Much has been made this week about the so-called morning after pill that allows women to effectively abort within hours of sexual intercourse. There is the social argument that goes hand in hand with abortion, but there is another angle to this current story that is not only heartbreaking but has major economic implications. Allowing girls as young as 15 to purchase the pill over-the-counter, no questions asked, on one hand some argue this saves them from becoming pregnant and having to enter parenthood at such a young age.
The more practical point is that this actually gives girls, which may have been originally intimidated from having sex, the green light, and this will eventually result in early parenthood, which overwhelmingly means single parenthood. This becomes an economic dungeon not only for the mother but also for her children growing up in poverty and squalor. It's a mean-spirited cycle where the would-be heroes actually doom girls and young ladies into a life of dependency. Some believe that's the goal anyway, but even if it's a sincere position, in the end it backfires miserably.
The moral compass always plays a role in how far we go economically in this nation. The Atlantic took these numbers and layered in states with higher percentages of unemployed men, and wouldn't you know it, they are also states with highest percentage of unmarried mothers. Broke men having kids but not creating families is far more nefarious than income inequality or other gripes about capitalism.
I think these products will end up creating more pregnancies, not less, as there has to be a limit to how many times they could be used, and many young girls will simply miss their windows of opportunity.
In turn there is nothing that can be done to counteract the economic impact. You can tax the rich, tax corporations, punish the successful or confiscate investment and estate wealth, and it doesn't alter the deep economic (and spiritual) hole in which babies of 15 year old mothers find themselves.
Real Austerity -Key
The European Central Bank President Mario Draghi made clear what I've been screaming about since solutions to the European crisis began - these guys aren't engaged in real austerity. A lot of this gets back to the media, which covers for anti-capitalism policies misreporting cause and effect in Europe and America. The argument is Europe has tried austerity and it's failed. There are numerous fallacies with this notion including the fact they haven't tried austerity.
Moreover, those nations mired in severe economic slumps embraced a mixture of communism and socialism for decades so the notion that a magic bullet will cure what ails in a few months is stupid. But, they haven't taken magic bullets-they mostly only raised taxes, one of the very reasons their economies grinded to a halt in the first place. So, when a report tried to get Draghi to eat crow, the ECB chief replied forcefully:
"Fiscal consolidation is, and I've said this since the very beginning of my tenure, is contractionary in the short term and in the medium term as well. So you want to mitigate this. You want to take action to mitigate the contractionary effects. "How do you do that? Well, we gave three indications. First of all, do fiscal consolidation based on reductions of current expenditures, rather than tax increases. Unfortunately, many of the fiscal consolidations took place under (an) emergency. And under an emergency situation, most governments really chose the simplest route, which is the one of raising taxes. Here we are talking about raising taxes in an area of the world where taxes are already very high, so no wonder this had a contractionary effect."
The bottom line is governments have over-promised, over-taxed, and over-regulated in the name of fairness, social justice and the environment. It's all backfired even though it's a beautiful day around the planet, but my gut says it has nothing to do with government policy-kind of been that way since the beginning of time. Just as seasons changing has been a constant phenomenon with from the beginning of time so, too, are changes in governments and economic philosophies.
This is how people enjoying the fruits of capitalism could be swayed to pick something else, something that's failed miserably in the past, for a variety of reasons. Unlike the changes in my backyard in the past thirty days - the grass is not greener.
Jobs Report
The unemployment rate in April was 7.5 percent, lower than the 7.6 percent reported for March and below the Street's consensus estimate of 7.6 percent. In addition, non-farm payroll employment increased during the month by 165,000, better than economists' average forecast calling for a 155,000 increase. On the other hand the unemployment rate adjusted for the marginally attached and those working part-time for economic reasons ticked higher from 13.8 to 13.9 percent.
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