A posting every day; an interesting idea every three months…
Folks: Who else is reading The Circle
I’m about one third of the way through, listening as a book on tape, and the Amazon reviews (“well written but pointless”) are encouraging me to return it to the library before I’m finished. Who has read to the end?
[Oftentimes I find that with science fiction-tinged books the author’s best ideas are in the first 100 pages.]
Full post, including commentsThe federal government is winding down its five-year-old program of sending checks to people who held jobs relatively recently but currently are not working (nytimes; also see my January 2011 posting on the 99-weeks-of-Xbox system).
So here’s an idea for a business… An employment agency for the long-term unemployed. Offer intensive training in areas where there is currently a shortage of workers as well as relocation assistance to parts of the country where jobs are abundant (check this map). Get funding from state and federal government grants (e.g., from http://www.doleta.gov/ ) and maybe from employers if the new workers is successful during his or her first 90 days on the job. Call the company “The 100th Week”.
[Separately and curiously, the New York Times article on the subject highlights the difficulties of an “information technology expert and web designer” in finding a job. If he is truly an expert and truly cannot find a job (perhaps due to his age of 68) that indicates a terrible lack of efficiency in the employment market, since employers say that they are finding it impossible to recruit IT experts (the example guy is also in the Washington, D.C. area, which has arguably the best job market in the U.S. (this study says it is second best for college grads)).]
Full post, including commentsI’m wondering if there should be a genre on Amazon of “Jew-pride” books. If so, Start-up Nation: The Story of Israel’s Economic Miracle
The book opens rather unfortunately, celebrating the achievements of Better Place. Given that Arab countries surrounding Israel won’t allow Israeli cars on their roads, it is basically impossible to drive farther than a person would within the state of New Jersey. So it was practical to set up a network of battery-swapping stations. Better Place would own the batteries, relieving consumers of the burden of having to pay for them up front and also from having to worry about battery condition deteriorating. The batteries could be charged at times that were most efficient for the Israeli electric grid. You had a group of consumers not necessarily enthusiastic about contributing to the demand for oil that has been funding wars and terrorism against Israel (e.g., the Saudi government paying the families of suicide bombers or the Iraqi government, back in Saddam’s day, doing the same (CBS News)). Better Place managed to secure a partnership with Renault to make the vehicles that would accept the batteries. It looked like a great idea when the book was printed… but by now we know how it worked out (investors left with a $700 million hole in their pockets, though unlike similar greentech companies in the U.S., these seem to have been private investors rather than taxpayers).
Lesson 1: Start-ups are risky, even when Israeli!
The authors claim that the success of a handful of companies has changed societal norms:
Most importantly, launching a start-up or going into high tech has become the most respected and “normal” thing for an ambitious young Israeli to do. Like the stereotypical Jewish mother, an Israeli mother might be satisfied with a child who becomes a doctor or a lawyer, but she will be at least as proud of her son or daughter “the entrepreneur.” What in most countries is somewhat exceptional in Israel has become an almost standard career track, despite the fact that everyone knows that, even in Israel, the chances of success for start-ups are low. It’s okay to try and to fail. Success is best, but failure is not a stigma; it’s an important experience for your résumé.
[I asked a married-with-kids friend who is a computer scientist in Israel “If a mom had to choose, would she be happier to see the new graduate going to medical school or into a startup?” and he responded “For sure, go to Medical School!”]
The most confusing thing about the book is that in several places the authors throw rocks at Singapore. The authors claim that having compulsory military service and existential threats to the country as a whole are conducive to economic success, citing Israel, South Korea, and Singapore as examples. But Singapore is supposedly woefully deficient in start-ups compared to Israel:
Although Singapore’s military is modeled after the IDF—the testing ground for many of Israel’s entrepreneurs—the “Asian Tiger” has failed to incubate start-ups. Why? It’s not that Singapore’s growth hasn’t been impressive. Real per capita GDP, at over U.S. $35,000, is one of the highest in the world, and real GDP growth has averaged 8 percent annually since the nation’s founding. But its growth story notwithstanding, Singapore’s leaders have failed to keep up in a world that puts a high premium on a trio of attributes historically alien to Singapore’s culture: initiative, risk-taking, and agility…
I’m not sure where they are getting their data on Singapore’s failure to keep up. The CIA Factbook says that Singapore has a GDP per capital (purchase-power adjusted) of $61,400. This is almost double Israel’s, at $32,800. If that is failure, where can we get some?
[The authors are not alone in their tender concern for the wealthy Singaporeans sweating peacefully next to their koi ponds and bonsai: “As the New York Times’ Thomas Friedman put it, ‘I would much rather have Israel’s problems, which are mostly financial, mostly about governance, and mostly about infrastructure, rather than Singapore’s problem because Singapore’s problem is culture-bound.'”]
The authors note that a planned economy worked well in the 1950s when Israel needed to build out basic infrastructure:
Israel’s economic performance occurred in part because of the government’s meddling, and not just in spite of it. During the early stages of development in any primitive economy, there are easily identifiable opportunities for large-scale investment: roads, water systems, factories, ports, electrical grids, and housing construction. Israel’s massive investment in these projects—such as the National Water Carrier, which piped water from the Sea of Galilee in the north to the parched Negev in the south—stimulated high-velocity growth. Rapid housing development on kibbutzim, for example, generated growth in the construction and utilities industries. But it is important not to generalize: many developing countries engaged in large infrastructure projects waste vast amounts of government funds due to corruption and government inefficiencies.
The authors go on to point out that this centrally planned economy worked only because of an unusual lack of corruption (Israel didn’t have any big companies lobbying for special benefits back in the 1950s and, in any case, the place is so small that ordinary citizens would have howled in protest at sweetheart deals for the connected). Anyway, the command-and-control economy stalled out and resulted in inflation rates above 400 percent in the 1970s:
… private entrepreneurs may not have been essential because the largest and most pressing needs of the economy were obvious. But the system broke down as the economy became more complex. According to Israeli economist Yakir Plessner, once the government saturated the economy with big infrastructure spending, only entrepreneurs could be counted on to drive growth; only they could find “the niches of relative advantage.” The transition from central development to a private entrepreneurial economy should have occurred in the mid-1960s. The twenty-year period from 1946 through 1966, when most of the large-scale infrastructure investments had been made, was coming to an end. In 1966, with no more frothy investment targets, Israel experienced for the first time nearly zero economic growth. …
A main reason for the hyperinflation was, ironically, one of the measures the government had taken for years to cope with inflation: indexing. Most of the economy—wages, prices, rents—were linked to the Consumer Price Index, a measure of inflation.
The last paragraph is cautionary for the U.S. as the government gradually assumes a larger role in the U.S. economy (see this chart for the growth from about 20 percent of GDP after World War II to nearly 40 percent now). A lot of government expenditures are indexed to the inflation rate, notably pensions, Social Security payments, etc. If inflation takes hold here, it may not be as easy to stop as it was in the past.
Like the U.S., Israel does not seek out educated immigrants. There is no Australian/Canadian/NZ-style point system that favors the educated and/or skilled. Anyone with a connection to Judaism can immigrate. Israel spends lavishly on integrating immigrants into its society, with a wide range of welfare programs targeted specifically at immigrants. How has it worked out?
… This was part of a secret Israeli government effort; the 1984 airlift mission, called Operation Moses, brought more than eight thousand Ethiopian Jews to Israel. Their average age was fourteen. The day after their arrival, they were all given full Israeli citizenship. .. The Ethiopian immigration wave has proven to be an enormous economic burden for Israel. Nearly half of Ethiopian adults age twenty-five to fifty-four are unemployed, and a majority of Ethiopian Israelis are on government welfare.
But then Israel picked up a batch of immigrants from Russia, who showed up with fantastic technical educations:
Between 1990 and 2000, eight hundred thousand citizens of the former Soviet Union immigrated to Israel; the first half million poured in over the course of just a three-year period. All together, it amounted to adding about a fifth of Israel’s population by the end of the 1990s. The U.S. equivalent would be a flood of sixty-two million immigrants and refugees coming to America over the next decade.
It seems that these Russians may in fact be the secret to Israel’s recent economic success:
Walk into an Israeli technology start-up or a big R&D center in Israel today and you’ll likely overhear workers speaking Russian. The drive for excellence that pervades Shevach-Mofet, and that is so prevalent among this wave of immigrants, ripples throughout Israel’s technology sector.
If so, that is hardly replicable for other countries, few of whom would welcome 800,000 Jews as immigrants (the authors note that “Even after World War II ended and the Holocaust became widely known, Western countries were still unwilling to welcome surviving Jews. The Canadian government captured the mood of many governments when one of its officials declared, ‘None is too many!'”).
One good thing about the book is that the authors interview people who have invested in Israel to ask “Why were you crazy enough to put your money at risk in a war zone?” It does seem reasonable for an investor to ask “What happens to my money when the Iranians finish their nuclear weapons and decide to test them out over Israel?” Warren Buffet’s subordinates shared his perspective with the authors:
Buffett spent fifty-two hours touring Iscar, the machine-tool company he’d purchased for $4.5 billion, and Israel, the country he had heard so much about. “You think of people walking those steps 2,000 years ago,” he said of his visit to Jerusalem, “and then you look at the Iscar factory on a mountaintop, supplying 61 countries—whether it’s Korea or the United States or Europe or you name it. It’s pretty remarkable. I don’t think you can really find that kind of combination of the past and the future, in such close proximity, virtually any place in the world.”
Buffett’s view, she told us, is that if Iscar’s facilities are bombed, it can go build another plant. The plant does not represent the value of the company. It the talent of the employees and management, the international base of loyal customers, and the brand that constitute Iscar’s value. So missiles, even if they can destroy factories, do not, in Buffett’s eyes, represent catastrophic risk.
Israel is a relatively crummy place to do business, according to the Heritage Foundation (link). The government chews up 45 percent of GDP, for example, compared to 17 percent in Singapore (the failed state, according to the authors of this book, because they are not cranking out as many iPhone apps!). But it used to be even crummier:
Full post, including comments… in 2003, [finance minister at the time] Netanyahu cut tax rates, transfer payments, public employee wages, and four thousand government jobs. He also privatized major symbols of the remaining government influence on the economy—such as the national airline, El Al, and the national telecommunications company, Bezeq—and instituted financial-sector reforms. “In the sense that he tackled the stifling role of government in our economy, Bibi was not a reformer but a revolutionary. A reform happens when you change the policy of the government; a revolution happens when you change the mind-set of a country. I think that Bibi was able to change the mind-set,” said Ron Dermer, who served as an adviser to four Israeli ministers of finance, including Netanyahu.18 Netanyahu told us, “I explained to people that the private economy was like a thin man carrying a fat man—the government—on its back. While my reforms sparked massive nationwide strikes by labor unions, my characterization of the economy struck a chord. Anyone who had tried to start a [nontech] business in Israel could relate.”19 Netanyahu’s reforms gained increasing public support as the economy began to pull out of its rut. At the same time, a package of banking-sector reforms pushed through by Netanyahu began to take effect.
Folks:
Generally when people question whether or not our central planners are allocating the right amount of money for health care, the debate is cast in terms of percentage of GDP (given that government will spend 67 percent of health care dollars in the Obamacare era (source) it seems fair to say that the level of health care spending is now almost entirely determined by bureaucrats in Washington, D.C.). Given how capital-intensive medicine has become, however, I’m wondering if this is the right measure.
The central planners are currently spending 18 percent of our GDP on health care and they are on track to increase this spending to 25 percent. As I noted in my health care reform proposal back in 2009, the Mexicans spend 6 percent of their GDP on health care (World Bank) . So in theory we will be spending only 4X as much as the Mexicans. But measured in dollars, we will actually be spending more like 20X (since our per-person GDP is about 5X larger, according to the World Bank).
If the only cost to health care were labor maybe it would make sense to use the percentage of GDP as a comparison. But health care involves a lot of stuff that is traded on the world market and costs about the same everywhere. There is cement to build hospitals. There are pills that come from factories in Israel and India. There are machines that go “bing” in the treatment rooms. There are LCD televisions in the waiting room.
So when people say that we spend double what the U.K. spends on health care right now (18 percent of GDP versus 9 percent), despite the fact that the U.K. manages to cover all of its residents without burying them in billing and insurance paperwork, that’s understating the difference. GDP in the UK is only about 75 percent of US GDP. A comparison in terms of spending power for buying stuff other than health care would show that we are spending closer to 2.7X what the UK spends.
What do folks think? Is it more accurate to assess our government’s competence in delivering health care with percentage of GDP consumed or absolute dollars spent?
Full post, including commentsFriends and I have been playing around with the Sony a7R
I tried it last night taking pictures of a sleeping baby in a room lit by a table lamp. A Samsung Note 3 mobile phone didn’t have any trouble capturing focus on the baby’s face (though the result was grainy). The a7R hunted, despite blasting the baby with a bright AF illuminator. It really was not a usable device, though in theory it has reasonable manual focus capabilities (hard for an old Canon EOS user to wade through Sony’s interface, though!).
For now I think it is safe to say that the Sony a7R is a dream camera for landscape photographers looking for a lightweight hiking companion but I don’t think it is as good a general-purpose camera as an Sony NEX-6
Is all of the excitement about mirrorless cameras misplaced? The old Canon Rebel G film body was very light and compact and had much better AF than this latest Sony (at 10X the price!). I’m wondering if we aren’t all suffering from a collective delusion and if it wouldn’t be better to stick a sensor in the back of a Rebel G.
I’ve posted some example images on Google+ and will be adding to the collection periodically.
Full post, including commentsA friend sent me this ArmyTimes article about the U.S. Army “cutting costs” by replacing old Bell JetRanger helicopters (the civilian 206B equivalents are available in airworthy condition for $300,000 to $500,000).
For active duty, the $300,000 single-engine machines will be replaced with $20 million twin-engine Apache helicopters. For primary training, students will learn to hover in $6 million twin-engine Eurocopter EC-145s (the “Lakota”). After you’ve paid the $6 million, what do these cost to run? Back in 2011 Conklin and de Decker estimated nearly $1200 per hour (source), i.e., nearly triple the cost of the EC120, a modern equivalent to the JetRangers that will be retiring.
[What do other countries do for primary training, you might ask? Some have decided to use the Robinson R44, whose brand new purchase cost is about $350,000 and whose direct operating costs are about $200 per hour. Where 100LL gasoline is impractical to obtain and brand new helicopters are desired, the jet-powered Robinson R66 is getting some military sales. These are about $800,000 to purchase with direct operating costs of perhaps $350-400 per hour.]
If this really does save money, I think our flight school needs to look into getting rid of our single-engine Piper Warriors ($30,000 to $80,000 in value, depending on vintage and engine time; about $85 per hour in operating cost). We could replace them with brand-new twin-engine jet-powered airplanes that cost $800 per hour to operate and then reduce our prices for customers.
Related: July 2010 posting about the Port Authority of New York operating Sikorsky S-76 helicopters for $15,500 per hour when the mission could have been done for $400 per hour in an R44.
Full post, including commentsI’m the secretary for the MIT Class of 1982. I recently sent out a request for news to be published in our alumni magazine. I asked folks if they had anything interesting/exciting/funny to share that related to Obamacare. I promised anonymity to anyone who was involved with the healthcare.gov debacle. This unleashed a firestorm of rage from Obama supporters and I was accused of “ridiculing efforts to provide health care to the poor.” Nobody questioned the equation of Obamacare with “health care for the poor.”
Given that this is a group with a lot of age, experience, and education, I think it is safe to say that Obamacare has won the PR battle. A fair number of people are attributing to it all of the things that they like about Medicaid (the actual government program to provide health care to the poor, established in 1965). I wrote about this in November 2012 and I’m wondering to what extent it is possible for politicians to take credit for doing things that the government is already doing. Could a politician convince voters, for example, that prior to his election there were no streets? That they needed to vote for him and his party in order that surface transportation remained possible? Probably not, but presumably there are harder-to-observe portions of government where the public might forget that a service predated a politician’s claim to have delivered it.
Anyway, it seems as though Obamacare will be permanent because all that supporters need to do to shut down any criticism is to assert that the critic is trying to strip poor people of health care. Especially at Christmas it would take quite the Scrooge to suggest that less than 100 percent of GDP might be spent on aiding the suffering.
[I should add that the most vociferous supporters of Obamacare among the class members, and the ones most likely to take the position that every American had a moral duty to support both President Obama and Obamacare, were physicians, i.e., folks who will draw approximately 67 percent of their revenue from the government. (source: Forbes). Employees of Lockheed Martin must be jealous. If you say that you’d rather our national wealth be spent on something other than the government giving them $200 million for an extra F-35 fighter plane, Lockheed Martin workers who would collect some of this as salary can’t call you immoral.]
Full post, including commentsFolks:
When I was in my 20s the end of a calendar year was a time to eat 12 plates of food at family dinners. Now it is an occasion for tax and retirement planning. So sad…
I’m poking around looking at ideas that might be better than just sticking money in a taxable S&P 500 index fund.
What I would really like is what state government workers get, i.e., a pension that starts sending me monthly checks when I turn 65 years old and adjusts those checks to account for inflation. So far I haven’t found a product like that. Does it truly not exist? If so, it is interesting that Detroit thought that they could provide this to their workers without going bankrupt. If Goldman Sachs and the rest of the Wall Street geniuses can’t figure out how such a product should be priced, why did states and cities think that they could do what the world’s most sophisticated financial services industry could not?
Insurance companies offer annuities, but they start paying immediately and don’t adjust for inflation. I’m 50 now. By the time I am 65 what seemed like a fat annuity check today might be the price of a Diet Coke. (Note to folks who ask why insurance companies can do this without going bankrupt as Detroit did… life insurance companies save money on their insurance polices when human lifespan is extended so they can use those savings to keep paying annuities that they have promised. When General Motors went bankrupt their oldest pensioned worker was 115 years old and GM had no way to benefit financially from people living longer.)
The “variable annuity” is something that I can’t figure out at all and I want a reader to explain it to me. The basic idea of a variable annuity is that you put money into it today and the investment returns compound tax-free until you decide to start taking money out for retirement income. Vanguard sells them at what they claim (source) are low fees. It turns out, however, that “low” means at least 0.5 percent per year more than the fee on a corresponding index fund. As the S&P dividend yield right now is 1.9 percent (source), that means that one quarter of the yield is raked off to pay Vanguard and its insurance company partner. This sounds suspiciously like paying taxes on qualified dividends plus the new Obamacare rake. If yields were 10 percent and tax rates on dividends were 40 percent this product would make sense to me. But if all of the benefits of tax deferral accrue to the insurance company and/or Vanguard, why go to the trouble and take the risk that the insurance company (think AIG!) will go bankrupt between now and when you need the retirement income?
Are people still buying variable annuities in this low-yield environment? If so, why?
[Oh yes, if you’re looking for a little humor from the financial services industry, here’s a gem from the Vanguard web site: “Note: The American Taxpayer Relief Act of 2012 (ATRA) raised the top marginal income tax rate to 39.6% and the top capital gains tax rate to 20%.” (emphasis added)]
Full post, including commentsToday’s New York Times has an article “Health Care Law Frustrates Many in the Middle Class” about Obamacare. Amusingly this is summarized on the front page with “While the Affordable Care Act clearly benefits those at the low and high ends of the income scale, many middle-class Americans don’t qualify for subsidies, and are facing steep premium prices.” How is that that people at the “high ends of the income scale”, who don’t get any subsidies and must pay a new 4% income tax surcharge, receive “clear benefits”? The authors of the article explain that rich people are different from the rest of us and don’t mind paying more for the same stuff (“rich people can continue to afford even the most generous plans”).
More substantively, the article talks about a family in New Hampshire that makes $100,000 per year but if they were able to ask their employer for a cut in hours so that they made $94,000 per year they would receive $6000 in subsidies from federal taxpayers. Given that the $6000 pay cut would be pre-tax and much of their health care spending is after tax, these folks would be financially better off working fewer hours and receiving lower wages. Not to mention the fact that the family would be emotionally better off if the wage earners had more leisure time.
The phenomenon of welfare cliffs is well-known for lower income people. This chart shows that a $29,000 job can yield a better lifestyle than a $69,000 job, for example. This is even more dramatic in cities with high rents, such as Cambridge, Massachusetts, where preserving one’s low income status can result in $50,000 per year or more in housing subsidies alone (equivalent to pre-tax earnings of $90,000 per year?).
With Obamacare, though, folks who earn more than average may nonetheless face a welfare cliff. Does this present a business opportunity? What about a web or phone app that takes into account the various subsidies available from local, state, and federal governments and advises the user on the after-tax and after-welfare effects of pay increases and decreases from their current salary? This is now a lot more complex than it was before Obamacare and it isn’t a simple matter of going to ADP.com to use a pre-tax/after-tax calculator.
[The other amusing thing about the article is that they cite “Experts consider health insurance unaffordable once it exceeds 10 percent of annual income. ” But they don’t explain how it is that adding layers of complexity and bureaucracy can somehow make it affordable for a nation to shovel 18 percent of its GDP into the maw of the health care industry! (and it will be “close to 25 percent of GDP in 20 years” according to this fall 2013 Brookings Institute paper)]
Full post, including commentsIncome inequality has been in the news lately, notably with Barack Obama’s pitch to raise the minimum wage. The statistics are kind of ugly. Some people get paid a fortune while most of us do not.
People can differ when comparing wages across fields. In October I was at Korean BBQ restaurant in Manhattan sitting across from Venus Williams. One of my companions said later “I don’t see why she gets paid so much to hit a tennis ball. My friend is a cancer researcher doing much more worthwhile work and he doesn’t get paid a lot.” My response was that people dropped dead every day from cancer and therefore his friend wasn’t doing an obviously great job. Venus Williams, by contrast, inspired tens of millions of people all over the planet as to what were the limits of human capabilities.
What about within a field, though? I have taken over all of the shopping and cooking in our apartment since our baby was born (1.5 weeks ago). In addition to making the inconvenience of pregnancy and the pain of childbirth seem insignificant, the results of my kitchen experiments I am sure are convincing the rest of the household that the chef of a Michelin-starred restaurant should be earning at least 100X what I might earn in the same field.
Consider also writing. In theory this is something that nearly 100 percent of Americans learn how to do. Yet some people cannot put together a single grammatical sentence while others can write a complete bestselling novel. It doesn’t seem unreasonable that the minimum wage is too high for a writer whose work is disorganized and needs thousands of dollars worth of copy-editing and at the same time that Stephen King might earn $20 million per year (source: Forbes).
In fact, considered in this light we would expect tremendous income inequality in any field except those where productivity is fixed (assembly line) or irrelevant (government).
So why are we continually surprised and, in some cases offended, that people earn different amounts? Is it because of people who get ahead seemingly unjustly, e.g., Bob Nardelli collecting hundreds of millions from Home Depot shareholders while earning a place in the “Worst American CEOs of All Time”? Aside from my friend, who is more passionate about cancer researcher compensation, most Americans seem to think that it is fair for sports stars to earn a lot. Is that because, absent doping, it is obvious that the sports star reached the top through fair competition?
[Separately, it might be worth looking at what politicians are proposing. As a remedy for income inequality, Obama suggests in his December 4, 2013 speech “strong application of anti-discrimination laws” and cites the figures that “women still make 77 cents on the dollar compared to men.” Given that government and government contracting is now nearly 50 percent of the economy, how can this be the result of sex discrimination unless the government itself is discriminating? Does it make sense for the CEO of the largest employer in the United States to say “Employers nationwide have to stop discriminating”? Why hasn’t the government snapped up all of these highly qualified underpaid women (this would roughly double their compensation (see this study))?
Obama’s next solution is “immigration reform” but immigration is a huge contributor to income inequality since a person who is new to the U.S. and may not speak English is going to earn less than a native-born citizen.
Obama then decries “disparities in education” but generally politicians like Obama fight against school vouchers that would allow poorer Americans to send their children to the private schools that are favored by wealthier Americans. Obama says that “obesity” among the poor contributes to income inequality but the New York Times reports that the USDA encourages industrial food companies to cram more cheese into everything. Why wouldn’t Obama use his executive authority to shut this down instead of decrying obesity? Obama attacks “absent fathers” without mentioning that a lot of state governments encourage this by making divorce and child support lawsuits highly lucrative for mothers (see “Child Support Guidelines: The Good, the Bad, and the Ugly” by Brinig and Allen for how some states encourage divorce). Obama complains about “isolation from community groups” without mentioning that higher tax rates and a bigger government will necessarily crowd out community groups. When the government is providing housing, food, health care, etc. to the poor there is less of a role for a community group to play. (This may be why Bill Gates and Warren Buffett, for example, concentrate their charitable efforts outside the U.S.)
Obama argues that a higher minimum wage will not eliminate jobs or raise costs to consumers. It will be truly a free lunch. But maybe there is a third possible consequence: it will eliminate poorly skilled Americans from the work force in favor of additional immigrants. As I noted an August 2010 posting, the cost of a poorly skilled person in a factory or office is now much higher than it was. Add that to a high minimum wage and an employer will simply fire poorly skilled Americans and learn more heavily on the H-1B program. So there can be the same number of jobs and roughly the same costs to consumers, as President Obama says, but more Americans on Welfare and more immigrants working.
Obama says “I challenged CEOs from some of America’s best companies to give these [long-term unemployed] Americans a fair shot.” Yet, as noted above, Obama himself is the CEO of America’s largest employer. Why doesn’t he hire these folks? The government spends huge quantities of taxpayer dollars recruiting young people fresh out of college. Why not shut that down and hire folks who just graduated from 99 weeks of Xbox? The government provides excellent jobs in air traffic control (more than $200,000 per year in total comp) and trains people for those jobs. Currently the government discriminates against anyone over age 30 by flatly refusing to hire them (FAA policy). Obama could adjust this regulation to allow 35-year-olds who’ve been unemployed for at least two years to apply.]
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