Preventing Future IRS Scandals is as Easy as Changing the Tax Code

Posted by PITHOCRATES - May 30th, 2013

Politics 101

The Tea Party was the Driving Force in returning the House of Representatives to the Republicans

The IRS is very powerful.  It can seize your property.  It can throw you in jail.  It can ruin your life.  There is no other arm of the government honest people fear more.  Because it is so powerful.  America did away with debtor’s prison.  Because it was inhuman to jail a person over a debt.  Unless you owe it to the federal government.  Then all of that compassion goes out of the window.

The recent scandal of the IRS targeting conservative groups is especially chilling.  For the Tea Party was the driving force in returning the House of Representatives to the Republicans.  Infuriating the Democrats.  As well as the Obama administration.  When President Obama ran for reelection in 2012 he had little to run on.  The economy was horrible.  No one was talking about Obamacare because the majority of Americans don’t want it.  It was so bad that the Democrat president had to highlight his single national security achievement—killing Osama bin Laden—while ignoring his domestic policy achievement.  Obamacare.

Then Benghazi threatened to ruin everything.  An attack on an American mission that killed four Americans.  Including a serving ambassador.  Making matters worse was that it was an al Qaeda affiliated terrorist group that was responsible for it.  This did not play well with the campaign message.  ‘Osama bin Laden is dead.  And General Motors is alive.’  President Obama had already won the War on Terror.  So he couldn’t have a terrorist attack during his reelection campaign.  So they hit the Sunday morning talk shows and said there was an anti-Muslim video on YouTube that created a spontaneous uprising.  Where average Libyans on the street then pulled out rocket propelled grenades and mortar launchers from their back pockets.  And launched a military assault on the American mission.

The IRS silenced the Tea Party during the 2012 Election by Harassing them and their Donors

You don’t hear much about the YouTube video anymore.  During the 2012 reelection campaign, though, both the president and the secretary of state pushed it hot and heavy.  Even apologized for it in a video to play in Pakistan.  And arresting the obscure filmmaker on some other charge.  And it worked.  Benghazi faded into the background.  Despite the Obama administration denying the American ambassador additional security.  And issuing a stand-down order for forces that could have gone to help the Americans under attack.  This order coming about 7 hours BEFORE the last two Americans died.  To this day we don’t know who gave that stand-down order.  And we don’t know where the president was when all of this was unfolding in Libya.

But it worked.  The misinformation spun from the White House won the president a second term.  And people started talking about what the Republicans had to do to start appealing to women and Hispanics.  For the early postmortem said that was why the Republicans lost.  They turned off women and Hispanics.  But something was wrong with that conclusion.  Because the conservative base didn’t turn out on Election Day.  That’s why the Republicans lost.  To explain that some said the problem was that Mitt Romney wasn’t a true conservative.  And he turned off true conservatives.  But that doesn’t make sense, either.  Because Romney may not have been the most conservative Republican to run for president but next to President Obama the man was practically Ronald Reagan.  There had to be some other reason why conservatives didn’t turn out like they did in the 2010 midterm elections that returned the House to the Republicans.

That was the million dollar question.  What happened to the Tea Party?  Who were so instrumental in turning out conservatives to vote in the 2010 midterm elections.  It’s as if they sat out the 2012 election.  For we didn’t hear their voice like we heard it in 2010.  And now we have a plausible explanation for that.  The IRS.  They delayed and made it so difficult to get their 501(c)(4) tax-exempt status that some just gave up trying.  Finding themselves and their donors getting IRS audits both for their businesses and their personal returns.  As well as other arms of the federal government auditing them from the Department of Labor to the EPA.

Everyone wins with a more Simplified Tax Code except those in Power who use it to Attack their Political Enemies

Did the White House coordinate this?  We don’t know.  Yet.  The IRS commissioner visited the White House 151 times.  While his predecessor visited the Bush White House about 1 time.  So that looks suspicious.  And silencing the Tea Party did help the president win reelection.  For silencing the Tea Party sure didn’t help Mitt Romney.  So it looks probable that the Obama administration used the nonpartisan IRS to attack their political enemies.  As they were determined not to suffer another Tea Party uprising like that which lost them the House of Representatives in 2010.  Right now the circumstantial evidence is pretty damning.

This is not what the Founding Fathers had in mind.  That was the point of limited government.  So it didn’t have this kind of power over people it perceived as political enemies.  And the source of this power is the complex and convoluted tax code.  That serves those in power better than the people they serve.  Allowing them to reward friends and punish their enemies.  One would almost have to believe the reason why the current administration ran the deficit up to record highs is to further empower the IRS.  By creating the need for ever more tax revenue.  And the need for more strenuous collection efforts.  Not to mention using the tax code to facilitate a permanent state of class warfare.  For the government needs this complex and convoluted tax code to make sure the rich pay their fair share.  As well as using it to reward their friends.  And punish their enemies.

So perhaps it’s time to revamp the tax code.  Some are talking about it.  As they always do.  But there is so much resistance because of the power the tax code gives those in power.  And those in power quickly shoot down any talk about a flat tax or a national sales tax as being unfair.  Regressive.  Hitting low-income earners harder than the rich.  But perhaps this is exactly what we need.  So everyone feels the pinch of the taxman.  So people won’t be so quick to give the taxman more powers.  Because a lot of low-income people don’t stay low-income.  And one of the quickest ways of raising low-income earners out of poverty is with a better and stronger economy.  And there is one thing that does that better than anything else in the world.  Low tax rates.  So let’s take a look at different tax plans for a married couple filing jointly.

Federal Taxes Current Brackets Flat Tax National Sales Tax

(For the national sales tax we assumed everything above a certain savings rate is spent somewhere in the economy.  Those who earn more can save more.  In our example the saving rates are 1%, 8%, 15%, 20%, 25% and 30 %.)

Those earning only $15,000 will pay more under a flat tax or a national sales tax.  But the IRS becomes far less intrusive and far less powerful.  Because it will be so much simpler.  Giving honest people less to fear about.  And giving those in power less power to attack their political enemies.  Making it harder for them to cheat during elections.

Also, lower tax rates will bring money sheltered outside of the country back home. Which those rich people will invest here.  To get even richer.  And probably end up paying more taxes than they were before.  Because they won’t have any need to shelter it.  While all the new jobs they create will increase tax revenue further.  Because there will be more people working and paying taxes.  So everyone will win with a more simplified tax code.  Except, of course, those in power who use the tax code to attack their political enemies.

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Write in Hillary Clinton if you want more Economic Destruction

Posted by PITHOCRATES - December 24th, 2011

Week in Review

There’s talk about Hillary and Condi on the 2012 ticket.  On opposing parties, of course.  Both have denied any interest to be on the 2012 ticket.  Or any future elected office for that matter.  But no matter.  There’s still hope on their respective sides.  Which isn’t all that interesting.  But what is interesting is what some thing a Hillary Clinton presidency would deliver (see Are Condi and Hillary about to join the 2012 race? Rivals tipped to run for VP (and the top job in 2016) by Meghan Keneally posted 12/19/2011 on the Mail Online).

Politico reports that a group called Run Hillary 2012 arranged automated phone messages to call voters in New York, Florida and North Carolina.

‘America would be better off today if Hillary Clinton was our president. The Wall Street robber barons would be jailed, young people could afford college and find jobs and six million home owners wouldn’t face foreclosure. We need to change our course. Please sign our petition to draft Hillary Clinton for president,’ the message said.

It was her husband, Bill Clinton, who carries a far greater responsibility for the Great Recession than Wall Street robber barons.  His Policy Statement on Discrimination in Lending put pressure on mortgage lenders to qualify the unqualified.  The rest is history.  And the Great Recession.  But that’s old news.

Would Hillary cap university professors’ pay and benefits?  To bring down the high cost of college tuition?  Somehow I don’t think that’s what the ‘draft Hillary’ people mean.  I think they mean to have other people pay for college and mortgages.  Through higher taxes.  As for those jobs?  That’s a head scratcher.  Because you don’t create jobs in the private sector by raising taxes.  So the jobs they’re talking about will probably be more government jobs.  Paid for by more taxes.  Which will, of course, stifle economic growth further.  And hinder job creation in the private sector.

So if you want more economic destruction, write in Hillary Clinton.  I guess.

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If Taxing the Rich won’t Reduce the Deficit then it’s not Tax Reform, it’s Class Warfare

Posted by PITHOCRATES - September 25th, 2011

The Rich are Paying Far More in Taxes than People like Warren Buffet’s Secretary

It’s tax reform.  It’s not tax reform.  They may not have their story straight.  But this much we know.  Obama’s Warren Buffett tax will do nothing for deficit reduction.  But it sure will fan the flames of class warfare (see WH self-contradicts, admits tax hikes arent reform by Joel Gehrke posted 9/25/2011 on The Washington Examiner).

President Obama and White House Senior Adviser David Plouffe have adopted contradictory rhetoric regarding  President Obama’s proposed tax increases, which the president has touted as “tax reform…”

Plouffe responded that “the president would like to do tax reform . . . But absent tax reform,  the president believes the right way to get our fiscal house in order is to ask the wealthy to pay their fair share.”

So according to Plouffe, raising taxes isn’t tax reform.  It’s to punish the rich.  That’s what making them ‘pay their fair share’ means.  Even though, right now, they’re paying more than their fair share.  Far more.  (More on that later.)  Obama, though, sees it differently.  And the way he sees it punishing the rich is reforming the tax code.

When two people can’t get their story street it typically means one thing.  They’re lying.  And can’t keep their stories straight.

Now, the Republicans say they’re in favor of tax reform.  Let’s go.  Let’s reform this tax code.  And let’s reform it based on a very simple principle:  Warren Buffett’s secretary should not be paying a higher tax rate than Warren Buffett. It’s a simple principle.

Why not?  Warren Buffett is still paying more tax dollars.  The rich are paying far more in taxes than people like Warren Buffet’s secretary.  So why keep saying this?  Can be for only one reason.  To punish the rich.  And to show the people that you want to vote for you that you’re punishing the rich.

Wallace pointed out to Plouffe that “the top 10 percent pay 70 percent of federal income taxes. Meanwhile, 46 percent of households pay no federal income tax at all.” Plouffe countered that “you can manipulate the statistics in any way you want,” and also said that “they are making a ton of money” while “we have inequities,” presumably in the tax code. And then Plouffe offered what would qualify as an argument for tax reform, except that Plouffe is admittedly not pushing for tax reform:

The American people are screaming out saying it’s unfair that the wealthiest, the largest corporations who can afford the best attorneys, the best accountants, take advantage of these special tax treatments that the lobbyist have, along with lawmakers, have cooked in the books here. So, the question is: how are we going to move forward as a country?

Wallace interjected, “Because 70% isn’t enough?”

For tax revenue?  Yes.  That 70% should be enough.  Perhaps too much.  But for class warfare?  No.  Because there’s a lot more money they can take from the rich.  And the more they take the more votes they gain from that 46% that doesn’t pay any federal income taxes.

It’s not that the President is Losing White Independents.  It’s just that Blacks Refuse to Give Up on Obama.

So why the class warfare?  Because it’s election time.  And when you don’t have a good record you don’t win reelections running on that record.  So you don’t.  Instead, you go class warfare.  Pit one group against the other.  Find narrow slices of the population that you can turn against your political opposition.  And, if you get enough of these slivers, you may just have a chance at reelection.  Despite your horrible record while in office (see Obama 2012 campaign’s Operation Vote focuses on ethnic minorities, core liberals by Peter Wallsten posted 9/25/2011 on The Washington Post).

President Obama’s campaign is developing an aggressive new program to expand support from ethnic minority groups and other traditional Democratic voters as his team studies an increasingly narrow path to victory in next year’s reelection effort.

The program, called “Operation Vote,” underscores how the tide has turned for Obama, whose 2008 brand was built on calls to unite “red and blue America.” Then, he presented himself as a politician who could transcend traditional partisan divisions, and many white centrists were drawn to the coalition that helped elect the country’s first black president.

The problem is that Obama is about as partisan as they come.  That’s why the tide has turned against him.  A lot of people hated George W. Bush.  And thought Obama was going to bring in the love.  Make the country as a whole link arms and sing Kumbaya.  But that hasn’t happened.

He spent more than George W. Bush.  Giving us record deficits.  And he keeps blaming his spending on the rich not paying their fair share of taxes.  The people see what’s going on, though.  They’re not blind.  It’s his spending.  Not a lack of taxes.  And all that spending hasn’t done a thing to help the economy.  The economy was, after all, far better under George W. Bush.  So they’re seeing the same old tax and spend liberal.  Not the candidate that was going to get us all to link arms and sing Kumbaya.

But not everyone is turning against this president.  The blacks haven’t turn on him.  They would have but for one reason.  He’s black.  The black community is furious with him.  But they still can’t abandon him.  As the chair of the Congressional Black Caucus, Maxine Waters, said in Detroit.  “If we go after the president too hard, you’re going after us. When you tell us it’s all right and you unleash us and you’re ready to have this conversation, we’re ready to have the conversation,” Waters said.

Today, the political realities of a sputtering economy, a more polarized Washington and fast-sinking presidential job approval ratings, particularly among white independents, are forcing the Obama campaign to adjust its tactics.

Operation Vote will function as a large, centralized department in the Chicago campaign office for reaching ethnic, religious and other voter groups. It will coordinate recruitment of an ethnic volunteer base and push out targeted messages online and through the media to groups such as blacks, Hispanics, Jews, women, seniors, young people, gays and Asian Americans.

It’s not that the president is losing white independents.  It’s just that blacks refuse to give up on Obama and join the exodus from him.

When you’ve been a poor president.  When your policies have made things worse.  There’s only one thing you can do.  You do everything to divide the American people.  Drive wedges.  Find reasons.  Why blacks should hate Republicans.  Why Hispanics should hate Republicans.  Why women should hate Republicans.  Why seniors should hate Republicans.  Why young people should hate Republicans.  Why gays should hate Republicans.  Why Asians should hate Republicans.

When you have failed you become what you said you weren’t.  Or stop pretending to be something you never were.  And you incite hatred.  Fan the fires of class warfare.  You pursue policies that further divide the American people.  Even if those policies hinder the economic recovery.

The campaign officials say they have not given up on wooing independents, and the 2012 presidential election will certainly involve a fierce fight for the college-educated whites and suburbanites who were more likely to back Obama in 2008 than the working-class whites who have always been more skeptical.

By ‘college-educated’ they mean ‘favorably-educated’.  Universities lean left.  Continuing the work of the public school teachers.  Both of who depend on government funding.  And growing tax rates.  So they need government to grow.  And will always vote for the party that will grow government.  And will ‘teach’ their young students to do the same.

Working-class people, on the other hand, have spent more time in the real world.  They’ve had a chance to get deprogrammed from their public school indoctrination.  That’s why it’s harder to fool the working-class.

When you’ve ‘Jimmy Cartered’ the Economy you can’t Run on your Record

It’s election season.  Little more than a year to go before the 2012 election.  So candidate Obama is back.  Running like he wasn’t the president for the last 3 years or so.  Somehow trying to explain to his most loyal base that he’s made things better than his predecessor.  George W. Bush.

But he hasn’t.  However you measure it.  GDP.  Unemployment rate.  Consumer confidence.  Whatever.  And the kicker is that the cause for the Subprime Mortgage Crisis that started under Bush wasn’t caused by Bush.  Putting people into houses they couldn’t afford was a liberal Democrat policy.  So housing wasn’t exclusive to only those who could afford a house.  Policies the Obama administration favors.  And policies that they want to implement again.  Despite having just suffered the Subprime Mortgage Crisis because of those policies.  Why?  Because it gets you more votes at election time.

So when you’ve ‘Jimmy Cartered‘ the economy you can’t run on your record.  The best you can hope for is to paint your political opponent as being everything the slivers of your most loyal base hate.  Attack the rich.  And promise more free stuff to that 46% that doesn’t pay any federal income taxes.

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Keynesian Tax and Spend Monetary Policy will Never Overcome Ruinous Fiscal and Regulatory Policy

Posted by PITHOCRATES - September 23rd, 2011

No Theory is Sacrosanct in the Scientific Method, Even if it’s Albert Einstein’s Theory

Albert Einstein‘s Theory of Relativity has held in the scientific community for some 106 years.  It hasn’t been accepted as a matter of faith, though.  It has been tested thousands of times in attempts to debunk it.  Right up to today.  Where it now appears we may be close to debunking it (see “Faster than light” particles may be physics revolution by Robert Evans posted 9/23/2011 on Reuters).

“It is premature to comment on this,” Professor Stephen Hawking, the world’s most well-known physicist, told Reuters. “Further experiments and clarifications are needed…”

“When an experiment finds an apparently unbelievable result and can find no artifact of the measurement to account for it, it is normal to invite broader scrutiny….it is good scientific practice,” he said…

Einstein’s theory has been tested thousands of times over the past 106 years and only recently have there been just slight hints that the behavior of some elementary particles of matter might not fit into it…

Ereditato, a physicist who also works at the Einstein Institute in the University of Berne, said the potential impact on science “is too large to draw any immediate conclusions or attempt physics interpretations…”

“Only when the dust finally settles should we dare draw any firm conclusions,” said Professor Forshaw. “It is in the nature of science that for every new and important discovery there will be hundreds of false alarms.”

This is the scientific method.  No theory is sacrosanct.  Even one by the great Albert Einstein.  Even if it’s been around for 106 years.

Quite the contrast to the theory of global warming.  Accepted by government scientists as indisputable fact.  Even though it has never been given serious scientific scrutiny like that given to one of the world’s greatest scientist.  Albert Einstein.

Considering the Economics, Only a Fool would Bet Against the Chinese in the area of Solar Panels

But Al Gore is smarter than Albert Einstein.  For he says that global warming is a scientific fact.  Even though we still call Einstein’s Theory of Relativity a theory after 106 years.  But not the theory of global warming.  No.  That theory is not a theory.  It’s fact.  So certain a fact that world governments have been killing economic activity everywhere to stop the ravishes of global warming.  Even investing in companies that promise to give us renewable green energy of the future.  Like that one that just ripped off the American taxpayer to the tune of half a billion dollars (see Solyndra haunts other government-backed solar firms by Steve Hargreaves posted 9/23/2011 on CNN Money).

At least three other government-backed solar firms face the same challenging market conditions that brought down Solyndra, the now bankrupt solar panel maker that could cost taxpayers over $500 million…

The company’s downfall is generally thought to have been caused by the declining price of silicon.

Solyndra didn’t use silicon. But many of its competitors did — traditional solar firms like Sunpower (SPWRA), Trina Solar (TSL), Yingli (YGE) and Jinkosolar (JKS). Solyndra was banking that high silicon prices would give it a competitive advantage…

Are they also doomed? Experts say that if they can further develop their technology they may have a fighting chance but market conditions in the near-term are working against them…

An Energy Department spokesman said the agency was not worried about these companies failing, saying it conducts rigorous reviews of all the ventures it funds.

Of course.  There’s nothing to worry about these other companies failing.  Because the Energy Department conducts a rigorous review of all the ventures they fund.  Except Solyndra apparently.  Or they did review them rigorously.  And the Energy Department just sucks at its job.

China’s investment in silicon as well as its huge investments in solar panel makers, combined with weaker demand worldwide as subsidies expire in Europe, caused the price of traditional solar panels to plummet.

In the last year alone they fell some 40%.

All across the globe, solar panel makers, especially ones that were developing more advanced technology, are finding it hard to compete with the Chinese as the price of solar panels drops.

I guess the Energy Department just sucks at its job.  I mean, imagine you’re an investor for a moment.  And you want to invest in a store that sells home improvement stuff.  Do you invest in the Home Depot?  Or the mom and pop hardware store?  The Home Depot is much bigger.  Has a greater variety of stuff.  And sells that stuff for 40% less than Mom and Pop.  Which store would you invest in?  Of course, you would invest in the Home Depot.  But the Energy Department, the geniuses that they are, would invest in Mom and Pop.  And then act shocked when they go belly up in the face of that fierce competition.

Considering the economics, only a fool would bet against the Chinese in the area of solar panels.  Then again, no one in Washington seems to understand economics in the least.

Cheaper panels mean more people will switch to the clean technology. Work has been booming for solar installers, project developers, and financiers. Just this week the industry said solar power capacity in the United States jumped 69% in the second quarter compared to the same time last year.

The Energy Department, as part of its plan to fund R&D and commercialization of renewable and clean energy technology, has backed or is considering backing loans to 42 firms across the sector totaling $39 billion in funding.

The manufacturers are taking it on the chin.  But the installers are installing these cheap Chinese solar panels like there’s no tomorrow.  You’d think the Energy Department would be happy that these silly things are being installed and get out of the investment business.  But no.  They’re going to piss away another $39 billion to fund firms that won’t be able to compete against the Chinese either.

By a show of hands who wants the Republican president to abolish the Energy Department in 2013?

One Gets the Feeling that Government Likes Wasteful Spending as it Adds to the Deficit

We really need to cut the government off.  They just aren’t responsible with our money.  If it ain’t throwing money away on solar panels, they’re throwing it away on dead people (see Gov’t paid $600 million in benefits to dead people by Sam Hananel posted 9/23/2011 on the Associated Press).

The federal government has doled out more than $600 million in benefit payments to dead people over the past five years, a watchdog report says.

Such payments are meant for retired or disabled federal workers…

In one case, the son of a beneficiary continued receiving payments for 37 years after his father’s death in 1971. The payments – totaling more than $515,000 – were only discovered when the son died in 2008.

If you owe a dollar in taxes you can bet the IRS will find you wherever you are.  But when it comes to spending our money it’s a different story.  As they are probably afraid of any close scrutiny that might show other mishandled funds.

Last year, government investigators found that more than 89,000 stimulus payments of $250 each from the massive economic recovery package went to people who were either dead or in prison.

There’s another $22 million pissed away by Uncle Sam.  $22 million here.  $600 million there.  And $16 muffins.  Where does it stop?  They are so ruthless when it comes to taxing us.  But once they get our money they apparently don’t give a damn about what happens to it then.

One gets the feeling that they like this waste.  As it adds to the deficit.  And the greater the deficit is the greater the need for new revenue.  Higher tax rates.  And getting the rich to pay their fair share.  I say let’s raise the tax rates on those doing such a poor job handling our money.  If they have such a cavalier attitude about taxpayers’ money, let them belly up to the bar and pay for their waste with their own damn money.

If You Want Real Stimulus Repeal Dodd-Frank.  That Alone will Create 30,000 Jobs at One Bank.

So the government is horrible at picking investment winners.  And is about as responsible as a teenager with money.  But Obama is looking to spend another $450 billion in stimulus.  To create jobs.  Unlike that $800 billion stimulus that failed to create jobs.  So they don’t know how to create jobs either.  Worse, they only thing they seem to be good at is destroying jobs (see The Dodd-Frank Layoffs posted 9/13/2011 on The Wall Street Journal).

Bank of America appears to have provided part of the answer by announcing yesterday that the nation’s largest bank will cut 30,000 jobs between now and 2014…

The Fed dutifully ordered banks to cut their fees almost in half. Bank of America disclosed in its most recent quarterly report that this change will reduce the bank’s debit-card revenues by $475 million in just the fourth quarter of this year. The new rules take effect on October 1, so BofA seems to have sensible timing as it begins to shed workers from a consumer business that has become suddenly less profitable by federal edict…

But given the real-world results for bank employees, politicians should not be allowed to pretend that there are no consequences when they deliberately reduce the profitability of employers. Mr. Obama proposed last week to spend some $450 billion more in outlays or tax credits to create more jobs, but it would have cost a lot less to save these 30,000.

If they want real stimulus they should repeal Dodd-Frank.  That alone will create 30,000 jobs.  At one bank.  If this happens at other banks you’re looking at hundreds of thousands of jobs.  Now that’s stimulus.

If they really want to create jobs they ought to go big.  Abolish the EPA.  And the Energy Department.  For a start.  With that kind of uncertainty removed just think of the explosion in economic activity.  Creating jobs galore.  Hundreds of thousands.  Perhaps millions.  The oil and coal industries alone would probable wrest this country from recession.

The Economy is not Just Monetary Policy.  It’s Fiscal and Regulatory Policy, too.

So it’s clear the government doesn’t know the first thing about stimulating economic activity.  They just can’t figure that out.  But what they can do is destroy jobs.  They’re real good at that.  And the reason for all of this is that they’re Keynesians.  They worship at the altar of Keynesian Economics.  Despite its horrendous track record.  Almost three years and counting for the current administration.  But they refuse to lose faith.  Instead, when they fail, they just choose to fail again.  By pursuing more of the same failed policies (see Markets tumble after Fed says it will buy longer-term bonds to try to boost economy by Neil Irwin posted 9/23/2011 on The Washington Post).

The announcement that the Fed would buy $400 billion in long-term Treasury bonds immediately achieved its intended effect, pushing rates on these securities and other investments to their lowest level in decades.

But the stock market rendered a sharply negative verdict. The Standard & Poor’s 500-stock index tumbled almost 3 percent on the Fed’s discouraging statement that its leaders see “significant downside risks” for the economy. Asian markets closed down between 2 and 4.85 percent, and key European indexes were trading more than 4 percent lower at midday.

No one wants to borrow money.  Businesses.  Or consumers.  Because there is just too much economic uncertainty with the Obama administration.  Everybody is hunkering down.  Deleveraging.  And hoarding cash.  Until better economic times.  Times with less uncertainty.  Probably starting sometime after 2012.  When there’ll be a new Republican president.  And hopefully a Republican House and Senate.  To undo those things causing all of this uncertainty.  Dodd-Frank.  Obamacare.  Etc.

The Fed action, which capped a two-day meeting, is focused squarely on lowering mortgage rates in an effort to strengthen the ailing housing market and lighten the load of the tremendous debt weighing on consumers. The move could also make it cheaper for businesses to borrow money for investments and push more dollars into the stock market.

The housing bubble create a surplus of houses that’ll be around for a long, long time.  The country is dotted with empty homes that banks have foreclosed on.  And the banks own a whole bunch more that will be hitting the market soon.  It’s a buyer’s market out there.  But it sure sucks to be a seller.  Especially if your mortgage is under water.  Homes have lost so much value after that bubble burst that anyone selling now will lose tens of thousands of dollars.  So they’re not selling.  Or buying.  No matter how cheap mortgage rates are.

The bond-buying program that ended in the summer, though massive in scale, failed to keep economic growth from sputtering. The disappointing result showed the limits of what the Fed can accomplish at a time when consumers are struggling with enormous debts and the U.S. banking system remains traumatized. The new initiative could face the same constraints.

Quantitative easing 2 failed.  And there’s no reason to think that quantitative easing 3 won’t fail as well.  So why do it?  Because they’re Keynesians.  And their scripture says that’s what you do.  Weak demand?  Why you fix that with cheap money.  But they don’t understand that the economy is not just monetary policy.  It’s fiscal policy, too.  And their fiscal policy is killing the economy.  And what their fiscal policy doesn’t kill their regulatory policy will.

The Only Way to Fix this Economy is to Get Rid of Keynesian Policies

Tax and spend Keynesian policies are strangling the economy.  Stimulus spending doesn’t work.  If it did the economy would be reaching record heights due to that record spending.  But it’s not.  The tax and spend Keynesians explanation for this record of dismal failure?  They didn’t spend enough.

The economic malaise has a lot more to do with uncertainty than weak demand.  It’s that out of control spending.  You eventually have to pay for it.  And every business owner knows that ultimately you pay for spending with taxes.  And they see the Obama administration is hell-bent on raising taxes on anyone earning more than $200,000 a year.  Which will be a tax hike on most small business as their earnings pass through to their personal tax return.

And while they’re waiting for punitive taxes to come down the pike they’re being hammered by regulatory compliance costs.  The big one scaring the bejesus out of them is Obamacare.  And Dodd-Frank is not just for Wall Street bankers.  Not to mention the EPA’s enormous impact on business operations.  They’re being bitch-slapped left and right by these regulations.  And they are terrified by what’s next from this administration.

You see, Big Government Keynesian politicians don’t understand economics.  Or business.  They see business as cash piñatas.  That they can whack at their pleasure.  They have no idea how they make money.  But they assume that they will go on making money no matter what they do in Washington.  And being the Keynesians they are, they believe that businesses make money for government first.  And then, after government takes what they want, what they deem fair, then and only then can they use whatever they earn for their own selfish wants and pleasures.  The selfish rich bastards they are.  Those contemptible business owners.

This is how Big Government Keynesians think.  And this is why they fail miserably at creating jobs.  And economic activity.  The only way to fix this economy, then, is to get rid of Keynesian policies.  And the only way to do that is to get rid of the Keynesians.  At the voting booth.  By voting conservative.  And in our two-party system, that means voting Republican.

www.PITHOCRATES.com

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Obama uses a Joint Session of Congress for a 2012 Campaign Speech on Jobs

Posted by PITHOCRATES - September 9th, 2011

The Obama Jobs Speech was the Same Old Same Old with the Angry turned up to Eleven

The big speech was last night.  President Obama‘s Jobs speech.  After waiting with bated breath.  For him to come back from vacation.  On Martha’s Vineyard.  Where no one wants for a job.  Or anything.

What you thought of it depends on your party affiliation.  If you’re a Big Government liberal Democrat that wants to stick it to the rich, I’m sure you liked it.  If you were looking for substance, I’m sure you were disappointed.  It was just the same old same old.  With the angry turned up to eleven.

Here are some selections from the transcript with commentary (see Obama jobs speech transcript: Full text (as delivered) posted 9/8/2011 on Politico).

These men and women grew up with faith in an America where hard work and responsibility paid off. They believed in a country where everyone gets a fair shake and does their fair share — where if you stepped up, did your job, and were loyal to your company, that loyalty would be rewarded with a decent salary and good benefits; maybe a raise once in a while. If you did the right thing, you could make it. Anybody could make it in America.

For decades now, Americans have watched that compact erode. They have seen the decks too often stacked against them. And they know that Washington has not always put their interests first.

Yeah, it used to be like that.  Until greed set in.  Government greed.  Their insatiable want of private sector wealth.  And power over our lives.  High taxes.  And punishing regulations.  These have hurt American businesses that once provided those fair shakes.  It’s President Obama and his party that have been making this a business unfriendly nation.  Giving American businesses an unpleasant choice who struggle to compete.  Either close.  Or conduct business in a country that lets them compete.

Just look at the effect of Obamacare.  All hiring is frozen.  And those who can get Obamacare waivers are.  The communist Chinese don’t have these problems.

The question is whether, in the face of an ongoing national crisis, we can stop the political circus and actually do something to help the economy.

He says as he scolds the American people.  And our Republican representatives.  Yelling at us.  Scowling at us.  Fed up with us.  Because he is not getting his way.

Ultimately, our recovery will be driven not by Washington, but by our businesses and our workers.

Absolutely right.  And the best thing Washington can to is to stop helping.  Their tax and regulatory policies are smothering economic growth.  You want to help?  Then get out of the way.  And let business do what business does best.  Grow.  And create jobs.  To meet demand.  That the market is demanding.  Not building what the government thinks is best.

I am sending this Congress a plan that you should pass right away. It’s called the American Jobs Act. There should be nothing controversial about this piece of legislation. Everything in here is the kind of proposal that’s been supported by both Democrats and Republicans — including many who sit here tonight. And everything in this bill will be paid for.

That urgent is it?  Urgent.  But not so urgent to cancel your luxurious vacation on the exclusive Martha’s Vineyard?  Where the rich and famous vacation to get away from people like us.  You know, if it could wait until after Martha’s Vineyard, it can’t be that important.

Democrats and Republicans support everything in this plan?  If so why isn’t this already law?  If not important before, why is it now?  Some two and a half years into your presidency?  And some two and a half years after applying your laser-like focus on job creation?

It will create more jobs for construction workers, more jobs for teachers, more jobs for veterans, and more jobs for long-term unemployed.

Jobs for teachers?  There’s nothing stimulative about that.  They don’t hire workers.  And the kids they teach aren’t going to hire any workers for a very long time.  This is just more money for teachers’ unions.  Which will be funneled back to the Democrat Party via union dues.

We pay teachers with tax dollars.  Paid by the taxpayers.  This is money the government transfers from the private sector economy to the public sector teachers.  So before teachers can stimulate with this money the private sector has to lose it first.  They take a large sum of money from the private sector.  And give it to the teachers.  Less administration costs to make this all happen.  To stimulate the private sector economy.  Which means the teachers spend less money than the private sector would have if they were able to keep their money.  This is a net loss of economic activity.  And is not stimulative.

Teachers are like government.  They provide an important service.  But they are taxpayer financed.  And like anything taxpayer financed, they are a drag on the economy.

More shovel-ready construction projects?  You told us yourself there is no such thing as a shovel-ready project.  This won’t be stimulative either.  Construction projects just don’t happen overnight.  Even if you get rid of all the regulatory red tape.  Projects take months to engineer.  If you cut that short there will be cost overruns to correct all the things missed in the engineering process.  Then there’s the asbestos abatement study.  Lead abatement.  Environmental impact studies.  At best these will start hiring in time for the 2012 election campaign.  Which no doubt is the goal.

It will provide — it will provide a tax break for companies who hire new workers, and it will cut payroll taxes in half for every working American and every small business. (Applause.) It will provide a jolt to an economy that has stalled, and give companies confidence that if they invest and if they hire, there will be customers for their products and services. You should pass this jobs plan right away. (Applause.)

If tax breaks are good for businesses then just cut tax rates.  A tax rate cut is more stimulative than a onetime tax credit.  A tax credit does not instill business confidence.  Because hiring a new employee is far more costly than any onetime tax credit.  Especially with Obamacare bearing down on small businesses.  It’s these permanent costs of current tax and regulatory policies.  These are what are keeping business skittish about expanding and hiring.  And a onetime tax credit won’t change that.  A repeal of Obamacare would probably spark some business growth.  But not a targeted tax credit.

Pass this jobs bill — pass this jobs bill, and starting tomorrow, small businesses will get a tax cut if they hire new workers or if they raise workers’ wages.

Wishful thinking.  Whoever came up with this is an economic simpleton.  He might as well have asked everyone to voluntary pay more for their groceries.  So the stores will hire more people with all that additional profit.  Employees are another cost of doing business.  Voluntarily increasing these costs above the market cost will only make these businesses less competitive in the market place.  Threatening their business.  And all the jobs they currently provide.

It’s not just Democrats who have supported this kind of proposal. Fifty House Republicans have proposed the same payroll tax cut that’s in this plan. You should pass it right away. (Applause.)

Yes, payroll tax cuts are good.  They reduce the cost of doing business.  And let employees keep more of their earnings.  So cutting Social Security and Medicare taxes will help.  But this will only set up higher taxes down the road.  Because these programs are going broke.  Businesses understand this.  They know it will only be temporary.  And illusionary.  For they will pay more in the future.  So they aren’t going to hire more now.

Building a world-class transportation system is part of what made us a economic superpower. And now we’re going to sit back and watch China build newer airports and faster railroads? At a time when millions of unemployed construction workers could build them right here in America? (Applause.)

No.  It didn’t.  We took over the title of economic superpower from the British before the federal highway bill.  And private industry built the railroads.  And robber barons.  Sure, government helped.  But it didn’t lead the way.

China?  Really?  Why is China building so much infrastructure?  Because they have cheap labor.  They couldn’t do what they’re doing if their labor costs were the same as ours.  And that high-speed rail system?  They’re now questioning quality and safety.

And there are schools throughout this country that desperately need renovating.

According to my calendar it’s September.  And I’m pretty sure it’s September throughout the country.  Which means what?  That’s right.  The kids just went back to school.  Which means the next round of school renovation projects will take place starting next June.  When the kids get out of school.  Not very stimulative if you ask me.  Unless you just want a lot of people working on these school renovations during the 2012 election campaign.

And to make sure the money is properly spent, we’re building on reforms we’ve already put in place. No more earmarks. No more boondoggles.

Just like you promised your $800 billion stimulus wouldn’t contain any pork or earmarks?  When it was mostly pork and earmarks?  Fool us once shame on you.  Fool us twice shame on us.

And we’ll set up an independent fund to attract private dollars and issue loans based on two criteria: how badly a construction project is needed and how much good it will do for the economy. (Applause.)

Great.  Nothing guarantees to speed things up like making it go through a new government bureaucracy.  Which can better send money to friends of the administration.  Just like that $800 billion stimulus.

Pass this jobs bill, and companies will get a $4,000 tax credit if they hire anyone who has spent more than six months looking for a job.

Let’s crunch some numbers.  Say you hire someone.  Pay them $30,000.  Your half of Social Security and Medicare taxes come to $2,295 for the year.  Now factor in your other costs.  State and federal unemployment insurance.  Workers’ compensation insurance.  Health care.  Etc.  Not to mention their salary.  It adds up to a lot of money.  Far more than that $4,000 tax credit.  For hiring someone they don’t need to support their current level of business.  And you know what?  A smart business owner isn’t going to do this.

The plan also extends unemployment insurance for another year. (Applause.) If the millions of unemployed Americans stopped getting this insurance, and stopped using that money for basic necessities, it would be a devastating blow to this economy.

The government has to take that money out of the private sector economy first.  Before it can pay unemployment benefits.  Someone is still spending that money.  Just a different someone.  By the time you add in the cost of administering those benefits, there is a net loss in economic activity. 

Unemployment benefits help the unemployed while they look for another job.  They don’t stimulate the economy.

The agreement we passed in July will cut government spending by about $1 trillion over the next 10 years. It also charges this Congress to come up with an additional $1.5 trillion in savings by Christmas. Tonight, I am asking you to increase that amount so that it covers the full cost of the American Jobs Act. And a week from Monday, I’ll be releasing a more ambitious deficit plan — a plan that will not only cover the cost of this jobs bill, but stabilize our debt in the long run. (Applause.)

Standard and Poor’s wanted to see $4 trillion in real spending cuts.  Not cuts in the out-years that will disappear in the next budget deal.  Real cuts.  If not they said they would downgrade the U.S. sovereign debt rating.  They couldn’t do it.  The best they could do was a $1 trillion tax cut over the next 10 years.  And by golly if S&P didn’t downgrade our credit rating.

And the special commission is to find another half trillion in spending cuts?  On top of the $1.5 trillion they were already looking for?  That Congress was unable to find?  And now they have to find $2 trillion?  Yeah, like that’s going to happen.  That’s a plan with but one goal.  Failure. 

With this kind of spending, a deficit reduction plan can only mean one thing.  More taxes.  Just what the economy needs.  Not.

While most people in this country struggle to make ends meet, a few of the most affluent citizens and most profitable corporations enjoy tax breaks and loopholes that nobody else gets. Right now, Warren Buffett pays a lower tax rate than his secretary — an outrage he has asked us to fix. (Laughter.) We need a tax code where everyone gets a fair shake and where everybody pays their fair share.

An executive secretary probably earns something north of $60,000 a year.  That puts her in a top marginal tax bracket of 25%.  Crunching the numbers and this executive secretary will pay $11,125 in federal taxes.  Now let’s assume Warren Buffet has a half billion dollars in investments that pay a return of 8%.  That’s a capital gain of about $40 million.  Taxed at a paltry 15% capital gains tax that’s a measly $6 million in federal taxes.  Funny.  His secretary has a higher tax rate.  But Buffet pays approximately 53,833% more in tax dollars.  I don’t know how you can say one person paying $40 million in taxes isn’t paying his fair share.

Should we keep tax loopholes for oil companies? Or should we use that money to give small business owners a tax credit when they hire new workers? Because we can’t afford to do both. Should we keep tax breaks for millionaires and billionaires? Or should we put teachers back to work so our kids can graduate ready for college and good jobs? (Applause.) Right now, we can’t afford to do both.

This isn’t political grandstanding. This isn’t class warfare. This is simple math. (Laughter.)

This is nothing but political grandstanding and class warfare.  And rather Orwellian.  In Nineteen Eighty Four, they just changed the meaning of words to control the people.  Such as slavery is freedom.  But changing the meaning of words doesn’t change what slavery is.  It’s still slavery.  No matter what you call it.  And political grandstanding and class warfare is political grandstanding and class warfare.  Even if you say it isn’t.

Now it’s time to clear the way for a series of trade agreements that would make it easier for American companies to sell their products in Panama and Colombia and South Korea -– while also helping the workers whose jobs have been affected by global competition.

America can’t compete with China because Chinese labor is cheaper.  So to make American products more competitive the president wants to subsidize our high cost of labor.  With American tax dollars.  Spread the higher cost of U.S. goods throughout the American economy.  Leaving everyone with less money for their own personal needs.  So we can keep Big Union working.  And supporting the Democrat Party.  Which will only increase government spending.  Our deficit.  And our debt.

To subsidize Big Labor they’ll have to pill that money out of the private sector economy first.  So you subtract X from the private sector economy.  And give X to Big Union.  Less an administration fee, of course.  Meaning that there will be a net loss of economic activity.

If we provide the right incentives, the right support — and if we make sure our trading partners play by the rules — we can be the ones to build everything from fuel-efficient cars to advanced biofuels to semiconductors that we sell all around the world.

The free market doesn’t need government incentives and support.  They did fine and dandy in the old days without any government help.  And making our trading partners play by the rules?  If you could do that they would be playing by the rules already.  There’s nothing you can do to make China stop undervaluing the yuan.  Unless you want to throw up protective tariffs on Chinese goods.  Of course they’ll retaliate.  Which will only make everything more expensive for the American consumer.  Besides, we already tried this.  Just before the Great Depression.

You really want to talk about the government picking winners and losers (i.e., incentives and support)?  Really?  After the Solyndra bankruptcy?  And the FBI raid on their executive homes?

Well, I agree that we can’t afford wasteful spending, and I’ll work with you, with Congress, to root it out. And I agree that there are some rules and regulations that do put an unnecessary burden on businesses at a time when they can least afford it. (Applause.) That’s why I ordered a review of all government regulations.

Didn’t Al Gore already reinvent government?  To root out wasteful spending and regulations?  Yeah, he did.  Or tried.  Turns out that’s a lot easier said than done.  Especially when you don’t really mean it.  I mean, come on, the Left lives and dies for these costly regulations.  They’re not just going to sit idly by and let them get repealed.  Not when they fund Democrat candidates in elections.

But what we can’t do — what I will not do — is let this economic crisis be used as an excuse to wipe out the basic protections that Americans have counted on for decades.

Really?  So you’re not going to let anyone do what you did?  Like Rahm Emanuel said, “You never want a serious crisis to go to waste.”  When you used the worst recession since the Great Depression to pass your stimulus?

Basic protections are one thing.  But your regulatory zeal has shut down this economy.  Just ask the Gulf oil workers.  If you can find any.  Because they aren’t working on rigs in the Gulf anymore.  Thanks to you.

We all remember Abraham Lincoln as the leader who saved our Union. Founder of the Republican Party. But in the middle of a civil war, he was also a leader who looked to the future — a Republican President who mobilized government to build the Transcontinental Railroad — (applause) — launch the National Academy of Sciences, set up the first land grant colleges. (Applause.) And leaders of both parties have followed the example he set.

The seeds of the first transcontinental railroad were sowed back in the 1830s.  Lincoln became president in 1861.  The NAS was established by an Act of Congress.  Land grant colleges came into being in with the Morrill Acts of 1862 and 1890.  First introduced in 1857.  Abraham Lincoln wrote the Emancipation Proclamation.  But he did not create these other acts of Congress.  Congress did. 

And the transcontinental railroad?  That was Congress, too.  And one of the most corrupt Congresses in history.  The incentives and support Congress gave encouraged them to build track on ice.  Zigzag to cover as much land as possible to claim the mineral rights beneath. And when east and west finally met, they kept building track.  Parallel to each other.  To keep collecting money for track mileage laid.  And the cost overruns made a lot of Congressmen wealthy.  No, this railroad was not America’s finest hour.

How many jobs would it have cost us if past Congresses decided not to support the basic research that led to the Internet and the computer chip?

The government Internet (DARPA) was nothing more than file sharing and email for scientists.  If private enterprise and entrepreneurs didn’t step in that’s what the Internet would still be. 

The computer chip?  Funny. I thought that was Texas Instruments and Fairchild Semiconductor.  Which was ultimately based on the transistor.  Invented in 1947 by John Bardeen, Walter H. Brattain, and William B. Shockley of Bell Labs.  Who replaced vacuum tubes with semiconductors everywhere.  Except in high-end audio amplifiers.

What kind of country would this be if this chamber had voted down Social Security or Medicare just because it violated some rigid idea about what government could or could not do? (Applause.) How many Americans would have suffered as a result?

Actually they’d probably be a lot better off.  As far as a return on investment, Social Security is one of the worst retirement investments out there.  Why?  Because it’s not an investment.  Your money goes into the Social Security trust fund.  Where it ‘waits’ for your retirement.  But before you do, the government takes that money and spends it.  Leaving an IOU in the trust fund.  This is no IRA.  No 401(k).  No mutual fund.  It’s not even a savings bond.  In fact, if you die before you collect, all that money you paid in is kept by the government.  It doesn’t go to your heirs with the rest of your estate.  Like an IRA, a 401(k) or a mutual fund would.

But Social Security has been a real success.  For the government.  Because it has made generations of people dependent on government in their retirement.  Who live in fear of losing their benefits.  And will do anything to keep those benefits coming.  Even if it means screwing their own children.  And their grandchildren.  They’re so frightened by the Democrats that they will vote Democrat.  No matter how much the Democrats steal from future generations.

I don’t pretend that this plan will solve all our problems. It should not be, nor will it be, the last plan of action we propose.

That’s right.  You never want a serious crisis to go to waste.  And they will milk this for all it’s worth.  Stimulus.  Bailing out the UAW pension funds (i.e., the auto bailout).  Financial reform.  Obamacare.  Everything they’ve always wanted.  But could never get through the normal legislative process.

The Problem with Barack Obama is that he’s a Keynesian who wants to Grow the Government

Once again the professor scolds those who don’t agree with him.  And offers more of the same.  Which has already failed to reverse the worst recession since the Great Depression.  And it’s not going to work this time.  How do we know this?  Because if this stuff worked it would have worked the first time.

And it would be nice to see the plan before our representatives pass the plan.  For as CBO said before, you just can’t score a speech.  We need to see the numbers.  And the leaps of faith.  But I guess it’s hard to quantify soaring rhetoric.  Especially when you’re offering the same thing.  That you’re trying to make sound different this time.

The problem with Barack Obama is that he’s a Keynesian.  With one slight difference.  Keynesian stimulus is supposed to be temporary.  Whereas Obama’s stimulus gets added into the baseline budget.  Making his stimulus spending permanent.  His number one goal isn’t growing the economy.  It’s growing the government.  That’s why his polices don’t help the economy.  But they sure have grown the government.  And in Obama’s book that’s mission accomplished. 

But he sure would like a second term to continue the fun.  But I just don’t see that happening.  For I can’t see how he can fool that many people into believing that they’re better off after four years of his policies.

www.PITHOCRATES.com

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Looking at the Economic Data it’s getting hard to tell who’s President, Barack Obama or Jimmy Carter

Posted by PITHOCRATES - August 22nd, 2011

Keynesian Economists’ Poor Forecasts suggests their Keynesian Economics doesn’t Work

More bad news for the housing market.  Not that this is a surprise.  That was a pretty big housing bubble that the Fed created.  With their stimulative low interest rates.  And the bigger they are the harder they fall.  Or pop, as it were.  And as the market corrected the Fed’s damage, it threw a slew of people out of work (see Early Mortgage Delinquencies Rise to Highest in Year as U.S. Economy Slows by Kathleen M. Howley posted 8/22/2011 on Bloomberg). 

The percentage of U.S. mortgages overdue by one month rose to the highest level in a year in the second quarter as homeowners who lost jobs were unable to make their payments…

The gain in early delinquencies signals a slowing economy may increase foreclosures, said Jay Brinkmann, chief economist of the trade group. The unemployment rate in the three months ended June 30 rose to 9.1 percent from 8.9 percent, the first quarterly increase since 2009, according to the Labor Department. Jobless claims jumped to an eight-month high in late April, government data show.

For the quarter ending June 30 unemployment was at 9.1 percent.  Ouch.  Remember why it was so urgent to pass the Obama Keynesian stimulus?  To keep the unemployment rate under 8%.  That was in February of 2009.  That’s two years ago.  Guess Keynesian economics doesn’t work.

The world’s largest economy grew at a 1.3 percent annual rate in the second quarter, the Commerce Department said on July 29. That was less than the increase of 1.8 percent forecast by economists surveyed by Bloomberg. A Federal Reserve report last week showed manufacturing in the Philadelphia region contracted in August by the most in more than two years as orders fell and factories fired workers.

Goldman Sachs Group Inc. and JPMorgan Chase & Co. lowered their forecasts for U.S. gross domestic product last week. The U.S. will expand 1.5 percent this year, down from a previous forecast of 1.7 percent, according to Goldman economists in New York. JPMorgan predicts 1 percent growth in U.S. GDP in the fourth quarter, down from an earlier projection of 2.5 percent, the bank said last week.

And the news just keeps getting better.  And by better I mean worse.  Again another record.  This one for manufacturing.  And actual GDP numbers are coming in under economists’ estimates.  The numbers are so bad these economists are revising their future projections down.  It should be noted that the vast majority of mainstream economists are Keynesian economists.  Which suggests their Keynesian economics doesn’t work very well.

Inflation Growing at a Greater Rate than Wages equals Real Pay Cuts

These mainstream economists said the Great Recession ended by July 2009.  Said that the Obama administration followed their Keynesian advice.  Kicked that recession in the behind.  And launched the recovery with a Recovery Summer.  Yay said the Keynesians.  Everything was going to be all right.  And yet two years later here we are.  Where things are still not right (see Survey: US companies say they’re planning another year of small raises for workers in 2012 by the Associated Press posted 8/22/2011 on The Washington Post). 

After increasing salaries by 2.6 percent this year and last year, companies are planning a 2.8 percent bump in 2012, benefits and human resources consultancy Towers Watson reported Monday.

That’s somewhat smaller than raises in the last decade. From 2000 to 2006, the year before the Great Recession began, salaries rose an average 3.9 percent for workers who were not executives.

And the modest bump may not help add much buying power for shoppers. In the 12 months through July, prices for consumers have risen 3.6 percent, according to the government’s latest calculations.

Those lucky enough to have a job are taking real pay cuts to keep those jobs.  Inflation is growing at a greater rate than their wages.  Which means as prices go up their pay checks will buy less.  Despite those raises.  High unemployment.  And rising inflation.  The last time the economy saw numbers this bad was during the Seventies.  When we called it stagflation.  And blamed Jimmy Carter.  Who became a one-term president because of it.

Obama Cares enough about the People to Hide from them on the Golf Course

President Obama is aware of the nation’s woes.  He is even thinking about them while on vacation.  On Martha’s Vineyard.  Playground for the uber rich (see President keeps low profile on Martha’s Vineyard by Mark Shanahan & Meredith Goldstein posted 8/20/2011 on the boston.com).   

But it was later, at the Vineyard Golf Course in Edgartown, where the president’s recalcitrance was most evident. Approaching the eighth tee in a golf cart with friend and frequent golfing buddy Eric Whitaker, the president noticed three TV cameras and a Globe photographer across the street. Rather than stop and be photographed teeing off, the president skipped the hole.

That’s how much he cares.  He’ll skip a hole during a round of golf just so we don’t see him living well during these bad economic times.  Talk about sacrifice.  He’s just not playing 17 holes instead of 18.  Skipping that hole may have an adverse affect on his handicap.  He called for fair-share sacrifice.  And he, too, is sacrificing.  Walking it like he talks it.  So think about this noble act before you start bitching about another tax hike.  He skipped a hole of golf.

Obama bailed out General Motors and Chrysler and put Detroit back to Work

But it’s back to work after Martha’s Vineyards.  Just like the rest of us after our vacations.  Though our vacations are a bit more Spartan these days.  And rarely venture farther than our own backyards (see Obama to join unions’ Labor Day festivities in Detroit by Aaron Kessler posted 8/22/2011 on the Detroit Free Press). 

WASHINGTON – President Barack Obama will join thousands of union members at Labor Day festivities in Detroit, the Free Press has learned,

Obama will deliver remarks at a Labor Day event sponsored by the Metro Detroit Labor Council, according to a White House official with knowledge of the trip.

While no other details were immediately available, it is likely he would again use the opportunity to tout his administration’s role in the rescues in 2009 of General Motors and Chrysler.

So the president is going to Detroit to celebrate Labor Day.  It makes sense.  I mean, he bailed out General Motors and Chrysler, didn’t he?  And put the good people of Detroit back to work.

With 13.7% Unemployment where’s the Summer Recovery in Detroit?

Then again, looking at the U.S. Bureau of Labor Statistics, it would appear that he has not put the good people of Detroit back to work (see Metropolitan Area Employment and Unemployment Summary posted 8/3/2011 on the U.S. Bureau of Labor Statistics). 

Eleven of the most populous metropolitan areas are made up of 34 metropolitan divisions, which are essentially separately identifiable employment centers. In June 2011, Miami-Miami Beach-Kendall, Fla., and Detroit-Livonia-Dearborn, Mich., registered the highest jobless rates among the divisions, 13.9 and 13.7 percent, respectively. Nashua, N.H.-Mass., reported the lowest division rate, 5.4 percent, followed by Bethesda-Rockville-Frederick, Md., 5.8 percent. (See table 2.)

No wonder Maxine Waters is so angry.  He skips Detroit on his ‘listening’ bus tour.  And vacations on the very exclusive Martha’s Vineyards.  While the Detroit area is suffering double-digit unemployment.  If he was listening anywhere, it should have been in Detroit.

The Detroit area unemployment rate is 13.7%.  While the national rate is only 9.1% for the same period.  Yes, the national rate is bad.  But it’s not Detroit bad.  And this after the automotive bailouts.  That put the good people of Detroit back to work.  On top of the Obama stimulus.  So where’s the Summer Recovery in Detroit?  What’s happened to the Motor City? 

So this is what a Second Jimmy Carter Term would have been Like 

In a word, Obamanomics.  His Keynesian policies that were supposed to save jobs have killed jobs.  In Detroit.  And across the nation.  Worse, on top of high unemployment these policies have ignited inflation.  Unemployment plus inflation equals stagnation.  Misery.  And malaise

So this is what a second Jimmy Carter term would have been like.  Makes one want to say, “Welcome back Carter.”  But not in that warm nostalgic way like in that Seventies sitcom (Welcome Back Kotter).  Of course you never saw Jimmy Carter living it up like Obama.  So there are some differences.

This economy will not help Obama in 2012.  Worse, the American people will get no relief until after 2012.  For it’s like Ronald Reagan said in his campaign against Jimmy Carter (see President Ronald Reagan – Liberty State Park [Pt. 1] at 5:26).  A recession is when your neighbor loses his job.  A depression is when you lose yours.  And recovery is when Barack Obama loses his.

I’m paraphrasing, of course.

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