September 30, 2006

Weekend Question 1: How Bad Have Things Gotten Inside Venezuela?

Filed under: MSM Biz/Other Ignorance,Taxes & Government,TWUQs — Tom @ 3:36 pm
ANSWER: VERY BAD, and the Free World’s press is ignoring it, as it has studiously ignored the evils in Cuba for decades..

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In a subscrption-only op-ed in the Wall Street Journal earlier this week, Alvaro Vargos Llosa takes a tour through modern-day Venezuela that the analogizes to the nine concentric circles of evil in the Inferno of Dante’s “Divine Comedy”:

Dante’s first circle is for those who lack faith. In Chávez’s Inferno, the first circle is made up of those who lack food. Cendas, a research center, maintains that 80% of Venezuelans cannot meet the cost of a basic daily diet.

….. Dante’s second circle is for those unable to control lust. Chávez’s second circle is for those unable to control homicidal instincts. His government has degraded social coexistence so much that there have been more homicides in Venezuela during his seven-and-a-half years in office than there have been deaths in any single armed conflict around the world in recent years. Between 2001 and 2006, the number of homicides in Venezuela has been three times the number of victims in Afghanistan.

Dante’s third circle is for gluttons who leave us with no food. Chávez’s third is reserved for corrupt authorities who leave Venezuelans with no wealth.

….. Dante’s fourth circle is for misers. In Chávez’s Inferno, the fourth circle is made up of bureaucrats who claim to provide social services but use funds to pay people to attend rallies or bust up opposition gatherings.

….. Dante’s fifth circle is for those who succumb to wrath. Chávez’s fifth is for political persecution. Venezuela’s human rights record is atrocious. Two violent incidents involving Chavista henchmen with many fatalities have gone unpunished, including the killing in April 2002 of 12 people who were protesting near the government palace.

Dante’s sixth circle is for heretics. Chávez’s sixth circle is for heretic journalists who try to tell the truth. In December 2004, a “gag law” was imposed making it easy to prosecute journalists. The president continually threatens to withdraw TV and radio licenses — the reason why there are no opinion programs on network TV. Government-controlled mobs called Bolivarian Circles, formed with the help of the Cuban intelligence apparatus, harass journalists.

Dante’s seventh circle is for the violent. Chávez’s seventh circle is another name for imperialism.

….. Chávez buys influence through oil. It is a form of blackmail: At OPEC, Chávez fights for increasing prices, making life hard for poor countries that import oil, and then offers those very nations oil subsidies they have no choice but to accept.

….. Dante’s eighth circle is for those who commit fraud. Chávez’s eighth is fraudulent anti-Americanism. Chávez exports 1.5 million barrels of oil a day to the U.S. Since oil makes up half the government’s revenue and the U.S. is the principal destination of Venezuelan oil, he pays daily homage to U.S. capitalism. Moreover, Venezuela imported $18 billion worth of goods and services from the U.S. in 2005. He may have signed 20 trade deals with Iran’s Ahmadinejad, but what he really lusts for is U.S. capitalism. (Another type of fraud involves the electoral system. Chávez has manipulated the voter registration rolls, adding two million phantom voters, including 30,000 who are 100 years old and citizens named “Superman.” Four out of five members in the Electoral Council are Chávez lackeys.)

Dante’s final circle is for traitors. Chávez’s ninth is for traitors, too — and the place is getting crowded.

….. At the end of Dante’s Inferno is the center of the earth, where Satan is held captive in the frozen lake of Cocytus. In Venezuela’s Inferno, Satan is frozen in oil-rich Lake Maracaibo, a metaphor for astronomical wealth squandered by tyrannical populism. The journey through hell is now complete.

Car Dealership Oversaturation Revisited

Filed under: Business Moves,Taxes & Government — Tom @ 12:01 pm

Forbes covered the topic this week (link requires subscription), confirming a problem mentioned in this previous BizzyBlog post (The Car Dealer-State Government Racket”), but with more numbers and research:

Having too many showrooms is bad for car dealers and the brands they sell. So why don’t carmakers do something about it?

….. Detroit is going through a wrenching contraction. The Big Three’s share of the U.S. market, 74% a decade ago, is down to 54%. Hence the cutting of tens of thousands of workers. But the vast, overpopulated dealer network is scarcely budging. The main sticking point is a collection of state and federal laws that make it difficult for car companies to terminate a dealer franchise.

General Motors still has 7,100 dealerships (some with multiple franchises, for example, Buick-Pontiac-GMC). That count is down from 8,434 ten years ago. Ford Motor has 4,400 dealers and Chrysler Group 3,900.

Contrast Toyota, with 1,215 franchises. These sell an average 1,613 new vehicles a year apiece. Chevrolet has 4,111 franchises selling an average 643 vehicles. Ford showrooms sell 696, and Dodge stores (Chrysler’s largest division) sell only 408. The situation is disastrous for the smaller brands: Buick franchises sell only 102 new cars a year, Jeep franchises 170.

Manufacturers can only watch as their dealers carve one another up by advertising giveaway prices. Worse, at least for the manufacturer, is that a lot of these dealers own competing franchises. A Buick dealer, that is, may also have a Toyota dealership down the road. Naturally, they shift their best salespeople and capital to the most profitable brands, leaving their Buick or Ford store looking shabby and staffed by inept or green sales agents.

Why don’t the weak dealers just fold on their own? Two reasons. They can still make money on service and on selling used cars. And the dealership provides jobs for the owner’s friends and relatives.

….. Carmakers can’t just shut down marginal dealers. Under state franchise laws car companies must show good cause to terminate a dealer’s franchise agreement. A federal law gives a terminated dealer the right to sue for “bad faith” by the car company. Try telling a jury that putting two dozen workers on the unemployment line was done in good faith.

These laws aren’t going to change. Dealers have traditionally been prominent businessmen with political clout in state legislative chambers. (Ever wonder why you can’t buy a car online?)

….. As long as the automakers have their checkbooks out–doling out billions of dollars to entice unionized workers to leave–why don’t they pay off some of their dealers to close up shop, too? Ford is quietly offering some dealers as much as $300,000 to encourage mergers that would streamline its network, a sum one dealer called “chicken feed,” according to Automotive News. It cost GM $583 million to compensate its 699 Oldsmobile dealers after it decided in 2000 to phase out the brand. That’s $840,000 per.

….. Don’t bet that anything like this will happen overnight. When a company eliminates a job, labor costs go down. When a company loses a dealer, its overhead costs stay the same and–at least in the short term–it loses a few hundred car sales.

The article goes on to say that Mercedes Benz endured the financial pain of paying off marginal dealers and a temporary dip in sales when it bought out about 20% of the dealers in the early 1990s. But with a stronger remaining contingent of dealers, the brand’s unit sales more than tripled from 1991 to 2000.

But Ford’s, GM’s, and Chrysler’s dealership count needs to be reduced by a lot more than 20%. Do the companies even have the capital to commit to this? Will Wall Street demonstrate any kind of patience with the inevitable but hopefully only temporary sales drop when the dealer roster is trimmed? Even worse, can the companies afford a temporary sales decline in the midst of employee buyouts and other serious capital drains?

It took about 50 years for the old Big Three to create this mess, but they probably have less than a decade, and maybe as little as 5 years, to solve it or go by the wayside.

Positivity: Geno’s Raises Money for Scholarship Fund

Filed under: Positivity — Tom @ 7:06 am

Apparently Joey Vento, owner of Geno’s Steaks in Philadelphia (yeah, THAT Geno’s), is in the habit of doing these kinds of things:

Philadelphia – Police Officer and Pa. Army National Guard Reservist Gennaro “Gerry” Pelligrini, Jr,. of the 26th Police District in Fishtown and North Philadelphia, died while serving in Iraq last year. In his memory, Geno’s Steaks owner Joey Vento will donate all sale proceeds over two days to a scholarship fund to cover private and parochial school tuition costs for low-income Catholic families.

The drive for the scholarship began yesterday and will end tomorrow night. Local Philadelphia WPHT 1210 radio host (and Evening Bulletin columnist) Dom Giordano will broadcast his program from Geno’s Steaks in order to boost publicity for the drive while encouraging listeners to add their support.

“We want to thank Joey Vento. ‘Thank you’ isn’t enough for his contribution for this fund. Thank you to everyone who comes out,” said Kim Petaccio, Gerry’s sister, on behalf of her family at the drive’s opening.

Captain Lou Campione of the 26th Police District, who helped initiate the fund, said that the scholarship honors Gerry’s love for Iraqi children. After an exchange of letters with Gerry, local Fishtown and North Philadelphia school children collected flip-flops and sent them to Gerry to give to young Iraqis.

“He had a tremendous love for children, which is why we developed the scholarship fund so we can continue to support children in his memory,” Capt. Campione said.

“He’s a true hero in all this,” Joey Vento said. “He gave his life so we can stay safe, to give a guy like me the opportunity to prosper. So I’m giving back because I can. God has been very good to me and my family.”

….. Gerry Pelligrini was 31-years-old when he died on August 9th, 2005. He served as specialist in Company A of the 1st Battalion of the 111th Infantry.

September 29, 2006

Friday Follies: Opposite Views of the Same Story on the Economy

Filed under: Economy,MSM Biz/Other Bias,Taxes & Government — Tom @ 7:07 pm

First from Reuters, which has not alway been very even-handed in reporting economic news, a pretty decent report:

Consumers bright, Midwest business strong in Sept

By Ros Krasny

CHICAGO (Reuters) – U.S. consumer spending slipped in August but falling gasoline prices elevated shoppers’ moods by September and Midwest factory activity picked up as well, according to reports on Friday that suggested the economy was still motoring along.

Meanwhile, consumer prices outside food and energy edged up just 0.2 percent in August, although year-on-year price gains hit an 11-year high, offering a mixed reading on inflation.

Poor Martin Crutsinger of the Associated Press, on the other hand, must have had a lot of pent-up negativity to get out before the weekend commences, as he took the same data and turned it into what Jim Taranto at Best of the Web described thusly: “If we didn’t know better, we’d think we were heading for another Great Depression.”

Here’s how Crutsinger, who also managed to ignore the good news on Midwest factory activity, led his story (negative and scare words in bold):

Consumers Cut Back Spending in August

WASHINGTON (AP) — Consumers battered by weak income growth and rising inflation trimmed their spending sharply in August. But analysts said a consumer confidence rebound in September should limit damage to the economy.

The Commerce Department reported Friday that consumer spending edged up just 0.1 percent in August after a much stronger 0.8 percent rise in July.

After removing inflation, spending actually dropped in August, falling by 0.1 percent, the weakest showing since September 2005 when the Gulf Coast was reeling from Hurricane Katrina.

Taranto observed:

All this for a decline of 1/1,000th! One suspects the same news would be reported with a rather less grim tone if a Democrat were in the White House.

Indeed.

Cross-posted at NewsBusters.org.

The Polls Done by That Columbus Newspaper Need to Be Dispatched to the Trash

Filed under: MSM Biz/Other Ignorance,Taxes & Government — Tom @ 2:17 pm

Of all the annoying things about Ohio elections, the polls done ahead of them are at or near the top of the list.

The most annoying of the lot are the mail-in polls done by the Columbus Dispatch. They are laughably unscientific and have varied from actual results so often, and by such large amounts, that I’m amazed that anyone gives them any attention, let alone credence.

For the quick studiers, I’ll present conclusions first and provide the detail below the fold.

We’re supposed to believe that this is where the two big statewide races stand:

US Senate (Brown-DeWine-Undec.) — 47-42-11
Governor (Strickland-Blackwell-Undec.-No Answer) — 52-33-13-2

I do not believe that this is where Ohio’s electorate is today because:

  • Prior use of similar polls in the eight top-of-ticket races reviewed (the 4 RON issues, 2 Senate primaries, and 2 gubernatorial primaries) led to double-digit errors in margin of victory six out of eight times.
  • Each of those six times, the double-digit margin of victory error was in the direction of the more conservative or less liberal candidate or proposition.
  • To believe the Dispatch polls, you have to believe that the response of the 84% of people who did not respond to the mail-in request would be the same as that of the 16% who did (Dispatch’s methodology page is here).
  • Based on past results, it appears that respondents are more likely to be more liberal and/or less conservative.
  • To believe the Dispatch polls, you have to believe that the 10,000+ people who received the surveys reflect the state’s electorate.
  • Based on past results, it’s pretty obvious that the Dispatch’s samples from past polls haven’t reflected the electorate. The Dispatch appears to have done very little to try to improve its accuracy, and what little it did caused no real improvement in results in the May primary. So it seems fair to say that the Dispatch is still missing large numbers of Ohio conservative voters who either don’t want to be polled or don’t want to be bothered, but who are nevertheless more likely to show up and vote on Election Day (as are many other pollsters). The Keiser and Pierce/Smith “surprises” are the best evidence of that.
  • Finally (and this is instinct), the closeness of the poll result on the Ohio Learn & Earn (OL&E) initiative (48% yes, 43% no, 9%, undecided) does not reflect true sentiment against OL&E on the ground. I believe OL&E is trailing by 15 points now, and will lose by at least 20 points.

Obviously I wouldn’t want DeWine or Blackwell to let up based on all of this, but I believe the reality today is that DeWine is up by 5, and that Blackwell is trailing Strickland by about 5. The Dispatch polls should be dispatched to the circular file.

For details, click “more” if you are on the home page:

(more…)

Air America Update

Brian at the Radio Equalizer reports that the $875,000 borrowed stolen from the Gloria Wise Boys & Girls Club by Air America Radio (AAR) has been repaid returned. Most of it ($625,000) went to other social service agencies and charitable organizations that took over functions from Gloria Wise after it was stripped of many of its responsibilities in the wake of the AAR scandal.

Brian cites a New York Sun report that “The club’s new chief executive, Fred Lewis, told the Associated Press that the investigation will likely lead to criminal charges.” And after over a year of virtual silence on the scandal, the New York Times actually reported on this story

The identities of those facing criminal charges, if they come, could indeed be revealing.

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Previous Posts:

  • Sept. 13 — Air America: Bankruptcy, If It Happens, Won’t Necessarily Mean Disappearance
  • Feb. 26 — Is the Air America Radio Bailout a Violation of Campaign-Finance Laws?
  • Jan. 26, 2006 — The Franken-stein Monster That’s Eating Air America Radio
  • Oct. 21, 2005 — Air America: If They Can’t Make It There, Can They Make It Anywhere?
  • Sept. 8 — Air America Radio (AAR) Update: Is the Endgame Near?
  • Aug. 8 — If It’s Monday, There Must Be At Least Three Obvious New York Times Errors, Omissions, or Hilarities to Report
  • July 27 — Did the Liberal Talk Network Really Steal from Kids and Seniors?

The Fence Will Be Passed, and Will Be Funded

Frist said so last night:

And, just moments ago, the Senate invoked cloture on the Secure Fence Act of 2006 by a vote of 71-28. Tomorrow the Senate will pass this legislation and send it to the President’s desk for his signature.

By requiring the construction of at least 700 miles of two-layered reinforced fencing along our southwest border and by mandating the use of cameras, ground sensors, UAVs and other forms of hi-tech surveillance, this legislation will help us gain control over every inch of our borders. The Homeland Security appropriations bill authorizes $1.8 billion in funding … so construction will proceed as quickly as possible. As the fence is erected, more funding in future budgets will be required, but I’m confident that the 71 Senators who proved themselves serious about border security today will support continued funding.

Michelle Malkin has already said she’s not impressed.

Brain Shavings has a map.

The Wall Street Journal has already said it will be deeply saddened:

The only real way to reduce the flow of illegal Mexican immigration is to provide a legal, orderly process to match open American jobs with workers who want to fill them. Mr. Bush is for that, and so is the Senate, but House Republicans have concluded that they’re better off building fences. When Ronald Reagan spoke of America being a “shining city on a hill,” he wasn’t thinking of one surrounded by electrified barbed-wire fences.

Maybe, maybe not. But Reagan did mention some things the open-borders dingalings at the Wall Street Journal, who have been busily claiming that the Gipper would be on their side if he were alive today, seem to have forgotten (bolded items):

The Immigration Reform and Control Act of 1986 is the most comprehensive reform of our immigration laws since 1952. In the past 35 years our nation has been increasingly affected by illegal immigration. This legislation takes a major step toward meeting this challenge to our sovereignty. At the same time, it preserves and enhances the Nation’s heritage of legal immigration. I am pleased to sign the bill into law.

Allow me to translate, WSJ:

  • Reagan obviously agreed with those who oppose all illegal immigration, and disagreed with you.
  • Reagan obviously recognized, as do those who oppose illegal immigration, that open borders and the lack of assimilation that accompanies open borders represent a challenge to our sovreignty. That means he disagreed with you.
  • Reagn clearly recognized the importance of allowing fairly significant numbers of LEGAL immigrants into this country, as do most of those who oppose all ILLEGAL immigration. That means he disagreed with you.
  • It’s fair to conjecture that the Gipper, observing what has occurred in the 20 years since the 1986 Act noted above, would reluctantly agree that a border fence is necessary. More likely than not, he would disagree with you on that too.

The Latest of 57 Reasons to Reject Ohio Learn & Earn Initiative (092906)

From Jill at Writes Like She Talks (original entry relating to Jill’s effort is here):

  • Reason 43: “Because everyone else is voting no” (actually, it’s down in the Columbus Dispatch poll 48-43, but it’s probably not that close).
  • Reason 42: “….. if the concept of Ohio Learn and Earn is so awesome, amazing and worthy of a state constitutional amendment, they why the &%#&%# aren’t each and every one of us in Ohio willing to just give that amount of money over to the Board of Regents starting now?”
  • Reason 41: “Because you, someone you know, someone you love, or someone related to you could become one of these stories” of problem gambling.

UPDATE: Reason 40 — “Because its mere existence forces me into bed with truly strange and otherwise extreme people.” An interesting one. I think when you find out that someone you normally oppose has the occasional sensible streak is beneficial. Just imagine how hard some of us on the right are having to swallow to say that Joe Lieberman is the better choice in Connecticut’s US Senate race. More appropros to the OL&E, the initiative isn’t really a right-left debate as much as it’s a matter of, first, inappropriately matching a public good (education) with a socially questionable enterprise (casino gambling), and second, even if you don’t agree with the first reason, recognizing a bad deal when you see it.

Biz-Econ News Roundup (092906)

Filed under: Business Moves,Economy,Taxes & Government — Tom @ 8:00 am

There’s been something for both optimists and pessimists to feed on during the past two days.

On the optimistic side:

  • Cheaper winter heating bills appear to be on the way — That goes for natural gas, fuel oil, and propane.
  • Sales of new single-family homes went UP 4.1% in August, a total reversal of expectations that they would drop 3.0%. That reversed three months of declines.

Not so good:

  • Mortgage applications dipped last week.
  • Ford’s massive job cuts spread to its credit operations. I’m surprised Ford hasn’t just tried to sell Ford Motor Credit. Maybe this move will dress it up for a sale.
  • Despite the near-record level of the Dow, it’s more than fair, as I mentioned the last time the Dow reached near-record territory back in May, to point out that the S&P 500 is over 12% below its alltime high of 1527 set in 2000, and the NASDAQ is still a whopping 55% below its alltime high of over 5000. I wouldn’t blame anyone for failing to be impressed until the S&P 500 achieves full recovery.

Marvel of the Day: Nanotech Light Bulb

Filed under: Marvels — Tom @ 7:55 am

From the Nashville Business Journal, Vanderbilt chemists connect the dots:

Seeing the light: Nanotech opening door to better bulb
September 22, 2006

One of Vanderbilt University’s projects with the most promising commercialization potential could produce light with less energy.

Sandra Rosenthal in the chemistry department focused her teams’ work on the nanocrystals of cadmium sulfite. Under the old paradigm, changing the size of a nanocrystal would change its color. By accident, a student of Rosenthal’s discovered last summer that making the crystals the smallest size caused them to emit all colors, also known as white light.

That discovery using quantum dots is important because it’s a potential source for solid-state lighting, which uses diodes instead of electricity or gas. Coating blue light-emitting diodes with broad-spectrum quantum dots can create light bulbs could last 50 times longer than the normal light bulb.

“You could really win big in saving electricity and you could really win big in producing less greenhouse gases,” Rosenthal says.

E-Voting in Maryland: “Total Fix” Promised

Filed under: Business Moves,Taxes & Government — Tom @ 7:50 am

Diebold means total repair, not fixed elections (HT Techdirt). If Maryland doesn’t get the first, it may get the second.

Positivity: A Canceled Wedding Its Transformed into a Celebration

Filed under: Positivity — Tom @ 6:02 am

How about this for a psychological recovery? Kyle Paxman fought through betrayal and sadness to turn a canceled wedding into a charity fundraiser:

In Vt., a canceled wedding is transformed into celebration
Fund-raiser is held to honor strong women
September 10, 2006

VERGENNES, Vt. — Bottles of Zinfandel lined the bar, hotel workers set up giant speakers by a parquet dance floor, and chefs in white hats prepared a lavish meal of Vermont cheddar cheese soup, filet mignon, and crab-stuffed shrimp.

This was to be Kyle Paxman’s wedding day, a day she had dreamed about for years and planned for months. She had sent out 180 invitations to guests from around the country, booked a reggae band, a florist, a trio from the Vermont Symphony Orchestra, a photographer, and the venue, the Basin Harbor Club, on the shores of Lake Champlain.

Then, six weeks ago, Paxman, 29, called off the wedding. According to her mother, Patricia Carbee , the bride-to-be had found out her fiancé, her boyfriend of four years, had been cheating on her. Paxman was heartbroken, but Carbee still had to pay the Harbor Club for the reception .

Rather than scrap the event, they decided to turn it into a charity fund-raiser to celebrate strong women — “beautiful, powerful, charismatic, and charitable women,” as the large green card in the club lobby puts it.

One hundred and twenty-five women were expected to show for the charity bash last night.

“We decided to hold this event after days of tears and sadness, to turn a bad situation into something positive,” Paxman said yesterday in a function room at the 120-year-old club, where she arrived, smiling, in an embroidered white dress, silver earrings, and a light blue shawl.

Her brother, Keith, 32, walked by her side. Her mother followed close behind.

“I couldn’t be more proud of Kyle,” Carbee said, beaming at her daughter. “I think she’s amazing. I think she’s beautiful from the outside in, and I think this really shows her strength.”

….. Carbee said she started canceling the events — the trio, the reggae band, and a golf outing that had been planned for the men. But they were stuck with the bill for the food, open bar, and the rooms at the Harbor Club. “Because of our contract, we had to pay for everything,” Carbee said.

Days later, over dinner at a restaurant, Carbee suggested an alternative plan to her daughter. “I said we could try and make it something else, something positive,” Carbee said, admitting that she was not sure what her daughter’s reaction would be.

After days of reflection, Paxman, manager of a spa in Carlsbad, Calif., said she agreed to turn her wedding into a charity fund-raiser.

The only thing left to decide was which charities they wanted to support, said Carbee.

Paxman, who grew up in Barre, Vt., and studied early childhood education at Castleton State College in Castleton, Vt., chose the Vermont Children’s Aid Society as one beneficiary. The other, she said, came to her one night when she and her mother saw an advertisement for CARE, the international relief organization that focuses on helping poor women. The ad shows women striding purposefully toward the camera and declaring, “I am powerful.”

“We both started crying and she said, ‘I found my second cause,’ ” Carbee said.

Soon, Paxman and her mother had contacted 125 women — family, friends, coworkers, from as far away as Florida and the US Virgin Islands — to invite them to Paxman’s fund-raiser.

Last night, as evening settled on the resort, the women started to arrive, dressed in shimmering gowns. As they entered the resort, many slipped checks into a donation box that Paxman had set out.

After the event, mother and daughter were headed to Tahiti for what would have been Paxman’s honeymoon.

September 28, 2006

Ireland Update: “From One of the Poorest to One of the Richest”

Filed under: Economy,Taxes & Government — Tom @ 2:10 pm

National Review writer Reuven Brenner observes, and asks why (HT NixGuy):

How did Ireland go from being among the poorest places in Western Europe to one of the richest? How did it attract the headquarters of 1,000 international companies? How did it come to rank, by some measures, among the EU’s top 15 original members? With per capita GDP estimated at $37,800 (U.S.), Ireland is now tops in Western Europe.

….. where has the talent been flowing in Europe? To Ireland: Over roughly a decade, more than 400,000 newcomers have moved there, an addition of 10 percent to the Irish population.

Here’s what Ireland did — or had to do — to attract this wave of talent and ambition to its shores.

To begin, the obvious: In 1986, Ireland slashed spending in areas such as health expenditures, education, agricultural spending, roads and housing, and the military, while abolishing agencies such as the National Social Services Board, the Health Education Bureau, and regional development organizations. By 1993, government non-interest spending declined to 41 percent of GNP, down from a high of 55 percent of GNP in 1985. Subsequently, it significantly lowered corporate tax rates to 12.5 percent, at a time when the lowest corporate rates in Europe were 30 percent and U.S. rates stood at 35 percent. Since 2004, Ireland also has offered a 20 percent tax credit on research and development.

But the true miracle came when, due to these policy changes, Ireland attracted capital and pools of ambitious young people from around the globe. By now, Ireland has one of the youngest populations in the Western world.

Between 1995 and 2000, 250,000 people migrated to Ireland (about half of Irish ancestry), which had in 1996 a population of only 3.6 million. Ireland later allowed, along with Britain and Sweden, unrestricted migration to its labor markets from the 10 countries which joined the EU in 2004. Since then the number of people of Irish origin migrating to Ireland has diminished. However, more than 130,000 Poles now live there and, according to recent reports, 10,000 Eastern Europeans arrive every month, on average. A young Polish immigrant to Ireland was recently quoted saying, “If you have ambition in Poland, you come to Ireland.”

Not only Poles, but Danes, Iranians, Swedes, Chinese, and Nigerians have come to Ireland, filling both low- and high-skilled jobs. Google’s European headquarters, located in Ireland, employs 800 people. Seventy percent aren’t Irish, and these workers speak 37 languages. According to reports, the company plans to hire another 600 university-educated people, mostly from abroad.

….. Fiscal and regulatory changes are a necessary part of the prosperity equation, but they make up the easier part. The harder part is to attract and retain talent. Ireland succeeded not only because of its fiscal changes, but because the country embodies the Western tradition of openness to many tribes.

With this in mind, Western countries should keep their borders open to the movement of those hard-working “vital few.” This policy may not only bring enhanced riches to the West, but also turn out to be its best weapon against the dictatorial, close-minded, backward-looking governments from which talent would escape.

Previous Post:

August 2 — Voting with Their Feet, International Edition: Irish High Techs, and the Rest of the Country, Are Smiling

Wall Street Journal Sees the Belgian Court’s Threat to Information Flow Noted Here

Filed under: News from Other Sites,Taxes & Government — Tom @ 11:45 am

From a subscription-only editorial today, the WSJ reacts to the Google Belgium and Google News Belgium court case covered here previously, and notes that there is plenty of reason to be concerned:

Google, meanwhile, maintains that the snippets it uses on Google News fall under the “fair use” doctrine, which allows small parts of a copyrighted work to be copied without legal liability. Fair use has yet to be fully defined for the Internet age, but the logical conclusion of the Belgian court’s decision is clear enough. If displaying a first sentence and a headline from another Web site is illegal, then so is much of what we do online: The blogger who links to a news story, the Fortune 500 company excerpting an article about itself, and all search engines could be breaking the law. Considering some American judges’ penchant for applying foreign precedent, expect one to notice and use the Belgian logic next time Google goes to court across the Atlantic.

Final GDP Growth for 2nd Quarter: 2.6%

Filed under: Economy,Taxes & Government — Tom @ 9:48 am

From AP (official release is here):

Economic growth clocked in at a 2.6 percent pace in the spring, even slower than previously thought.

The latest reading on the gross domestic product, released Thursday by the Commerce Department, reinforced expectations that the economy is settling into a spell of somewhat sluggish activity.

The growth rate was weaker than the 2.9 percent figure estimated for the April-to-June quarter a month ago. Many economists were predicting that this estimate would hold and thus there would be no revision to the overall GDP figure.

Gross domestic product measures the value of all goods and services produced within the United States and is considered the best barometer of the country’ economic standing.

This is the first quarter in quite a while where the final revision did not go up. In a previous post, I noted that the second quarter had a surprising reduction the federal spending component of GDP that I would not expect to repeat itself in future quarters. Today’s release says that this component went from a 4.5% increase in the first quarter to a 8.9% decrease — a swing of over 13%. The final 2.6% figure reported today means that the rest of the economy grew at about 3.0% in the second quarter.