Since we don't make much forward progress if we only discuss the issues that matter over martinis at the Bistro and then jump right back on the life treadmill with our blinders on, today we want to review some updates and some pushback the Friends of JAM have received from last quarter's JAM Views posts.
First, always remember that JAM Views embraces criticism and opposing viewpoints, because these are what make life more interesting! Don't you bore of hanging out with people whose beliefs are all the same and are so predictable that you can anticipate their exact opinion on every issue? We grow as thinkers by hanging around people who view the world differently than we do, and with people whose life experiences have no resemblance to our own, so please keep those opinions coming.
Dave, a proud resident of Los Angeles, claims that my critiques of California's socialist economics are "stupid," and he points us to the recent Bloomberg article "California Must Be Doing Something Right." [LINK] This article notes that California recently passed the U.K. to become the world's 5th largest economy with a GDP of $2.7 trillion all its own. This home of the NBA Champion Golden State Warriors also is currently leading the nation in job growth, manufacturing, personal income and corporate profits. The Friends of JAM replied to Dave that they had once enjoyed an amazing meal at Mastro's on Rodeo Drive right next to the "Pretty Woman" Hotel, even striking up a conversation with Warren Beatty at the next table. Dave seemed validated.
As we looked at the Boeing and Airbus subsidies in our post on President Trump's steel tariffs, it's worth noting that after 14 years of arguing, the World Trade Organization (WTO) is now backing the U.S. claims that European countries have pumped $22 billion in illegal subsides into Airbus to help it compete with Boeing. But, later this year Airbus' counter claims will be heard accusing Boeing of receiving billions in government funding from the Pentagon and NASA, along with state and local tax breaks. Well, maybe they received one less billion, as we previously covered President Trump's reaction to the sticker shock when receiving the bill for the new Air Force One! If the U.S. prevails, it may impose several billion in "penalties" annually on European goods for payment, which reinforces our lesson that the word "tariff" identifies just a small fraction of the penalties imposed on global free trade, and that the press rarely communicates the true picture.
Remembering our post "Driving Myself to Prison," multiple readers inquired, "Is that really a true story?!" Friends of JAM responded that, unfortunately, this post was 100% accurate. Actually, the following day the story took another crazy turn, but we have to tell that tale another day.
As a follow up to our "Pay for Performance and That's It!" post, the socialists in downtown D.C. are now attempting to take away all motivation to excel from the District's servers and bartenders. Initiative 77 on the local ballot raises these hard workers' minimum wages to $15 an hour by 2020, erasing the exemption servers and bartenders were previously granted. But, servers and bartenders are some of this country's greatest capitalists, and they want no part of Initiative 77. They want their de minimis wage and the opportunity to earn performance-based tips paid directly by discerning customers. High minimum wages force restaurant owners to raise prices substantially and eliminate tipping. This model has been a disaster for owners and staff everywhere it's been attempted. Well-known New York restaurateur Danny Meyer attempted this model at Union Square Cafe and Gramercy Tavern before losing 40% of his veteran staff. Only pay for performance!
Finally, circling back to our post "The Government Has No Money," the Trustees for Social Security and Medicare last week again warned Congress that they are running out of money faster than expected. As we discussed, the benefit and revenue schedules are badly out of alignment. Medicare funds are now due to run completely dry by 2026. Social Security benefits have to be cut 21% across the board to keep the program solvent. Interestingly, workers receiving disability benefits have soared over the last 20 years from 4 million to 10 million. Also, today there are 25 Americans age 65 and older for every 100 working-age citizens, but it will be 35 over 65 for every 100 in just 12 years (40% worse!). And, of course, this imbalance is directly connected to our volatile immigration issue. So, let me ask you. Which President in their second term, along with which band of Senators who are planning soon retirement, are going to finally show the leadership integrity to 1) cut entitlements, and 2) implement performance-based immigration of amazing new citizens who will make substantial payments into the system? It is the only answer. Simple math.
Thank you to our JAM Views readers for your input and support. Looking forward to the 3rd Quarter - Big Things Happening! A reminder to sign up for the email alert for each Sunday's post, and I believe the Friends of JAM are installing an RSS feed link for ease of regular viewing.
"It is the business of the very few to be independent; it is a privilege of the strong." - Friedrich Nietzsche