Coming Soon - How Hollywood Is Like Big Business

Yes, that's right. Hollywood and big business: one and the same. The similarities aren't evident right from the get-go, but once the diligent observer digs deep it is quite easy to see why the business of making movies is just like the business of making consumer products or anything else for that matter. For one, just examine the pay structures for everyone behind a movie and everyone behind an iPod or Dell laptop.

Climate Change or Climate Cycle?

It is truly amazing how global warming alarmists and doomsayers are so invested in their philosophy. It is as if the rest of their lives go on hold while they galavant across the frozen regions of the Earth searching for "examples of climate change." It would seem they've hit the mother lode in this case.

A remote chain of Norwegian islands in the Arctic seems to be experiencing a slight heat wave. UN scientists claim the region is warming at twice the rate of the rest of the world and receding glaciers in the area are leaving previously "undiscovered" islands in their midst. They argue that this represents a "portent of changes further south."

I argue, conversely, that this is exactly what happened after the Ice Age when the glaciers that used to cover the Midwest states receded all the way to the North Pole. There were no evil SUVs and CO2 emissions to worry about back then. The only thing that possibly could have caused this intense warming (which followed, go figure, an intense cooling) has to do with celestial interference. By this I mean what many scientists have been referring to recently; the sun has always been prone to periods of relative dormancy and relative activity. They noticed this when, in researching Martian weather patterns recently they discovered similar warming patterns as Earth's.

An article published by the Heartland Institute says:

The planet Mars is undergoing significant global warming, new data from the National Aeronautics and Space Administration (NASA) show, lending support to many climatologists' claims that the Earth's modest warming during the past century is due primarily to a recent upsurge in solar energy.

Interesting. Solar energy causing changes in the climates of two planets many millions of miles away? It may seem ridiculous, but the correlations are much more convincing than anything being trumped up in the Algore camp. It also has the luxury of lending support to the theory that we aren't to blame and that we don't have to use one square of one-ply toilet paper to combat our destructiveness.

According to a recent post on Sen. Inhofe's (R-OK) Environment & Public Works blog, there is a growing list of former global warming alarmists moving into the skeptics' camp. With so much dissension, shouldn't there be more of a rational debate than simply having news anchors claim "the debate is over" as Brian Williams said not too long ago ...

Foresight: A Tool, Not A Trick

*** NOTE: After finishing my finals today, I'll be sure to keep the posts coming on a more regular basis. ***

There is one fundamental difference in how liberals and conservatives handle economic issues. Conservatives value foresight as tool while liberals view everything through its short-run effects. While studying for my history final, I read a section on the Reagan tax cuts in 1981 which seemingly caused an economic downturn, according to the book's author. There is an economic tool that conservative supply-siders use to discourage this notion.

Economic policies tend to have a lag effect. For example, a tax cut will cause consumers to act as though they have more money when in reality they won't until at least the following year. Increased consumption and demand in domestic markets leads to price inflation. So immediately following a tax cut, the short-run effect is inflation. In the long-run, however, tax cuts increase output and bring prices down. Several years following Reagan's tax cuts, inflation and unemployment dropped drastically, but nobody understood exactly why. That, ladies and gentlemen, is the lag effect.

The lag effect is a prime example of the benefits inherent in foresight. A good economist knows both short-run and long-run policy implications. Short-run thinking leads to reactionary policies that keep the economy on a see-saw pattern of expansion and recession. Long-run thinking smooths the crests and valleys caused by the business cycle. Liberals often make the mistake of seeing benefits in the immediate future while overlooking the obvious long-run implications. For example, medicare and social security are headed for insolvency in the very near future. They see any solution as having a negative effect on current recipients but they choose to ignore the long-run implications of doing nothing.

Short-run thinking often wins elections, which is exactly why it is so alluring. If a politician can pursue a policy that has very visible positive effects in a short period during election season, they can trumpet their success during the campaign. Nobody notices the implications five years down the road when the same politician is championing a solution to the problem they caused. This is one of the biggest reasons that we need term limits in Congress. A politician with no option for re-election will find it much easier to adopt a long-run philosophy.

State Sponsored Price Gouging

It seems like a story from a parallel universe. You know, one where the same people who accuse multinational oil conglomerates of price gouging turn around and perpetrate the very action they condemn all the while leaving their victims no choices. Well such is the case here in Wisconsin where Governor Doyle two summers ago was on a list of signatories for a letter condemning so-called "gouging" at the pumps in the Katrina aftermath.

I'll leave for another day the explanation of why gas stations and their corporate suppliers were and never have been guilty of gouging. For now, here's a little piece for you to chew on. A gas station in Merrill, Wisconsin has been offering discounts of two and three cents/gallon for seniors and boosters which support youth sports, respectively. The state Department of Agriculture was quick to intercede on behalf of a law that prohibits gas stations from undercutting a designated 9.2% markup on wholesale prices. The Unfair Sales Act was created to prevent stations owned by big oil companies from undercutting smaller, privately owned suppliers. It's no wonder the National Federation of Independent Business supports the legislation.

In reality what has resulted is a much higher average per gallon price in the state of Wisconsin than the rest of the nation. According to the AAA's gauge of daily averages, Wisconsin currently exceeds the national average of $3.03/gallon by twelve cents. Our tax burden at the pump is currently the highest in the nation without having to worry about the minimum mark-up law. At $0.321/gallon, the current state gas tax is equal to 14% of the reformulated gasoline futures contract and over 10% of the current statewide per gallon average fuel price.

Price gouging, by definition, is raising the price of a good at a time of adverse supply shock when demand is highly inelastic so as to take advantage of the consumer's need for the given product. That is exactly what our high gas tax and minimum mark-up law are guilty of doing. They are taking advantage of Wisconsinites' need to drive on a daily basis and are prohibiting station owners from discounting for any reason whatsoever. The real gougers, it appears, have seats in the State Capitol ...

Tancredo Voices Support For Fair Tax

The "FairTax," or national consumption tax, is an idea that has been batted around the offices of conservative members of Congress for several years now. It was explained plainly and simply in a book two years ago by libertarian talk-show host Neal Boortz and Congressman John Linder (R-GA). It is the alternative to the flat tax which would tax income at a uniform rate across all income levels. The FairTax would tax consumption at a uniform rate, and it would do so implicitly by being factored in to the prices of all new goods and services (not second-hand or used goods).

Every new session of Congress brings the reintroduction of the FairTax Act by Rep. Linder and each time it gains support in the form of additional cosponsors. It has received some very vocal support recently as Congressman Tom Tancredo (R-CO) uttered the following phrase during the segment on taxes during last week's Republican presidential debate:

For all the reasons mentioned by some of my colleagues I absolutely support the Fair Tax, it has to be accompanied however with the repeal of the 16th Amendment or we'd end up with a consumption tax and an income tax.

You can't be more supportive than that. The thing to distinguish this option from everything else being ballyhooed around the halls of Congress is that second part of Tancredo's statement. The repeal of the 16th Amendment would essentially end the IRS's choke-hold on the American taxpayer and shut down the Marxist form of taxation. The income tax has become the Washington's easiest way to increase their influence on the economy through continuously tweaking the code and inventing new loopholes while closing others. It is because of this that there is a $500 billion annual cost of complying with the tax code. This equates to a per capita cost of $1,667.

Opponents to the FairTax, some of whom are conservatives, will decry the loss of jobs suffered by IRS employees. Well, I for one wouldn't shed a single tear for them. Did they go to school specifically to be employed at the IRS? I'm sure that 100% of those people would be able to find a job in the financial services marketplace within a month.

The honest truth is that we need to figure out ways to cut the ever-increasing influence of the federal government in our everyday lives. The best way to do so is to take their collective hand out of our pockets once and for all ...

House Democrats Offer Reparations ... to Guam

When you hear the words "Democrats" and "reparations" in the same sentence, it most commonly will have something to do with paying African-Americans back for the cruelty of slaveowners over 150 years ago. Their penchant for thinking emotionally leads to these kinds of offers, but nobody could have seen this coming.

In submitting H.R. 1595, they are offering to compensate the residents of Guam for the oppressive acts of Imperial Japan during the course of World War II. Even more ridiculous than the purpose is the opening sentence of Paragraph II:

Directs the Secretary of the Treasury to make specified payments to: (1) living Guam residents who were killed, injured, interned, or subjected to forced labor or marches resulting from, or incident to, such occupation and subsequent liberation ...

Leave it to a Democrat to draft a statement so non-sensical. Beyond this, the overall idea of the bill is simply absurd. In the culminating battle for the island, soldiers from the 3rd Marine Division and the 77th Infantry Division landed on July 21st and proceeded to retake the island from Japanese forces. With a toll of over 10,000 casualties including 3,000 KIA, the battle for Guam lasted three weeks in the summer of 1944.

After the price paid by members of the American military, men from all walks of life each with families of their own, House Democrats neglect their sacrifice by arguing that we owe the citizens of Guam for what agents of another country perpetrated. The absurdity of the 110th Congress continues ...

New Poll Puts Sarkozy Well Ahead in French Race

A poll taken after the televised debates between French presidential candidates Nicolas Sarkozy and Segolene Royal has the conservative Sarkozy leading 54-46 over the Socialist, Royal.

I'm going to venture a guess and say that even the French don't want a Socialist at the helm after the many years of left-wing presidents who've destroyed the country from within through plentiful disincentives to hard work, including: a 35 hour work week, massive unemployment benefits, and measures making it hard to fire poor employees and difficult to hire good employees. The subsequent escape of capital has left the French economy in a shambles with the unemployment rate creeping into double digits.

Sarkozy will win handily, and you can be sure that the American media will be shocked.

Wall Street's Bull Run Continues

Several months ago, the majority of financial commentators were sounding the death knell for Wall Street's historic three-plus year rally. Between then and the time the second round of Bush tax cuts went into effect (May 2003), the blue-chip Dow Jones Industrial Average (DJIA) had soared 47%. Yet many in the financial community as well as naysaying pundits on America's editorial pages were calling for a stock market correction (when an exchange or index loses 10% or more of its value in a short period of time) and an economic recession. The popular question of Dow 9,000 or 12,000 was met by the resounding reply of "NINE THOUSAND!!"

And back to the present ...

The DJIA is now setting records that seem to come day after day, week after week. At its intraday record value of 13,256 the blue-chip index is at a 60% premium from its May 2003 low. In the last month, the DJIA has gained on 21 of 24 sessions with the total amounting to a 7.4% gain, its best winning streak since 1955 when it gained 10% on 22 of 25 up sessions. On top of that, the tech-heavy NASDAQ is at a 6 year high and the S&P 500, an index of the 500 largest companies, is at a 6-1/2 year high.

The economy is hitting on all cylinders as well, trouncing all calls for an oncoming recession. After a year and a half of interest rate hikes by the Federal Reserve, inflation is moderating and any signs of economic weakness are becoming signs of economic stability. What was said to be a housing bubble has turned out to be nothing more than a valley. Even a crisis in the subprime lending industry hasn't seeped into the robust economy, but has been contained to the already hampered housing industry. Put another one in the "wrong" column for the pessimists.

Clinton had the tech boom to grant him a roaring economy for his first seven years in the White House. In 2000, the tech bubble and stock market crash left the economy in a downward spiral when George Bush took over. In only his eighth month, the despair was compounded by 9/11. But after the 2001 tax cuts staunched the bleeding, the road to recovery was short and robust growth was restored with the 2003 tax cuts. After all of this, Clinton gets the praise while Bush is looked upon as a foolish failure. Sounds like someone has their facts mixed up ...

One Month Down, Five To Go

*** In a deviation from the norm, here is the inaugural baseball post as promised. ***

With the first month of baseball in the books, things are looking up for the Milwaukee Brewers organization. They enter the month of May with a National League leading 16-9 record (tied for best with the Atlanta Braves) and a promising 8-5 road record. The Brew Crew now finds itself in the midst of a 10 game homestand with series against St Louis, Pittsburgh, and Washington. The best, albeit unfortunate, thing about their success in April is that it came without Ben Sheets on his A-game following an opening-day gem.

The Brewers are sixth in the NL in hitting and eighth in pitching due to several blowouts and a number of one-run wins. The bright spots in the organization come in the form of starting pitching and the outfield's offensive production. Jeff Suppan and Chris Capuano are both tied for third in the league with four wins in April and both are in the top 25 in the league in ERA. The left field platoon of Geoff Jenkins and Kevin Mench has combined for six HRs and 21 RBIs with a combined .338 BA. The team has carried a streak of games with a double through the entire month to a current franchise record of 25 games in a row.

MLB.com had this to say of the Crew's April Success:

Milwaukee manager Ned Yost piloted the Brewers to one of the best records in
baseball despite Ben Sheets' groin strain and batting slumps from regulars Bill
Hall, Rickie Weeks and Craig Counsell. Makes you wonder what Yost's team will do
when they start hitting.

If April's success is any indication of future performance, the plethora of preseason predictions that the Brewers would top the NL Central division may indeed turn out to be accurate. I, for one, am holding out until the end of this month to make any firm judgments either way.

Something to Remember This May Day

This May Day, as was the case last year, immigration and workers' rights activists will be out in force to demand improved conditions for unskilled laborers. In many cases, they will simply refuse to show up for work and cause many companies to shut down operations for the day to avoid racking up the fixed costs associated with machinery using energy but producing nothing. Last year, several companies pre-empted the rallies by announcing closures ahead of time and allowing their employees to have the day off. I'd just as easily have fired and replaced them, but unfortunately, I don't have that luxury.

In light of the rallies that will take place today and that have taken place in the past, I have something for everyone to keep in mind. Everyone that works in the absence of a written and signed contract in the United States is considered an "at-will employee" and is subject to immediate termination at the discretion of management. In my case, if I refused to show up at my part-time job at Golf Galaxy, they've notified me that after my third unexcused absence I can be terminated. In other cases, businesses are more or less lenient based on the supply of labor in that particular field. For example, if the supply of labor is tight in the production of widgets, then the producer will be less inclined to fire employees. Conversely, if the supply of labor is plentiful in the production of cogs, then the producer will be more strict.

So everyone should remember one important thing. Every individual is replaceable to the point where nobody else is willing to do their job. At that point, any worker is free to demand whatever their hearts desire from management for the latter is without leverage in the bargaining process. Until that point, however, workers are at the mercy of their employer save the few cases where unions still wield power in their industries. If conditions are truly worth changing, then the labor market would dry up as job seekers avoid the field until conditions improve.

Simple neo-classical economics tells us this. For those of you unfamiliar with the concepts discussed in this post, I direct you to Henry Hazlitt's Economics In One Lesson.