The Dow Jones Industrial Average and the Labor Force Participation Rate from Ronald Reagan to Barack Obama

Posted by PITHOCRATES - February 10th, 2014

Economics 101

(Originally published May 21st, 2013)

The DJIA and the Labor Force Participation Rate tell us how both Wall Street and Main Street are Doing

Rich people don’t need jobs.  They can make money with money.  Investing in the stock market.  When you see the Dow Jones Industrial Average (DJIA) increasing you know rich people are getting richer.  Whereas the middle class, the working people, aren’t getting rich.  But they may be building a retirement nest egg.  Which is good.  So they benefit, too, from a rising DJIA.  But that’s for later.  What they need now is a job.  Unlike rich people.  The middle class typically lives from paycheck to paycheck.  So more important to them is a growing job market.  Not so much a growing stock market.  For the middle class needs a day job to be able to invest in the stock market.  Whereas rich people don’t.  For a rich person’s money works enough for the both of them.

So the Dow Jones Industrial Average shows how well rich people are doing.   And how well the working class’ retirement nest eggs are growing for their retirement.  But it doesn’t really show how well the middle class is living.  For they need a job to pay their bills.  To put food on their tables.  And to raise their families.  So the DJIA doesn’t necessarily show how well the middle class is doing.  But there is an economic indicator that does.  The labor force participation rate.  Which shows the percentage of people who could be working that are working.  So if the labor force participation rate (LFPR) is increasing it means more people looking for a job can find a job.  Allowing more people to be able to pay their bills, put food on their tables and raise their families.

These two economic indicators (the DJIA and the LFPR) can give us an idea of how both Wall Street and Main Street are doing.  Ideally you’d want to see both increasing.  A rising DJIA shows businesses are growing.  Allowing Wall Street to profit from rising stock prices.  While those growing businesses create jobs for Main Street.   If we look at these economic indicators over time we can even see which ‘street’ an administration’s policies favor.   Interestingly, it’s not the one you would think based on the political rhetoric.

Wall Street grew 75% Richer under Clinton than it did under Reagan while Main Street grew 65% Poorer

Those going through our public schools and universities are taught that capitalism is unfair.  Corporations are evil.  And government is good.  The Democrats favor a growing welfare state.  Funded by a highly progressive tax code.  That taxes rich people at higher tax rates.  While Republicans favor a limited government.  A minimum of government spending and regulation.  And lower tax rates.  Therefore the Republicans are for rich people and evil corporations.  While the Democrats are for the working man.  Our schools and universities teach our kids this.  The mainstream media reinforces this view.  As does Hollywood, television and the music industry.  But one thing doesn’t.  The historical record (see Civilian Labor Force Participation Rate and Recessions 1950-Present and Dow Jones Industrial Average Index: Historical Data).

DJIA vs Labor Force Participation Rate - Reagan

The Democrats hated Ronald Reagan.  Because he believed in classical economics.  Which is what made this country great.  Before Keynesian economics came along in the early 20th Century.  And ushered in the era of Big Government.  Reagan reversed a lot of the damage the Keynesians caused.  He tamed inflation.  Cut taxes.  Reduced regulation.  And made a business-friendly environment.  Where the government intervened little into the private sector economy.  And during his 8 years in office we see that BOTH Wall Street (the Dow Jones Industrial Average) and Main Street (the labor force participation rate) did well.  Contrary to everything the left says.  The DJIA increased about 129%.  And the LFPR increased about 3.4%.  Indicating a huge increase of jobs for the working class.  Showing that it wasn’t only the rich doing well under Reaganomics.  The policies of his successor, though, changed that.  As Wall Street did better under Bill Clinton than Main Street.

DJIA vs Labor Force Participation Rate - Clinton

Despite the Democrats being for the working man and Bill Clinton’s numerous statements about going back to work to help the middle class (especially during his impeachment) Wall Street clearly did better than Main Street under Bill Clinton.  During his 8 years in office the LFPR increased 1.2%.  While the DJIA increased 226%.  Which means Wall Street grew 75% richer under Clinton than it did under Reagan.  While Main Street grew 65% poorer under Clinton than it did under Reagan.  Which means the gap between the rich and the middle class grew greater under Clinton than it did under Reagan.  Clearly showing that Reagan’s policies favored the Middle Class more than Clinton’s policies did.  And that Clinton’s policies favored Wall Street more than Regan’s did.  Which is the complete opposite of the Democrat narrative.  But it gets worse.

The Historical Record shows the Rich do Better under Democrats and the Middle Class does Better under Republicans

The great economy of the Nineties the Democrats love to talk about was nothing more than a bubble.  A bubble of irrational exuberance.  As investors borrowed boatloads of cheap money thanks to artificially low interest rates.  And poured it into dot-com companies that had nothing to sell.  After these dot-coms spent that start-up capital they had no revenue to replace it.  And went belly-up in droves.  Giving George W. Bush a nasty recession at the beginning of his presidency.  Compounded by the 9/11 terrorist attacks.

DJIA vs Labor Force Participation Rate - Bush

The LFPR fell throughout Bush’s first term as all those dot-com jobs went away in the dot-com crash.  Made worse by the 9/11 attacks.  As all the malinvestments of the Clinton presidency were wrung out of the economy things started to get better.  The LFPR leveled off and the DJIA began to rise.  But then the specter of Bill Clinton cast another pall over the Bush presidency.  Clinton’s Policy Statement on Discrimination in Lending forced lenders to lower their lending standards to qualify more of the unqualified.  Which they did under fear of the full force and fury of the federal government.  Using the subprime mortgage to put the unqualified into homes they couldn’t afford.  This policy also pressured Fannie Mae and Freddie Mac to buy these toxic subprime mortgages from these lenders.  Freeing them up to make more toxic loans.  This house of cards came crashing down at the end of the Bush presidency.  Which is why the DJIA fell 19.4%.  And the LFPR fell 2.1%.  Even though the economy tanked thanks to those artificially low interest rates that brought on the subprime mortgage crisis and Great Recession both Wall Street and Main Street took this rocky ride together.  They fell together in his first term.  Rose then fell together in his second term.  Something that didn’t happen in the Obama presidency.

DJIA vs Labor Force Participation Rate - Obama

During the Obama presidency Wall Street has done better over time.  Just as Main Street has done worse over time.  This despite hearing nothing about how President Obama cares for the middle class.  When it is clear he doesn’t.  As his policies have clearly benefited rich people.  Wall Street.  While Main Street suffers the worst economic recovery since that following the Great Depression.  So far during his presidency the LFPR has fallen 3.7%.  While the DJIA has risen by 86%.  Creating one of the largest gaps between the rich and the middle class.  This despite President Obama being the champion of the middle class.  Which he isn’t.  In fact, one should always be suspect about anyone claiming to be the champion of the middle class.  As the middle class always suffers more than the rich when these people come to power.  Just look at Venezuela under Hugo Chaves.  Where the rich got richer.  And the middle class today can’t find any toilet paper to buy.  This is what the historical record tells us.  The rich do better under Democrats.  And the middle class does better under Republicans.  Despite what our schools and universities teach our kids.  Or what they say in movies and television.

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Cairo Speech, Treaty of Rapallo, German-Soviet Non-Aggression Pact, and Operation Barbarossa

Posted by PITHOCRATES - January 14th, 2014

History 101

President Obama’s Cairo Speech of Islamist Appeasement Emboldened our Enemies

Candidate Barack Obama said during the 2008 presidential campaign that he would talk to our enemies.  Without preconditions.  He would discontinue the gunboat diplomacy of George W. Bush.  Instead he would open a dialogue with the people who wanted to kill us.  Find out why they wanted to kill us. And then resolve those issues that caused our enemies to want to kill us.  Which was the core of his foreign policy.  Being nice to our enemies to get them to like us.  And once they did they would stop killing us.

Some say this started with the Obama apology tour.  With his message of appeasement in Cairo in June 2009.  Where he told our militant Islamist foes, those people who have a tendency to kill Americans, we only want to live together in peace.  And that there is a level of conservative Islamism that was acceptable to the United States.  When the Arab Spring began in Iran (a sponsor of anti-American/Western terrorism) in June of 2009 (after Mahmoud Ahmadinejad had won reelection despite reported irregularities) President Obama did nothing to support the Iranian protestors.  And the enemies of the United States took notice.  The Cairo speech of appeasement.  Not condemning the Iranian election results and telling Mahmoud Ahmadinejad that he had to go (as he would tell Egyptian president Hosni Mubarak).  The message was clear.  America’s enemies could do whatever they wanted.  Even become a rogue nuclear power (see Iran: US and others ‘surrendered before the great Iranian nation’ in nuclear deal by Alexander Smith posted 1/14/2014 on NBC News).

Iranian President Hassan Rouhani said world powers including the United States “surrendered before the great Iranian nation” in agreeing an interim nuclear deal with his country, state media reported Tuesday.

Iran reached the deal with the five permanent members of the United Nations Security Council — the U.S., Canada, Britain, China, and Russia– and non-member Germany…

Speaking to a crowd gathered in the oil-rich province of Khuzestan on Tuesday, Rouhani said: “Do you know what the Geneva agreement means? It means the big powers have surrendered before the great Iranian nation.”

Apparently appeasing our enemies only makes our enemies bolder.  And stronger.  Which is probably not a good thing.  North Korea is a rogue nuclear state.  But their need for food and energy make it unlikely that they will launch a nuclear weapon.  They have so far used the threat of doing so just to get what they desperately needed.  Food and energy.  Militant Islamists, though, want to rid the world of anyone who is not a militant Islamist.  Even if they have to die in the process.  Which they don’t mind.  Because for them this world is only the prelude for the far better afterworld.  Whereas the regime running North Korea has no desire to die.  They enjoy living in the here and now.  And know that won’t continue if they launch a nuclear weapon.

Neville Chamberlain opened a Dialogue with a Lying Adolf Hitler who lied to Chamberlain

The Allies blamed Germany for World War I.  And the Versailles Treaty made the peace following the war a difficult one for Germany.  Blame for the war, war reparations, loss of territories, emasculation (severe limits on Germany’s military strength), etc.  It did a number to German esteem.  Especially when they didn’t technically lose World War I.  The war ended in an armistice.  Where the combatants agreed to a cease fire as they were all exhausted by war.  Of course, America’s entry into the war would have most likely led to a German surrender.  For they were not yet exhausted by years of war.  And could extend the conflict indefinitely until Germany did surrender.  But that didn’t happen.  Which made for a lot of angry Germans when the Allies treated them as if they had surrendered unconditionally.  Setting the stage for an Adolf Hitler to come to power.  Which is what happened.

The war left the Germans isolated.   Russia pulled out of World War I before its completion and devolved into revolution.  Bringing the communists to power.  Replacing Russia with the Soviet Union.  These developments left them, too, isolated in the post-war world.  And then these two isolated nations found each other.  Signing the Treaty of Rapallo in 1922.  Renouncing any territorial or financial claims between them from the war.  And becoming trading partners.  Among other things.  Such as using Soviet soil to rebuild German armed forces in direct violation of the Versailles Treaty.  Where they trained for armor warfare.  Built an air force.  And even developed chemical weapons.  This new eastern friendship had another shared interest.  Poland.

 

Germany and Russia lost portions of Poland following World War I.  And they wanted them back.  But Hitler tested the waters first.  To see how the war-weary allies would react.  He marched troops into the demilitarized Rhineland in violation of the Versailles Treaty.  And the Allies did nothing.  Hitler sent an ultimatum to the Austrian chancellor to hand over power to the Austrian NSDAP (i.e., Austrian Nazi Party) or he would invade Austria.  The Austrian chancellor did.  And Hitler’s Wehrmacht marched triumphantly into Austria the following day.  And the Allies did nothing.  Then Hitler turned his eyes to Czechoslovakia.  And the Sudetenland.  Which he wanted to annex into the Third Reich.  And he was willing to do this with an armed invasion.  Something that got the war-weary Allies’ attention.  For the last thing they wanted in Europe was another war.  British Prime Minister Neville Chamberlain met with Hitler.  And opened a dialogue with him.  Finding Hitler to be a reasonable man.  And the Allies agreed to give Czechoslovakia’s Sudetenland to Hitler.  With Czechoslovakia having little say in the matter.  But it was for the greater good.  “Peace in our time.”  And it was the last territorial acquisition he wanted.  He promised.  So Hitler got the Sudetenland.  And within 6 months Hitler took the rest of Czechoslovakia.  Without firing a single shot.  Because the Allies were so eager to appease Hitler that they never considered that he was lying to them.  Which he was.

The Treaty of Rapallo allowed the Nazis to build the War Machine they eventually Unleashed on the Soviet Union

With the southern border of Poland secured thanks to the Allies giving Czechoslovakia to Germany it was time to recover their lost territory in Poland.  All they needed was a little help from their new best friend.  The Soviet Union.  And it came in the form of a non-aggression pact with the Soviet Union.  The Treaty of Non-aggression between Germany and the Union of Soviet Socialist Republics signed August 23, 1939.  Promising that neither would go to war with the other.  Or ally with a nation that does.  As well as the secret agreement to invade and divide Poland.  As well as dividing up Bessarabia, Estonia, Finland, Latvia, Lithuania, Romania, etc.  Then, on September 1, 1939, Hitler invaded Poland.  Launching World War II.  Something they couldn’t have done if it weren’t for their new best friend.  The Soviet Union.

After Poland came Norway.  Then France and the Low Countries.  The British held the Nazis off in the Battle of Britain.  Then came North Africa.  Yugoslavia.  And Greece.  Then came Operation Barbarossa.  Starting on June 22, 1941.  Something Hitler thought about since writing about it in Mein Kampf back in 1925.  Finding Lebensraum (i.e., living space) for the German people.  In particular the Bread Basket of Europe.  The Ukraine.  Which if you know your history, and your geography, was part of the Soviet Union.  Yes, that’s right.  Hitler lied to Joseph Stalin to get what he wanted.  Launching off points for the conquest of the Soviet Union.  A land he viewed as filled with sub-humans he would kill off with famine after taking their food.

The Soviet people paid a dear price for their leader’s treachery.  Enduring hell on earth on the Eastern Front.  With some 20 million dead by the time it was over.  It was these innocent Soviets who won World War II.  Who wore down the Germans with their wholesale dying.  At times 10 Soviets dying for every one German.  None of which would have happened if Stalin had read Mein Kampf.  Or if he didn’t make a pact with the Devil that led to World War II.  The secret agreements in the Treaty of Rapallo.  Letting the Nazis develop the war machine they eventually unleashed on the Soviet Union.  Which just goes to show you that you need to understand who your enemies are.  And once you do you cannot try to make nice with them.  For they will turn on you once you’ve served your useful purpose.  Just like Hitler turned on Stalin.  As Iran will turn on the United States after they served their useful purpose in getting them their nuclear weapons.  And when that time comes the cost of that war will be far greater than it would have been if it was fought before they had nuclear weapons.  With scenes from that war looking more like Hiroshima and Nagasaki than the hell on earth of the Eastern Front

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Our Free Press has become an Extension of the Democrat Party instead of Safeguarding Democracy

Posted by PITHOCRATES - January 9th, 2014

Politics 101

Our Free Press embraced the George Washington Bridge Scandal to ignore Robert Gates’ Autobiography

“The price of liberty is eternal vigilance.”  A quote attributed to Thomas Jefferson, Patrick Henry and Wendell Phillips.  To name a few.  John Philpot Curran may have said it first when he said, “The condition upon which God hath given liberty to man is eternal vigilance; which condition if he break, servitude is at once the consequence of his crime and the punishment of his guilt.”

This is why the Founding Fathers gave us the First Amendment.  And freedom of the press.  Which exercises that eternal vigilance.  To safeguard democracy.  By keeping government transparent.  And making it difficult for government to hide things from the American people.  Especially when those in power use their positions of power for self interest.  Instead of the public’s interest.

So this is the free press as envisioned by the Founding Fathers.  Is it still that noble institution?  Well, you be the judge.  Recently Robert Gates just published a tell-all memoir putting the Obama administration in a very poor light.  Saying things like Vice President Joe Biden has been wrong on every important foreign policy issue.  That senators Hillary Clinton and Barack Obama voted against the surge in Iraq for political reasons.  What was best for them.  Not their country.  And that as much as Candidate Obama said Iraq was the wrong war while Afghanistan was the right war he never believed in the war in Afghanistan.  He didn’t have any interest in winning.  Only in getting out.  Big news.  But now you don’t hear anything about it because someone in Chris Christie’s administration caused gridlock on the roads leading to the George Washington Bridge.

President Obama sacrificed the Americans in Benghazi for the sake of a Campaign Message

The George Washington Bridge scandal has gripped the media.  It’s all they can talk about.  Unlike those ‘phony scandals’ president Obama complained about that the Republicans were creating out of nothing.  Like the ATF Fast and Furious scandal.  Gunwalking to put thousands of weapons on the street.  So the Obama administration could pick them up after they were used in a crime and say, “See?  We need to pass new gun control legislation.”  In Fast and Furious that meant new controls for multiple rifle sales or long guns.  As explained in Demand Letter 3.  One of these guns killed a U.S. border agent.  And countless people in Mexico.  But that was a phony scandal.  Not a real one like the George Washington Bridge scandal.

The Solyndra scandal funneled money to a maker of solar arrays that was bleeding money.  To delay the bankruptcy until after the 2010 midterm elections the Obama administration promised the largest private investor—and Obama donor—to restructure the loan.  To put him above the taxpayers in any bankruptcy filing.  In violation of Section 1702(d)(3) of Energy Policy Act of 2005.  The Obama administration did.  And the taxpayers’ ate the private investor’s loss.  But that was a phony scandal.  Not a real one like the George Washington Bridge scandal.

With the death of Osama bin Laden President Obama said al Qaeda was reeling.  On the ropes.  On the path to being no more.  And he was going to ride this foreign policy achievement into the 2012 presidential election.  Which is why when Ambassador Stevens requested additional security at the Benghazi mission the Obama administration denied his request.  For how would it look if they were beefing up security in the country they just liberated when the threat from al Qaeda was receding?  The problem was that al Qaeda was resurgent in Libya.  It was so dangerous the British pulled out completely after an attack on their people.  But President Obama sacrificed the Americans in Benghazi for the sake of a campaign message.  And after four Americans died President Obama, Hillary Clinton and Susan Rice blamed their deaths on a spontaneous protest that turned deadly due to an obscure anti-Muslim video no one had heard of in Benghazi.  A spontaneous protest where people had rocket propelled grenades.  And mortars that were pre-sighted on their targets.  Things few people normally carry on them.  The administration lied and they stonewalled Congress over Benghazi.  Hiding the truth.  Of how politics trumped the lives of four Americans.  But that was a phony scandal.  Not a real one like the George Washington Bridge scandal.

Our Free Press is NOT exercising that Eternal Vigilance that safeguards Democracy

CBS correspondent Sharyl Attkisson was one of the few in the media to investigate the Obama administration.  Breaking stories on Fast and Furious.  And Benghazi.  Someone hacked into her computer in late 2012.  Someone sophisticated who was searching for something on her computer.  And knew how to cover their electronic tracks.  Well, almost.  The Obama Justice Department denied any involvement.  But they did spy on reporters at the Associated Press.  And Fox News journalist James Rosen.   Attorney General Eric Holder even personally signed an affidavit naming him a potential criminal for doing his job.  And then lied under oath when asked in Congress.  Saying he didn’t get involved with the prosecution of journalists for doing their jobs.  Even though he had.  But these were phony scandals.  Not a real one like the George Washington Bridge scandal.

And then there was the IRS scandal.  Which targeted enemies of the Obama administration.  Holding up tax-exempt status for Tea Party groups.  Hindering their ability to fund raise and exercise their free speech during the 2012 presidential election.  And conservative donors faced punitive IRS audits.  Dissuading others from donating.  Further hindering fund raising and free speech.  The Obama administration said that those responsible were low-office holders in the Cincinnati office.  But when the head of the tax exempt division, Lois Lerner, appeared before Congress she pleaded the Fifth Amendment.  For the paper trail led to her.  And possibly into the White House.  For she was an active Democrat supporter.  And wasn’t above breaking the law to help her party.  Such as violating Section 6103 of the Internal Revenue Code.  Forbidding her to disclose income tax return information to anyone.  Even another governmental agency.  Which she did.  And now we learn that the Justice Department lead investigator for the IRS scandal is a Democrat donor.  But the IRS scandal was a phony scandal.  Not a real one like the George Washington Bridge scandal.

Of all of these scandals which one are you most familiar with?  Probably the George Washington Bridge scandal.  Because our free press is NOT exercising that eternal vigilance that safeguards democracy.  They have become an extension of the Democrat Party.  Putting politics above the wellbeing of the people.  Helping the Democrats to advance their agenda.  While hiding their scandals.  To destroy what the Founding Fathers gave us.  Liberty.  And expand one-party rule.  Putting us on the road to servitude.  Just as John Philpot Curran warned.

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Invoking the Nuclear Option to Legislate more Easily from the Bench

Posted by PITHOCRATES - November 21st, 2013

Politics 101

Liberals pack the Judiciary with Liberal Judges to Write Law they can’t Write in Congress

Harry Reid and the Democrats went nuclear today.  Changing the Senate rules for the first time since the Founding.  To increase the power of those in the majority.  So they can run roughshod over those in the minority.  Thanks to the poor launch of Obamacare.  And the sinking realization that because the Democrats have so angered the people in the process of implementing the Affordable Care Act (the president and Democrats lied and people are losing their health insurance and doctors) that Democrats up for election in 2014 are going to be thrown out with extreme prejudice.  Turning the Senate over to the Republicans.  Hence the need to go nuclear now.

It’s no secret the left legislates from the bench.  Using judges to write legislation that Congress won’t.  Such as making abortion legal via Roe v. Wade.  That was a law made not by the law-makers.  The legislature.  Congress.  But by liberal judges on the bench.  Who are to interpret law.  Not write it.  But in Roe v. Wade, as in so many other laws that came to be that Congress refused to write, judges wrote law in their legal rulings.  Allowing the liberal minority to make their will the law of the land.

America is a center-right country.  Which means there are more conservatives than liberals.  In fact, only about 21% of the people identify themselves as liberal while about 40% of the people identify themselves as conservative (see Conservatives Remain the Largest Ideological Group in U.S. by Lydia Saad posted 1/12/2012 on Gallup).  Yet this 21% has implemented a lot of their liberal agenda.  How?  Liberal judges.  The key to changing the country against the will of the people.  When you can’t get the people’s representatives to write your laws you turn to the judiciary.  Which is why Harry Reid went nuclear today.  So they can pack the judiciary with liberal judges.  Before they lose the Senate.  So they will be able to write law from the bench that they won’t be able to do after they lose the Senate.

The Filibuster is the Last Line of Defense for the Minority

The filibuster is a stalling tactic.  A tool the minority can use to prevent the majority from running roughshod over them.  To protect minority rights.  For majority rule can be dangerous.  The majority could write law that restricts the rights of the minority.  Don’t like the internal combustion engine?  Well, the majority could write legislation for a costly carbon tax.  Of course, the Democrats don’t have a majority in the House.  But they do have one in the Senate.  Which confirms the president’s judicial appointments.  So if the president stacks the courts with liberal judges the left can get their carbon tax.  By writing regulations for a carbon tax instead of legislation.  And having the courts make that regulation law.  With the left saying that they had that right under their environmental regulatory powers.  And if you don’t like that sue us.

This is why the left wants to stack the courts with liberals.  Who may or may not be actual judges.  For they don’t want judges to interpret law.  They want them to write law that Congress won’t.  If the right sues the government for exceeding their constitutional authority and the case ends up in a court packed with liberal judges the right will lose.  And the unconstitutional regulation will become law.  Despite the Republican-controlled House.

The right has been holding up some exceptionally liberal Obama appointees to the bench.  Frustrating the left.  Because they can’t move their liberal agenda through the Republican held House of Representatives.  While their plan B—stacking the courts—was being blocked by the Republicans because the Democrats did not have 60 Senators in the Senate.  For if they did they could invoke cloture.  End debate.  And force a vote.  Which they would, of course, win.  Making the filibuster the last line of defense for the minority.  For if the judicial appointment only appeals to the 21% of the population the minority can filibuster until they withdraw the appointment.  And appoint someone that doesn’t appeal ONLY to 21% of the population.

When the Democrats were in the Minority they said Opposition to the Republicans was Patriotic

Back when the Republicans held the Senate during the George W. Bush administration the Democrats were holding up Bush appointees.  The Republicans broached the subject of the nuclear option.  And the left attacked Republicans.  Calling it a power grab.  An affront to the Founding Fathers.  The worst thing that could happen to our republic.  Harry Reid, Nancy Pelosi, Hillary Clinton, Barack Obama and other Democrats spoke on the record opposing the nuclear option.  But that was then.  This is now.  After the rollout of Obamacare.  And the very likely possibility that the Democrats will lose control of the Senate in 2014.  Now Harry Reid, Nancy Pelosi, Hillary Clinton, Barack Obama, et al are all for the nuclear option.

Because the Republicans are so partisan the left had no choice.  They simply wouldn’t rubber-stamp the liberal agenda.  So they had no choice but to grab power.  To run roughshod over those in the minority in Congress.  So the minority in the nation can impose their rule on the majority.  When the Democrats were in the minority in Congress they said opposition to the Republicans was patriotic.  That it made the republic healthier.  Locking the Congress into gridlock because they couldn’t get their way was fulfilling the vision of the Founding Fathers.  By preventing one-party rule.

But all that changes when they are in the majority.  And those in the 21% are fine with it.  Those in the mainstream media.  Hollywood.  Late-night television.  Even the audiences of the late-night television shows.  Who are all for debate when they are out of power.  But are fine with one-party rule when they are in power.  Because they believe that their side is the only side that matters.  Which is decidedly NOT what the Founding Fathers envisioned.  The left believes everyone should think like they think.  And if they don’t there should be laws to compel people to act like they (the left) think they should act.  Even if it requires violating the Constitution.  Like Obamacare forces people to buy something against their will for the first time in the history of the republic.  But expecting people to pay for their own birth control instead of forcing others to pay for it?  Why, that’s an affront to the Founding Fathers.  Making any law-violating power grab acceptable.  As long as it’s the left doing the law-violating and the power-grabbing.  For the left believe the end justifies the means.  Just like the Nazis did.  The communists.  And other tyrannical regimes have throughout time.

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FT195: “Democrats ridicule Sarah Palin because we elected a far less qualified Sarah Palin—Barack Obama—twice.” —Old Pithy

Posted by PITHOCRATES - November 8th, 2013

Fundamental Truth

Democrats don’t want to face Conservatives in General Elections because when they do they Lose

Democrats want to win elections.  They spend enormous amounts of money to make that happen in tight races.  Which limits the amount of money they can spend elsewhere.  So they don’t want to spend any more money than they absolutely have to.  Which tells us one thing.  Whoever they say should be the Republican candidate and is the one that will take the Republican Party in the right direction is actually the candidate they want.  Because he or she is the candidate they think they can defeat easiest.

The Democrats loved John McCain.  They loved how he reached across the aisle.  How he could work with Democrats.  Always willing to compromise to give them what they wanted.  Without demanding hardly anything in return.  In fact, he valued his ability to compromise with Democrats more than any conservative principle.  Democrats like that.  And told Republicans that McCain was their candidate.  Nay, should be their candidate.  For this is the direction the people want the Republican Party to move in.  The Democrat direction.

So with John McCain in the general election the voters had a Democrat candidate (Barack Obama) and a Democrat-lite Candidate (John McCain).  Which is what the Democrats want.  Because it helps Democrats.  They don’t want a conservative that can get Democrats to cross over and vote Republican.  Like the Reagan Democrats.  While at the same time invigorating the conservative base.  That’s the last thing they want.  For when they have that in a general election (like with Ronald Reagan) they lose in landslides.

Whenever Republicans nominate a Candidate the left approves of they NEVER win General Elections

When the Republican candidate is a Democrat-lite candidate it will discourage the conservative base.  Which is what the Democrats want.  Fewer Republicans voted in 2012 than they did in 2008.  This decline in Republican turnout helped win the election for Obama.  So that’s what a Democrat-lite candidate does for Republicans.  And when it comes to Democrat voters they will never vote for Democrat-lite when they a full-blown Democrat to vote for.

This is why the Democrats praised John McCain during the 2008 Republican primary.  And why they praised Mitt Romney during the 2012 Republican primary.  Both moderate Republicans.  More importantly, neither was a conservative.  One (Mitt Romney) even gave Massachusetts universal health care.  Making it difficult for him to attack Obamacare without sounding like a hypocrite.  So the left loved both of these moderate non-conservatives.  Right up until the general election.  When they tore each of them a new you-know-what.

Watching Republicans campaign is like watching Gilligan’s Island.  Where each week we tuned in to see if this was the week they would finally get rescued from that deserted island.  And just when rescue seemed imminent Gilligan would do something to ruin everything.  While viewers never noticed the recurring theme.  They NEVER get rescued.  Just as it is with elections.  Every election the Republicans listen to the Democrats.  As if they are really interested in helping Republicans win elections.  Instead of doing everything within their power to win themselves.  And whenever Republicans nominate a candidate the left approves of they NEVER win general elections.

Being Likeable was Enough to get one of the most Unqualified Candidates elected President of the United States

The Democrats got John McCain for the Republican candidate.  Which they went on to defeat in the general election.  Just as they had planned.  But they got something else they hadn’t planned on.  Sarah Palin.  No one saw that coming.  No one even knew who she was when McCain announced her as his running mate.  But she was someone.  She served on the Wasilla City Council in 1992.  Became mayor of Wasilla in 1996.  She was chair of the Alaska Oil and Gas Conversation Commission.  And governor of Alaska in 2006.  Then, of course, Republican vice presidential candidate in 2008. 

She was dangerous.  A young and accomplished woman.  With real governing experience.  And a folksy charm.  She was likeable.  And she was conservative.  This to the left was a greater threat than al Qaeda.  They had to destroy this woman.  Lest she become more influential in Republican politics.  So they ridiculed her night and day.  From politicians to policy wonks to the mainstream media to late night television.  It was open season on Sara Palin.  And they had good reason to fear her.  For when the 2010 midterm elections came around she was part of a new political movement.  The Tea Party.  The movement was so strong that the Republicans took the House of Representatives back in 2010.  And the left did not want that to happen again.  So they attacked her.  And the Tea Party.

The Tea Party and Sarah Palin are the worst enemies the left can have.  Conservatives.  A recent Gallup Poll showed that only 21% of the electorate call themselves liberal while 40% call themselves conservative.  And 35% call themselves moderate.  Which means the majority of the electorate agree with the Tea Party.  And Sarah Palin.  Which is why Sarah Palin is so dangerous.  She has governing experience.  The majority of the electorate agrees with her.  And she’s likeable.  They just don’t want anyone like that on the ticket if they can help it.  Especially if they’re likeable.  So the Democrats ridicule Sarah Palin.  Because they saw how easy it is to get a far less qualified ‘Sarah Palin’ elected.  Barack Obama.  Who had no governing experience.  And shared an ideology with only 21% of the electorate.  But he was likeable.   And being likeable was enough to get one of the most unqualified candidates elected president of the United States.  Twice. 

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The Dow Jones Industrial Average and the Labor Force Participation Rate from Ronald Reagan to Barack Obama

Posted by PITHOCRATES - May 21st, 2013

History 101

The DJIA and the Labor Force Participation Rate tell us how both Wall Street and Main Street are Doing

Rich people don’t need jobs.  They can make money with money.  Investing in the stock market.  When you see the Dow Jones Industrial Average (DJIA) increasing you know rich people are getting richer.  Whereas the middle class, the working people, aren’t getting rich.  But they may be building a retirement nest egg.  Which is good.  So they benefit, too, from a rising DJIA.  But that’s for later.  What they need now is a job.  Unlike rich people.  The middle class typically lives from paycheck to paycheck.  So more important to them is a growing job market.  Not so much a growing stock market.  For the middle class needs a day job to be able to invest in the stock market.  Whereas rich people don’t.  For a rich person’s money works enough for the both of them.

So the Dow Jones Industrial Average shows how well rich people are doing.   And how well the working class’ retirement nest eggs are growing for their retirement.  But it doesn’t really show how well the middle class is living.  For they need a job to pay their bills.  To put food on their tables.  And to raise their families.  So the DJIA doesn’t necessarily show how well the middle class is doing.  But there is an economic indicator that does.  The labor force participation rate.  Which shows the percentage of people who could be working that are working.  So if the labor force participation rate (LFPR) is increasing it means more people looking for a job can find a job.  Allowing more people to be able to pay their bills, put food on their tables and raise their families.

These two economic indicators (the DJIA and the LFPR) can give us an idea of how both Wall Street and Main Street are doing.  Ideally you’d want to see both increasing.  A rising DJIA shows businesses are growing.  Allowing Wall Street to profit from rising stock prices.  While those growing businesses create jobs for Main Street.   If we look at these economic indicators over time we can even see which ‘street’ an administration’s policies favor.   Interestingly, it’s not the one you would think based on the political rhetoric.

Wall Street grew 75% Richer under Clinton than it did under Reagan while Main Street grew 65% Poorer

Those going through our public schools and universities are taught that capitalism is unfair.  Corporations are evil.  And government is good.  The Democrats favor a growing welfare state.  Funded by a highly progressive tax code.  That taxes rich people at higher tax rates.  While Republicans favor a limited government.  A minimum of government spending and regulation.  And lower tax rates.  Therefore the Republicans are for rich people and evil corporations.  While the Democrats are for the working man.  Our schools and universities teach our kids this.  The mainstream media reinforces this view.  As does Hollywood, television and the music industry.  But one thing doesn’t.  The historical record (see Civilian Labor Force Participation Rate and Recessions 1950-Present and Dow Jones Industrial Average Index: Historical Data).

DJIA vs Labor Force Participation Rate - Reagan

The Democrats hated Ronald Reagan.  Because he believed in classical economics.  Which is what made this country great.  Before Keynesian economics came along in the early 20th Century.  And ushered in the era of Big Government.  Reagan reversed a lot of the damage the Keynesians caused.  He tamed inflation.  Cut taxes.  Reduced regulation.  And made a business-friendly environment.  Where the government intervened little into the private sector economy.  And during his 8 years in office we see that BOTH Wall Street (the Dow Jones Industrial Average) and Main Street (the labor force participation rate) did well.  Contrary to everything the left says.  The DJIA increased about 129%.  And the LFPR increased about 3.4%.  Indicating a huge increase of jobs for the working class.  Showing that it wasn’t only the rich doing well under Reaganomics.  The policies of his successor, though, changed that.  As Wall Street did better under Bill Clinton than Main Street.

DJIA vs Labor Force Participation Rate - Clinton

Despite the Democrats being for the working man and Bill Clinton’s numerous statements about going back to work to help the middle class (especially during his impeachment) Wall Street clearly did better than Main Street under Bill Clinton.  During his 8 years in office the LFPR increased 1.2%.  While the DJIA increased 226%.  Which means Wall Street grew 75% richer under Clinton than it did under Reagan.  While Main Street grew 65% poorer under Clinton than it did under Reagan.  Which means the gap between the rich and the middle class grew greater under Clinton than it did under Reagan.  Clearly showing that Reagan’s policies favored the Middle Class more than Clinton’s policies did.  And that Clinton’s policies favored Wall Street more than Regan’s did.  Which is the complete opposite of the Democrat narrative.  But it gets worse.

The Historical Record shows the Rich do Better under Democrats and the Middle Class does Better under Republicans

The great economy of the Nineties the Democrats love to talk about was nothing more than a bubble.  A bubble of irrational exuberance.  As investors borrowed boatloads of cheap money thanks to artificially low interest rates.  And poured it into dot-com companies that had nothing to sell.  After these dot-coms spent that start-up capital they had no revenue to replace it.  And went belly-up in droves.  Giving George W. Bush a nasty recession at the beginning of his presidency.  Compounded by the 9/11 terrorist attacks.

DJIA vs Labor Force Participation Rate - Bush

The LFPR fell throughout Bush’s first term as all those dot-com jobs went away in the dot-com crash.  Made worse by the 9/11 attacks.  As all the malinvestments of the Clinton presidency were wrung out of the economy things started to get better.  The LFPR leveled off and the DJIA began to rise.  But then the specter of Bill Clinton cast another pall over the Bush presidency.  Clinton’s Policy Statement on Discrimination in Lending forced lenders to lower their lending standards to qualify more of the unqualified.  Which they did under fear of the full force and fury of the federal government.  Using the subprime mortgage to put the unqualified into homes they couldn’t afford.  This policy also pressured Fannie Mae and Freddie Mac to buy these toxic subprime mortgages from these lenders.  Freeing them up to make more toxic loans.  This house of cards came crashing down at the end of the Bush presidency.  Which is why the DJIA fell 19.4%.  And the LFPR fell 2.1%.  Even though the economy tanked thanks to those artificially low interest rates that brought on the subprime mortgage crisis and Great Recession both Wall Street and Main Street took this rocky ride together.  They fell together in his first term.  Rose then fell together in his second term.  Something that didn’t happen in the Obama presidency.

DJIA vs Labor Force Participation Rate - Obama

During the Obama presidency Wall Street has done better over time.  Just as Main Street has done worse over time.  This despite hearing nothing about how President Obama cares for the middle class.  When it is clear he doesn’t.  As his policies have clearly benefited rich people.  Wall Street.  While Main Street suffers the worst economic recovery since that following the Great Depression.  So far during his presidency the LFPR has fallen 3.7%.  While the DJIA has risen by 86%.  Creating one of the largest gaps between the rich and the middle class.  This despite President Obama being the champion of the middle class.  Which he isn’t.  In fact, one should always be suspect about anyone claiming to be the champion of the middle class.  As the middle class always suffers more than the rich when these people come to power.  Just look at Venezuela under Hugo Chaves.  Where the rich got richer.  And the middle class today can’t find any toilet paper to buy.  This is what the historical record tells us.  The rich do better under Democrats.  And the middle class does better under Republicans.  Despite what our schools and universities teach our kids.  Or what they say in movies and television.

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The Left goes after the Youth Vote before they Grow Up and Become Responsible

Posted by PITHOCRATES - October 13th, 2012

Week in Review

The Left always urges kids to vote the moment they turn 18.  That it’s important they exercise their right to vote.  Because their views and opinions are important.  Because they haven’t become corrupted or jaded yet by politics.  We need to listen to the young.  Because they are our future.  And not a bunch of doddering old people who vote just to protect their bank accounts, their homes, their children and their country.  No, these people are just too old and blind to the progressive needs of our country.  Maybe they knew what was important in their youth but they’re completely out of touch today.  And therefore we need the young to help us move the nation forward.  For they may be young but they’re smart, responsible and in touch with the important issues of the day (see Investigators suspect teen in fatal LI crash was ‘high’ by KIERAN CROWLEY, ERIN CALABRESE and DAN MANGAN posted 10/9/2012 on the New York Post).

Joseph Beer, 17, “was driving way too fast” right before the spectacular crash at about 3:40 a.m. yesterday on the Southern State Parkway in Nassau County, a law-enforcement source said.

Authorities suspect Beer “was high” at the time the his new 2012 Subaru STI slid across a section of the highway known as Dead Man’s Curve and went sailing into a group of trees — totaling the car and ejecting all five people inside, the source said.

Only Beer survived — but killed instantly were his four recently graduated classmates from Richmond Hill HS in Queens, all of whom were 18 years old…

Because Beer only had a learner’s permit, he was barred from driving between 9 p.m. and 5 a.m., from driving without a licensed 21-year-old driver in the car to supervise him, and from carrying any passengers under age 21 who were family members.

There but for the grace of God go I.  We’ve all done stupid things in our youth.  Despite things like this happening to someone we know or to someone in our community.  But we are so stupid in our youth that we continue to do stupid things.  Which is why we can’t drink until we’re 21.  And can’t drive after 9 PM without a licensed 21-year-old (or older) driver to help us stop doing stupid things.  But as much as we try to stop these stupid things from happening they do.  Which is why car insurance is so expensive for young drivers.  Because of the stupid things we do in our youth.

Had it not been for the youth vote Barak Obama would not have won the 2008 election.  But if they’re not mature enough to drink until they’re 21 perhaps they’re not mature enough to vote either.  President Obama’s Keynesian policies have devastated the economy.  They caused a credit downgrade for the first time in history.  We have had record trillion dollar deficits in each year of his presidency.  We have a record debt thanks to his deficits.  His stimulus bill rewarded campaign contributors while creating no ‘shovel ready’ jobs.  His bailout of GM and Chrysler did what a normal bankruptcy filing would have done only without screwing the bond holders and giving the company to the UAW to bail out their pension plan while leaving the same structure in place that prevented them from selling vehicles profitably in the first place.  His investments in green energy rewarded campaign contributors instead of creating jobs of the future.  His attacks on oil have raised the price of gasoline and food.  And his attack on coal is setting up the country for an energy future of rolling blackouts and outages.

A lot of old people understand this because they have experienced a lot of this before.  They lived through the disaster of the Carter presidency.  And the Morning in America of Ronald Reagan.  They know that the pro-business policies of Warren Harding/Calvin Coolidge, JFK, Ronald Reagan and George W. Bush produced both economic growth and increased tax revenue.  And they’ve already lived through a decline in American Exceptionalism once during the Seventies and don’t want to live through it again now.  Especially those who immigrated to the United States for a better life.  And they’re seeing it decline again right before their eyes thanks to excessive government spending and attacks on success.  Old people see this.  They’ve experienced it.  Which is why they vote the way they vote.  Not for promises of free birth control or access to unlimited abortion services.  Or the decriminalization of marijuana.  Issues that weigh heavily on the minds of young voters.  Which the Left knows.  And exploits.  Which is how they got Barack Obama elected.  And put the nation into the precarious position it is now in.

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Jimmy Carter, Malaise, Ronald Reagan, Austrian Economics, Morning in America, Barack Obama, Keynesian Economics and Great Recession

Posted by PITHOCRATES - September 4th, 2012

History 101

It was Morning in America again because Ronald Reagan reduced the Misery Index by 42.7%

Ronald Reagan was a supply-sider when it came to economics.  Of the Austrian school variety.  In fact, one of his campaign promises was to bring back the gold standard.  A very Austrian thing.  The Austrian school predates the Keynesian school.  When the focus was on the stages of production.  Not on consumer spending.  These policies served the nation well.  They (and the gold standard) exploded American ingenuity and economic activity in the 19th century.  Making the U.S. the number one economy in the world.  Surpassing the nation that held the top spot for a century or more.  Perhaps the last great empire.  Great Britain.

Following the stagflation and misery (misery index = inflation rate + unemployment rate) of the Seventies Reagan promised to cut taxes and governmental regulations.  To make it easier for businesses to create economic activity.  Easier to create jobs.  And he did.  Among other things.  Such as rebuilding the military that the Carter administration severely weakened during the Seventies (it was so bad that the Soviet Union put together a first-strike nuclear option.  Because they thought they could win a nuclear war with Jimmy Carter as president).  During the 1980 campaign Reagan asked the people if they were better off after 4 years of Jimmy Carter.  The answer was no.  Four years later, though, they were.  Here’s why.  (Note:  We used so many sources that we didn’t source them here to save space.  The inflation rate and unemployment rates are for August of the respective years.  The dollar amounts are annual totals with some estimates added to take them to the end of 2012.  The debt and GDP are not adjusted for inflation as they are only 4 years apart.  Gas prices and median income are adjusted for inflation.  There may be some error in these numbers.  But overall we believe the information they provide fairly states the economic results of the presidents’ policies.  (This note applies to both tables.))

Reagan entered office with some horrendous numbers.  The Carter administration was printing so much money that inflation was at 12.9% in 1980.  Added to the unemployment rate that brought the misery index to 20.6%.  A huge number.  To be fair Carter tapped Paul Volcker to be Fed Chairman and he began the policy of reigning in inflation.  But Carter did this far too late.  The only way to cure high inflation is with a nasty recession.  Which Volcker gave Ronald Reagan.  But it worked.  By 1984 inflation fell 8.8 points or 66.7%.  Even with this nasty recession the unemployment rate fell 0.2 points or 2.6%.  Which shaved 8.8 points off of the miserable index.  Or reducing it by 42.7%.  This is why it was morning in America again.  The Left to this day say “yeah, but at what cost?” and point to the record deficits of the Reagan administration.  Saying this is the price of tax cuts.  But they’re wrong.  Yes, the debt went up.  But it wasn’t because of the tax cuts.  Because those tax cuts stimulated economic activity.  GDP rose 12.6% by 1984.  And tax receipts even increased with those lower tax rates.  Because of the higher GDP.  By 1984 Reagan’s policies increased tax revenue by 28.9%.  And on a personal level the median income even increased 0.4%.  And this following a very bad recession a few years earlier.  Finally, gas prices fell 22.2%.  And the way Americans feel about rising gas prices this was truly morning in America again.

To Top off the General Malaise of the Obama Economy Gas Prices Soared while Median Income Fell

Barack Obama is a Keynesian through and through.  A believer in pure demand-side economics.  To that end his administration focused everything on increasing consumer spending.  Tax and spend policies.  Income redistribution.  Deficit spending.  Anything to make America ‘more fair.’  Raising taxes on the rich so the poor can spend more money.  With the Keynesian multiplier they believe this is the path to economic prosperity.  Just doing everything within their power to put more spending money into the hands of poorer people.  Increasing government regulation, fees and fines as well as taxes to bring more money in Washington so they can redistribute it.  Or spend it directly on things like roads and bridges.  Or solar power companies.  Even paying people to dig a hole and fill it back in.  Because these people will take their wages and spend them.  Creating economic activity.

So President Obama put Keynesian economics to work.  Beginning with a $787 billion stimulus bill.  Investments into green energy and the jobs of the future.  Like a Department of Energy loan of $528 million to the now bankrupt Solyndra.  Which was only one of many loans.  The bailout of the UAW pension fund (aka the auto bailout).  The government poured $528 million into GM.  And President Obama touted the Chevy Volt, boasting that GM would sell a million each year bringing his green goals to fruition (GM is struggling to sell 10,000 Volts a year).  A lot of malinvestment as the Austrians would say.  But a Keynesian sees any government expenditure as a good investment.  Because if all the people who receive this government money spends at least 80% of it (while saving only 20%) the Keynesian multiplier will be five.  Meaning that the net gain in GDP will be five times whatever the government spends.  So how has that worked for the president?  Well, here are his numbers:

The government spent so much money that the federal debt increased by $5.4 trillion.  Trillion with a ‘T’.  That’s over a trillion dollar deficit each of the president’s 4 years in office.  And his last year isn’t even a whole year.  Unprecedented until President Obama.  And what did all of that federal spending get us after about 4 years?  An unemployment rate 2.1 points higher.  Or 33.9% higher than when he took office.  Inflation fell but it did nothing to spur GDP growth which grew at an anemic 3.1%.  Which is less than a percentage point a year.  Which is why the Great Recession lingers still.  Meanwhile the Chinese are having a bad year with a GDP growth of 7.8%.  So all of that spending didn’t help at all.  In fact, it made things worse.  The economic activity is so bad that even tax receipts fell 2.2% after four years of President Obama.  Which has many in his party saying that we need to raise tax rates.  Contrary to what Ronald Reagan did.  And to top off the general malaise of the Obama economy gas prices soared 107.6% under his presidency.  While the median income fell 7.3%.  One has to look hard to find any positive news from the Obama economy.  And there is one.  Inflation did fall.  But even that really isn’t good.  As it may be an indicator of a looming deflationary spiral.  Giving America a lost decade.  Like Japan’s Lost Decade.

The Flaw in Keynesian Thinking is that it Ignores the Layers of Economic Activity above the Consumer Level

So there you have an Austrian and a Keynesian.  Both entered office during bad economic times.  Although things were much worse when President Reagan took office than when President Obama took office.  The misery index was 20.6% in 1980.  It was only 11.6% in 2008.  About half as bad for President Obama than it was for President Reagan.  It came down 16.4% under Obama.  But it came down 42.7% under Reagan.  Which is why it isn’t morning in America under President Obama.  Reagan increased tax receipts by 28.9 % by the end of his first term.  They fell 2.2% under Obama.  Adjusted for inflation Reagan averaged annual deficits of $348 billion.  That’s billion with a ‘B’.  Obama averaged $1.324 trillion.  That’s trillion with a ‘T’.  Or 280% higher than Ronald Reagan.  Gas prices fell 22.2% under Reagan.  They rose 107.6% under Obama.  Median income barely rose 0.4% under Reagan.  But it fell 7.3% under Obama.  In short there is nothing in the Obama economic record that is better than the Reagan economic record.

And why is this?  Because Obama’s policies are Keynesian.  While Reagan’s policies were Austrian.  Reagan focused on the stages of production to improve economic activity.  Cutting taxes.  Reducing regulatory compliance costs.  Creating a business-friendly environment.  A system that rewarded success.  Whereas Obama focused on consumer spending.  Tax, borrow and print (i.e., quantitative easing).  So the government could spend.  Putting more money into the pockets of consumers.  Which stimulated only the last stage in the stages of production.  So while some consumers had more money it was still a business-unfriendly environment.  Where tax, regulatory and environmental policies (as well as the uncertainty of Obamacare) hindered business growth everywhere upstream from retail sales.  From raw material extraction to industrial processing to construction to manufactured goods.  Where these Obama’s policies punish success.  For the bigger you get the more you pay in taxes and regulatory compliance costs.

The greatest flaw with Keynesian economics is that it looks at aggregate supply and demand.  With a focus on consumer spending.  And ignores the layers of economic activity that happens before the consumer level.  The Austrian school understands this.  As did the British when she became one of the greatest empires of all times.  As did America during the 19th century.  No nation became an economic superpower using Keynesian economics.  Japan grew to be a great economic power during the Fifties and Sixties.  Then went Keynesian in the Eighties and suffered their Lost Decade in the Nineties.  Some Keynesians like to point to China as an example of the success of Keynesian economics.  But they still have a fairly restrictive police state.  And their economic policies are hauntingly similar to Japan’s.  Some have even posited that it is very possible that China could suffer the same fate as Japan.  And suffer a deflationary spiral.  Resulting in a lost decade for China.  Which is very plausible considering the Chinese practice state-capitalism where the state partners closely with businesses.  Which is what the Japanese did in the Eighties.  And it hasn’t been great for them since.  As it hasn’t been great in America economically since the current administration.

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JFK would have seen a lot of himself in Ronald Reagan

Posted by PITHOCRATES - December 4th, 2011

Week in Review

If you read a speech by JFK without knowing it was a JFK speech something interesting would happen.  You would think you were reading a speech by Ronald Reagan (see By Today’s Standards, JFK Was A Tax-Cutting Supply-Sider posted 11/25/2011 on Investors.com).

Forty-nine years ago, with the economy still recovering from a 10-month recession that ended in 1961, President Kennedy sketched out a bold plan to get the economy moving again. It focused on deep, across-the-board cuts in taxes. Those cuts, made after Kennedy’s tragic death in November 1963, created a boom that lasted through the 1960s and into the 1970s. Contrast his tax-cutting rhetoric of nearly 50 years ago with today’s tax-hiking rhetoric of President Obama and his Democratic colleagues. Following is an abridged version of Kennedy’s remarks to the Economic Club of New York on Dec. 15, 1962.

Yeah, that’s right.  That’s JFK we’re talking about here.  A tax-cutting supply-sider that has more in common with Ronald Reagan than Jimmy Carter, Bill Clinton or Barack Obama.  And he was a Cold War warrior to boot.  Also a lot like Ronald Reagan.

Here are some closing remarks from that JFK speech.

In short, it is a paradoxical truth that tax rates are too high today and tax revenues are too low, and the soundest way to raise the revenues in the long run is to cut the rates now.

The experience of European countries and Japan have borne this out. This country’s own experience with tax reduction in 1954 has borne this out. The reason is that only full employment can balance the budget, and tax reduction can pave the way to that employment. The purpose of cutting taxes now is not to incur a budget deficit, but to achieve the more prosperous, expanding economy that can bring a budget surplus.

Perhaps the Republicans should be quoting this guy.  Run a candidate that is like JFK.  And put him up against Barack Obama.  That would make an interesting campaign.  For the left hates Ronald Reagan.  But they simply adore JFK.  Even though he stood for everything they’re against.

And whenever the Democrats attack the Republican candidate, the Republicans could say that it was an attack on JFK.  Because the Republican candidate believes what JFK believed.  You raised tax revenue by cutting tax rates.  Not by raising tax rates like Barack Obama wants to do.

Unfortunately the Kennedy legacy is not the JFK legacy.  It’s more the liberalism of Teddy Kennedy.  Who stood for everything that JFK did not.

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Once again the Political Advice for Republicans is to Stop Being Conservative even though Conservatism wins Elections

Posted by PITHOCRATES - November 27th, 2011

Week in Review

Once again someone is advising the Republican Party how to pick their candidate.  And apparently the ideal Republican candidate would be a Democrat (see Jon Huntsman’s Vision for the US Military by E.D. Kain posted 11/24/2011 on Forbes).

It’s become increasingly clear to me what a shame it is that the Republican Party is so in thrall to its far-right fringe. If they weren’t, former Utah governor Jon Huntsman might stand a chance at the GOP nomination. That would be a good thing for the Republican Party and for the United States.

It would be good for the Republican Party because Huntsman has broad appeal outside of the conservative base. He also has presidential good looks, has command of the issues, and manages to be at once reasonable and articulate in a debate that has teetered too often between the ludicrous and the absurd.

So, the Republican Party, the party of conservatism, would be best served by nominating a candidate that isn’t a conservative?  Didn’t we try this already?  Didn’t we nominate John McCain because he was everything this guy says Huntsman is?  Well, everything perhaps except being handsome.  And how did that work for us?  Not good.  Because the moderate voters chose the other moderate in the general election.  Barack Obama.  And he was only lying about being a moderate to boot.

The last great Republican president was Ronald Reagan.  And why did we elect him with such overwhelming majorities?  Could it be because he ran as an unabashed conservative?  You bet.  Because the voters in a center-right nation didn’t want someone who could reach across the aisle and cave on issues conservatives hold dear.  Like John McCain campaigned that he was only more than willing to do.

When they compare Barack Obama to Ronald Reagan during election times you know running as a conservative wins elections.  Republicans should try that.  Running conservative candidates.  And forget about reaching across the aisle.  For the Democrats don’t.  The only time they feign interest in bipartisan cooperation is when they’ve lost Congressional majorities.  And can’t dictate policy anymore to the minority party.

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