than 3-to-1. Back in 1980 the Chinese economy accounted for just 2.2% of global economic output, one third the size of Germany's share. By 2016, according to the International Monetary Fund, the Chinese share will be 18%, six times larger than Germany's.

We are living through an extraordinary reversal of economic fortunes after 500 years when the big story was what historians call "the great divergence." Beginning in 1500, Europeans and European settlers in North America began to get richer than Asians (and everyone else, too). The gap between the "West and the Rest" widened at an accelerating rate until the later 1970s. But then -- on our watch -- that trend went into high-speed reverse.

So what has been going on?

The West first surged ahead of the rest thanks to a series of institutional innovations that I call the "killer applications":

1. Competition. Europe was politically fragmented into multiple monarchies and republics, which were in turn internally divided into competing corporate entities, among them the ancestors of modern business corporations.

2. The Scientific Revolution. All the major 17th-century breakthroughs in mathematics, astronomy, physics, chemistry and biology happened in Western Europe.

3. The rule of law and representative government.An optimal system of social and political order emerged in the English-speaking world, based on private-property rights and the representation of property owners in elected legislatures.

4. Modern medicine. Nearly all the major 19th- and 20th-century breakthroughs in health care were made by Western Europeans and North Americans.

5. The consumer society. The Industrial Revolution took place where there was both a supply of productivity-enhancing technologies and a demand for more, better and cheaper goods, beginning with cotton garments.

6. The work ethic. Westerners were the first people in the world to combine more extensive and intensive labor with higher savings rates, permitting sustained capital accumulation.

For hundreds of years, these killer apps were essentially monopolized by Europeans and their overseas cousins in North America and Australasia. Westerners not only grew richer than "Resterners." They grew taller, healthier and longer-lived. They also grew more powerful. By the early 20th century, just a dozen Western empires -- including the United States -- controlled 58% of the world's land surface and population, and a staggering 74% of the global economy.

Beginning with Japan, however, one non-Western society after another has worked out that these apps can be downloaded and installed in non-Western operating systems. That explains about half the catching up that we have witnessed in our lifetimes, especially since the onset of economic reforms in China in 1978. The other half is explained by our tendency to delete the secrets of our own success.

Ask yourself: Who's got the work ethic now? The average South Korean works about 39% more hours per week than the average American. The school year in South Korea is 220 days long, compared with 180 days here.

The consumer society? Did you know that 26 of the 30 biggest shopping malls in the world are now in emerging markets, mostly in Asia? Only three are in the United States.

Modern medicine? Well, we certainly outspend everyone else. But the results in terms of public health are pretty miserable.

The rule of law? For a real eye-opener, take a look at the latest World Economic Forum Executive Opinion Survey. On no fewer than 15 of 16 different issues relating to property rights and governance, the United States fares worse than Hong Kong.

What about science? Statistics from the World Intellectual Property Organization show that already more patents originate in Japan than in the United States, that South Korea overtook Germany to take third place in 2005, and that China is poised to overtake Germany, too.

Finally, there's competition, the original killer app that sent the fragmented West down a completely different path from monolithic imperial China. Well, the World Economic Forum has conducted a comprehensive global competitiveness survey every year since 1979. Since the current methodology was adopted in 2004, the U.S. average competitiveness score has fallen from 5.82 to 5.43, one of the steepest declines among developed economies. China's score, meanwhile, has leapt up from 4.29 to 4.9.

Hands up readers who thought the future would, like an iPhone, be designed in California and only assembled in China? You were wrong. Western predominance is ending on our watch. And it's ending not just because the rest of the world finally figured out how to download our killer apps. It's ending because we deleted them.

Source: CNN