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Economy

Opioid addiction hinders American manufacturing

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As Americans, we have all heard stories about the opioid epidemic. We have heard stories from both our local news and national news outlets. Zero Hedge’s “Tyler Durden” recently took a look at the effects of opioid addiction on the American manufacturing industry.

“Regina Mitchell, co-owner of Warren Fabricating & Machining in Hubbard, Ohio, told The New York Times that four out of 10 applicants otherwise qualified to be welders, machinists and crane operators will fail a routine drug test

Manufacturers around the country are struggling to find qualified and sober workers. With the inherent dangers of working in a manufacturing shop, there is no room for employees who are impaired. One small mistake can ruin someone’s life or end it completely.

Durden, speaking about President Trump’s promise to bring manufacturing jobs back, stated that the biggest problem may not be a scarcity of jobs, but rather finding “workers who are not under the influence. As Mitchell said she has jobsshe just doesn’t have sober applicants.”

There may be a lot of truth to this. The New Yorker stated, “according to the National Survey of Drug Use and Health, 97.5 million Americans used, or misused, prescription pain pills in 2015.”

To put this in perspective, in 2016 America’s population was just over 323 million. This 97.5 million amounts to over 30% of the U.S. population having used prescription pain pills. When almost one-third of Americans report using a drug with a high potential for abuse, it is no surprise that it became a national problem.

Durden closes by saying that maybe we “should contemplate how to eliminate the pervasive addiction problem which is rapidly becoming a structural hurdle for America’s millions of unemployed.”

Perspectives

 

The opioid crisis is draining America of workers – Patrick Gillespie, CNN Money

http://money.cnn.com/2017/07/07/news/economy/opioid-epidemic-job-market/index.htmlIn addition to opioid abuse, factors such as technology, an aging population and globalization, have also contributed to the declining participation of working age adults in the labor market.

But the ballooning use of opioids — whether as prescription drugs or heroin — is preventing many workers from coming back into the job market, economists argue.

FDA warns on mixing opioid addiction treatments with other meds – Health – CBC News

http://www.cbc.ca/news/health/opioid-treatment-1.4300283?cmp=rssThe U.S. Food and Drug Administration issued new warnings about the dangers of combining medication for opioid addiction with anti-anxiety medicines and other drugs that also slow breathing and brain activity.

The agency said a growing number of people fighting opioid addiction with methadone or buprenorphine also take other prescription drugs that slow action of the central nervous system.

Resources | National Institute on Drug Abuse (NIDA)

https://www.drugabuse.gov/publications/principles-drug-addiction-treatment-research-based-guide-third-edition/resourcesIt supports and conducts research across a broad range of disciplines, including genetics, functional neuroimaging, social neuroscience, prevention, medication and behavioral therapies, and health services. It then disseminates the results of that research to significantly improve prevention and treatment and to inform policy as it relates to drug abuse and addiction. Additional information is available at drugabuse.gov or by calling 301-443-1124.

 

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Final Thoughts

Most of our attention is focused on the effect of opioids on those closest to us – our families, friends, and communities. The next time you hear a story on the news about another local overdose, remember that this happens all around the nation. If you have ideas for solutions, reach out to organizations that can help. If you know someone who is struggling with an addiction, try to guide them towards some resources that can help. When we stand around without taking action or trying to find solutions we are demonstrating our complacency.

Jake Gambino has endless passion for liberty, marketing, and good lulz. After just seven years, he received his business degree from a local Community College. He would call this a sign of being a prodigy. No one else would agree, but Jake doesn't care. He is guided by reason and driven by principles.

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Democrats

Elizabeth Warren introduces dangerous anti-capitalist bill

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Elizabeth Warren introduces dangerous anti-capitalist bill

Elizabeth Warren made a big announcement this week in introducing her new bill called the “Accountable Capitalism Act.” Her bill aims to “eliminate skewed market objectives” and return America to an era in which “American corporations and American workers did well together.” It’s unclear when the utopia like conditions were according to Warren; however her website lists the 1980’s as the time period in which corporations shifted focus to maximizing shareholder returns. In any business college, it is taught that the job of a CEO is to maximize shareholder wealth. Senator Warren wants to shift this mentality with her new bill. In the statement on her website, she asserts that the “shift” has led to booming profits and less reinvestment into the companies themselves. She claims that wages have not increased despite booming corporate profits. Elizabeth Warren then moves to make the argument that the top 10% owns 84% of American stock and only 50% of households own stock. Thus, she claims, that this reinforces a cycle of the rich getting richer. This is a growing socialist sentiment that poor people, and even middle class, are incapable of affording stock. The main bullet points are outlined below. Read the text of the bill here.

Office of United State Corporations (more government!)

The bill creates a new administration within the Department of Commerce. Corporations earning more than $1 billion in revenue are required to obtain a charter from the federal government, per this new created office. The charter obligates these large corporations to consider the interests of all stakeholders. Failure to obtain this permit to exist results in loss of corporation, which in business terms mean, it would no longer be treated as a separate entity. Therefore there would be no liability protection. The Director of this office would be a Presidential appointee and requires Senate confirmation. The term last four years. Warren seeks to create a new and powerful tentacle of the Federal government.

Employee Chosen Board of Director

Employees, not shareholders, will have the ability to choose no less than 40% of a company’s board of director. This bullet point is perhaps the most ridiculous and anti-capitalist. Company boards serve to set goals for the company. The board is usually chosen by investors. In the world of private investment, the board of directors is a bargaining chip for control of the company, as opposed to just percentage of stock. Warren’s bill doesn’t outright say it, but she wants unions to control company boards. Meaning instead of the company’s interest, the board will be powerful weapon of the union. Boards start out as founding members, investors and their appointees, and neutral parties because entrepreneurs and investors craft such interesting deals. Insisting that 40% must be elected by employees renders a board relatively useless for small investment worthy companies or inflates company boards well beyond what they should be for their size (ie small company with GM size board.) This will possibly lead to more empowered officers and weakened boards so that CEOs can perform their fiduciary responsibilities without a labor union threatening their disposal. This could also make companies more risk adverse because undoing mistakes, laying off workers, and other rainy day measures are now more difficult to undo. Ultimately this would empower worse CEOs, ones who aren’t as interested in shareholder wealth. The Securities and Exchange Commission along with the National Labor Relations Board are responsible for enforcing this part of the act, as further indication that this applies to all corporations. Stiff daily fines are to be imposed for failing to comply.

Government control of stock options

Elizabeth Warren claims top executives are compensated mostly with stock options. Her bill restricts these executives ability to sell their shares for five years so that they can focus on long term company success. Basically these executive will be given stock, but will have no real ownership of that stock. This would be the government restricting private property. These types of issues are best left to corporations and shareholders who already impose vesting periods to ensure the same exact goal.

Supermajority for political expenditures (not for unions)

This is a jab at Citizens United because Elizabeth Warren and others are butthurt about the outcome of a critical first amendment case Supreme Court case. It forces company shareholders to vote in order for a corporation to make any political expenditures. It imposes a 75% supermajority threshold. Conspicuously absent from this requirement are labor unions.

Revoking of charter

The corporate charter resembles a “rule of club” for large companies. If they don’t meet the requirements of their charter or have a history of illegal activity, they will have their corporation status removed in time. The question is how political will the enforcement of these charters be? Will there be a separate set of rules for democrats and republicans? If the rest of government is any indication, the answer is clearly foreshadowed.

Closing Thoughts

The socialist movement wants to fundamentally change the purpose of starting a business and running a company. This would most certainly lead to lower caliber CEOs. The bill makes no mention of labor unions yet it’s intentions are clearly to empower them in companies that still allow them and to create politics in organizations that do not. This ideas pressed fourth in this bill are sure to gain traction, just as “Medicare For All” became a socialist rallying point. It brings about questions of how business literate politicians like Senator Warren are? Do they fundamentally misunderstand what a corporation is, or do they not care? The bill aims to reduce a shareholder’s power and return on investment which will only hurt our economic growth. While Elizabeth Warren’s bill isn’t socialist, it is heavily anti-capitalist.

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Economy

Trump expects Harley to lose money on his behalf one way or the other

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Trump expects Harley to lose money on his behalf one way or the other

American motorcycle motorcycle manufacturer Harley Davidson is in a tough spot. Tariffs imposed from Europe against imported motorcycles in response to President Trump’s tariffs on steel and aluminum have forced Harley to consider moving some production to Europe to avoid the tariffs. It’s a fair response, but the President is having none of it.

He has ratcheted up calls to boycott Harley over the potential move.

It’s imperative for President Trump’s reelection that these tariffs work. If they have the expected effect of bringing some jobs back while pushing others away, then they will be painted by the media as a failure. He knows this and therefore must do everything he can to keep jobs in America even if it means painting one of the most beloved American companies as the bad guys.

Trump backs boycott of Harley Davidson in steel tariff dispute

https://www.reuters.com/article/us-harley-davidson-tariffs-trump/trump-backs-boycott-of-harley-davidson-in-steel-tariff-dispute-idUSKBN1KX0J9The Wisconsin-based motorcycle manufacturer announced a plan earlier this year to move production of motorcycles for the European Union from the United States to its overseas facilities to avoid the tariffs imposed by the trading bloc in retaliation for Trump’s duties on steel and aluminum imports.

In response, Trump has criticized Harley Davidson, calling for higher, targeted taxes and threatening to lure foreign producers to the United States to increase competition.

My Take

What does he expect them to do? They will lose tens of millions of dollars if they continue to try to export motorcycles to Europe. They will lose even more if they stop selling motorcycles in Europe. If they try to mitigate the damage by moving some operations to Europe, the President wants them to lose money as a result. This, too, will likely result in cuts to the workforce.

In other words, President Trump will make certain Harley Davidson, an iconic American company, loses money and cuts American jobs no matter which direction they go. If he has an alternative for them that does not hurt Americans, I’m sure they’re all ears.

Most tariffs are bad in the 21st century. It’s impractical to believe we can maintain our supremacy as the world’s consumer if we continue to slap tariffs on some of our best trading partners. He either lacks the understanding of how this all works or has chosen to ignore the facts for the sake of spinning it for votes when his term concludes.

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Economy

Tariffs on Turkey: Bad for the economy but damaging to a dangerous dictator

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Tariffs on Turkey Bad for the economy but damaging to a dangerous dictator

Say what you will about President Trump’s foreign and economic policies. Whether you support them or not, it’s hard to deny that they’ve made things much more interesting.

The latest move by the President to impose stiff tariffs on Turkish steel and aluminum may seem in line with how he’s been treating the national and world economies recently, but more is at stake with this move than previous ones.

There are two factors at play that make this move different from previous tariffs. First, it is not purely economic but is a response to Turkey continuing to hold pastor Andrew Brunson for allegedly supporting the coup attempt of 2016. Second, the tariffs come at a time when Turkey’s currency, the lira, is in free fall.

It was already starting to show signs of failure when leaders from both countries pushed it even further down. Turkish President Recep Tayyip Erdogan added more challenges for the lira when he asked his people to convert their foreign currency and gold, a sign of trouble that will likely have the opposite effect.

Erdogan calls on Turks to convert hard currency, gold into lira

https://www.reuters.com/article/turkey-economy-currency-erdogan/erdogan-calls-on-turks-to-convert-hard-currency-gold-into-lira-idUSA4N1TM024Turkish President Tayyip Erdogan on Friday called on citizens to convert their hard currency and gold into lira, after the local currency tumbled to a record low this week, reflecting investor concern about a widening diplomatic rift with the United States.

Erdogan, in a speech in Ankara, also said Turkey was diverting to the Chinese market to overcome what he said were “subjective evaluations” from ratings agencies. Erdogan has repeatedly railed against credit raters, saying their downgrades of Turkey’s sovereign debt to “junk” status were politically motivated.

Seizing on the free fall, President Trump made matters worse for for the lira with the sanctions:

Trump authorizes doubling of metals tariffs on Turkey

https://www.cnbc.com/2018/08/10/trump.html“I have just authorized a doubling of Tariffs on Steel and Aluminum with respect to Turkey as their currency, the Turkish Lira, slides rapidly downward against our very strong Dollar! Aluminum will now be 20% and Steel 50%. Our relations with Turkey are not good at this time!” Trump wrote.

Losses in the the Turkish lira deepened on Trump’s tweet, falling as much as 20 percent vs. the U.S. dollar in Friday trading.

Erdogan is now calling this an economic war with the United States and claims he will not back down. Meanwhile, the Euro and other currencies are also feeling the heat:

Euro tumbles as investors fear bank exposures to Turkey

https://www.reuters.com/article/uk-global-forex/euro-whacked-on-turkey-turmoil-as-investors-scramble-for-safety-idUSKBN1KV07M“You’ve had a fairly sharp move lower in the euro and it’s broken through key technical levels as well,” said Richard Franulovich, head of FX strategy at Westpac Banking Corp in New York.

The euro dropped below technical support at $1.15 to $1.1421, down 0.91 percent on the day and the lowest since July 2017. Against the yen, the euro slid 1 percent to 126.79 yen, a two-month low.

Now, the criticism and praise of President Trump’s moves will be debated for days, maybe weeks.

My Take

As I’ve stated on many occasions, I’m not a fan of tariffs. They are misunderstood by most, particularly the President, and no longer yield the results they did in previous centuries. From an economic perspective, I oppose this move.

The bigger picture is how this is being used as a pressure tactic against Turkey. Currently, I like it a lot. That opinion could change based on how things go, but moves like these that apply pressure against a dangerous dictator of the false ally that Turkey has become are welcome. It isn’t just about securing Brunson’s release, though that’s extremely important. Turkey is a rising power on every spectrum that is increasingly turning to Russia and China for help instead of their “friends” in NATO.

The strategic importance of Turkey as a hub that connects Europe, west Asia, and the Middle East cannot be understated. In an ideal situation, Turkey would still be a good ally as they once were. Erdogan has taken advantage of two past U.S. Presidents and seemed poised last year to start taking advantage of President Trump. That doesn’t seem to be happening anymore.

Is this the right way to handle Erdogan? Probably not. Whether it is or not will be revealed in coming weeks. One thing is certain: we’re seeing things being done from the White House that we’ve never seen before and may never see again. It’s troubling, but at least it’s entertaining.

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