Another piece of Debt & Credit, corporation style. By Calpinist from TMF and notes on the Doge vs Ford case around 1919. This was in replay to a piece on teaching proper "Credit Use" in the schools.
Interesting take off on that subject:
As follows
Social Clubs / The Land of Sisu
Subject: Re: The Debt Burden Date: 11/30/04 1:13 PM
Author: Calpinist Number: 14703 of 14703
In fact, since Dodge v Ford. 1919, USA corporations’s duties are seen as solely to their stockholders —- in effect this means corporations are their own primary constituents.
I was interested in this part of your post because I was not familiar with that court case. Off I went on a google and this site gives a good synopsis:
Rather than pay regular and special dividends, as the company had done in previous years, Ford announced that only regular dividends would be paid. The remaining profits would be used to expand production capacity, increase wages, and offset losses expected from his cutting the price of cars.
(…) Ford proclaimed broader social goals: "to employ still more men, to spread the benefits of this industrial system to the greatest possible number, to help them build up their lives and their homes." The Dodge brothers sued, claiming that Ford was using shareholder equity to pursue his own personal philanthropic goals. The Michigan Supreme Court, while professing to respect Ford’s business judgment, agreed with the Dodges. It stated that a corporation exists to benefit its stockholders and that corporate directors have discretion only in the means to achieve that goal. It may not use profits for "other purposes."
In Europe as is well known, corporations have separate boards for employees and shareholders, and employees have a voice in how the business is run. This runs directly counter to the American situation. Quite interesting and I tend to agree with the U.S. position, as long as the government acts as a good steward of workers’ rights.
There have been instances recently — e.g Wal-Mart not offering most of its workers health benefits — where that stewardship appears to be failing, but in general I believe the U.S. system works. In contrast, the European system has contributed to the rigidity of their labor markets and thereby reduced economic growth and productivity.
Calpinist
30
Nov
Found today: US$ and trade problems, an article from TSC and Aaaron Pressman on the "Box" the FED finds itself in these days.
Enjoy
Kentm401 (aka Economics R Us)
Dollar Defies Greenspan Fix
By Aaron Pressman
Senior Market Columnist
11/30/2004 6:58 AM EST
Snip:
Federal Reserve Chairman Alan Greenspan and his fellow central bankers may bear some responsibility for the dollar’s decline — but don’t expect them to do much to end the trend. After all, the Fed didn’t cut rates to such historic lows because the dollar was overvalued. And now that the dollar is on the wane, they’ve got bigger problems to deal with.
In theory, the historically low short-term interest rates the Fed kept in place over the past few years should have prompted global investors to move money to countries where they can earn a better return. So with the Fed now raising rates and the economy still doing well, shouldn’t the dollar rally as those investors are lured back?
It’s not working out that way this time because, to borrow from the classic Terry Gilliam movie Brazil, there’s been a little complication with the dollar’s complications.
For a while at least, the "complication" of Asian central banks buying Treasuries limited the dollar’s decline. Instead of converting trade surpluses back into local currencies by selling dollars, they kept their export bounty and amassed huge dollar reserves. Now that complication has developed a complication of its own as investors realized that central bank demand was hardly unlimited. Russia and China recently have given indications that they might be tiring of owning so many dollars.
"Interest rates aren’t the only thing that matters," explained T. Rowe Price chief economist Alan Levenson. "It’s the current account deficit and the fiscal deficit that have been exerting downward pressure."
For the past few years, American consumers and the federal government have been running up huge debts that are being financed in large part by Asian central banks. China and Japan collectively own $895 billion of Treasuries as of Sept. 30. That financing imbalance, along with increasing purchases of imported goods such as oil, have driven the U.S. current account balance with the rest of the world to record levels — 6% of GDP last quarter and counting.
/Snip
30
Nov
And so it goes. This piece on the "China Trade" and Wal-Mart, re-posted from TMF and originally found by Mish over there.
Enjoy
Kentm401
Politics & Current Events / Current Events
Subject: "China Trade" & Wal-mart Date: 11/30/04 11:23 AM
Author: kentm401 Number: 98015 of 98024
Interesting post & stats, nicked from mish……China trade estimated to show about a $150 billion deficit with the US this year….read the whole piece via the link…
KBM (not a Wal-Mart fan)
Snip:
Xu declined to comment if the anti-dumpling measures of the US Department of Commerce have impacted the firm’s procurement of textile commodities and household appliances in China, saying again that China is an important sourcing base for the firm.
So far, more than 70 per cent of the commodities sold in Wal-Mart are made in China.
Experts say Wal-Mart’s plan of increasing its procurement from China has granted the firm a positive corporate reputation in the country.
"Buying more products in China means more job opportunities, which helps the firm win not only the government’s hearts, but also the customers’ appreciations," said Wang Yao, director of information department under the China General Chamber of Commerce.
In the United States, poor people find it possible to afford cheap "Made In China" products for their daily necessities, Wang said.
Wal-Mart, headquartered in Bentonville, Arkansas, entered China in 1996. It has opened 39 stores, including supercenters, "Sam’s Clubs" and neighborhood markets in 15 cities around China, including Beijing, Harbin and Dalian.
It has recently announced the opening of its first store in Shanghai, slated for the middle of next year.
The firm has a total of 4,900 stores in 10 countries worldwide.
/snip
Original link here:
Netherlands Hospital Euthanizes Babies
AMSTERDAM, Netherlands – Raising the stakes in an excruciating ethical debate, a hospital in the Netherlands the first nation to permit euthanasia recently proposed guidelines for mercy killings of terminally ill newborns, and then made a startling revelation: It has already begun carrying out such procedures in a handful of cases and reporting them to the government…..
In August, the main Dutch doctors’ association KNMG urged the Health Ministry to create an independent board to review euthanasia cases for terminally ill people "with no free will," including children, the severely mentally retarded, and people left in an irreversible coma after an accident.
The guideline says euthanasia is acceptable when the child’s medical team and independent doctors agree the pain cannot be eased and there is no prospect for improvement, and when parents think it’s best.
Examples include extremely premature births, where children suffer brain damage from bleeding and convulsions; and diseases where a child could only survive on life support for the rest of its life such as spina bifida and epidermosis bullosa, a blistering illness.
The hospital said it carried out four such mercy killings in 2003, and reported all cases to government prosecutors but there have been no legal proceedings taken against them.
I was really getting into the subject matter of this topic, but I was distracted when it got to the end:
However, experts acknowledge that doctors euthanize routinely in the United States but that such practice is hidden.
"Measures that might marginally extend a child’s life by minutes or hours or days or weeks are stopped. This happens routinely, namely, every day," said Lance Stell, professor of medical ethics at Davidson College and staff ethicist at Carolinas Medical Center in the United States. "Everybody knows that it happens, but there’s a lot of hypocrisy. Instead, people talk about things they’re not going to do."
More than half of all deaths occur under medical supervision, so it’s really about management and method of death, Stell said.
First of all, there is a difference between not prolonging a death, and intentionally ending a life. That point is very clear in the minds of all except TOBY STERLING, who wrote this article. Euthanasia, according to dictionary.com, is:
The act or practice of ending the life of an individual suffering from a terminal illness or an incurable condition, as by lethal injection or the suspension of extraordinary medical treatment.
Now that we have that point clear, do we truly know that the Dutch have actually been euthanizing people, or have they been allowing them to die naturally?
The hospital said it carried out four such mercy killings in 2003, and reported all cases to government prosecutors but there have been no legal proceedings taken against them.
OK, they are clearly stating they intentionally ended four lives in 2003. They did this and reported on the reporting mechanism in place. Their report on the reporting mechanics is linked under "the hospital". What they don’t do, and don’t seeem too terribly concerned with, is telling anyone why they did what they did. I mean, if a baby is left abandoned at a hospital, or a single mother dies during birth, all the doctor has to do is say the baby is severely handicapped, euthanize it, report it, and it’s done. No more babies born into poverty.
IMO, the lapses of concern in The Netherlands over ending lives is too much evidence that the issue of euthanasia has not been properly addressed there. Until someone comes up with a systematic approach that assures ethical treatment of euthanasia candidates, it can’t be morally justified. And, being as The Netherlands is having these issues after legalizing euthanasia, it is no where ready to be implemented in the US.
30
Nov
Today’s GDP revision showed that the economy grew a whole buch during July, August and September. Of course you should already know that, because according to the government you were responsible for almost all of that growth:
http://www.bea.doc.gov/bea/dn1.htm
(download the spreadsheet entitled "Tables from news release")
Of the 3.9% number for total annualized growth in economic output, consumer spending accounted for 3.53%, leaving 0.46% for private investment, 0.23% for government expenditures and a subtraction of 0.27% for the trade gap.
Breaking down the consumer portion we find the biggest growth was in:
Motor Vehicles and parts; 0.97%. Car makers report sales when they ship models to dealers, not when somebody actually purchases them (or pays for them for that matter).
Food; 0.41%. We spent $25.7 Billion more on food in Q3, supposedly adjusted for inflation. If you believe inflation is being adequately measured, then we really feasted up a storm last quarter. Otherwise, you can see how understating inflation boosts GDP.
Medical Care; 0.59%. We spent $14.9 Billion more on medical care compared to Q2 and $45.0 B vs. a year ago. Since millions more people are without health care, those who get it must be getting some REALLY GOOD medical care. Funny how the government doesn’t hedonically adjust downward for all the hassles and BS we have to endure with our HMOs these days.
Breaking down the private investment portion:
Residential housing; 0.10% grew at its slowest rate since Q4 2001.
Equipment and software; 1.28%. Bigger impact than cars? Love those hedonic adjustments, don’t you. Selling the same amount of stuff really means selling more when you hedonically adjust for how much better it is than the stuff you sold last year.
Changes in nonfarm inventories; -0.99%. Too bad all that extra stuff that was supposedly produced didn’t actually get sold.
Breaking down the government expenditures portion:
National defense; 0.44%. $726 B worth of dead Iraqis and global military domination (annualized Q3) is great for the GDP ($9.7 more than Q2 and $32.1 B more than the year ago quarter).
Federal Nondefense; -0.12%. Who says GWB isn’t fiscally responsible. He makes the tough decisions to cut spending on anything that might actually help Americans.
State and Local; -0.09%. Since State and Local governments aren’t supposed to be able to run a deficit, this gives a better idea of how the economy actually did last quarter.
30
Nov
Sunday, February 22, 2004 Posted: 6:24 PM EST (2324 GMT)
Schwarzenegger: Let foreign-born seek White House
He says longtime citizens should get to run for president
Arnold Schwarzenegger, making his Sunday talk show debut as governor, said that he and other foreign-born citizens should be eligible to run for the White House and that President Bush can carry California in November if he does more to help the state.
In order to make this possible, 3/4 of the Senate, 3/4 of the US Legislature, and 38 states have to ratify it. As of now:
A middle-of-the-road Republican with connections to the Kennedys that John Kerry could only dream about. Don’t underestimate Arnie.
30
Nov
The Kentucky Department of Commerce recently came out with these numbers for top manufracturing jobs:
| Rank | Industry | 2001 | 2002 | Y2Y | 2003 | Y2Y | 2004 | Y2Y | Overall |
| 1 | Turbojet and Turboproller Parts | $ 1,614 | $ 1,666 | 3% | $ 1,622 | -3% | $ 1,545 | -5% | -4% |
| 2 | Antisera and Other Blood Fractions | $ 74 | $ 220 | 197% | $ 354 | 61% | $ 348 | -2% | 370% |
| 3 | Purebred Breeding Animal | $ - | $ - | $ 164 | 100% | $ 348 | 112% | 100% | |
| 4 | Parts for Automatic Data Processing Machines | $ 937 | $ 750 | -20% | $ 440 | -41% | $ 288 | -35% | -69% |
| 5 | Parts and Accessories of Motor Vehicles | $ 219 | $ 278 | 27% | $ 320 | 15% | $ 280 | -13% | 28% |
| 6 | Parts of Airplanes or Helicopters | $ 370 | $ 310 | -16% | $ 195 | -37% | $ 258 | 32% | -30% |
| 7 | Trucks With Diesel Engine | $ - | $ - | $ 350 | 100% | $ 256 | -27% | 100% | |
| 8 | Natural Uranium & Compounds Alloys & Ceramics Etc | $ 106 | $ 36 | -66% | $ 120 | 233% | $ 199 | 66% | 88% |
| 9 | Spark-Ignition Internal Combustion Piston Engines | $ 185 | $ 157 | -15% | $ 290 | 85% | $ 198 | -32% | 7% |
| 10 | Cast or Rolled Glass | $ 122 | $ 104 | -15% | $ 137 | 32% | $ 191 | 39% | 57% |
| 11 | Vehicles With An Engine Capacity Between 1500 & 30 | $ 258 | $ 194 | -25% | $ 234 | 21% | $ 141 | -40% | -45% |
| 12 | Silicones In Primary forms | $ 15 | $ 20 | 33% | $ 47 | 135% | $ 134 | 185% | 793% |
| 13 | Vehicles With An Engine Capacity Greater Than 3000 | $ 97 | $ 100 | 3% | $ 271 | 171% | $ 133 | -51% | 37% |
| 14 | Whiskies | $ 97 | $ 118 | 22% | $ 111 | -6% | $ 124 | 12% | 28% |
| 15 | Parts of Seats | $ 122 | $ 84 | -31% | $ 91 | 8% | $ 117 | 29% | -4% |
| 16 | Trucks With Spark-Ignition Engine | $ 87 | $ 53 | -39% | $ 208 | 292% | $ 115 | -45% | 32% |
| 17 | Spark-Ignition Engine Parts | $ 110 | $ 93 | -15% | $ 109 | 17% | $ 112 | 3% | 2% |
| 18 | Uranium Enriched In U235 | $ 26 | $ 100 | 285% | $ 208 | 108% | $ 105 | -50% | 304% |
| 19 | Aluminum Alloy Plates | $ 109 | $ 96 | -12% | $ 92 | -4% | $ 104 | 13% | -5% |
| 20 | Automatic Data Processing Input or Output Units | $ 83 | $ 90 | 8% | $ 104 | 16% | $ 103 | -1% | 24% |
| 21 | Vinyl Chloride (Chloroethylene) | $ 83 | $ 65 | -22% | $ 57 | -12% | $ 101 | 77% | 22% |
| 22 | Insulated Wiring Sets for Vehicles Ships Aircraft | $ 74 | $ 67 | -9% | $ 103 | 54% | $ 100 | -3% | 35% |
| 23 | Brakes and Servo-Brakes & Parts for Motor Vehicles | $ 79 | $ 89 | 13% | $ 111 | 25% | $ 98 | -12% | 24% |
| 24 | Acrylic Polymers In Primary forms | $ 66 | $ 92 | 39% | $ 113 | 23% | $ 97 | -14% | 47% |
| 25 | Other Engines | $ 65 | $ 62 | -5% | $ 83 | 34% | $ 91 | 10% | 40% |
| TOTAL OF TOP 25 MANUFACTURING | $ 4,998 | $ 4,844 | -3% | $ 5,934 | 23% | $ 5,586 | -6% | 12% |
Y’know, you always hear about the loss of agriculture jobs due to the tobacco purge. You always hear about the loss of textile jobs due to all the entire industry moving to Mexico and the Caribbean. You always hear all these gloom and doom prognostications and horrid headlines about the crashing economy.
What you don’t hear about is the apparent booming Turbojet and Turboproller Parts industry. Why is that? You also don’t hear much about the apparent booming Antisera and Other Blood Fractions industry. Why is that? The media and economists make sure we hear about every single plant closing, but in Kentucky, apparently several incredibly large plants have opened making products I’ve never even heard of before. Why don’t we hear about those? I’m sure people who lost their jobs due to the textile and "tech boom" crashes would love to know that these new jobs are here. If Bill Clinton were still president I’m sure we would have heard all about them. The economy in Kentucky has grown the last four years. It’s diversified over the last four years. It’s adapted from reliance on products that can be made in China to products that have to be made here. It’s adapted from stuff that has to be sold in the US to stuff that can be sold anywhere in the world. That’s a pretty important adaptation if you ask me.
And no one even knew it was happening.
I did Kentucky because I live here. I’m sure it’s happened in other states as well.
— Moon
29
Nov
During the 2004 Presidential election, John Edwards reached what I perceived to be the all-time low in political pandering by promising that if elected, they would have people like Christopher Reeve walking again. It was one of the few events of the race that just truly disgusted me.
Well, I may have been premature in my disgust. John Edwards may have known something. For, no sooner than the election’s over, and Bush hasn’t even been sworn in yet, we have this:
29
Nov
Jason Javitz of Political Vice Squad asks:
What is the very first thing the GOP-dominated Congress should do when it convenes next year?
I, like everyone else that keeps up with the process that rules our land, has an opinion of what it should be. I personally would like for them to tackle something quick and easy just to get the ball rolling and results presented. Like, oh, say, eliminating the 527‘s. Not hard to do, easy to present due to all the rancor of the election, and no one visibly gets hurt. Having John McCain lead the parade would make it a no-brainer. Bush has already spent political capitol on this topic, they just need to finish the job and pull the trigger on it.
If Bush and the Republicans try to start too big ( such as intelligence reform, social security, tort reform ), the issue could bog down the entire process and have no success on anything, which is probably the only agenda the Democrats have left at this point.
Start small, build momentum, then tackle the biggies.
29
Nov
Nobel prize winning economist Gary Becker has teamed up with Richard Posner in what might historically be considered the first blog of Nobel quality. Pretty heavy stuff. I’ll have their link over there —>
