Friday, February 07, 2003

Florida Immigration

Four Cuban Coast Guard were arrested in Key West today. They told the officers they were "tired of living in poverty."
"My impression is that it was a last-minute decision,'' Koenig said. "They were patrolling, talking about living at the poverty line when they said 'You know what, the United States is only 90 miles that way.' So they set the heading on their boat, terminated communication with Cuba and headed straight here.''
The same thing happens with Canadians, but they don't have to risk their lives, they can just immigrate.

Will Work For Money

This morning we had some strange unemployment figures. Nonfarm payrolls increased 143,000 jobs, dropping the unemployment rate to 5.7% from 6%. Thats quite a drop. I heard a joke saying the statistics were compiled by Bush, Rumsfeld and Powell. Kidding aside, its an off the chart number, and many economists feel it will be revised. Actually, because of the cold weather some econs were expecting a weak number from slashed construction jobs, but construction jobs were added by 21,000.

What A Guy

Don Luskin has a blog called The Conspiracy to keep you Poor and Stupid. Great title. I check it every morning. He seems to never miss an opportunity to raise an objection to Paul Krugman. Luskin is a bright guy, but I am really impressed by his determination. Reading Krugman is no small feat, when I attempted it I ended up with a concussion. But Don seems to do it everyday. Best of luck Don, I hope your health holds up.

Good Morning Vietnam

Oh Oh. Vietnam was not impressed by Powell's presentation at the UN. The "Voice of Vietnam" reports
US Secretary of State Collin Powell could not convince the world with his 80-minute address to the United Nations Security Council on the Iraqi case on Wednesday. All the so-called used evidence to accuse Iraq of violating UN Resolution 1441 presented by Powell proved unreliable.
The benevolent rulers of Vietnam must listen to the BBC on their shortwave radios.
Meanwhile, BBC said on Thursday all Powell’s materials were just intelligence information. According to international law, such information is not admissible in court.
"not admissible in court". You can't make this stuff up.

Wednesday, February 05, 2003

Sticks and Stones

Jack Straw just "informed" the UN that Iraq holds the body in contempt. Boy, Iraq is not the only one.

Tin Cup

Now that the President has decided he would rather throw taxpayer's money at all the world's problems rather than letting them keep it, he might want to undo something stupid from last year: eliminate the tariffs on steel. Consuming Industries Trade Action Coalition (CITAC) have testified before the House Small Business Committee on the "unintended" impact of steel tariffs. Is something "unintended" if you knew it would happen but did it anyway because something else is more important? You would have to be AMAZINGLY ignorant/stupid to think tariffs on raw materials would not hurt consumers of those materials.

CITAC studied the effects and issued a report (pdf). The report asserts
• 200,000 Americans lost their jobs to higher steel prices during 2002. These lost jobs represent approximately $4 billion in lost wages from February to November 2002.3
• One out of four (50,000) of these layoffs occurred in the metal manufacturing, machinery and equipment and transportation equipment and parts sectors.
• Job losses escalated steadily over 2002, peaking in November (at 202,000 jobs), and slightly declining to 197,000 jobs in December.
• More American workers lost their jobs in 2002 to higher steel prices than the total number employed by the U.S. steel industry itself (187,500 Americans were employed by U.S. steel producers in December 2002).
• Every U.S. state experienced employment losses from higher steel costs, with the highest losses occurring in California (19,392 jobs lost), Texas (15,826 jobs lost), Ohio (10,553 jobs lost), Michigan (9,829 jobs lost), Illinois (9,621 jobs lost), Pennsylvania (8,400 jobs lost), New York (8,901 jobs lost) and Florida (8,370 jobs lost). Sixteen states lost at least 4,500 steel consuming jobs each over the course of 2002 from higher steel prices.
• The analysis shows that American steel consumers have borne heavy costs from higher steel prices caused by shortages, tariffs and trade remedy duties, among other factors. Some customers of steel consumers have moved sourcing offshore as U.S. producers of steel-containing products became less reliable and more expensive. Other customers refused to accept higher prices from their suppliers and forced them to absorb the higher steel costs, which put many in a precarious (or worse) financial condition. The impact on steel-consuming industries has been significant.
So how about it Mr President? Is it time to remove our heads from our asses? These assinine moves do wonders for your credibilty on economic matters.

Tuesday, February 04, 2003

War, What Is It Good For

Something got my attention today in the WSJ, an article titled War Spending Won't Outweigh Its Negative Impact On Economy. This headline caught my eye today like a blown grain of sand. Painful and annoying. The point the writers are making is since military spending is such a small portion of the US economy ( $10-trillion a year, thats a lot of zeros ) when we have a war the economy doesn't get a (pun ahead) shot, unlike the good old days (WW1 and WW2). If we were in a room together this is when I would have to cough "bullsh-t!!!". There are two closely related myths/load-o-crap that this article perpetuates: 1) war is good for the economy (e.g. WW2 ended the Great Depression) 2) Roosevelt's policies helped end the Great Depression. Actually, the article never mentions Roosevelt, but one cannot help mention the man when discussing the GD and WW2.

Is war good for the economy? The logic here is that war requires a LOT of bullets, bombs, tanks, and planes. The government starts cutting some big ass checks to military-related businesses. The military industry needs bodies to meet orders and hires lots of people. If quantity of stuff produced and people employed was so important than lets look at the workers paradise, Soviet Union. The Soviet Union, for much of its tortured existence, produced more steel and shoes than the US. When was the last time you bought a shoe made in Russia? Unfortunately, in the real world what you produce is a bit more important than how much you produce. A healthy economy is not about employment, tons of steel produced, or $10-trillion GDP, these things are side effects. A healthy economy is when, simply put, one person produces something in exchange with another person. A healthy economy efficiently utilizes available resources. It has been this way ever since the whole division of labor concept took off and spawned civilization; not just civilization as we know it, but CIVILIZATION. Period.

Munitions are not quite as usefull as Starbucks coffee, much less cars, houses, tractors, doctors, or waiters. I don't mean to say that military spending is not important. But it is faulty to view these goods as net contributors to the economy on par to the paper-boy's contribution to the economy. Without munitions all the other things we need to live and work, can be taken away. Either by a lowly criminal or a foreign enemy. Munitions are more like an insurance policy or a tax, than an economic good.

What about FDR? Well when FDR was elected (in 1933) unemployment was ~18%. On the eve of the US entry into WW2 (1941) unemployment was ~18%. How did FDR accomplish this feat? FDR sent taxes sky high, and all those famous employment programs moved workers from private productive jobs to government busy work. The government set prices on almost all consumer goods, ushering in shortages and rationing. With the advent of war 16 million men entered the military, 10 million were conscripts. FDR died before the war in the Pacific completed the US adventure. Truman's failure to alter the abysmal economic course set by FDR, caused big losses for the Democratic party and led to an unwinding of many of the programs FDR championed. Gone were the price controls, factories were started producing cars rather than bullets, taxes were lowered. Free men and women were allowed to be productive.

Ch Ch Changes

Treasury Deputy Secretary Ken Dam is resigning. Last day will be in a few weeks. It has been speculated that R. Glenn Hubbard will likely replace him. Hubbard was a big proponent of eliminating the double-taxation of dividends.


Watching Chirac on TV right now and I think... I see... his secret weapon... He talks and puts people to sleep... Must stay ... awake... zzzz

Monday, February 03, 2003


The US Mint (a division of the US Treasury) earns $1,457,400,000 for the government by manufacturing and distributing pennies, nickels, dimes, and quarters. A penny is copper-plated zinc, where it is 2.5% copper and the rest zinc. The mint produced 12,773,000,000 pennies in 2001. Each penny cost $0.008 to produce, thats a profit of $24,600,000 in pennies. A nickel is 25% nickel and remainder copper. Each nickel cost $0.0331 to produce with 1,668,000,000 nickels minted in 2001 thats a profit of $28,600,000. A dime is copper and nickel clad, where nickel is 8.33%. There were 3,123,000,000 dimes made in 2001. Each dime is produced at a cost of $0.0230, for a total profit of $240,400,000. A Quarter is also copper and nickel clad, where nickel is 8.33%. It costs $0.0524 to produce each quarter, with 5,531,000,000 produced thats $1,080,400,000 in profit.

The US Mint is also the custodian for the US Treasuries gold and silver reserves. The Mint is the custodian of 245,262,897.04 fine troy oz of gold and 7,075,171.14 fine troy oz of silver.

The Bureau of Engraving and Printing is responsible for printing the paper money. In 2002 they printed
DenominationBills PrintedValue
One Dollar5,145,600,000$5,145,600,000
Five Dollar979,200,000$4,896,000,000
Ten Dollar652,800,000$6,528,000,000
Twenty Dollar1,017,600,000$20,352,000,000
Hundred Dollar201,600,000$20,160,000,000

Each bill costs $0.03045 to produce, so all the bills in 2002 costs $243,502,560 for a profit of $56,838,097,440.

Not bad.