About Me

In writing the "About Me" portion of this blog I thought about the purpose of the blog - namely, preventing the growth of Socialism & stopping the Death Of Democracy in the American Republic & returning her to the "liberty to abundance" stage of our history. One word descriptions of people's philosophies or purposes are quite often inadequate. I feel that I am "liberal" meaning that I am broad minded, independent, generous, hospitable, & magnanimous. Under these terms "liberal" is a perfectly good word that has been corrupted over the years to mean the person is a left-winger or as Mark Levin more accurately wrote in his book "Liberty & Tyranny" a "statist" - someone looking for government or state control of society. I am certainly not that & have dedicated the blog to fighting this. I believe that I find what I am when I consider whether or not I am a "conservative" & specifically when I ask what is it that I am trying to conserve? It is the libertarian principles that America was founded upon & originally followed. That is the Return To Excellence that this blog is named for & is all about.

Friday, March 13, 2015

Escape From New Jersey - But To Where?

 
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Shortly after the first of the year Mercedes-Benz announced that it would be moving its corporate headquarters from Montvale – Bergen County NJ to Atlanta – taking with it 1,000 well-paying jobs.  The company has been in NJ for over 40 years.
 
NJ, home to 14 of the world's 20 largest pharmaceutical companies, also learned the last few years that Merck would close its Summit, NJ facility in 2015 & close & move its 23 year old global headquarters intrastate from Whitehouse Station to an existing facility in Kenilworth, NJ.  These moves help Merck realize greater cost savings & operational synergies (i.e., less people on the payroll).
 
In 2009 Roche began shrinking its 127 acre campus in Nutley, NJ & started moving the operation to South San Francisco with a loss of almost 1,500 NJ jobs.  In 2013 Roche completely closed the Nutley facility shedding another 1,000 jobs.  Roche had been in Nutley for more than 80 years with a peak workforce of 10,000 employees.
 
The above closings & moves were part of an exodus from NJ that includes Hertz, Bristol-Myers Squibb, & Ocean Spray with personnel reductions by Warner Chilcott & Sanofi-Aventis. 
 
According to United Van Lines NJ led the nation for the second time in three years with a 62% (65% according to the 2014 Annual National Movers Study) out-bound rate meaning that almost twice as many people moved out of NJ than moved into the state.  Washington DC led the nation for inbound movements for the last five consecutive years – do you think that is just a coincidence with the country's slide toward government dependence?  Economics Professor Art Laffer moved his residence from California to Tennessee in recent years & the one way U-haul movements from California to Texas are well documented.  See map below for details that show the tri-state area of NJ, NY, & CT hurting.  Both NJ & NY each lost one congressional seat as a result of the 2010 census, the country's 23rd.  Ten thousand millionaires moved out of NJ in 2014 – source Governor Chris Christie @ a town hall meeting in Somerville, NJ on March 10, 2104.
 
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Now the problem with NJ is that it is a highly regulated, highly taxed, high cost of living state (for instance – the cost of living in NJ is 32% higher than in Mississippi – source BEA) with lackluster economic growth caused by small businesses not starting or existing businesses not expanding because of the regulations & taxes – NJ has an overall rating of 48th out of 50 states according to the Mercatus Center of George Mason University, & is also rated 48th in regulatory, economic, & fiscal matters.  To compensate for this NJ has the second highest median income (after Maryland – another federal government connection because of its location next to the nation's capital) of the 50 states meaning the highly paid scientists & professional people in the pharmaceutical & telecom industries have the incomes to enjoy the cultural & sports interests in the state & NYC & Philly metropolitan areas but NJ businesses have trouble competing worldwide after paying these salaries & non-professional people choose to move out as described above.  For professional people who choose to stay NJ is a high cost but vital energetic state – for the rest, including the high paid who want less government intrusion in their lives, not so much so especially with NJ's higher unemployment rate compared to states it borders.
 
But the question is where do New Jerseyans move in the U.S. to better their situation?  The entire country is in the apathy to dependence stage of our history – government is now looked to as the supporter of families (in fact a decidedly second-rate crummy proxy for families) as it replaces the traditional two-parent family structure in far too many households while the aspiration of personal responsibility fades along with the liberty that has brought us the prosperity we have known since our founding that is now being spent down by people to make ends meet.  In the next five short years Social Security, Medicare, Medicaid, Income Security (e.g., unemployment compensation, disability benefits, food stamps, housing allowances), & other (e.g., interest on the national debt & ObamaCare) amount to over 75% of total federal spending thereby crowding out defense & every other program while overwhelming our ability to support all of these programs.  This dependence is shown on the graph below prepared from OMB & CBO data.
 
The 2015 Heritage Foundation Index of Economic Freedom rates five countries in the world as free & America is not one of them.  America is listed as mostly free in the Heritage Index & comes in 12th in the 186 country analysis – America has dropped from sixth to twelfth - one place every year BO has been president.  Small & medium-sized businesses are dying faster than they're being created - the U.S. also ranks twelfth among developed nations in business startups behind such countries as Hungary, Denmark, Finland, New Zealand, Sweden, Israel, & Italy.  All net new jobs in America since the start of the Great Recession have gone to workers classified as foreign born (i.e., immigrants – legal & illegal).  Statistically there are currently two unemployed people for every job opening not counting hundreds of thousands of people no longer looking for work because their search resulted in the conclusion that there is no work for them – this is indicative of the mismatch between needed skills & job openings – Senator Rob Portman of Ohio reports that three people have abandoned the workforce for every net job created since the start of the Great Recession.  Inflation adjusted median household income is dropping & the Federal Reserve's official monetary policy's stated goal reduces the purchasing power of people living @ the median income level by $1,000 per year.  Record numbers of people 25 to 34 (22.6 million such adults in 2013) have moved in with their parents during the past eight years & a record number of individuals renounced their citizenship or permanent resident status in 2014 – a 14% increase over 2013 which also was a record.
 
Productivity - the inflation adjusted business output per hour worked - declined @ a 3.5% annual rate in the first quarter of 2014.  Since 2005 productivity has declined by more than 8% relative to its long run trend meaning that business output is nearly $1,000 billion less today than what it would be had productivity continued to grow @ its average rate of 2.5% per year.  Lagging productivity growth is an enormous problem because virtually all of the increase in Americans' standard of living comes from rising worker productivity.
 
Almost two-thirds (65 percent) of children in 2014 lived in households that participated in at least one or more of the following government aid programs: Temporary Assistance for Needy Families (TANF); the Supplemental Nutrition Assistance Program – (SNAP, i.e., food stamps); the Special Supplemental Nutrition Program for Women, Infants, and Children (WIC); Medicaid; & the National School Lunch Program. The largest number of children who lived in households that received government aid participated in the National School Lunch Program (35.0 million), followed by Medicaid (26.4 million), SNAP (17.3 million), WIC (6.4 million), and TANF (2.3 million).
 
This dependence is exacerbated by BO's plans to legalize every illegal immigrant he can find – simultaneous open borders & open welfare programs that total 126 such programs as counted by the Cato Institute form a suicide pact & giveaway of our way of life. 
 
The cost of ObamaCare is also baked into the cake as 11.4 million people according to BO's count have picked healthcare insurance policies through one or another of the ObamaCare insurance exchanges during the official sign up window that ended on February 15.  America's Health Insurance Plans (AHIP), a national political advocacy and trade association with about 1,300 member companies that sell healthcare insurance coverage to more than 200 million Americans reports that 85% of the people who signed up for ObamaCare via the healthcare insurance exchanges are eligible for government subsidies which amount to 76% of the premiums.  The 76% subsidy level is in line with government subsidies received by participants in Medicare Parts B & D.
 
You can try to minimize the impact of the cost of the American welfare system but you cannot totally eliminate it anywhere you move.
 
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Scott Hodge, President of the Tax Foundation, calculated that the top two quintiles of income earners currently pay $1.5 trillion in taxes that go to the bottom three quintiles (yes, this means even an average middle quintile family – i.e., middle class - receives over $7,000 more in benefits than they pay in federal taxes each year) – this represents 21% of the top quintile's income.  Mr. Hodge calculates that in order to bring every family in America to average would require the people in the top two quintiles to pay higher taxes than they currently do with people in the top quintile paying the vast majority of an additional $2.4 trillion per year in federal taxes or 74% of their income.  For instance, someone making $400,000 per year working for Cantor-Fitzgerald or JP Morgan in NYC who takes a train from NJ to NYC every day & works long hours (on things that most people have no idea about) in addition to the time of the commute will be required to pay $300,000 to the federal government to support BO's income inequality programs.  This leaves such an individual $100,000 to pay state income taxes, sales taxes, & property taxes before he starts to wonder why he is working all of these 60+ hour weeks.
 
I know people in their 20s, with college degrees, who are about to go through the first quarter of their lifetime earning potential years with no American-dream future in sight & people in their 50s & 60s who realize they will never work again let alone for anything near their previous compensation.  BO's promises in 2008 of the hope of bringing everyone up have turned into class warfare & envy that really were deliberate plans to bring everyone down to the same government dependent level whether they live in NJ or any other state. 
 
I ask everyone who reads this post who supported or still supports BO to look @ the above information with an open mind & for one minute bring yourself into the world of ideas to see what BO's policies have come to – to the misery, poverty, & wreckage of human lives – to see that the vast majority of human beings are only capable of being led – they don't have the capability to rise, they only shrink if there is a negative influence or excuse to fail.  The sky is the limit with liberty & free enterprise.  In order for America to return to the prosperity of her founding excellence we need a mindset change that dares great enough to trust our founding principles of limited government, self responsibility, & free enterprise – a mindset change that sees through & rejects every politician who tries to make us dependent on government while he or she only gets richer @ our expense.
 
I offer four points for accomplishing this mindset change in the referenced post below.
 
 

6 comments:

  1. Hi Doug - Good article. I hasten to add another problem with NJ is that we are dead last in rate of return of the taxes New Jerseyans send to Washington. In other words we are subsidizing 49 other states.

    The solution is not for us to pay more but for the other states to stop living off of us. Under the current tax code, a code based on income that is not going to happen.

    My other observation is based on one of the "Four Points" at the end of the article. Changing the way Social Security is calculated will not make it solvent. A Ponzi Scheme is a Ponzi Scheme and all politicians in DC, including Paul Ryan don't have the guts to do what it takes to turn SS into a truly self sustaining program.

    I agree with your assessment of Ryan's Plan, calling it "timid". I listened to his book on audio and it was more of the same"conservative principles" gobbledygook.

    They all talk a good game about standing "on a principled stand based on their conservative" values but they can't surrender quick enough when the pressure is on. Just look at Ryan's voting record on the federal budget.

    Regards and Hi to Carol.

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    1. The referenced Susan Lee column says that "if benefits were indexed to prices. . .Social Security would, @ this very minute, be in balance over the long-term - the system would be permanently solvent. Not only would future revenues equal future costs, but there would be a surplus." The column appeared in the WSJ on November 23, 2004.

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  2. Thanks for the update.

    ReplyDelete
  3. Doug
    I sent this to all my RTE gang, as usual.
    I had this hit my email box today. Thought you would find it interesting.
    If you can't do it in Texas, there isn't any place left.
    http://dailysignal.com/2015/03/15/in-texas-state-leaders-attack-local-governments-for-going-big-on-regulations/?utm_source=heritagefoundation&utm_medium=email&utm_campaign=morningbell&mkt_tok=3RkMMJWWfF9wsRoivK7NZKXonjHpfsX56OgpUaS3lMI%2F0ER3fOvrPUfGjI4HSsJkI%2BSLDwEYGJlv6SgFQrLBMa1ozrgOWxU%3D

    ReplyDelete
  4. Doug - They've destroyed the economy so badly so that even if you don't want to go on the dole, you can't possibly do ANYTHING to earn $ independently.

    It all started with the income tax 100 years ago - and then they doubled down when they decided people couldn't write a check at the end of the year, but rather had to have their wages garnished and then beg for their own money back every April 15. The only option is to have them withhold less, then gamble that you have enough $$$ in April to cut them a check if you end up "owing" taxes.

    The only way to put an end to this is to do what our founders did _ BUT NO ONE IN THIS COUNTRY HAS THE STOMACH FOR IT. Our founders REFUSED the tax collectors and sent them packing.

    Voting doesn't work - it's completely rigged. The only thing these politicians will understand is CUT OFF THEIR ALLOWANCE - but no one, no one will refuse to pay taxes. It's too "unpleasant"

    We all know the problems. but no one will do anything about it. I've talked myself hoarse to people who agree and disagree with me. The people agree don't do anything more, and the disagree-rs, short of a blow to the head, won't get a clue. And even when they do, they won't do anything effective. Just complain as much as the people who do have a clue. Talk is cheap. nothing short of action or a miracle will save this country.

    Good luck and God bless.

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  5. The Tax Foundation - Scott Hodge projection of extra taxes required to equalize income in the US, along with many politicians arguing that top earners do not pay enough taxes, discourages our bright young adults. Left unchecked, this scenario leads to less entrepreneurial activity and lower economic growth for all. A significant warning today is that more companies are failing or exiting versus new ones starting up. A solution therefore is for prominent politicians, businessmen, entrepreneurs to educate the public of the benefits of free market capitalism and debate the Left relentlessly on this. We need to get this debate out mainstream. No Leftist can win a debate with a well informed, determined champion of free market capitalism.

    Finally, all who love this country and it's traditions should take initiatives in their daily conversations to make the case for limited government and free markets. I am amazed that so many well educated people I have come across have very little understanding of economics and government policies that impact economic growth. Patiently and kindly engage such people in this debate.

    ReplyDelete