Where Does the Money Come From?

Posted on November 15, 2013 by MN Gordon

This week revealed fresh evidence that things may get worse for the economy before they get better.  Obviously, this is not the direction we’d wish to see things go.  But rarely do we get what we wish for.

This new insight into the economy is provided courtesy of small business owners.  If you recall, small businesses are the lifeblood of the economy.  That’s why, when small business owners reveal their outlook on where things are headed we take notice…even if we don’t like what they see.

According to the National Federation of Independent Business’s Optimism Index, “small-business optimism dropped from 93.9 to 91.6, largely due to a precipitous decline in hiring plans and expectations for future small-business conditions.  Of the ten Index components, seven turned negative, falling a total of 27 percentage points.”

‘“Small employers are not fooled by headlines announcing record high stock market indices; everyday they live the economic realities of overregulation, increased taxes, weak sales and a government without any direction or plan for the future,’ said NFIB chief economist Bill Dunkelberg. Continue reading →

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Tomato Economics

Posted on November 12, 2013 by MN Gordon

No one quite understands what’s going on with the economy as far as we can tell.  Looking to government reports for answers doesn’t help much either.  In fact, the government’s economic data actually generates more questions than answers.

For instance, last Friday the Labor Department reported 204,000 new jobs were created in October.  Not bad, at first glance.  But what were these jobs comprised of, really?  And will they result in a boost to household incomes?

From what we gather, 53,000 of these jobs were in leisure, hospitality, and restaurants.  Obviously, more new jobs are better than less or no new jobs.  But, unfortunately, these are not the jobs people make careers of or can rely on to build family wealth.

What’s more, even with the addition of these jobs the unemployment rate rose from 7.2 to 7.3 percent.  Huh?  How did that happen?

According to The International Business Times the rise had to do with the difference between the payrolls tally and the household tally.  The payrolls tally considered furloughed federal employees as employed. Continue reading →

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Redistributing Wealth to the Rich

Posted on November 8, 2013 by MN Gordon

The world’s more unbelievable and fantastical than anything we could imagine.  Look around.  Astounding things are taking place each and every day.

For instance, earlier this week China’s richest man, Wang Jianlin, paid $28.2 million for Pablo Picasso’s painting of his children, “Claude et Paloma.”  That’s over double the price the painting was estimated at.  Surely, Christie’s in New York was pleased to auction it off for such a princely sum.

Nonetheless, we suppose Jianlin won’t have buyer’s remorse.  He has a net worth of $13.2 billion.  But why pay $28.2 million for a dead man’s painting of his kids?  That’s absurd.

Another daily reminder things are quite incredible is the giant, expansive hole in the ground at the corner of Wilshire Boulevard and Figueroa Street in downtown Los Angeles.  We expend many of our days at the high rise office building across the street grinding out mass quantities of good work at a profit for the enterprise.  In exchange, and in addition to a paycheck, we get all the free coffee we can drink. Continue reading →

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Stunting the Lives of Millions

Posted on November 5, 2013 by MN Gordon

An extraordinary occurrence took place last Friday.  Congress let a temporary $5 billion food stamp stimulus from the 2009 Recovery Act expire.  We can’t recall ever hearing of a federal program becoming smaller.  Can you?

As a result, one in seven Americans, or about 47 million people, who are dependent on the Supplemental Nutrition Assistance Program (SNAP) for their daily bread, will find their loaves a little lighter.  This amounts to about a $36 per month cut in food stamp benefits for a family of four.  How will they get by?

“Families will either buy less food or they will buy cheaper food,” said food expert Marion Nestle.  “Food stamps don’t last the entire month.  People will have to make much more careful choices in order to make the money go as far as it can.”

According to Census Bureau data, nearly 1 in 2 Americans are now living at or near the poverty line.  Perhaps this is why SNAP spending has doubled over the past four years to almost $80 billion a year.  But, unfortunately, when something expands this fast there’s got to be some waste and fraud involved. Continue reading →

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