Tag Archives: Overseas

News

What will the Copenhagen conference mean to ordinary Americans?

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Article from Forbes magazine. (H/T Muddling Towards Maturity)

Excerpt:

Whatever the results of the Copenhagen conference on climate change, one thing is for sure: Draconian reductions on carbon emissions will be tacitly accepted by the most developed economies and sloughed off by many developing ones. In essence, emerging economies get to cut their “carbon” intensity–a natural product of their economic evolution–while we get to cut our throats.

[…]Our leaders will dutifully accept cuts in our carbon emissions–up to 80% by 2050–while developing countries increasetheirs, albeit at a lower rate. Oh, we also pledge to send billions in aid to help them achieve this goal.The media shills, scientists, bureaucrats and corporate rent-seekers gathered at Copenhagen won’t give much thought to what this means to the industrialized world’s middle and working class. For many of them the new carbon regime means a gradual decline in living standards. Huge increases in energy costs, taxes and a spate of regulatory mandates will restrict their access to everything from single-family housing and personal mobility to employment in carbon-intensive industries like construction, manufacturing, warehousing and agriculture.

You can get a glimpse of this future in high-unemployment California. Here a burgeoning regulatory regime tied to global warming threatens to turn the state into a total “no go” economic development zone. Not only do companies have to deal with high taxes, cascading energy prices and regulations, they now face audits of their impact on global warming. Far easier to move your project to Texas–or if necessary, China.

Now consider this Wall Street Journal article regarding the EPA decision to call carbon dioxide a threat to public health.

Excerpt:

An endangerment finding would allow the EPA to use the federal Clean Air Act to regulate carbon-dioxide emissions, which are produced whenever fossil fuel is burned. Under that law, the EPA could require emitters of as little as 250 tons of carbon dioxide per year to install new technology to curb their emissions starting as soon as 2012.

The EPA has said it will only require permits from big emitters — facilities that put out 25,000 tons of carbon dioxide a year. But that effort to tailor the regulations to avoid slamming small businesses with new costs is expected to be challenged in court.

Legislators are aware that polls show the public appetite for action that would raise energy prices to protect the environment has fallen precipitously amid the recession.

Congressional legislation also faces plenty of U.S. industry opposition. Under the legislation, which has been passed by the House but is now stuck in the Senate, the federal government would set a cap on the amount of greenhouse gas the economy could emit every year. The government would distribute a set number of emission permits to various industries. Companies that wanted to be able to emit more than their quota could buy extra permits from those that had figured out how to emit less.

Proponents of the cap-and-trade approach say emission-permit trading will encourage industries to find the least-expensive ways to curb greenhouse-gas output. But opponents say it will saddle key industries with high costs not borne by rivals in China or India, and potentially cost the U.S. jobs.

There will be an economic impact on ordinary Americans from the Democrats trying to “do something” about global warming. The economic impact will not be felt primarily by liberal elites in government.

News

How Democrat policies cause corporations to outsource jobs overseas

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David Farr is the CEO of Emerson Electric, a $1.7-billion-dollar company heavily involved in manufacturing. What does he think about the job that the Democrats are doing in Washington?

In this Bloomberg article, he explains:

Emerson Electric Co. Chief Executive Officer David Farr said the U.S. government is hurting manufacturers with regulation and taxes and his company will continue to focus on growth overseas.

“Washington is doing everything in their manpower, capability, to destroy U.S. manufacturing,” Farr said today in Chicago at a Baird Industrial Outlook conference. “Cap and trade, medical reform, labor rules.”

Emerson, the maker of electrical equipment and InSinkErator garbage disposals with $20.9 billion in sales for the year ended September, will keep expanding in emerging markets, which represented 32 percent of revenue in 2009. About 36 percent of manufacturing is now in “best-cost countries” up from 21 percent in 2003, according to slides accompanying his speech.

Companies will create jobs in India and China, “places where people want the products and where the governments welcome you to actually do something,” Farr said.

The unemployment rate in the U.S. jumped to 10.2 percent in October, the highest level since 1983. Emerson, which Farr said employs about 125,000 people worldwide, has eliminated more than 20,000 jobs since the end of 2008 to lower expenses.

“What do you think I am going to do?” Farr asked. “I’m not going to hire anybody in the United States. I’m moving. They are doing everything possible to destroy jobs.”

[…]Mature markets such as the U.S., Western Europe and Japan continue to decline in importance and the company will keep investing in emerging markets, Farr said during the presentation.

“We as a company today are putting our best people, our best technology and our best investment in these marketplaces to grow,” he said. “My job is to grow that top line, grow my earnings, grow my cash flow and grow my returns to the shareholders. My job is not to shrink and roll over for the U.S. government.”

[…]In renewable and alternative-energy markets, Emerson had 2009 sales of $50 million and plans to increase that to more than $800 million in five years.

“But you are not going to see Emerson going out there with fancy commercials or sitting at the right hand of some president, talking about this,” Farr said. “We do it.”

When it comes to manufacturing jobs, the only person whose opinion counts is the CEO of the manufacturing company, because he makes the hiring decisions.

Why Obamanomics will not improve the economy

I noticed the Bloomberg article because it was linked to this American Thinker article, which was linked at Marshall Art’s blog.

The American Thinker article analyzes why Obamanomics will not improve the economy.

Excerpt:

The reason that Obamanomics will not and cannot work is because an economy cannot be managed from the top. Economics is a bottom-up process that depends upon individual incentives. Critical incentives have been diminished or destroyed by recent economic policies. Fear, uncertainty, threats, tax increases, penalties, and violations of the rule of law are but some of the conditions anathema to entrepreneurs, small business, and large business. Businesses will not hire, invest, or expand in a climate of disincentives. No commands from on high can force economic activity. That was a lesson that should have been learned from Eastern Europe and the former USSR.

If these disincentives are left in place, our economy will continue to shrink and our standard of living will continue to diminish. Capital has no nationality, and it will start to flee our shores. Talent will follow. We will not recover from this economic downturn until businesses and individuals have a more favorable incentive structure.

You can’t argue with the 10.2% unemployment rate, and it’s only going to get worse. Everything that Obama has done has been bad for business, and has contributed to raising unemployment. Democrats, (and the people who voted Democrat), know less about economics than my keyboard.

News

Canadian court rules that student need not repay 50K of student loans

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Story from Yahoo News.

Excerpt:

A Nova Scotia court has ruled that a former university student does not have to pay back tens of thousands of dollars he borrowed from a bank.
Alfredo Abdo won his case in bankruptcy court this week, with the court concluding that the Royal Bank of Canada was at least partly responsible for what happened.

“I question whether advancing all that money at one time was prudent banking on the part of RBC,” registrar Richard Cregan said in a written decision.

Abdo was a promising engineering student at Dalhousie University in September 2004. He had good grades, a scholarship and lived at home with this family.

In his second year, at the age of 19, he borrowed $20,000 from RBC though a student line of credit. He made bad investments online, according to court documents, and he accepted an offer from the bank for another loan of $30,000 to solve his problem.

Abdo started having dizzy spells. Finding his engineering program very stressful, he switched to commerce. But he dropped out of university in his third year.

The dizziness and social anxiety never went away, Abdo said, and therefore he couldn’t work or pay back the bank loans. He filed for bankruptcy last November.

The Canadian court probably thinks that they are compassionate, good people sticking it to the corporations. But actually what they’ve done is caused the banks to think a second time about making loans to borderline cases, so that the poorest students will now be refused student loans. If the courts refuse to enforce contracts signed by both parties, then the banks just won’t enter in to those contracts.

Down in New Zealand, they have the same problem.

Excerpt:

Thousands of people with student loans are defaulting on payments, leaving the Government to chase hundreds of millions of dollars.

More than one in five borrowers – or 114,000 people – have overdue payments and thousands of students are leaving tertiary education with no qualification and big bills.

The Education Ministry’s student loan scheme annual report shows that $306 million in payments is overdue, a $100m increase from a year ago.

The substantial growth includes a big rise in the level of payments owed by people now living overseas, more than doubling to $114m.

New Zealand University Students Association co-president Sophia Blair said it was not surprising that students with loans were heading overseas and letting the bills mount. “You can earn higher wages [overseas].”

[…]Total student loan debt had reached $10.2 billion and is predicted to grow by an average of $875m a year to more than $20b by 2022.

The report also showed about 39 per cent of students who left tertiary education with a loan did so without achieving a qualification.

About 8000 students with loans who left study in 2005 had nothing to show for it by 2007.

New Zealand, if I understand correctly is a fairly left-wing country, which probably subsidizes tuition and taxes income. So, students would be incentivized to game the system by taking out loans backed by the government, and then leaving to work abroad in more capitalist economies. Socialism encourages people to game the system and avoid taking responsibility for their own decisions.

UPDATE: New Zealand blogger Madeleine Flanagan wrote to me in an e-mail:

It’s old news, it has been the same way for years and years and that story comes out every year but as always it is interesting.

Your assessment is pretty spot on. In New Zealand student loans are pretty much available to anyone who applies for one. Acceptance at University or an alternative tertiary institution is not difficult, especially once you are over 20 as the institutions want your money – they get more funding the more students they have. Student loans are interest free and you do not have to begin repayments until you finish study. The state funds something like 75% of the tuition fees directly anyway so the loan is only for 25% of the actual cost. There are benefits available for living costs and if you don’t qualify for them you can borrow living costs and have them added to your student loan. So it is set up to make it easy to get into debt.

Being a fairly left-wing country there is a lot of regulation in the market place so of course you can pretty much always earn more overseas and once overseas the state cannot garnish your wages to get your student loan repayment.

The system has some fairly bad holes in it. For example, people who are being funded for Uni by they employer, like I was pre-accident, to study can take the cash for tuition fees from their employer, invest it and then take out an interest free student loan to pay their tuition fees. At the completion of study they then pay off the loan with the invested funds and pocket the interest – compliments of the taxpayer. Only students with cash coming from somewhere can do that as your student loan gets paid straight to the education provider apparently a lot of students with wealthy parents do this too.

As if this situation were not bad enough, organizations like New Zealand University Students Association (NZUSA), quoted below whinging about the level of pay rates in New Zealand , typically also whinge that education is not “free” anymore like it used to be when the politicians went to Uni! They argue that being educated to tertiary level benefits society so therefore society should pay for all of it (and have much higher wages).

New Zealand is crazy.

Madeleine and her husband Matt write at MandM blog.