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\\n \\t* Today we got the official numbers for Q2 Non-Farm Productivity and the consensus was that it would increase for the first time in 3 quarters; the prior 2 quarters we saw a decline in productivity
\\n \\t* So analysts were looking for a .5 increase in the second quarter
\\n \\t* Instead, we got a decline of .5
\\n \\t* More importantly, this is the first 3-quarter consecutive decline in productivity since 1979
\\n \\t* That was the Carter years - stagflation, the misery index, sky-high inflation, sky-high interest rates
\\n \\t* That was the last time we had a 3-quarter drop in productivity and President Obama is bragging about how great the recovery is and Hillary Clinton promises more of this
\\n \\t* If you look at the actual size of the decline over those 3 quarters, it\'s the biggest drop in productivity since 1993
\\n \\t* If you look at the year-over-year decline, this is the biggest decline in productivity in 3 years
\\n \\t* Productivity is extremely important
\\n \\t* Politicians are all talking about higher wages - "We need higher wages!"
\\n \\t* You can\'t get higher wages without higher productivity.
\\n \\t* That is where higher wages come from
\\n \\t* Now, a lot of politicians want to substitute government decrees - they want to mandate higher wages
\\n \\t* Like minimum wage - we\'re going to force employers to pay this minimum wage
\\n \\t* All that does, is raise the bar; it makes it harder for unskilled workers to get a job in the first place
\\n \\t* Now employers are forced to pay a wage that may be well above the productivity that they can deliver
\\n \\t* In that case, they can\'t get the job
\\n \\t* Mimimum Wage doesn\'t just raise wages, it raises the bar
\\n \\t* Another popular way that politicians try to mandate higher compensation is by mandating benefits such as health care, sick leave, paid vacation days, or overtime
\\n \\t* The idea is that you\'re getting something for nothing - I voted for this guy and he delivered
\\n \\t* That\'s not how it works
\\n \\t* When an employer hires somebody, they look at the overall cost of employing that person, relative to the productivity required for the job
\\n \\t* If I am mandated to provide certain benefits, the costs associated with them are also mandated
\\n \\t* If you force the employer to provide benefits at a certain cost, how is he going to pay for it?
\\n \\t* What happens is, the compensation becomes a mix of wages and benefits
\\n \\t* Maybe the worker doesn\'t perfer that, maybe the worker just wants the higher wage
\\n \\t* The worker can\'t have it because the government took that decision away by mandating that a portion of the pay include benefits, whether the worker wants them or not
\\n \\t* The politicians hope the voters fall for the idea that they got something for nothing
\\n \\t* That\'s government for you.\\xa0 They always want you to think you\'re getting something for nothing
\\n \\t* But the something for nothing costs a lot more than you think because the nothing is not nothing
\\n \\t* In this case, wages go down so the benefits can go up
\\n \\t* Everybody would be better off if the government stayed out and let each worker negotiate independently with the employer for a compensation package that is most valuable to that worker
\\n \\t* But productivity is really the holy grail of higher wages
\\n \\t* If we really want higher wages we need to raise productivity and that\'s not happening
\\n \\t* If productivity is going down, wages are going down
\\n \\t* If you want wages to go up, you have to have higher productivity
\\n \\t* How do you get that?\\xa0 Less government, lower taxes, higher interest rates so we get more savings and more investment and less of all this speculation and paper-shuffling that we have in this bubble economy
\\n \\t* I want to talk also on this podcast about Donald Trump\'s economic speech yesterday
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