Income deflation My concern about income deflation is the effect that it could have on the housing market. In some parts of the country, already, foreclosures are up. At least in isolated markets, such as Dallas, this has happened before. One time was when oil prices collapsed, in the early to mid-1980's. It was not long after that, that the Soviet Union went under, taking much of the defense industry with it. One factor which can counteract the effects of income deflation is when there are restrictions on "growth", as there are in Minnesota. One effect of that policy, where it is aggressively pursued, as around the Twin Cities, is that you have Democratic mayors decrying the lack of "affordable housing". That lack is simply a reflection of the free market at work. When you restrict the nature and location of new construction, you must expect prices to rise and supply to be lower.

Outsourcing and Joseph Schumpeter The lead editorial, in today's Wall Street Journal, talks about sending work offshore, and Joseph Schumpeter. Some people who I have been associating with for the last decade, or so, have been talking about Schumpeter for a long time. A too condensed version of his message is about destroying the old to make way for the new. My interpretation is that there always will be change, and attempts to halt change are mistaken and short-sighted. People and organizations that will prosper are those that embrace change and look for what they can do, in the future, to contribute. I recently read about how we usually want to pay the lowest price for what we buy. If we are selling products or services, we want the highest price we can get. If Tata Consultancy Services is beating our price, then we will have to find a way to compete, or get out of the business. The process of competing with TCS and their peers has been painful, as it has driven down rates for everyone. Obviously, TCS has to perform, but if they can, then they are helping to keep costs down. Eventually, that translates into lower prices to the consumer. If they are charging less to governments, that might translate into lower taxes for taxpayers. The difference between software consulting rates (to the consultant) between 2000 and 2004 is breathtaking. We were fortunate, for those of us who stayed employed through most of 2001, that rates still stayed relatively high, although they had started to subside, as the year progressed. What we are hoping, is that more jobs open up, that there might be a rise in rates, as there is competition for experienced people. For specific skills, that already seems to be happening. That still seems to be very isolated, geographically. For a senior .NET programmer in the Dallas area, I have seen as high as $55 per hour advertised. I believe that was contract and not for a salaried employee. There are still too many stories about positions that want to pay $55K per year. Supposedly, though, there are many positions available, in the software field, that pay at least $30 per hour. In small population regions with many businesses, the typical may be $35 or $40 per hour. In the software field, at least, we are seeing wage deflation, which could be trouble. Too many people have debt structures predicated on late 1990's incomes.

We need some elections We need some votes to be cast, so we can see what support Howard Dean really has. Even among liberal Democrats, he has created Dean-haters. I don't know how much his positions are poses and how much he really believes. I do think that his hatred, with bulging veins, is real. What is unclear is how much of the "red meat" he throws to his fans is what he believes, and how much is simply pandering. That is why we need to actually count votes, and see what sort of support "Doctor Dean" really has. I do agree with Andrew Sullivan (how big of me) that at least you have someone who isn't always calculating the effect of what he says. Howard Dean is an unabashed Bush and Southern Conservative hater. We will have to see how far that goes. I am very sceptical about any poll that purports to show Howard Dean very close to President Bush, in support. There are too many liberal Democrats who are afraid of the effects of a Howard Dean matchup with President Bush, that it seems implausible.

Howard Dean, again I have been interested to hear Howard at work, trying to present himself as being in the mainstream. That is the first step, I guess, recognizing that he has a problem. From my perspective, he seems not to "get it", as he still reveals his real self, at least to the discerning viewer. I read somewhere, earlier today, that Howard Dean is now campaigning for the general election. That means presenting himself as someone you could trust with protecting the country from terrorism and helping the economy to recover. So why would you impose a big tax hike on "middle class families"? I read estimates of between $1,800 and $2,000 dollars a year rise in taxes. I have no idea what sort of income, they are thinking about, but it probably is low. I can imagine that $80,000 a year is "rich".

Ancient History (1996) and free speech I thought of a commercial that was run, during the 1996 presidential election cycle, where famous people would say what they would do, if they were elected president. I was shocked and dismayed by what Peter Fonda said. He would suspend the constitution, until a new system could be put in place that would offer real justice to all. My reaction was that what he, and his ilk, would like would be something along the lines of North Korea or Cuba. Something really good like that. I was appalled, at the time, that someone would think that it was acceptable to say something like this, and that an advertiser would pay to broadcast such a view. We have free speech up to a point: you can't advocate overthrowing our present system.

More about change If we can have our way, we all will be in our own, warm and cozy burrow. We are where we want to be, doing what we want to be doing. All of sudden, change, beyond our control, upsets our little world. Right now, the most usual instrument of change is the layoff, possibly coupled with business shutdowns. The terror that is generated by such things is greater in smallish towns, that are not part of some major metropolitan area (say in Southwestern Michigan, for example). The Michigan mantra of the early 1980's was "last one out, turn out the lights". I'm sure that small business people and politicians, especially, fear such a thing, again.

Change

People in Kalamazoo, Michigan, didn't like Pharmacia's acquistion of Upjohn, when it happened. They worried about the changes that might take place. Upjohn had been the one constant in local life, providing jobs, incomes, and a growing population, as the business expanded.

Now, with Pfizer's acquistion of Pharmacia, there are the expected layoffs in Kalamazoo. Panicked Michigan politicians are trying to pressure Pfizer in retaining their operations in Kalamazoo.

The paper mills used to be the big industry in Kalamazoo. Through the 1960's and 1970's, the decline happened. Part of the problem was that the old facilities generated so much pollution, that they poisoned the land and water.

The fine old names, like Sutherland and KVP (Kalamazoo Vegetable Parchment) disappeared from the landscape. Parchment (named after the KVP operation) was the last to be hit.

Now, the biggest institution in Kalamazoo is the university: Western Michigan University. Perhaps that could be the basis for creating and fostering new business in the area.

Change is unavoidable, and nothing can be done to stop it. To survive, you have to be constantly learning new ideas, skills, and creating new businesses, some of which may survive.

Discouraged workers Apparently, my mother is plugged into the leftist-media information pipeline. She was telling me that there are an abnormally large number of people who have given up looking for work, so that they don't show up as being unemployed, keeping the numbers lower than they really are. My mother and father worked for Nelson Rockefeller's presidential campaign in 1968, and were liberal Republicans. My mother is now more sympathetic to the Democrats. Her main difficulty with President Bush is his "smirk". I just read Daniel Drezner's post on Andrew Sullivan's blog, The Daily Dish. The truth is that there is not a larger number of "discouraged workers" now, then is usual. He says that there were more in the early 1990's than now. This just goes to show that the Democrats continue to have a good media conduit for their talking points.

My assessment of Howard Dean hasn't changed

From what I have read over the last few days, Howard Dean seems mainly concerning with making inflamatory statements, to delight his base. His base seems mainly to be composed of Bush-haters. If you don't have an irrational hatred for George W. Bush, you had better find another candidate. Another reason for not being a Dean follower is if you are capable of logic and reason, and are willing to look at facts.

Talk about a "cult of personality", the Dean movement appears to be one. Despite later denials (if any), Howard Dean meant what he said about his people not supporting other candidates.

I believe that Howard Dean means everything he says, even if he or his staff might later deny it.

More demagoguery

I was dismayed to see that Richard Gephardt was saying that "Bush worries me". Perhaps he prefers a Jimmy Carter, or even better, yet, Neville Chamberlain. That would be just what we need (sorry for the sarcasm).

Need I make the point, again, that we were perfectly willing, prior to September 11, 2001, to let other people in the world do whatever they wanted, no matter how bad it was (the Taliban, for example). The only way we became involved was when they attacked us.

Why were we attacked? They flew passenger planes into buildings because of who we are. We are a country that educates women, lets them work, and gives them equal rights. We are a country that makes rock music and dances. We are a country that not only tolerates homosexuality, but gives them special rights.

They started the war in 1993, by trying to blow up the World Trade Center with a bomb in a rented van. After that, the terrorists were not able to attack on U.S. soil until September 11. The Clinton administration seems never to have been really engaged, and treated this as some isolated crime.

Is Richard Gephardt saying that we shouldn't be making strong defense against this enemy? Why not fight in the Middle East and Central Asia, rather than in New York or California?