Thursday, January 19, 2012

A Company Can Always Fire Employees But Government Can Not Fire Americans as Citizens and Therein Lies the Difference Between Business and Politics

Paul Krugman and David Brooks at the New York Times have both just published comparable takes on businessman Mitt Romney's Presidential campaign, from different political standpoints, of course.

We need in any case to remember that the last businessman to be elected President of the United States, Herbert Hoover, led the country straight into the Great Depression and in his attempt to get the country back on its feet utilized many of the instruments touted today by some conservatives as solutions....

-- they all failed.

See Paul Krugman in America Isn’t a Corporation

See David Brooks in The C.E.O. in Politics

What pro-business people sometimes fail to realize is that it is easy to slim down any corporate operation by firing half the employees. But that puts people out on the streets as inescapable problems for someone else, and usually it is the government that must handle the problem, because the government can't fire ITS citizens, it has to take care of everybody.

That is one message we would DRILL into political campaigns and into candidates.

You want to run the country?
I personally do not care what party you represent.

But you must take care of EVERYBODY, not just a chosen few.
That is what makes it all so difficult to be a capable President.

The Euro, The U.S. Dollar and Money Speculators: Why Do Economists Not Concentrate on the ESSENTIALS?

John Rosenthal has posted at The Weekly Standard, "The Blog" about

German Euro-Deputy: S&P Downgrade Part of American ‘War Against the Euro’

There is no question of course that money speculators and speculating financial institutions have their hands in the till whenever there are large and fast swings in currency exchange rates, as currently, where the Euro has lost substantially against the U.S. Dollar in a very short space of time.

On the other hand, one could look at COMPARATIVE PRICES to pose some questions about what realistic exchange rates should actually look like.

Our experience recently was that a laptop (notebook) personal computer (PC) sold on sale this summer at Walmart in New York was ca. HALF the price of that notebook in Germany calculated in Euros. That is quite a spread in purchasing power, even if it was a sale item, because we have never seen a lower price for that notebook in Europe, on sale or off.

Our experience a few years ago was that a top brand blazer bought at SteinMart for $250 cost 600 pounds sterling (ca. $1000) some months later on Bond Street in London, United Kingdom, a price differential of about 1 to 4.

Take a look at house prices in the UK at and and compare them to U.S. house prices at, which might lead one to ask whether a similarly large comparative discrepancy exists between the price of housing in the US and the UK.

House prices in continental Europe are definitely more realistic than in the United Kingdom, but even here, housing is vastly over-priced because of real estate investment in residential properties, which drives prices far beyond where they should be in terms of their actual value as places to live.

Inflated inequitable incomes also drive housing prices up beyond sensible levels. Many people who work in Luxembourg, for example, live in neighboring Germany, Belgium or France, because the cost of housing in high-income EU institution-rich and banking paradise Luxembourg is prohibitive.

What the economists should be giving us is the price of an average home as a function of the minimum wage in each country under discussion, or even better, they should be telling us the number of hours in a lifetime an average citizen must work to pay for a standardized house, nationally, AND globally, including mortgage costs of course.

THAT would be a revelation, you can be sure. Many citizens in the UK could work a lifetime and never pay for many of the houses on the UK market, a market which mirrors disproportionately the top wage earners and the wealthy. In the UK as a general rule, as you can see at THE WEEK (just search there for "properties"), outdated properties in sometimes terrible condition command outrageously high prices because a small minority of home buyers have a disproportionate share of wealth and income.

Hat tip to CaryGEE.

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