Is Subsidized Employment the Answer?

Yesterday, Lynn Tilton was a guest on Bill Bennett's show. She suggested that the way to solve America's problem with people staying on unemployment forever was to adopt a policy of "subsidized employment," like they have in Germany. The way she explained it, if a company was about to lay off people, it would go to the government and the government would pay to keep those people on the payroll so they could keep doing something productive. It would keep factories from going idle, etc. She provides additional explanation on her blog.

While I agree that it would be preferable for people to engage in productive work over drawing a check for doing nothing, I am concerned that this proposal could create perverse incentives. In particular, if a plant is idle, it is likely because no one is buying what the plant is producing. Creating more things that few people are buying will only increase inventory (i.e., supply) and result in lower prices for those goods. How much good would it do to put all of GM's factories to work to build more cars that no one wants (or can afford) to buy? This seems to me to be a temporary fix that could ultimately result in a colossal misallocation of resources and massive market distortion. On the other hand, more people might buy cars if they were cheaper and they might be better able to compete globally. But does a new car really add value to a society that is already awash in automobiles?

Tere is no easy solution. What could the unemployed do that would truly create long term value so that the taxpayer's get something in return for the payments they are making? I am no fan of FDR's policies, but it seems to me that we should be able to find something that could be done to create value without using something like "subsidized employment" to build a bunch of unneccessary inventory. What if, in order to get unemployment benefits beyond, say, 6 months, you had to be willing to work at a project to benefit all of society? Maybe that means building a dam or building some windmills. Maybe that means modernizing and rebuilding schools that actually need it (or roads that actually need it), unlike this recovery.org crap where we are paying for Obama-esque re-election signs to build bridges to nowhere and pave roads that don't need paving. Or does it mean subsidizing employment so we won't have to buy from China?

While I would love to see a free market solution, there is no way that will happen with King Barry in charge. So, we must decide where to get the most bang for the buck. Certainly, paying people to sit at home and watch Oprah is a recipe for disaster. That is creating its own set of perverse incentives and must be stopped. I would certainly prefer subsidized employment to what we currently have - subsidized unemployment.

Pepsico CEO should be fired

I had the misfortune of watching the CEO of PepsiCo (NYSE: PEP), Indra K. Nooyi, on Cramer's Mad Money last night. She sounded like a stark-raving mad socialist. Here is my best effort at transcribing one of the most offensive statements with respect to PepsiCo's "Performance with Purpose" doctrine:

We believe that the new future is public/private partnerships – where companies feel responsible for society at large... If society has a problem with obesity, rather than say 'it is not my problem,' you work with the lawmakers, work with the regulators, legislators and NGO’s to say, “how can we address it?”

That all sounds real cheery and makes for great PR for the government-controlled media, but a company's job is to make money for its shareholders, not take responsibility for society at large. We don't need companys working with regulators to solve every perceived problem with mankind. One look at PepsiCo's website and you might think they are an environmental company instead of a food and beverage company. CEO's who lose sight of the mission of improving shareholder value should be fired. Boards who lose sight of the mission of improving shareholder value should be sued for breaching their fiduciary duties. Oh, I'm sure these folks would say that by doing these things, they are improving shareholder value, but that's doubtful. It appears to me that the board and the CEO are using shareholder money to advance their own left-wing radical agenda. American Family Association is already boycotting Pepsi for, among other things, donating money to causes that promote the radical homosexual agenda, including same sex "marriage." How, exactly does promoting the homosexual lifestyle build shareholder value?

The politics of change

Tearing this country apart? Rob Huddleston does not believe the Union will survive his lifetime. He may be right.

Grocery Stores to Nationalize

Wherever you read "food" in the article replace it with "health care." (h/t Boortz)

Obama the Socialist

It looks like Mr. Obama even went so far as to join the "New Party", a group of socialists. Of course you won't hear about this on MSNBC. His socialist leanings are something that I have blogged about repeatedly. The media will tell us what to think. Keep moving - there's nothing to see here. Did you know Sarah Palin's husband was supposedly in the Alaskan Independence Party? That's really important, since he is not running for President. Don't worry about this socialism thing. It's nothing. Maybe the New York Times will chime in on this. . . when hell freezes over.

Not all "change" is good

People keep forgetting that undeniable truth. A caller to Bill Bennett's Morning in America put it very succintly this morning: "Not every change is an improvement, but every improvement, by definition, is a change." That's my best paraphrase, but America needs to remember that the focus should be on improvement, not change. The best thing that the government could do would be to simply allow this country to improve by getting out of the way. Socialism is not an improvement.

Liberals less honest than conservatives

That is the gist of this story. It probably should not surprise anyone that those who want to take wealth away from the producers at the point of a gun and give to the non-producers would be dishonest. "Stealing" does not appear to be in their vocabulary.

More evidence that Obama cannot manage his own household finances

In keeping with the theme discussed in a prior post of Obama's failure to properly manage his household, it looks like he also failed to save for retirement. This guy appears to spend most of what he makes and it wasn't until recently that he had any earnings at all from investments. And he wants to manage your tax dollars.....

Looks like Obama missed the sermon on tithing, too.

One percent is not ten percent. I suppose Obama's failure to live up to his scriptural obligations will now be used to shield him from Jeremiah Wright's (Obama's nutty pastor) hate speech. Here is how it works. "Just as I missed all of Uncle Jeremiah's hate rhetoric, I missed his sermons on tithing as well. I really don't attend church as often as I should. It is because I have devoted my life to public service and to helping the little man."

The article takes great pains to mention that he gives about what the average American gives. So what? Should the next President be like the average American?

On top of his failure to give generously, he has next to no interest income. The Obamas blame all their problems on student loans. "If only the government had given them a free education...." I'm sorry, but even the most pathetic financial manager should have been able to generate more interest income over that period of time, simply by playing the float on the time between when his paychecks arrive and the due dates of his bills. Doing that is like picking up free money off the ground. This pathetic excuse for a Presidential candidate cannot even manage his own household efficiently. How can he possible manage our government?

Forced Government Indoctrination

In California, it is now essentially illegal to homeschool your children. This is a horrible decision. I think this quote from the judge sums it up nicely:

"A primary purpose of the educational system is to train school children in good
citizenship, patriotism and loyalty to the state and the nation as a means of
protecting the public welfare," the judge wrote, quoting from a 1961 case on a
similar issue.

We don't need government indoctrination in order to protect the public welfare. Of course, the teachers' unions are rejoicing in this decision.