Wednesday, April 20, 2016

Economic Speculation on Hitler's Birthday, 2016

Economic rule of thumb:  America innovates, the Chinese steal, and the Europeans sue! Scott Galloway of NYU's Stern School of Business remarked that there is more innovation capitalization within a bike ride of Stanford, Berkeley and Columbia Universities than in all of Europe since WW II. This of course isn't "fair".  The EU's latest complaint against Google is a case in point. To the EU, merely having a predominant market share makes you "guilty" automatically. You must, therefore, surrender market share to local European companies (who were instrumental in petitioning the EU in the first place!).

If European societies lag in innovation, Islamic societies are a joke! I saw a post on Face Book where a Muslim man had committed suicide to "protest the lack of Nobel Prizes given to Muslims!"  Sorry Ahmed, it'll take more than that to breed innovation into Islamic Doctrine! Same can be said with Black Lives Matter whining about "the white Oscars"!  The minute prizes are passed  out according to politically correct ratios, the prestige of the Prizes will go into the toilet!

Galloway also remarked that the "creative destruction" of jobs is taking place so rapidly that there is no way for society to cope  in a reasonable manner. I witnessed Southern California go from an aerospace manufacturing based economy in the 1960's to today's tech, but it's taken 50 years!

The solution Professor Galloway proposed is to pay people the difference between the job they can get compared to the job they lost. In 1971, I saw Aerospace engineers who were making $80K a year go to flipping hamburgers at $20K per year. Many lost their homes, cars, and marriages.   This, I might add, is the appeal of Mr. Trump to those of us in the middle class which is being rapidly wiped out.

Everyone knows the hypocrisy of the person who brays about American jobs but still will pick blue jeans made in China over the custom ones from Lands End. But if we drill down, there are moral implications to moving manufacturing from America to  factories in China owned by Chinese Generals using slave labor!

So what will our society look like in 50 years? Our tradition of innovation depends on freedom of thought. One of Obama's "fundamental change" in America is political correctness, which is stifling freedom and, ultimately, innovation. Thus, Venture Capital will be awarded not to good ideas but to those who meet the politically correct criterion.

One can see a growing government elite in partnership with the small ultra wealthy international business elite. Small business and entrepreneurship will be crushed by regulations, as we see taking place today with the CFPB. It destroys businesses with massive fines to fund their bureaucracy using the excuse of "protecting the consumer". One horror story: a medium sized mortgage company was audited. The CFBP thought their disclosure form was in non-compliance and fined the company $20 million, which put both the company and its owner  into bankruptcy. The CFPB is like a shark making passes through a school of small fish.

Then there's immigration. If we flood America with another 10 to 30 million semi-literate welfare dependent people with no Judaeo-Christian tradition, the savings and capital base of the country will be confiscated and converted to sewage emanating from welfare housing projects by a  collectivist one Party State. What we can see is a future America with no middle class.

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