More redistribution, less new production - this the meaning of the Obama's speech on economy, during State of the Union address. More taxes, more spending on government programs and an increase in the minimum salary - it is just like we were hearing a trade union leader from Europe.

The rich must pay more and share the pain of lowering the deficit. OK. But in fact even now the so called "rich" are paying most of the taxes in this country. And something else is more interesting - these "rich" are starting to flee from USA cancelling even the citizenship. Can you imagine this - one of the most wanted statutes in the world - the US citizenship, is becoming more and more undesired. In fact USA does not lack green card candidates. But most of them are not rich. There are much common people that want to come to USA and integrate in the ready and working economy with relatively high salaries. But there is also much people that are leaving USA, and these are exactly these people that are creating jobs and businesses. I.e. USA is gaining a proletariat and losing entrepreneurs. An "Atlas Shrugged" scenario.

So taxing more is a very suspicious idea in times of losing the "rich". When you lose something, the last thing you should do is to tax it :)

The presence of "rich" is not granted. It is a socialist assumption that the Rich will always exist, they will somehow make much money and it is a main mission of Government to extract this money from them. It is simply not so, and there is a serious risk of becoming a rich-less country with all consequences. There are such rich-less countries and they are not very prosperous. So you can't just tax the rich in a populist inspiration. You must first ensure the "rich" will stay here.

The idea of increasing the minimum wage sounds like a joke is a country that is losing its industrial base in favor of emerging markets like China, India, Brazil, etc. Generally if the neo-protectionism concept is accepted and implemented, and if local production is protected from import competition, then the salaries will go up by itself. This is the way USA has become the economic leader of the world. But instead of neo-protectionism we see another pro-globalist idea - of continuing the liberalization of trade with EU. It is funny to hear comments from both sides saying this will stimulate their export and develop economy. But this is mathematically impossible. Of course it is not the EU the main trade problem of USA. It is Asia. But is a paradox to talk about increasing minimum wage and further liberating the international trade.

But even without the trade problem, every administrative increase in wages leads to unemployment. Today USA feels one of the highest unemployment rates in all history. So it is wiser to keep jobs at lower salary than to lose jobs with higher salary. Even from socialist point of view it is better and more fair to have more workers with lower salaries than to have less with higher...

The assumption that jobs-number is granted and government must only press the employers to make salaries higher is deeply wrongful. The jobs are not granted. You must fight for them in an increasing competition.

And finally - the idea of spending more money for an administrative support of manufacturing, via public-private and educational partnerships (so called " manufacturing innovation institutes"), looks just like a waste of money. The last thing the business needs when in trouble is the government to come to help. The business just needs less obstructions from the government, and not a direct help that almost granted will create just a corruption.

Obviously US governing administration is much far away from a qualitative understanding of the situation. As the general economy situation develops very fast and needs serious and adequate measures, this means the incoming days for the country will not be good ones. It is the economy, stupid. It is really the economy...And the socialism is never good for the economy...

Dobri
Feb 13th