Big City Mayors Promote Green Space Consumption

Somebody needs to remind the dirtbags that run San Francisco, Chicago,  and Boston that by imposing ideological means testing on new businesses wishing to enter their cities, e.g. Chicken sandwich outlets, they are, in fact, driving those businesses off to the suburbs and other greenfield sites.  More outrage over the beliefs of one of the franchise owners than outrage over hundreds of people murdered in their cities every few weeks or so, speaking of chickens, is the sham of the grit pickers who masquarade as responsible government.
Hey San Francisco!!  Did you know that the bottom of the paper cup handed to you at the In n' Out Burger franchise actually cites the scriptures?  Horrors!  Ran them out of town!  They don't subscribe to San Francisco values.  That is probably why they are located within easy reach of the San Francisco market in friendlier climes, but far enough away from the madness that the clowns can't touch them.  Given the popularity of the franchise, even the dimmest of political wits, might want to think twice.

Chicken Rahm

People living on the west side of Michigan are attuned to Chicago, more so than Detroit.  Many people, such as me, have extolled the virtues of our proximity to Chicago.  But Chicago of recent times is becoming a place known more for its violence and its weekend murder orgies.  Tourists have been subjected to random attacks (some called "racially motivated") by urban carnivores and thugs.  The Chicago tourism people are pleading for action.
On St. Patrick's Day weekend, one week after the Trayvon Martin shooting, 10 people were murdered in Chicago, 42 were wounded.  A 6 year old girl, as she sat on a proch with her mother, had her brains splattered all over her mother from a stray bullet.  While Sharpton and Chicago-based Jesse Jackson were in Florida attempting, with their good friends and news thugs from MSNBC, to turn a Hispanic man into the Great White Whale, blood of Black people and children was splattered all over Chicago.  It now takes Chicago two weekends to accomplish what James Holmes accomplished after months of evident diligent planning.  And yet the silence of outrage is deafening.
Enter, tough guy, Little Rahm Emmanuel, who begs the thugs to "stay away from our children."  He didn't beg them to stay away from tourists.  He didn't beg them to stop slaughtering each other.
He didn't decry the fact that 84% of Black children in Chicago are born to unwed mothers.  He didn't decry the toxic culture riddled with urban pathologies like fatherlessness.  In 1959, 8% of Black children in Chicago were born to unwed mothers.
No, Little Rahm saved his testosterone for a real tough guy attack on a chicken franchise.  It seems like the chicken franchise has an owner that supports a traditional definition of marriage.  Standing up to his neck in blood, murdered children, and a runaway toxic urban culture, Little Rahm said the chicken franchise, if it didn't accept "Chicago values", it wasn't welcome. 
I am not sure anybody should accept "Chicago values", which, apparently, had their origins with Al Capone and were updated by Tony Resko and 250,000 known murderous gang members.  No, Little Rahm, you keep your Chicago values.  In fact, why don't you stick them?

In the Heat of the Night--redeux

From Charlotte Stoker Manning, Chair of Women, in the NAACP of Romney:
"You cannot possibly talk about jobs for Black people at the level he's coming from.  He's talking about entrepreneursip, savings accounts--Black people can barely find a way to work".
Black people can't start or operate businesses?  Black people can't maintain savings accounts?  The major wonder is why there is no outrage on the part of Black America concerning the utter diminishing of their most basic capabilities by an NAACP leader.
Consider the following:

1. Black people in America are, by far, the richest Black people on earth.
2. A Swedish family of four lives at 90% of the standard enjoyed by a Black American family of four.
3. Black Catholics, for example, constitute 9% of the total Black population in the U.S. They have some of the highest educational attainment rates, most stable marital rates, and highest average income rates of any subgroup in the US ethnic mix.
4. Tens of thousands of small businesses in New York are owned by Black Jamaicans, and Blacks from the West Indies.  Skin color was no inhibitor to the dreams, aspirations, and drive of these important entrepreneurs.

Many years ago, maybe in the mid-Sixties, there was a good movie entitled "In the Heat of the Night", starring Sidney Poitier as a Black police officer from Philadephia who was drawn into the solving of a murder mystery in the deepest most blatantly racist south.  In the movie, the character, Virgil Tibbs meets the patriarch of the area, a caricature of southern white racism, a man who raises orchids.  The southern patriarch racist compared the assiduous care of orchids to the care needed by Black people in his employ.  Honestly, his characterizations of the limited abilities of Black people in the Sixties does not hold a candle to the implications of Stoker-Manning's statement in 2012.
I wonder what good all this money expended on "racial healing", embracing diversity, Community Development Block Grants, etc., ad infinitum.--all the tools of the social welfare class and what do we as a country have to show for it?
A proud people who have survived four hundred years of various degrees of repression being herded back on to the government/social welfare plantation because they can't maintain a savings account.

Musings

Yesterday's lengthy article was one of the best I have seen in illustrating the process of creative destruction--a process of wealth creation well beyond the limited powers of ratiocination of your average community organizer.  I put it up more as an educational tool although the substance of the article itself reflects the woefully inadequate understanding of how the economy works by somebody who lauds the importance of innovation, but condemns the very essentials of the innovation process.

It is also worthy to note that Airbus, a foreign subsidized maker of commercial aircraft, will locate a production facility in the RIGHT-TO-WORK state of Alabama.  Where is the National Labor Relations Board when we need them?  Why did the Obama administration do everything it could to get in the way of Boeing's expansion into South Carolina?  Here's Boeing, a non-subsidized private sector producer, in which hundreds of thousands of Americans have investments through their 401 (K)s, an American company, and it has to spend hundreds of thousands in legal fees to assert its right to locate its business.  Airbus, a foreign government subsidized producer that constitutes the greatest competitive threat to Boeing, is allowed to implement a union avoidance strategy by locating in Alabama.

Schumpeter in the White House: From CITY JOURNAL

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Table of Contents A quarterly magazine of urban affairs, published by the Manhattan Institute,edited by Brian C. Anderson. • • • • • • • • • • • • • • • Economics  Does Not Lie:  A Defense of the Free Market in a Time of Crisis by Guy Sorman The Empire of Lies:  The Truth about China in the Twenty-First Century by Guy Sorman

GUY SORMAN Schumpeter in the White House How to talk about creative destruction The 2012 presidential race will be, in part, a showdown between two different models of economic growth. President Barack Obama and his Democratic administration will defend the once-discredited and now-resurgent theory that government must act as the economy’s “tutor” and use public funds to stimulate it. The Republican nominee, presumably Mitt Romney, will advance the free-market argument that the main source of new growth is the innovative energy of American entrepreneurs and that government needs to get out of the way. ILLUSTRATION BY ROBERT PIZZO An essential part of the free-market argument is “creative destruction,” a theory proposed by the great Austrian economist and Harvard University professor Joseph Schumpeter. If you don’t understand Schumpeter’s insight—expressed most powerfully in his classic 1942 book Capitalism, Socialism and Democracy—you’ll have a hard time understanding why free markets work so well to generate prosperity. Yet creative destruction is a complicated concept, poorly understood by the general public and not always easy to defend. As November nears, the Republican nominee will have to figure out a way to show voters how essential it is to American prosperity. Schumpeter believed that progress in a capitalist economy requires that the old give way constantly to the new: production technologies in a free economy improve constantly, and new products and services are always on offer. But this creative transformation also has a destructive side, since it makes earlier products and services—and the workers who provided them—obsolete. Today’s consumers have little reason to buy an oil lamp instead of a lightbulb, or a Sony Walkman instead of an iPod—which can be bad news for the people who manufacture the oil lamp and the Walkman. Looking back at the history of Western capitalism, we can see how the discovery of new energy sources, new communications systems, and new financial instruments regularly demolished old ways of doing things. When this happened, the result was typically short-term pain, as certain workers found themselves displaced, and sometimes even what appeared to be economic crises; but there was also substantial long-term gain, as the economy became more efficient and productive. Economists W. Michael Cox and Richard Alm point to transportation as a striking example of the process. “With the arrival of steam power in the nineteenth century, railroads swept across the United States, enlarging markets, reducing shipping costs, building new industries, and providing millions of new productive jobs,” they write. Automobiles and airplanes had similar effects. Yet “each new mode of transportation took a toll on existing jobs and industries. In 1900, the peak year for the occupation, the country employed 109,000 carriage and harness makers. In 1910, 238,000 Americans worked as blacksmiths. Today, those jobs are largely obsolete.” Creative destruction can take place not just across sectors of the economy but within particular firms, too. Since the invention of the automobile, many automakers have disappeared, unable to improve their products; those that survived have had to transform themselves radically to stay competitive. Sometimes firms even change their business to stay alive. Think of IBM, which started in 1930 by building calculating machines, shifted to computers in the 1950s, and today is a service company. Trying to prevent creative destruction brings economic torpor or worse. At the extreme were the twentieth century’s totalitarian Communist regimes. I vividly recall the Soviet economy under Brezhnev and the Chinese economy under Mao Zedong. In these state-controlled societies, competition was illegal and existing factories were never shuttered; every industrial complex contained layers of antiquated technologies to which more recent ones had been added. To close down a factory, after all, would imply that the central planners had made mistakes—an impossibility, since socialism was supposedly scientific. Innovation is very rare under such state-stifled conditions. In East Germany, factories produced the same car—the only one available—for three decades: the infamous Trabant. Without competitors providing consumers with other choices, there was no incentive to do anything else. Visiting Communist countries during the seventies and eighties, as I frequently did, was to enter a museum of industries past. In the poorly stocked shops, one would come across outmoded devices, like mechanical watches, long gone from advanced capitalist economies. In- deed, most of the innovative products that did surface in the Communist world—usually for the benefit of the military—were stolen or smuggled in from the West. The same weakness affects, though less dramatically, the watered-down form of state economic planning often practiced in European democracies and renascent in America under the Obama administration, with its Keynesian stimulus spending, massive bailouts of the auto industry, partial takeover of General Motors, and subsidies of alternative energy. The track record of such economic intervention in democratic societies has been stagnation, though it has occasionally proved useful in emerging economies, like Japan’s in the 1950s, when capital is scarce and entrepreneurs are thin on the ground. Even in Japan’s case, though, many of the government-backed industries failed, while sectors of the economy that weren’t nurtured by the state’s “industrial policy”—cars, components, ceramics—flourished. Central planners can never match the private innovators of a competitive economy. (Friedrich Hayek called this bureaucratic arrogance the “fatal conceit.”) A bureaucrat would need omnipotence to anticipate, let alone invent, the paradigm shifts that capitalist economies, churning with creative destruction, have regularly birthed. Economies open to creative destruction have innovated more, created more employment, and enjoyed higher growth rates than their statist rivals. No place has been more open to creative destruction than the United States, where whole cities, left behind by technological advance, have crumbled into ruin, with abandoned factories standing forlornly alongside rusted railroad tracks and many workers long since departed to clear new lands, like the pioneers of yesteryear. The willingness of Americans to endure creative destruction has allowed their economy to outperform European economies for decades. But creative destruction always runs the risk of ruining the lives of individuals along the way, which poses a significant political problem for defenders of free markets. Consider an example from overseas. Rail now allows travelers to zoom easily and quickly from London to Paris and back. Who, then, needs the slow-moving ferry that links Dover and Calais? But just try explaining Schumpeter’s virtues to a unionized sailor! Yes, free-market advocates can point out that when a state steps in to help a dying sector of the economy, it is actually harming economic growth by sinking financial capital—a limited resource—into inefficient activities and diverting funds from more innovative enterprises. A job saved in an obsolete economic sector, they will say correctly, is a job—often many jobs—forgone elsewhere in the economy. But that’s a very hard argument for a politician to make. As the great free-market economist Milton Friedman frequently observed, a business closing gets on the television news, while the new businesses that get created from the reallocated capital go unnoticed because they are so widely dispersed. Mitt Romney has run smack into this problem during his campaign for the Republican nomination. Bain Capital, the firm he led, was a pure engine of creative destruction: a private investment fund that bought troubled businesses, restructured them (often by firing people), and sold them for a profit. Even some of Romney’s Republican opponents, who know better, couldn’t resist attacking him for his entrepreneurial work; Newt Gingrich went so far as to run ads featuring workers who had lost their jobs because of Bain’s restructuring. Romney contended that Bain had helped create 100,000 new jobs, which may be true, but—underscoring Friedman’s point—no one knows exactly where they are. It may therefore be necessary for defenders of creative destruction to balance Schumpeter with some form of social support. It is misguided to protect superseded firms and industries, they would maintain, but helpingpeople displaced by economic progress is a moral imperative. They would argue for the implementation of a “compassionate capitalism,” perhaps including unemployment benefits, retraining, and various welfare services. (These should be designed not to become disincentives to work, as they frequently have been in the past.) A compassionate capitalism wouldn’t merely be humane; it would also help preserve capitalism, because in a democracy, creative destruction cannot occur without some type of safety net. Workers who risk losing their jobs and lack any social support will soon vote an end to free markets. Private Equity, Capitalism’s Secret Weapon Created in the United States in 1946, private equity funds are collective investment schemes that didn’t become serious economic players until the 1970s in Silicon Valley. Early private equity investors, also known as venture capitalists, would buy shares in promising new industries like high-tech and sell their investments at a considerable profit. Eventually, private equity funds spread beyond Silicon Valley and invested in a wider range of industries. Today, they raise capital from cash-rich investors—pension funds, insurance companies, wealthy individuals—or borrow it from commercial banks and other financial institutions. Then they invest in various companies. The goal of the private equity fund is to sell those investments—often to another private equity fund—and turn a profit. Smart investors at private equity funds select poorly managed companies whose value can be increased by extending, reducing, or reshuffling their activities. After buying a significant number of shares in such a company, a private equity fund can redirect or replace its management structure. Private equity managers may terminate redundant workers to increase productivity; scale back or eliminate less profitable departments; or use the company’s existing business to extend its brand and reach. For instance, Bain Capital, the private equity fund founded by Mitt Romney, turned Staples from a local brand into a national office supplier. In the simplest sense, private equity investors reallocate capital where it will be most effective—from less productive uses to more profitable ones. Private equity funds propel capitalism’s creative destruction: by promoting innovation and punishing obsolescence, they fuel economic growth. At the same time, by speeding up processes that might otherwise take a long time—such as the decline of an old industry and the emergence of a new one—private equity funds make the social costs of creative destruction more visible. Those who defend free markets, creative destruction, and private equity must do a better job of explaining their genuine benefits while supporting effective social policies to help workers make smoother transitions from old industries to new ones. Schumpeter himself prophesied that the unpopularity of capitalism would eventually kill it. He doubted the capacity and willingness of the bourgeoisie to defend capitalism’s legitimacy, and he doubted the heirs of capitalist entrepreneurs even more. He knew many, both in his native Austria and in the United States, who squandered the capital that their parents and grandparents had accumulated and who were eager for the Left to forgive them for having inherited their wealth. The ultimate enemies of capitalism, in Schumpeter’s view, were intellectuals, many of whom found it outrageous that businessmen had so much more money than they did. Envy—and the indisputable imperfections of capitalism—made these thinkers and writers, including some of Schumpeter’s Harvard colleagues, yearn for a better economic system. Ironically, the wealth created by capitalism had bankrolled a massive expansion of the educational system, empowering the intellectual class that hated that wealth. “Capitalism inevitably . . . educates and subsidizes a vested interest in social unrest,” Schumpeter noted. The rhetorical talent of the intellectuals, he predicted darkly, would help bring capitalism to its knees. Schumpeter’s pessimism about capitalists’ heirs may have gone too far: some of them, especially in America, have put their money to good use in philanthropies, museums, and foundations that don’t lobby against capitalism. His characterization of intellectuals, though, remains as accurate today as when he made it decades ago. And while it’s true, of course, that socialism as Schumpeter feared it has all but disappeared, the Obama administration’s enthusiasm for economic intervention shows that American openness to creative destruction is not a given. Perhaps the most virulent opponent of creative destruction is the riotous antiglobalization movement. Perpetually laying siege to G-20 meetings, the antiglobalists refuse to accept—or fail to understand—that competition spurs innovation and that innovation spurs economic growth and human progress. Thanks to trade, market competition has become global, establishing a worldwide division of labor that dramatically reduces the costs of consumer goods, from food to cell phones and beyond. In the antiglobalists’ dreamworld, everything would become local again—a fantasy that, were it ever to become reality, would limit access to many goods to the wealthy alone. Can a Schumpeterian candidate make it to the White House in 2012? Yes, but in the current climate of economic uncertainty, he will need to be a talented rhetorician. Otherwise, America in a second Obama term will probably continue to move in a European direction, with the government playing an increasingly activist role in the economy, protecting out-of-date ways of doing business. And without the liberating fire of creative destruction, America will follow Europe down the path of slow growth, high unemployment, and decline. Guy Sorman, a City Journal contributing editor and French public intellectual, is the author of Economics Does Not Lie. EMAIL ARTICLE | PRINTER-FRIEND

If Occupy Wall Street was not comprised of a bunch of phonies, they'd occupy Public Education.

Techers earn an average of $50k a year, mas or menos, but their union presidents generally average around a half million dollars, mas or menos.  Does that make them part of the "1%"?    Where is Occupy Wall Street when you need them?  How about Occupy Public Education?  That wage disparity is "immoral," "proof that the system doesn't work," and "no accountability". 
Selective outrage is a good reason why our problem solving is dysfunctional.

The Michigan Economic Development Corporation and Kalamazoo Team Up to Gangbang Already Economically Stressed Battle Creek

The Michigan Economic Development Corporation is supposed to pursue job creation and wealth creation projects in Michigan.  But in view of recent published reports that one million dollars provided by the MEDC actually enabled Arcadia Brewery to move from Battle Creek (a Michigan city) to Kalamazoo (a Michigan city), does the MEDC live up to its mission?
One wonders if all those bright people in Lansing have ever heard of zero sum economic development.  The MEDC likes to talk "economic gardening", but they evidently like to walk a neanderthal and wasteful strategy of zero sum economic development.  Zero sum economic development produces no new net jobs (which Michigan badly needs) and it epitomizes exactly the arguments made against economic development by such thinktanks as the Mackinac Insitute.
By any "market standard" or "free market principle" (to which the new Lansintg gang says it adheres), this is a dumb deal.  It was enabled when the MEDC decided to pitch in $1 million of taxpayer resources to "bridge the gap".  If the deal stood on its own, there would be no gap to be bridged.
Thus, you have one million in taxpayer resources being used to transfer up to sixty jobs (do they include health care for the employees?) from one Michigan community to another.
And this is called "economic development", "job creation"?  SPARE ME!!

I know crony capitalism when I see it.

Two Days after Independence Day

One of my very favorite pieces of writing in human history is the U.S. Declaration of Independence.  While listing the grievances that compelled the separation from the Crown dominate much of the Declaration, the precocious statements about freedom and liberty and consent of the governed were truly radical concepts, at the time.  And so the actions taken by those signing the Declaration were truly radical acts designed to overturn the established monarchies, dictatorships--the establishment of ruling elites in favor of the consent of the governed and the freedom of the people to seek life, liberty, and pursuit of happiness.  No matter what the revisionists and the au courant gang say, there is clearly no document in human history as well written or as impactful as the American Declaration.