It’s easy to be negative about the U.S. economy these days. Find a glint of silver, and folks come running to point out all of the dark clouds looming about. This, of course, is what we got last week when the monthly jobs report was released from the U.S. Department of Labor (DOL). Folks pooh-poohed the number of jobs and whining that they’re not enough or that it’s less than a bunch of economists thought that it might be. But you know what? Stuff ’em.
Given how poorly states like California and Illinois have funded the pension funds for their own employees, one would think that this would stop dead in its tracks any plan to have the government assist in managing private sector funds too. The spate of recent activity, however, suggests otherwise.
The financial world is plodding along like a drunken sailor avoiding debt collectors by keeping no cash in his wallet. It’s not the kind of calm that’s going to last or end well. But the storm will have to wait until after the Olympics.What a game! We’ve never watched ice hockey closely before. But watching […]
“When they come for my gun, they will have to pry it out of my cold, dead hands,” is a common refrain I often hear from the Neo-Cons when there is a threat, credible or otherwise, that the U.S. government is going to take their firearms.And, when I hear this crazy talk, I agree with […]
Last year was quite the year for Bitcoin. We’ve seen exponential growth in Bitcoin’s exchange rate and extensive coverage in the media. Another phenomenon we have witnessed is the proliferation of alternative cryptocurrencies, five of which we’ve provided below.What all of these cryptocurrencies have in common is that they rely on a decentralized network to […]
The nonpartisan Congressional Budget Office is acting in a bipartisan way to cover up the biggest single threat to the bipartisan political alliance that is stripping America of its wealth: the United States Congress.There is no question that the following policy is bipartisan. Democrats and Republicans in Congress are completely agreed that the following information […]
Amidst all the revelations about how the American people, many of whom are absolutely convinced they live in a free society, have their telephone calls, emails, website visits, and who knows what else under surveillance by their own government, let’s not forget the massive infringements on financial privacy that have gone on for decades.Consider, for […]
Image: ShutterstockBitInstant CEO Charlie Shrem, along with alleged co-conspirator Robert Faiella, was arrested by federal authorities last week for allegedly laundering more than $1 million worth of Bitcoins. This is a tiny amount compared to the largest drug-and-terrorism money laundering case ever. Yet when British bank HSBC was found guilty in 2012 of laundering billions, […]
The exercise had an awesome name, inspired by the movies: “Quantum Dawn 2.”On July 18, scads of U.S. banks, stock exchanges and government agencies took part in a digital fire drill — a practice run in the event all of Wall Street came under massive cyberattack.This isn’t the first time banks have come under an […]
The faces of the Detroit bankruptcy are the thousands of pensioners whose promised benefits are suddenly part of the restructure negotiation. When Motown filed for Chapter 9 last July, the city had $11.5 billion in unsecured liabilities. The vast majority of this was pension and health care benefits owed to retired city employees.The images of […]
So you’ve maneuvered the Obamacare website, plugged in your top-secret information and found out how much you are forced to pay to avoid a fine.And for some of you, it turns out you qualify for a government subsidy — making the premium sound like a bargain. But signing on that line to accept the government’s […]
The Largest Company in History:“The United States Corporation of Government (USCOG)”I follow global social and commercial networks, looking for entrepreneurial opportunities.Innovation surges when industry and government models change. Buggy whips. Landline phones. Railroads. The Soviet Union. Apartheid South Africa. All marked social and commercial innovation, both bad and good.We are witnessing a new form of […]
We’d like to give the banks in Australia some credit. They’ve finally gone and done it. They have caught up with 1960s technology. They’ve figured out how to use PIN numbers.How to only use PIN numbers, that is. They’re considering scrapping signatures on credit cards to cut down on fraud. Apparently, having to verify your […]
We put in a good-citizen call to the SEC the other day.“There’s a massive scheme to manipulate stock prices,” we told the friendly agent.“I have to tell you that your call is being monitored so that we can better serve the public,” he replied.“Oh, don’t worry about that. The NSA is tapping our call anyway.”“Are […]
Bitcoins are largely considered digital currency (or “crypto currency”) so you’d expect it to be treated like currency on a retail web site. But the Internal Revenue Service might not think so.
Politicians — elected officials — are street smart rather than book smart.If you care about influencing government policy it helps to know how they think.Forbes contributor Nathan Lewis argues that:“Too much is done today on the oral tradition. That is, literally, what it is. In this post-Gutenberg age, we have some better alternatives.“Thus, we need […]
Bitcoin has been making headlines for months now. Extreme price fluctuations have sparked a vigorous debate: Is it a currency or a scam? Is Bitcoin viable in the long-term, or are we witnessing a bubble waiting to burst?The answers to these questions are simple: Yes, Bitcoin is a currency, but we cannot know if it […]
The Silk Road was an undercover website where you could buy or sell illegal goods — drugs mainly. I believe passports were changing hands for about $6,000, and I understand weapons were also sold, but that was ceased in response to the spate of shootings in the U.S. over the summer. The essence of the […]
The market has selected different things as money throughout history. Some of these items have served as money in isolated places for specific periods of time — for instance, cigarettes in prisoner-of-war camps. Cigarettes continue to be a currency in prisons if allowed, but if not, according to Wikipedia, “postage stamps have become a more […]
[Ed. Note: This article originally published on Jan. 24, 2013]Stocks up. Gold down. Bitcoin… waaay up.The S&P 500 busted through the 1,500 mark this morning. Stocks haven’t been this expensive since 2007… right before they got a whole lot cheaper… for a whole lot longer. Gold, meanwhile, dipped a tad. This, despite central bankers of […]
Now, this is sheer entertainment. The Chicago branch of the Federal Reserve has addressed the great monetary question of our day. A researcher has taken a detailed look at the prospects for market-based crypto-currency, with a special focus on Bitcoin. It concludes that Bitcoin is not a viable replacement for the dollar. The report includes […]
The standard version of how money came to be goes like this: First, there was barter. (A handful of nails for a pint of ale!) Then, along came various forms of money. An evolutionary derby eventually crowned gold and silver as the supreme money. And finally, credit (or debt) was born. This is the apex […]
2013 represents another turning point in the demise of the American Empire. If you view it in economic (rather than ethical or moral) terms, the high water mark of Empire was probably in the late 1990s.But the Internet bubble and bust marked an important turning point. It coincided with the birth of the euro, a […]
It was a wild ride last week in the world of the Deep Web, that section of the Internet that requires special tools to access. The feds took down the site called Silk Road and claim to have arrested its founder and administrator. The news streams were filled with lurid tales of derring-do in this […]
My community in the Deep South prides itself on friendship, community feeling, and an overall happy spirit. So it was a bit strange for all of this to be utterly smashed and obliterated in the course of a few calamitous weeks in which friend turned against friend, colleagues became antagonists and enemies, and families were […]
A new assessment of state pension obligations suggests the problem is even worse than it already appears.How much worse?EMPTY COOKIE JAR: Pension liabilities are worse than many states’ official figures indicate.Using a more conservative method of accounting for financial gains in the marketplace, there is a $4.1 trillion gap between assets and liabilities — known […]
I dreamed I saw Bernard von NotHaus, alive as you or me.Said I, “But Bernard, you’ve been jailed two years.”“I never was,” said he.Bernard has been the called the Rosa Parks of the alternative money movement. More than 10 years ago, he had this idea that he would make his own money — not the […]
Oh, how the media love a good strike. Look at these fast-food workers and peasants standing up to the owners of capital! They aren’t going to take the oppression anymore. The suits in the boardrooms had better shape up and stop hoarding all that money. They need to give it up to the men and women who are doing the work by giving them not $8 per hour, but $15. And they need to act now.
And so goes the media narrative on the “nationwide” walkouts from fast-food restaurants this week. Thousands of stories poured out in the papers and wire services. The signs, the screaming, the demands, the sad stories of exploitation, the reporters shouting over the yelling — it’s all a scene out of the old storybooks.
But wait just a minute, here. These people are demanding a doubling of wages? You don’t even have to study economics for more than a few seconds to see that this would be catastrophic for employment.
Think of it this way: What if the price of a Big Mac suddenly went from $4 to $8? Are you going to buy as many? McDonald’s can’t make you. Do a quick mental experiment and imagine what would happen to the demand for this sandwich. Well, in the same way, no one can force McDonald’s to buy labor at $15 an hour. Demand for labor would collapse. Bankruptcies would abound. People would suffer.
So what’s with these demands? Sure, everyone wants more money (universal rule!) but this is a horrible way to go about it.
If you look a bit more deeply, you begin to the see the hoax. There’s every indication that people outside the restaurants protesting didn’t actually work for the place they were protesting. It was a classic “rent-a-mob” situation, and the rent was being paid by political activists whose agenda has nothing to do with helping the average burger flipper.
These were mostly media stunts cooked up by the Service Employees International Union, which bused in these so-called workers as a fulfillment of a little charade and subsequent media blitz. The SEIU coordinates these protests with various professional worker groups and in conjunction with the press to make the biggest possible splash.
Notice that in the course of the protests, McDonald’s, Wendy’s and Burger King reported on no cases of actual shutdowns due to striking workers. A rare case was reported in Detroit, but it seemed to come and go. There were sporadic reports of some closings, but due more to the chaos than refusal to work. As Labor Notes reported, “A Qdoba Mexican Grill was entirely shut down when a crowd occupied the store. A Subway was unable to stay open because of a large crowd out front.”
In other words, the most these so-called walkouts accomplished was to block the entrances for consumers. As soon as the ruckus ended, consumers poured back in and workers happily served up the food and drink that people wanted.
That alone is enough to cause any objective observer to suspect a rat. Among all the media stories about these so-called strikes, only Bloomberg hinted at the reality: “Moments after protesters left a Wendy’s in downtown Manhattan, about 20 people piled into the store for lunch. When chanting strikers entered the Chicago McDonald’s, workers continued to pour coffee and bag food for a throng of customers.”
RealClearMarkets provided some more detail — and did so even before the protests began. In short, these were not workers, but pressure groups acting in a coordinated fashion through politically driven “workers centers” — Fast Food Forward and Low Pay Is Not OK — backed by the American Federation of Teachers, the new incarnation of the Obama-ite ACORN, and other highly politicized parasites:
“Fast Food Forward and Low Pay Is Not OK are allied with other worker centers, including Stand Up KC, Raise Up Milwaukee, Fight for 15, Central American Resource Center, MassUniting, Rally for 15, Atlanta Jobs with Justice, Flint-15. At Low Pay Is Not OK’s website, people can download a strike kit (“Download 15 Steps for $15/hour”) and a strike letter… Fast Food Forward activists do not have to worry about losing their own jobs, so they seek extraordinary wage increases of up to 100%.
“Fast Food Forward is funded by New York Communities for Change, which was set up in 2010 to replace the Association of Community Organizations for Reform Now, better known as ACORN. ACORN closed down due to financial shenanigans and scandal, but NYCC has the same address and leadership. Jonathan Westin, a former ACORN organizer, directs NYCC and Fast Food Forward.
“The SEIU has contributed over $100,000 to NYCC, according to documents filed with the Labor Department. These documents also show that NYCC received $353,881 from the United Federation of Teachers between Aug. 1, 2011 and July 31, 2012.”
If you want to follow the money further, you can trace Teachers Union dollars straight back to you and me in the form of the taxes we pay. So to some extent, this whole charade was a subsidized racket.
Stranger still, consider that these so-called strikes have no real end game. You can’t negotiate with an entire industry. Wages in these franchises are decided by the local owners, not dictated by the center. If McDonald’s corporate headquarters suddenly mandated a $15 minimum, it would stand in massive contract violation with the owners of the stores — robbing them of their rights.
It would never happen. But if it did, the result would be to bankrupt thousands of stores, throw possibly millions of people out of work, and do terrible damage to future job creation. These franchises operate on extremely thin margins as it is, and the owners never know for sure whether they are going to make it another year.
As for the workers themselves, they are mostly entry-level jobs, and some 75% of the new workers in these restaurants end up leaving for other positions after a year of work. In other words, these are brilliant places to get your foot in the door. They hire people who really need the experience and train them in money management, cooking skills, interpersonal skills, and the ethic of the commercial marketplace.
The agenda of these activists groups is to ruin this beautiful opportunity for people. And what’s the point? Well, labor unions of the sort represented by SEIU are nearly extinct in this modern, dynamic, entrepreneurial economy. They once dominated. Now, the percentage of private sector workers who are unionized is down to 6.6%. Even the rate of government unionization is collapsing by one-third.
Looking at this bigger picture, you can see that these stunts are really acts of desperation. The unions need to shore up their membership. They will do it at the expense of the poor, the low-wage workers, small-business owners, and consumers. They really don’t care. At this late stage, these near-death unions are willing to pillage anyone and everyone just to survive.
The mainstream press is not doing anyone favors by covering up the true racket here. The fast-food franchises are not owned and run by fat cats, but by mostly local business owners who scraped up enough money to take on a risky investment. They have suffered terrible economic strain over the past five years, with ever-increasing regulatory costs, higher minimum wages, and the constant threat of death by Obamacare.
Despite all this, fast food has been a growth industry — a bright spot in a dim economic landscape. This faked “strike” charade is the last thing they need right now. The trolls will always be with us. If only the attention-hungry press would learn to spot them and ignore them so business could get on with making the world a better place.