Some good news for local economies battered by the War on Coal

Commentary by James Shott

It is a common idea among many Americans that coal as a major industrial fuel is dead, or at least dying, and cleaner fuels, like wind and solar energy, and natural gas, are taking over. There is some truth there; but there are other influences on coal’s recent decline.

Less costly natural gas has become the fuel of choice in power plants and for other industrial uses, not because of the natural relative price of the fuels, but because of the cost of regulatory demands on mining and burning coal that require enormous investments that have priced coal higher than natural gas. Remember former President Barack Obama’s prediction: “So if somebody wants to build a coal-powered plant, they can. It's just that it will bankrupt them.”

These regulations produced the closing of more than 400 coal-burning power plants, which dropped the demand for coal, and altogether put 63,000 people in the coal industry, electric production industry and related support industries out of work in just the last few years.

At just the right time hydraulic fracturing (fracking) became popular, after lying mostly dormant since its first commercial application in 1957, and that produced a boom in natural gas production at attractive prices to compete with coal.

Many think burning less coal is a great thing, because burning coal fouls the air and is dangerous to our health, a “truth” which loses importance when you know the actual infinitesimal improvement in air quality derived from burning less coal.

However, considering all those factors, and paraphrasing a famous quote attributed to Mark Twain, the rumors of coal’s demise have been greatly exaggerated.

Of course, coal will never regain its former dominance among industrial fuels; time and technological/industrial evolution would just as certainly, although much more gradually, have eaten into coal’s popularity without the help of the Obama War on Coal.

But the regulatory adjustments of the Trump administration, the growing acceptance of the idea that the climate change/global warming mania is dramatically overstated, the reality that coal is still the best fuel for many things, the fact that many countries that do not have domestic coal supplies depend upon it for fuel, and the improvement in coal-burning technology all point to a continued market for American coal.

And let’s not forget that fossil fuels made up 81 percent of the fuels used to produce electricity in 2016, and coal is still the primary fossil fuel in electricity production.

Industry insiders, like Murray Energy CEO Robert Murray, see a partial resurgence in coal. “Coal will grow back,” he told Fox Business Network’s Stuart Varney. “But we’re in a decline right now.”

He went on to say that Trump “can bring back at least half of those [63,000 lost] jobs as the economy grows and as he ends the regulations on coal.” He noted that we have not had a level playing field in coal; “the government has been picking winners and losers.”

And he told Maria Bartiromo, also on Fox Business Network, former President Obama closed 411 coal-fired plants, and that the Clean Power Plan which Trump ended recently, would have closed 56 more plants. That, he said, would have caused a steep spike in electric rates.

“As [Trump] grows the economy [and] brings jobs back to America, coal will participate in that growth because we are one-sixth the cost of a windmill and one-fourth the cost of natural gas,” Murray said.

Rep. Bill Johnson, R-Ohio, said, “The coal industry knows and understands how to mine coal … and protect our environment. We don’t do it the way it was done 50, 60 years ago.”

Here are a few pieces of evidence:

* Reports from the Kentucky, West Virginia and Virginia coalfield regions say that mines are cranking back up and miners are being rehired. Train yards are seeing cars filled with coal moving through them in greater numbers.

* Bluefield State College recently held a Job Fair to immediately fill 85 open coal positions at Wyoming and McDowell county mines that mine coal used in making steel.

* Fox News reports that in Wise County, Virginia, a “long-awaited revival is under way in this beleaguered Central Appalachia community where residents see coal as the once and future king. Trucks are running again. Miners working seven days a week cannot keep up with current demand.”

* Coal exports through Hampton Roads last month rose more than 50 percent from last year's level, led by a nearly five-fold increase at Newport News' Pier IX, according to the most recent Virginia Maritime Association statistics. "A lot of mines are open again," said Harry Childress, president of the Virginia Coal and Energy Alliance."

Few if any argue that the coal industry will return to its former greatness, but it will certainly endure for many years at a lower level if natural forces are allowed to work, free of politically correct environmental engineering.

When you replace regulations resulting from selfish ideological goals with a business regulatory level based upon common sense, good things can happen.

And for areas of the country like ours, that have suffered so greatly from Obama’s over-zealous EPA, this is good news.

Cross-posted from Observations

October’s jobs and economic numbers do not warrant much celebration

Commentary by James Shott

President Barack Obama’s last chance before the election to show that Democrat policies are producing favorable economic and job conditions has ended, and October’s economic numbers contain some positive news, but not a lot.

Among the better news, the most often cited unemployment rate dropped slightly, and average hourly earnings for all employees on private nonfarm payrolls rose by 10 cents.

President Obama and the Democrats are thrilled that the U-3 unemployment rate dropped a bit in October to 4.9 percent, the same level at which it stood in June, July and August before rising to 5.0 percent in September. Unemployment of 4.9 percent is a respectable rate, so long as other factors do not provide contradictory facts. But, alas, they do.

The U-3 rate is one of six different looks at alternative measures of labor underutilization in the country, and counts those in the labor force who are working as well as those who have lost their job, but are actively looking for another one.

The weakness of the U-3 is, however, that there are a tremendous number of Americans of working age who are not working or looking for a job any longer because they became discouraged at being unable to find a job, and have dropped out of the labor force, although they would gladly go back to work if the business climate improved and the economy produced a job for them. The U-6 rate reflects the unemployment rate with these folks included in the calculation, and stood at 9.5 percent at the end of October. The U-6 rate is far more reflective of the actual health of the employment environment than the more frequently cited U-3 rate, and 9.5 percent is not good.

Thus far in 2016, employment growth has averaged 181,000 per month, compared with an average monthly increase of 229,000 in 2015. Neither level has been enough to help those millions of discouraged workers who have given up looking for work, as demonstrated by the U-6 unemployment number.

In October, 1.7 million persons were marginally attached to the labor force. While total nonfarm payroll employment rose by 161,000 in October, 487,000 discouraged workers dropped out of the workforce; three times as many people quit the workforce because they couldn’t find a job as were hired for a new job. That explains the small improvent in the U-3 rate.

“The sectors witnessing the strongest boost in hiring over the past year included education, health and professional and business services in October,” write Nick Timiraos and Josh Zumbrun on The Wall Street Journal blog. “The sectors with the weakest performance included manufacturing and mining.” Service sector jobs thrive while manufacturing sector jobs continue to suffer. And, since the last recession began in December of 2007, the number of new full-time positions and the number of new part-time positions are nearly equal.

Neither of these are good signs. Most people want full-time jobs, but they are in short supply, and that means lower earnings as a part-timer, or having to work multiple jobs to make ends meet. And in terms of worker earnings, manufacturing jobs most often pay better wages than service jobs.

The Labor Force Participation Rate was at 62.8 percent at the end of October, muddling along at levels not seen since the late 1970s.

A participation rate of 62.8 percent means that of every 1,000 people of working age that are actively in the labor force or have dropped out but are willing and want to work, only 628 have a job, a little less than two out of three. That translates to 94.5 million Americans of working age that are not working. The highest the participation rate has been in 2016 is 63.0 percent and the lowest is 62.6. Until after the recession began near the end of 2007, the participation rate hovered around 66.0, and nothing President Obama has done in eight years has reversed the steady slide and the leveling out in the 62 percent range.

After seven years in office the Obama economy had produced an average real GDP growth rate of a weak 1.55 percent, ranking Obama as fourth from the bottom of previous Presidents of the United States. In October 2016, GDP registered a growth rate of 2.9 percent, by far the best this year. However, by comparison, U.S. real GDP growth averaged 3.79 percent from 1790 to 2000. The Obama administration’s over-regulation and poor tax policies hampered business activity, hence job production.

As voters go to the polls to complete the process of choosing Obama’s successor, a major question is whether they will vote to elect Hillary Clinton and stay on the present failed course for four or perhaps eight more years of economic weakness, millions of Americans out of work, weak GDP, and jobs forced overseas by foolish tax and regulatory policy.

Or, will they vote for a change by electing Donald Trump, who at least very well understands business and how economic policies like those of Obama and Clinton harm the very people they are elected to serve. Let us hope for the latter, and provide America the chance for better things in the future.

Cross-posted from Observations

Presidential campaign has not focused much on important issues

Commentary by James Shott

The presidential campaign has not adequately addressed the issues and problems facing the United States, but the next president has a mountain of problems needing attention.

Looking at polls from major news organizations – CBS News/New York Times; ABC News/Washington Post; NBC News/Wall Street Journal – from May through October of this year, the economy/jobs is the leading issue in all polls, followed by the combination of terrorism, national security and immigration. Tam Warner Minton, writing on The Huffington Post blog, suggests that the Supreme Court is the most important of the issues.

All of these issues are important, but two of them – The economy/jobs; and the U.S. Supreme Court – are already affecting the country.

The thing to remember when evaluating the way Donald Trump and Hillary Clinton approach these problems is that one of them loves and lives for big and bigger government, while the other plainly prefers the private sector.

Looking at the economy and job creation, Trump has actually created jobs through his hotels, golf courses and casinos; while Clinton’s decades in the public sector leaves her with no real experience in this important sphere.

Her approach to jobs and the economy will rely on increased regulation, reducing taxes on the middle class and making the rich pay more. The National Center for Policy Analysis (NCPA) analyzed the Clinton plan and said, “As currently presented, the Clinton tax proposals would increase taxes on high-income earners, reduce the exceptions to the corporate income tax, and increase estate taxes, in an effort to raise more revenue and bring greater equity to the current U.S. tax system. According to our NCPA-DCGE model, the plan would generate $615 billion in revenue over 10 years, with most of that increase coming from the federal personal income tax. The cost to the economy would be a net loss of 211,000 jobs by 2026, and a reduction in real GDP of 0.9 percent.”

Clinton has criticized Trump’s tax cutting policy, deriding it as “Trumped-up trickle-down,” a cute phrase, but a horribly ignorant economic reality. The NCPA explains why this idea will out perform Clinton’s: “Rather, insofar as tax cuts raise after-tax profits, they induce taxpayers to expand investment and, in so doing, wages, and jobs. Insofar as they raise after-tax wages, they induce taxpayers to enter the labor force and work longer hours. This is not the result of money “trickling down” from one person to another but of the reduction of disincentives to invest and work that are inherent to any tax code,” and especially one that punishes people with money to invest in job-creating economic activity.

Where the U.S. Supreme Court is concerned, it can cause great harm to the nation if Justices stray from their Constitutional limits, and they often do.

In response to a question in a presidential debate, Clinton said: “If I have the opportunity to make any Supreme Court appointments, I’m going to look broadly and widely for people who represent the diversity of our country, who bring some common-sense, real-world experience.”

This answer displays a shocking lack of understanding of the job of the Supreme Court, and the purpose and meaning of the U.S. Constitution. The Court’s duty and function have nothing to do with ideas of diversity, or the supposed benefits of real-world experience. Its job is essentially to resolve legal disputes, being sure always to uphold the principles of the Constitution.

The Constitution is alive, but it is not a “living document,” the meaning of which would change with the winds of societal preferences. The Founders based the Constitution upon important principles that were intended for the ages. They understood that at some future point there may be a true need for modification, and they created a mechanism for doing so. That mechanism is not simply a majority of Supreme Court Justices wanting to make a change; it is a clear and difficult process, difficult by design to prevent foolish modifications to satisfy some momentary desire.

There are essentially two approaches to how justices interpret the Constitution: conservatism/originalism, which honors and adheres to the actual language and original intent of the Constitution; and liberalism, which is a willingness to interpret the language for some social or political end, which results in making law from the bench instead of in the Congress, as the Constitution requires.

Packing the Court with Justices who do not honor the original meaning of the Constitution in order to achieve some narrow ideological objective is a form of subversion, and Hillary Clinton is married to that goal.

Donald Trump, on the other hand, understands the great wrong of that goal, and has vowed to nominate judicial conservatives/originalists to fill Court vacancies.

The left likes for things to be easy: easy border control and easy citizenship; easy changing of the Constitution; easy to vote through early voting and without a picture ID; and easy to live off of government support, rather than facing the rigors of a job, among them.

Such laxness and failure to uphold traditional standards makes it much easier to turn America to liberalism/socialism through subversive measures than trying to persuade people to accept it. We must resist these efforts.

Cross-posted from Observations

Lipstick on a pig: Administration putting a spin on the U.S. economy

Commentary by James Shott

It is natural for politicians to put things in the most favorable light, and the worse the general situation, the greater the need to do so. That serves as an appropriate introduction to the White House’s June economic analysis, which is summarized thusly: “The economy added 287,000 jobs in June, as labor force participation rose and the broadest measure of labor market slack fell.” As far as that statement goes, it is true.

That new jobs number is a decent number – the best jobs figure since October – and miles ahead of May’s revised number of only 11,000 new jobs. But it is not an outstanding number, and is only one of several really significant numbers.

Back in December 2009, six months after the end of the recession and 11 months into Barack Obama’s first term, economist Paul Krugman said that 300,000 new jobs each month were necessary to make up the job losses of the recession over the next five years, so the June figure falls short of that number. In the weak Obama recovery new job production has only met or exceeded 300,000 six times in 89 months. The last was in November of 2014 at 331,000.

Whether the 287,000 number holds up after revision we won’t know until August. May’s preliminary number was revised down by more than two-thirds to a mere 11,000; therefore August may show a downward revision, an upward revision, or a number that is pretty close to the preliminary figure.

Other relevant numbers from the Bureau of Labor Statistics (BLS) data set for June include an increase in the U-3 unemployment rate, the one President Obama prefers to cite, from 4.7 to 4.9 percent. Despite the increase, the U-3 rate still looks good because it discounts all those marginally attached to the labor force that involuntarily work part-time instead of full-time, or have given up looking for work because they cannot find a job. Those workers are included in the U-6 rate, which more accurately represents reality, and stood at 9.6 percent in June, and improved one-tenth of a percent since May, as some of the previously disaffected workers started seeking employment again.

Even so, the Labor Force Participation rate was still at the late-70s level of 62.7 percent. From 66.0 percent in December of 2007 when the recession began, the trend in the participation rate has been steadily downward and has been below 63 percent since March of 2014. The labor force is made up of those age 16 and older that are working, looking for a job, and not in prison or in the military, and totaled 94,517,000 people last month. That means that 56,228,000 working age Americans are not working, and not in the military or in prison.

In June, 1.8 million persons were marginally attached to the labor force. These are individuals who wanted to work, were available for work, and had looked for a job sometime in the prior 12 months, but were not counted as unemployed because they had not searched for work in the 4 weeks preceding the survey.

Another 5.8 million individuals prefer full-time employment, but are working part time because their hours had been cut back or because they haven’t been able to find a full-time job.

The BLS reported, “Among the major worker groups, the unemployment rates [U-3] for adult women (4.5 percent) and Whites (4.4 percent) rose in June. The rates for adult men (4.5 percent), teenagers (16.0 percent), Blacks (8.6 percent), Asians (3.5 percent), and Hispanics  (5.8 percent) showed little or no change.”

The 9.6 percent U-6 rate tells one part of the story, but the actual harm of the administration’s policies that keep the economy from cranking up are another story.

“Today’s jobs number can’t hide the ongoing struggles facing the country’s main jobs producers – small businesses – which are overwhelmed by over-taxation, over-regulation, and a lack of access to credit,” said Jobs Creators Network (JCN) president Alfredo Ortiz. “And it shouldn’t distract us from an underwhelming labor force participation rate—still the lowest figure since the 1970s.”

National Federation of Independent Business president and CEO Juanita Duggan commented, “Each month our survey shows that small business owners are trying to hire qualified workers,” and, “The job openings are there, but owners are not going to invest in new employment when labor costs are becoming insurmountable, and the political climate is wildly uncertain.”

All the way back in November of 2010 President Obama was already claiming a “new normal” for the economy: “What is a danger is that we stay stuck in a new normal where unemployment rates stay high,” he said on CBS “60 Minutes.”

Today, with a real unemployment close to 10 percent, Obama may be viewed as a pretty good prophet. However, rather than seeing the future, he engineered it, and the term “new normal” is much less a reality than an excuse. As the JCN’s Ortiz noted, high taxes, rampant and intrusive regulation and limited credit do not a good recovery make.

America deserves better. November’s election provides the opportunity to elect as president someone who understands job creation.

Cross-posted from Observations

Democrat policies have a troubling past and promise a bad future

Commentary by James Shott
 
When Barack Obama took office in January of 2009 the U.S. was emerging from the recession that began in December of 2007. Running 18 months, this was a significant recession, with GDP reaching -8 percent in 2008 and unemployment peaking at 10.0 percent in October 2009, four months after the technical end of the recession.

In February 2009 President Obama signed the American Recovery and Reinvestment Act into law, an $830 billion spending plan that was supposed to keep unemployment from rising above 8 percent. It didn’t.

Truthfully, seven full years later the United States has not fully recovered from the recession, and Obama blamed the recession throughout most of his presidency to cover his tracks on the poor economic recovery. But the severity of the recession wasn’t to blame.

Gross Domestic Product growth has been inconsistent during Obama’s presidency, and averaged slightly above the 2.0 percent range. And while unemployment finally dropped to respectable territory at 4.9 percent in January, that must be considered in light of the fact that it’s only that low because more than 90 million Americans couldn’t find a job to replace the one they once had and left the workforce. When those people are included in the calculation, the unemployment rate at the end of April was 9.3 percent (U-6).

The labor force participation rate is the percentage of working-age persons in an economy who are employed, or are unemployed but looking for a job. Today, according to the Bureau of Labor Standards, the participation rate is 62.8 percent, the lowest since the 1970s.

Contrast Obama’s dreary results with the last recession that lasted at least 16 months. During Ronald Reagan’s first term, the recession began in July 1981 and ended in November 1982. Under Reagan’s policies the unemployment rate fell from a high of 10.8 percent in December 1982 to 7.2 percent in November of 1984 – that’s a 3.6 point improvement in 23 months, a striking difference from the 2007 recession, where unemployment peaked at 10.0 percent and never fell below 8.0 percent in the first 43 months afterward.

During the Reagan recovery the economy posted a robust 4.8 percent annualized growth over 23 quarters, according to economist Stephen Moore in The Daily Signal, and that was more than double the rate during Obama’s tenure.

Where Obama responded to an economic recession with $2 trillion worth of government expansion (more than $1 trillion on health care and $830 million in economic stimulus), Reagan cut marginal income tax rates across the board permanently through the Economic Recovery Tax Act of 1981: Different approach; different results. Reagan’s results were far better.

When your country is in trouble the president is supposed to put political and ideological goals aside and take actions that help the country recover. Instead Obama, not one to let a crisis go to waste, pursued his manic pledge to “fundamentally transform” the country, doubling down on reckless environmental policies that since September of 2014 have cost 191,000 people in mining industries their jobs, about 30 percent of them in the coal industry, according to CNS News, citing data from the Bureau of Labor Statistics.

That trend will continue if, through some great misfortune, Hillary Clinton gets elected. Recently, Clinton said, “I’m the only candidate which has a policy about how to bring economic opportunity using clean renewable energy as the key into coal country. Because we’re going to put a lot of coal miners and coal companies out of business.”

She then visited West Virginia coal country on the campaign trail and faced an out-of-work coal miner who is having trouble taking care of his family because of the Obama administration’s punishing policies on mining and burning coal. She answered his complaint about killing the coal industry by saying that her comment was out of context and that she had a plan to help families and individuals who have been put out of work.

The Huffington Post described that plan: “Hillary Clinton has a $30 billion, 4,300-word plan to retrain coal workers ...”

But there are two problems. First, in her initial statement she clearly promised to kill coal jobs. For a candidate for president to advocate a policy of deliberately targeting a group of jobs that are legal ought to be disqualifying. Furthermore, Clinton said the focus would be retraining those out of work for new jobs. And just what sort of new jobs would there be in this situation and in a state so terribly wracked by Obama-caused economic woes?

Of Clinton’s plan, West Virginia Coal Association Senior Vice President Chris Hamilton told The Huffington Post, “Hillary’s plan is akin to somebody running you over, then offering to pick you up,” he said. “It’s not a plan. It’s a care package.”

Obama’s policies have inflicted great pain on the nation, and Hillary Clinton gives every indication of continuing along a similar line. So much of what liberal Democrats have done and will do is to shove their ideas down our throats, instead of allowing change to evolve naturally. People who live in coal producing states understand quite well the damage such policies cause.

Cross-posted from Observations

Commentary by James Shott

The 2016 Index of Economic Freedom shows that the United States has climbed one notch from 12^th place to 11^th among the 186 nations of the world that were surveyed and rated.

The Index is an annual guide published by The Wall Street Journal and The Heritage Foundation, and rates nations for labor freedom, business freedom, and fiscal freedom. There are 10 different measures inside those three major groupings. Data used is from 2014, and was compiled and analyzed last September.

The nations with more economic freedom than the U.S. are, starting with first place: Hong Kong; Singapore; New Zealand; Switzerland; Australia; Canada; Chile; Ireland; Estonia; and the United Kingdom.

Ranking 11^th over all and 2^nd among the three North American nations, the U.S. “remains mired in the ranks of the ‘mostly free,’ the second-tier economic freedom status into which it dropped in 2010,” the introduction to the report states. In seven of the past eight years Americans have seen their economic freedoms decline, and this year’s score equals their country’s worst score ever in the Index. At 75.4 out of 100 points, the U.S. has seen its score drop 0.9 since 2012, and from 80.7 since 2009.

“America’s historically vibrant entrepreneurial growth is significantly hampered by intrusive, expensive, and often ineffective government policies in areas ranging from health care to energy to education,” the report states. “Government favoritism toward entrenched interests has hurt innovation and contributed to a lackluster recovery and stagnant income growth,” even though a private sector energy boom has put the U.S. at the top of the world’s producers of oil and gas.

While America’s 6.2 percent unemployment rate in 2014 has improved, GDP growth was an unimpressive 2.2 percent over five years from 2009 to 2014. Our public debt then was nearly 105 percent of national GDP, which means that if every dollar of production – the value of all final goods and services produced in a year – went to pay down the debt, we still would have debt.

One small piece of good news is that in the Rule of Law category the “Freedom From Corruption” rating rose from 72 to 74 from the prior year, but the “Property Rights” rating dropped 10 points from 90 to 80, and this year produced the lowest ranking of the American people’s trust in government in the last 10 years, based on polls taken in 2015, where 75 percent of respondents said they believe corruption is widespread in the government and in government regulation of business.

Taxation continues to bedevil America’s freedom standing, with more than one of every four dollars of domestic income being taken by taxes, the U.S. having one of the highest corporate tax rates on the planet at a punishing 35 percent, and the top individual income tax rate of 39.6 percent. Government spending runs just short of 40 percent of GDP, and the size and scope of the government remains too big and too intrusive. The “Government Spending” and “Fiscal Freedom” ratings each fell, 59.6 to 54.7 and 67.5 to 65.6 respectively.

The nation saw substantial declines in the Regulatory Efficiency category, where each sub-category saw declines: Business Freedom - 91.9 to 84.7; Labor Freedom – 95.1 to 91.4; Monetary Freedom – 84 to 77. The report notes that “180 new major federal regulations have been imposed on business operations since early 2009 with estimated costs of nearly $80 billion,” explaining that the regulations themselves are not rigid, but that policies, such as excessive occupational licensing, restrict employment opportunities, and “damaging monetary policies, tangled webs of corporate welfare, and various subsidies” have affected the economy negatively.

The U.S. was heavily affected in two of the three sub-categories of Open Markets, where “Trade Freedom” remained essentially flat at 87 points, but “Investment Freedom” and “Financial Freedom” each took a 10-point hit, falling from 80 points to 70. The report notes that while “domestic regulations have been emerging only gradually, the financial reforms adopted in 2010 have increased both costs and uncertainty.”

Even though the U.S. moved up one position among the 186 nations, being 11^th instead of 12^th does not provide enough for even Donald Trump to brag about, especially in view of the fact that the overall score fell nearly one point and that the U.S. lost ground in 8 of the 10 sub-categories contained in the Index. And its position in the second tier may prompt a drive to change our “land of the free” motto to “land of the mostly free.”

The importance of this report is not so much the U.S. ranking, but the continued commitment of its government to policies contrary to the values that made America exceptional and free. This perspective is not merely the view of conservatives and libertarians, but also of someone who has seen this same scenario up close and personal.

Filmmaker and American citizen Agustin Blazquez saw this same theme play out in his native Cuba, and warns, “Wake up, America!” Blazquez sees the same radical shift happening in America that turned Cuba into a communist country.

This ought to be a call to action, but thus far all of those have failed.

Cross-posted from Observations

Commentary by James Shott

The American concept of personal freedom takes a back seat in West Virginia and other states that do not protect their citizens’ ability to get some jobs without being forced to join or pay fees to a labor union. For state governments or the federal government to allow such conditions for going to work to exist is as antithetical to the idea of individual freedom that our nation was built on as it gets.

Half of the 50 states have already embraced worker freedom and passed right-to-work laws. These laws have a positive impact on the economies and job picture for those states, and are creating jobs. And now West Virginia is poised to become the 26th state where workers are free to choose whether or not to join a union.

The state House of Delegates and Senate have both passed right-to-work legislation. The Mountain State’s Democrat Governor Earl Ray Tomblin, has vowed to veto the bill, but the Republican majorities in both houses can override that veto.

Advocates of right-to-work in the state legislature say they are not opposed to unions, per se, but do oppose state laws dictating that unions receive taxpayer and worker funds.

West Virginia and 25 other states believe that people should be free of pressure to join a union to get a job and believe that such mechanisms are deterrents to business development and job creation, and thus are harmful to the economy of states.

Characterized as pro-worker, pro-growth, pro-freedom and pro-job, abolishing forced unionization and the prevailing wage rule in the state are predicted to improve the state’s business climate, increase job opportunities for West Virginians, and help overcome the economic damage to the state’s economy brought on by the Obama administration’s war on coal.

The rub arises when a union has negotiated a contract for workers in a business, and some workers do not want to join the union. The union argues that it isn’t fair for non-union workers to benefit from union negotiations, and the union is correct about that. So then non-union workers are assessed a fee to compensate the union for their benefits.

But then that isn’t exactly fair, either, as non-union workers have nothing to say about how the union uses their money.

The solution is simple: Those workers who want to join the union should be able to do so, and to benefit from the union negotiated work conditions and wages, and those who choose not to join should not be required either to join, or to pay money to the union, and therefore would negotiate their own deal with the employer.

Labor unions evolved from workers wanting better conditions, having endured conditions that were generally unfair and even dangerous for many years. Over the years after workers became organized, however, federal and state governments put laws and rules into effect that provided protections for workers, taking on the primary role that labor organizations had been providing.

With their prime function now essentially covered by laws and regulations, labor unions had to change their focus in order to survive. They have become active and influential political organizations, using member dues and non-union worker fees for political purposes. And too often, the demands they make to attract membership frequently involve things that no sensible business would do on its own, such as demanding work rules that are inefficient and designed to increase union jobs, rather than increase efficiency and productivity. They often demand pay practices that ignore individual worker performance, basing pay on considerations other than the worker’s abilities. And they routinely protect the job of all members regardless of their performance, or the health of the business.

Despite their actions on behalf of their members, which frequently are harmful to the businesses in which their members work, union membership has declined sharply from its peak in the mid-1950s, when one in three workers belonged to a union. The decline began to accelerate in 1980, according to Economy Watch online, and today union membership is a mere 11.1 percent.

That figure includes public-sector workers, who among all workers have the least justification for union representation, given that their employers are the governments that enforce labor law. Public workers are 5 times more likely to belong to a union than their private-sector counterparts, with a union membership rate of 35.2 percent, while the private employee rate is just 6.7 percent.

Many of the demands of unions on businesses, while good for union members, make profitability more difficult for businesses, artificially raising wages and labor costs, thereby increasing the price of goods and services for everyone, including union families. 

Rather than being an adversary of management, unions could become partners, focusing on providing a better trained and more productive workforce, assisting business in succeeding, and creating jobs through natural economic methods, rather than blackmailing employers into actions that benefit only one side of the labor/management equation.

Under this scenario unions could succeed on their own merits rather than depending upon government force and political intrigue for their survival.

Cross-posted from Observations

How to Capture the Minds of the Young and Help them Lead America to Better Times

I am convinced that young people are well aware that America and our present culture is corrupted and dying. Sure I could point to polls and research to support my premiss but I base my position on the competency of the human mind to see truth in lies.

How to reach those people that intuitively understand the dangers America faces and rally them to see a better view. That is part of my daily goal. Reaching young people on levels that interest them and rallying them around the  history and principles of  "freedom".

The "Extreme Technology News" site can help do just that. We are the 'Drudge Report' of extreme Technology like robots and space travel. We combine that information with the new ways to "Equity Crowdfund" business startups under the new investment laws that went into place last year.

XtremeTech News Daily 
http://www.videoonix.com

Please help spread this website around to young and old. It's packed with fun tech stuff to read. With your help we can get the attention of many young people and help them see the constraints being placed on their freedoms and motivate them to vote for freedom in the next election.

God Blessed America.

Now we must show respect for that which he bestowed on us. We must take action to preserve what we were honed with, America: A Place Called Freedom. I offer this idea, this news site as a way to get more active and engaged with younger people.

A tool to interact around, reading these select articles you'll know as much or more about space travel and space farming than most 20-25 year olds.

Did you know the first flower to bloom in space was/is an Orange Zinnia? Just happened a week ago… This is it… Photo from Scott Kelly, part time space horticulturalist on the ISS.

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America’s tendency toward over-spending leading to catastrophe

Commentary by James Shott

Many years ago Beatle John Lennon compared America to Rome. Some interpreted his statement as being complimentary, that America was like the Roman Empire in its glory days: the place to be. Others took it to mean that like Rome’s eventual fate, America was declining and headed for the dustbin of history.

As it turns out, both interpretations were correct, depending upon the time frame of the analysis. From its early days America was a bright spot in the world, becoming a leader in many areas and doing things never done before. The rise of the hippie movement of the 60s and 70s spawned the flower children that viewed the U.S. as tarnished and wicked. And since then, particularly in recent years, America has been transitioning to resemble Rome’s decline. Perhaps a more accurate comparison for 2015 is Greece, where out-of-control spending is about to kill the nation.

There is a steady record of troubling statistics that U.S. presidents and Congresses have negligently ignored. For example, in 1971 the federal debt was $348 billion, about 34 percent of GDP, but today it is about $18 trillion, and is more than 100 percent of GDP. This trend caused Standard and Poor’s to downgrade America’s credit rating in 2011.

Federal assistance program payments have risen from about 21 percent of GDP in the 1970s to about 70 percent today. The Supplemental Nutrition Assistance Program in 2008 cost $37.6 billion, but by 2012 totaled $78.4 billion.

The 2014 Index of Culture and Opportunity, published by the Heritage Foundation, reports how food-stamp participation has soared from 2003 to 2013, growing by more than 26 million people. In 1970, the number receiving food stamps was well below 10 million, growing to more than 20 million by 2003, and nearing 50 million by 2013. The index also shows that total welfare spending has climbed by $246 billion between 2003 and 2013. In 2014 the federal government operated more than 80 means-tested welfare programs that provide cash, food, housing and medical care to poor and low-income Americans.

Heritage’s Robert Rector notes that government spent $916 billion on these programs in 2012, and roughly 100 million Americans – nearly one in three – received aid from at least one of them, averaging $9,000 per recipient.

Many will see the increase in these numbers as necessary support from the government for Americans in trouble. Some do truly need help, but many are simply availing themselves of easy money.

Government policies and actions have kept the economy stagnant since the recession of 2007, preventing job creation that would allow millions to provide for themselves, or at least to contribute to their own wellbeing. More than 93 million Americans desiring work – nearly one in three – are not in the labor force. These policies and actions are championed by politicians, many of whom subscribe to the same socialist ideals that are killing Greece, and who benefit from having large numbers of individuals and organizations depending upon them for their survival.

And, the common theme of government wreaking havoc by interfering with business economics rises to the fore, yet again.

One example of a foolish policy is when Obamacare reduced the number of hours of the full-time workweek from 40 to 30 in an attempt to force employers to cover some part-time workers. This resulted in thousands of full-time workers becoming part-time workers, who lost 11 hours of pay a week, as businesses suddenly faced massive new expense and were forced to counteract that by reducing the number of full-time employees by cutting their hours.

Had the leftists that threw together Obamacare in the dark, smoke-filled rooms of the Capital actually thought about what they were doing, they could have avoided some of the punishment they caused these workers. No doubt that thousands of those workers now qualify for government support as a result.

Ignoring the wisdom of not raising the minimum wage, Seattle, Washington raised its minimum wage to $11 an hour in April. And guess what? Some of the workers who benefitted from the increase are now complaining that since they are making more money they will lose their housing subsidy, and are asking to have their hours reduced so that they can keep the free money flowing. Seattle’s minimum wage is scheduled to rise to $15 an hour by 2017.

The American tradition of self-reliance, of working to improve one’s plight, has been replaced by the opportunity to benefit from “free money” from government.

“If we keep on this way, we’ll reach a tipping point where there are too many people receiving government benefits and not enough people to pay for those benefits,” Rep. Paul Ryan (R-Wis.) wrote in The Wall Street Journal. Currently, about half of Americans pay no income taxes. “That’s an untenable problem. The receivers cannot receive more than the givers can give.”

The politics of government largesse and the sensible policy of holding individuals and institutions responsible for their actions, the tradition of self-reliance upon which America became the wondrous nation it used to be, are inalterably opposed. The question is, how much more of this dependency can the country survive before it becomes a Greek tragedy?

Cross-posted from Observations

The First Step in Correcting 80 Years of Discrimination Against “Regular Joe” Investors - Free Market America on the comeback trail.

Tectonic Changes in US

Investor Regulations

Part One of Two

Breaking the Hold of the Corrupted Banking System.

This past week was the beginning of a sea change in the small business financial markets.  1070 days after it became law the SEC finalized Title IV of The JOBS ACT of 2012. Though it got little attention from the press the new law is expected to have a significant impact on both private investors and on of how small businesses access capital, a very positive impact that could benefit the vast majority of Americans.

At times it’s been called Reg. A+ and sometimes called IPO-Lite  the new law dramatically changes investor limitations enacted nearly 80 years ago at the beginning of the Great Depression.  The new investor regulations overcome some of the limits and impediments that one of the original exemptions to the primary securities laws, referred to as "Regulation A", faced. 

Ben and Jerry's Ice Cream Company was an Exception

With the notable exception of the business Ben and Jerry’s Ice Cream which did use Regulation A to go public the regulation has rarely been used by business'. This was due to restrictions in both the amount of money that could be raised and the cumbersome requirement that issuers such as Ben and Jerry's faced when using the exemption, in particular,  individual state filings and approvals to raise money in each of the states.  

The new regulations overcome these impediments and enable companies to issue securities throughout the country with just the SEC’s approval and the amount of money that can be raised in a single year has been increased from $5 million dollars under the old rules to $50 Million dollars (this limit can be increased by the SEC as it deems warranted).

The potential value of the original regulation A to ‘regular ol' Joe’ investors was that you are not required to be an accredited investor to participate in these offerings. This differs from most early stage offerings where it is required that investors are accredited. Since Reg A was rarely used the ol' Joe had few opportunities to benefit. In practice most businesses seeking growth capital over the past 80 years were pushed into or chose the Private Equity markets where ol' Joe investors were not eligible to participate. Thus, these high return and often times tax favored opportunities were reserved for Americas more privileged "Banker Class'. 

In this writers view it is this discriminating law that in large part has led to the bifurcation of our society into the “banker class” and the regular ol' people.  It has done great damage to our society and this step taken last week by the SEC is hopefully the first step to help rectify that. Looking ahead the next step is for the SEC to release the regulations on Title III of the Jobs Act, which will be covered in more detail in part two of this article. Suffice to say here that Title III will enable Regular ol' Joe investors to participate in the private equity markets also through crowdfunding. 

The regulations for Title III is anticipated to be released by the SEC this fall. Remember it has been over a thousand days since the law was passed and the SEC released regulations on the first two sections Title I and Title II years ago these sections established the rules for  Equity Crowdfunding and lifted the prohibition on “General Solicitation”. Since then Crowdfunding has led to the cost efficiencies of Equity Crowdfunding in particularly benefiting the commercial real estate capital markets. 

These are very complex issues and I suggest that whether you are an investor or a company seeking growth capital you are advised to seek competent financial and legal council before investing or embarking on a fundraising effort for your company. 

In the next article we'll review the details of the yet to be finalized Title III including the potential benefits that may come for the regular ol' folks. It is time long overdue for the destructive class bifurcation that these arcane securities laws have helped to cause in America. These laws are at the heart of the Divided state of America today.

Final note: At the core of crowdfunding of all types is getting the word out to the masses, I specialize in PR and Marketing associated with all forms of Crowdfunding. For more information you are welcome to subscribe to our newsletter found on the contact page of our website.   www.VideoOnix.com

Democrats want to “help” people even when they don’t need help

Last July, Jeffrey Dorfman discussed the battle that began near the end of 2013 over maintaining extended unemployment benefits for up to 99 weeks. In Forbes Magazine the University of Georgia economics professor explained that during the debate the preceding December and January Congressional Democrats and President Barack Obama insisted that if the benefits were not extended, it would hurt workers who would lose benefits, but the nation’s economy would also suffer.

Adding a little background, he wrote: “After the 2007-2009 recession, Congress repeatedly authorized emergency extended benefits so that the unemployed could collect benefits for as long as 99 weeks [nearly two years]. When the extended benefits finally were allowed to expire in December 2013 they had lasted 20 months longer than following any previous recession. Yet, Democrats wanted to continue them even longer.”

But, he said, six months after the decision not to extend the benefits again, neither the unemployed nor the economy suffered as predicted, and in fact “the results have been quite positive.”

“Economic research seems to be clear that providing such extended unemployment benefits went beyond helping people transition to a new job,” wrote professor Dorfman, “instead allowing them to extend their job search. Instead of taking a job offer that might be suitable, unemployed people who still had some income thanks to Congress’ generosity looked for a great job. Thus, extending unemployment benefits led to higher unemployment and a slower recovery.”

Unemployment benefits are funded by an insurance premium paid by employers to provide benefits for a set period of time, which helps folks cope until they find a new job. In most states employees are covered for up to 26 weeks. During and immediately after a recession when unemployment rates are high, the federal government generally steps in and provides an extended period of benefits. However, in such cases, benefits paid after the period covered by unemployment insurance are paid for out of tax revenue, which is essentially welfare.

A recent study supports the professor’s assertion, this one by the National Bureau of Economic Research (NBER), which indicates that the labor market improvement President Obama so frequently uses to show his policies are working, occurred even though Congress did not follow the president’s wishes and extend the benefits again to 99 weeks. Rather than widespread doom and gloom, when extended benefits were not approved, job creation increased by about 1.8 million. NBER also noted that in 2013 the states with generous unemployment benefits created fewer jobs than the national average, but that job creation in those states increased in 2014 to above the national average when they cut back on benefits.

In examining this situation the Las Vegas Review-Journal opined: “Was long-term unemployment assistance necessary for some people? Yes. But, without question, millions of Americans at the margin — those who rejected offers to work for a little more than jobless benefits were worth, or those who supplemented jobless aid with under-the-table work in the gray economy — saw no point in re-entering the taxpaying workforce when they could be paid for so long to not work. And that simply wasn’t working for our economy.”

There is substantial support in these data for the idea that liberal/Democrat policies that are intended to help people beyond their actual need for help is good neither for the people they intend to help, nor for the best interests of the country at large.

The reality that government policies have failed shows up in the low level of people in the workforce who actually have jobs. The civilian labor force participation rate reflects the proportion of non-institutional civilians 16 to 64 years of age who are working or looking for work. The Bureau of Labor Statistics (BLS) reports that the participation rate hovered between 62.9 percent and 62.7 percent in the eleven months from April 2014 through February 2015, and has been 62.9 percent or lower in 13 of the 17 months since October 2013. 

It has been 37 years since the participation rate was below 63 percent, back in March of 1978. In February, the number of work-eligible civilians not working or looking for work totaled nearly 93 million people. 

BLS reported that the non-institutional population reached 249,899,000 in February, and only 157,002,000 of those were working or looking for work. The rest had become discouraged and stopped looking for a job.

So while job creation has been in positive territory lately, and the unemployment rate has dropped to near 5 percent, the economy has not produced enough jobs to get those 93 million people back to work, and when those numbers get figured in to the employment picture, the unemployment rate doubles.

The job market still has not returned to pre-recession levels nearly six years after the recession ended in 2009.

A vibrant economy depends upon people working and earning money they can spend on needs and wants. Business, not government, creates jobs. But government restricts job creation through over-regulation and high taxation.

Our elected leaders and bureaucrats seem immune from learning that less restrictive market conditions contribute to creating jobs. 

This immunity affects those of the liberal persuasion to a disproportionate degree.

If we raise the minimum wage, we’ll get these fantastic results!!

The narrative of the left is that even people who have never had a job and/or don’t have any skills deserve and need a “living wage.” Merriam-Webster defines a living wage as “a wage sufficient to provide the necessities and comforts essential to an acceptable standard of living,” which varies widely depending upon where one lives.

The drive for a hike in the minimum wage to $10.10 an hour, or sometimes as much as $15 an hour, lives on as a cause du jour for some Americans, defying the laws of business economics. Workers, labor unions, and politicians, support the wage hike through lobbying efforts, civil demonstrations, and labor strikes often paid for by labor unions.

These folks reject out of hand the fact that every job has an actual calculable value in the business it is a part of that takes into account the benefit to the business’s entire operation, the qualifications of the worker, and other real factors, unlike what drives the minimum wage hike: it is a nice idea, makes people feel good, helps unions raise members’ wages, and garners support for politicians.

The National Center for Policy Analysis (NCPA) notes that minimum wage hike proponents support an increase because it would save the government money in social support services, since those whose wages rise will be less likely to seek and need welfare benefits.

Research by the Economic Policy Institute shows that increasing the minimum wage to $10.10 an hour would reduce welfare spending by $7.6 billion, but that is only 3.8 percent of the total of $200 billion in welfare spending that taxpayers fund. Not that saving seven or eight billion is a bad idea.

However, in its efforts to give to people things they should earn through personal effort, the left focuses on the benefits of their ideas, and ignores the negative consequences.

This erroneous reasoning is responsible for a long and growing list of government programs the negatives of which far outweigh their benefits. The Community Reinvestment Act combined with repealing Glass-Steagall, and Operation Fast and Furious spring quickly to mind.

Addressing the negative impact of a wage hike, NCPA cites research by Ben Gitis of the American Action Forum asserting that raising the minimum wage will result in lost jobs. His analysis shows that 2.2 million new jobs would not be created, totaling a stunning $19.8 billion in lost earnings, if the minimum wage is increased.

The truth is that the number of minimum wage earners who really need a living wage is tiny. Only about 3.6 million workers, or 2.5 percent of all workers, earn the minimum wage, according to Bureau of Labor Statistics, and teenagers living at home comprise 31 percent of that group. And 55 percent are 25 years old, or younger, mostly inexperienced and just learning skills. Therefore, of all workers over 25, only 1.1 percent would be affected by a wage hike that would cost 2.2 million future jobs.

Combine that small number with the fact that well over half of workers earning less than $9.50 an hour are the second or third earner in a family, two-thirds of whom earn more than $50,000 a year, and that critical number shrinks even more.

As a percentage of hourly workers those earning the minimum wage has shrunk dramatically since 1980, when they comprised 15 percent of that group. Today, that portion is just 4.7 percent. And more than half of them are part-timers working less than 30 hours a week.

If you earn the minimum wage it certainly is appealing to imagine getting an increase in your wage of about half. But a hike in the minimum wage has to have solid economics-based reasons behind it, or it shouldn’t happen. The economic reality is that the numbers just don’t add up to support a $10.10 an hour minimum wage.

This wildly popular idea evolves from not understanding business and basic economics. How, in a country with education spending on average of $11,000 per student per year, can there be so many who have no idea about things like supply and demand, and how high costs, high taxes, excessive regulations raise prices and decrease sales.

The United States has just lost the top spot in the world in productivity to China, the first time since Ulysses S. Grant was president that America has not led the world.

A friend who ran a company doing business in several foreign countries was talking about his company’s expansion into China a few years ago. At the time China had 1.35 billion people, he said: 100 million communists, and 1.25 billion capitalists.

While Communist China embraces capitalist principles and becomes the most productive nation, the United States, once the bastion of free enterprise, increasingly embraces socialistic mechanisms and lost the lead in productivity for the first time in more than 130 years.

Most likely few of the proponents have ever had to make a payroll or keep a business viable in the face challenges like competition, high taxes and onerous regulations.

Foolish ideas like raising the minimum wage without sound reason helps explain our loss to China and our overall anemic economy.