Consumer Confidence falls as President Obama’s Policies fail Economically but succeed Politically

Posted by PITHOCRATES - February 2nd, 2013

Week in Review

If you watch any reporting on the economic news chances are you’re a little confused.  Apple posts record profits and its stock price slides.  The Dow Jones Industrial Average broke 14,000 despite an uptick in the official unemployment rate.  Democrats talk about how great the economy is despite some 8 million people dropping out of the labor market since President Obama took office because they can’t find a job.  And the U-6 Unemployment rate that measures everyone who can’t find a job is holding steady at 14.4%.  The Democrats can spin the economic news all they want but it doesn’t change the numbers.  And they’re not fooling the people (see Consumer confidence drops to lowest level since November 2011 by Ricardo Lopez posted 1/29/2013 on the Los Angeles Times).

Consumer confidence continued to slip in January, falling to its lowest level since November 2011, the Conference Board said Tuesday…

The index, based on a compilation of consumer polls, found that those claiming business conditions are “good” declined from 17.2% to 16.7%. On the labor market front, those claiming jobs were “plentiful” declined to more than 2 points to 8.6%.

The economy sucks.  Despite the trillions in new government spending.  And it’s only going to get worse now that the 2% payroll tax cut has expired.  And more of the Obamacare taxes hit the American people.

Obama’s economic policies have failed.  If you measure success with things like the unemployment rate, job creation and consumer confidence.  Of course if you measure by a different metric one could say Obama’s policies have been a great success.  Politically.  Especially if people keep demanding the government do something to fix the economy.  And if they never fix the economy the people will always demand that the government do something.  Which is what those in government want.   People demanding for more government.  So by this metric the Obama policies have been a great success.  Because they have been a great failure.  Economically.

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Keynesian Policies are giving us Great Depression Unemployment with no Hope of Economic Recovery

Posted by PITHOCRATES - September 4th, 2011

Real Unemployment is Greater than the Unemployment Rate for about half of the Great Depression 

The unemployment numbers are bad.  But few realize just how bad they are.  The real unemployment numbers.  Not the official unemployment rate released by the government (U-3).  Because that number doesn’t count a lot of people who can’t find a full time job (see Unemployed face tough competition: underemployed by Paul Wiseman and Christopher Leonard posted 9/4/2011 on the Associated Press).

America’s 14 million unemployed aren’t competing just with each other. They must also contend with 8.8 million other people not counted as unemployed – part-timers who want full-time work…

And the unemployed will face another source of competition once the economy improves: Roughly 2.6 million people who aren’t counted as unemployed because they’ve stopped looking for work. Once they start looking again, they’ll be classified as unemployed. And the unemployment rate could rise.

Combined, the 14 million officially unemployed; the “underemployed” part-timers who want full-time work; and “discouraged” people who have stopped looking make up 16.2 percent of working-age Americans…

If you look at the unemployment rate during the Great Depression (1929 to 1941), this more real rate (16.2%) is greater than the unemployment rate for about half of those years.  From 1932 until 1936, the rate was 23.53%, 24.75%, 21.60%, 19.97% and 16.80%.  After dropping down to 14.18% in 1937, it went back up to 18.91% in 1938.  It fell to 17.05% in 1939.  It was below 16.2% for only 6 years of the 13 years of the Great Depression.  So this 16.2% is bad.  Very, very bad.  And very, very real.

In a healthy economy, this broader measure of unemployment stays below 10 percent. Since the Great Recession officially ended more than two years ago, the rate has been 15 percent or more.

Even if you don’t use Great Depression standards this 16.2% is still very, very bad.

Eventually, lots of Americans…will start looking for jobs again. If those work-force dropouts had been counted as unemployed, August’s unemployment rate would have been 10.6 percent instead of 9.1 percent.

If it wasn’t for a counting gimmick to exclude long-term unemployed who gave up looking for work, the official unemployment rate would count all the unemployed.  And it would be 10.6%.  Not the ‘official’ 9.1% reported.  Of course, throw in the underemployed and it’s back up to 16.2%.

If Taxes and Regulations were Good for the Economy, we wouldn’t have Real Unemployment of 16.2%

No doubt the employment picture is far worse than the media has reported.  And that Recovery Summer was purely political propaganda.  To put a positive spin on some really wasteful ‘stimulus’ spending.  Spending that was more pork and earmarks than stimulative.  And President Obama is going to address a joint-session of Congress to tell us how he’s going to fix the economy.  No doubt urging more of the same that hasn’t worked thus far (see Cheney dismisses Obama’s jobs speech: ‘Don’t think it will get the job done’ by Vicki Needham posted 9/4/2011 on The Hill).

Former Vice President Dick Cheney suggested Sunday that the White House should adopt Reagan-era tax and regulatory policy to spur economic growth…

“The Obama administration is doing exactly the opposite, they’re loading on more regulation on the private sector in respect to how the economy functions,” he said.

They say if it ain’t broke, don’t fix it.  But if it is broke then we should probably fix it.  And based on the real unemployment numbers, the Obama policies are broke.  And need to be fixed.  And a good place to start would be to back off on all of their regulations.  And stop with the new taxes.  We know they’re bad for the economy.  For if they were good for it, we wouldn’t have a real unemployment rate of 16.2%.

President Obama will address a joint session of Congress on Thursday to outline a jobs plan likely to include a call for more infrastructure spending along with an extension of the payroll tax cuts, unemployment benefits and tax incentives for business to pick up hiring…

The president used his weekly address to push passage of an extension of the surface transportation bill to spur highway construction, bridge repair and the improvement of mass transit systems.

Haven’t we heard this message before?  Infrastructure spending?  As in ‘shovel-ready jobs’?  That was the whole point of the stimulus bill.  And being that we’re still talking about ‘infrastructure spending’, apparently it didn’t work.  So why return to a failed policy?

Infrastructure Stimulus Projects are like a Pill that Cures the Common Cold…in only 3 Weeks

Even Obama conceded there was no such thing as a ‘shovel-ready’ job.  Not with the regulatory red tape you have to go through before breaking ground.  Which costs millions of dollars.  So it’s not likely anyone spent millions of dollars over the years just in anticipation of a stimulus program.  Something unknown then that would pay for a project started without adequate funding.  Yeah, like that would ever happen.

But infrastructure work isn’t your everyday make-work kind of employment.  It takes skill.  And experience.  It’s not picking up trash along the side of the road that any unemployed person can do without extensive training (see Did the Stimulus Create Jobs? Not Always for the Unemployed by Megan McArdle posted 91/2011 on The Atlantic).

In the construction industry, there’s another wrinkle; many of the specialties in heavy construction are, at least as I understand it, not overfull with qualified applicants; finding young people who have the math skills and other academic talents necessary to be a modern skilled construction worker, and also want to skip college and apprentice with an outfit like the operating engineers, is something that a lot of the skilled trades worry about. 

I think a lot of people assumed that doing infrastructure construction projects would be a great way to soak up excess labor from the homebuilding industry, but there’s not actually that much overlap; knowing how to install drywall or do framing work does not qualify you for a job that requires sandhogs and specialty welders.  And it can take a long time to make journeyman in many of these professions.  This is also true of certain kinds of civil engineers and so forth. 

Cleary infrastructure projects are not the panacea the Obama administration thinks they are.  They are not ‘shovel-ready’ for the unemployed.  After years of regulatory compliance expenditures, highly skilled and highly specialized workers will break ground.  Which won’t employ a single person outside these specialties.  At least, not without years of training.  And working as an apprentice.  Which will be years down the road.  Which won’t stimulate anything in the here and now. 

This is like a pill that cures the common cold.  In only 3 weeks.  They have no effect.  And their ‘cure’ is purely illusionary.

The Era of Keynesian Big Government came to an End in 1980…for Awhile 

So we know what doesn’t work.  We know what policies are wrong.  Almost 3 years of Obama policies have told us that.  But it’s easy to point to failure.  To identify problems.  It’s a little more difficult to fix problems.  But the amazing thing is we don’t have to fix them.  We just have to stop causing them (see Free The Market by Peter Boettke posted 9/2/2011 on The European).

“The curious task of economics is to demonstrate to men how little they really know about what they imagine they can design”, F.A. Hayk once wrote. We would we well-served to heed his call and reinvigorate the ideology of the free market.

There are a few schools of economics.  There’s the Keynesian school.  The majority of mainstream economists adhere to this.  As well as the Obama administration.  And then there is the Austrian school.  Which is more in keeping with economists like F.A. Hayek and Adam Smith

The Keynesians want hands-on government control and spending.  The Austrian school doesn’t.  Because they don’t think they are better and smarter than the average consumer.

The past thirty years proved the validity of Adam Smith’s assertion, “The natural effort of every individual to better his own condition…is so powerful, that it is alone, and without any assistance, not only capable of carrying on the society to wealth and prosperity, but of surmounting a hundred impertinent obstructions with which the folly of human laws too often encumbers its operations.”

During “the age of Milton Friedman”, as Andrei Shleifer dubed it, key developments in economic freedom—deregulation in the US and UK, the collapse of communism in East and Central Europe, and the opening up of the economies of China and India—allowed individuals to surmount government meddling in the economy. From 1980 to 2005, there were marked, world-wide improvements in life expectancy, education, democracy, and living standards as integration into a world economy delivered billions of individuals from poverty, ignorance and squalor.

From 1980?  You know what happened at that time?  The era of Keynesian Big Government came to an end.  For awhile.  With the rise of Margaret Thatcher in the UK.  And the rise of Ronald Reagan in the USA.  Both were adherents to the Austrian school.  And because of that their nations exploded with prosperity.  Thanks to tax cuts.  And deregulation. 

Unfortunately, this began to reverse course around 2005.  Big Government began to return.  And it’s becoming bigger than it ever was.  We see this in declining Western economies.  And financial crises in these same Western economies (in Europe and the United States).  As they are imploding under excessive government spending.  And debt.

A setting of private property rights, free pricing, and accurate profit and loss accounting aligns incentives and communicates information so that individuals realize the mutual gains from trade with one another. Efficient markets are an outcome of a process of discovery, learning, and adjustment, not an assumption going into the analysis. That process, however, operates within political, legal, and social institutions. Those institutions can promulgate policies that block discovery, inhibit learning, and prevent adjustment, causing the market to operate poorly.

So rather than free market ideology being obsolete, what is needed is a reinvigorated ideological vision of the free market economy: a society of free and responsible individuals who have the opportunity to prosper in a market economy based on profit and loss and to live in caring communities. Yes, caring communities. The Adam Smith that wrote The Wealth of Nations also wrote The Theory of Moral Sentiments, and the F. A. Hayek that wrote Individualism and Economic Order also wrote about the corruption of morals in The Fatal Conceit. Our challenge today is to embrace the full scope of free market ideology so as to understand the preconditions under which we can live better together in a world of peace, prosperity, and progress.

Get government out of the private sector.  Let the private sector respond freely to market forces.  Be responsible.  And be kind to others.  Like they told us in kindergarten.

Keynesians don’t like the Masses, they just want to Rule over Them

Anyone looking objectively at the economy can see where the problem lies.  With government.  Their policies didn’t work in the Seventies.  And they’re not working now.  So why are they returning to failed policies of the past?  Because Keynesian policies grow government.  And those in government want to grow government.  For the money and the power.  And to stroke their egos. 

Keynesians are academics.  They have little real-life experience.  They didn’t run businesses.  Make payrolls.  They didn’t sell.  Or live on the other side of regulatory compliance.  Why?  Because they aren’t entrepreneurs.  They don’t have the ability to be creative.  So they elevate themselves above those who are.  To compensate for their inadequacies. 

They prefer privilege.  Entitlement.  Like the aristocracy in the Old World.  Where a good last name was all you needed for wealth and power. 

Just listen to them talk.  Their very words drip with condescension.  They don’t like the masses.  They don’t live with them.  They don’t vacation with them.  They don’t want to have anything to do with them.  Except to rule over them.  The way it should be.  In their world of privilege.

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Keynesians turn to Alien Invasions to Fix the Economy and to Stop Global Warming

Posted by PITHOCRATES - August 19th, 2011

Paying them to Dig Ditches, then Paying them to fill them back In

Leave it to a Keynesian to find the silver lining in a war of annihilation (see The Dimlight Zone posted 8/17/2011 on Investor’s Business Daily).

“If we discovered that space aliens were planning to attack,” Krugman told CNN’s Fareed Zakaria on Sunday, “and we needed a massive buildup to counter the space alien threat, and inflation and budget deficits took secondary place to that, this slump would be over in 18 months.”

Where did Krugman get his idea for “Up-in-the-Sky-Side Economics”? He told Zakaria, “There was a ‘Twilight Zone’ episode like this in which scientists fake an alien threat in order to achieve world peace. Well, this time we don’t need it; we need it in order to get some fiscal stimulus.”

And Paul Krugman won the Nobel Memorial Prize in Economics.  Not for his theory on space alien threats but for something about New Trade Theory and New Economic Geography

He’s Ivy League.  A Keynesian economist of the first order.  And an Orwellian socialist, apparently.  For in Orwell‘s Nineteen Eighty-Four, that was a key party tenet.  Perpetual war.  To unite the people against the common enemy (which often changed if one of their two possible enemies was losing too badly).  And to consume the products of state labor.  To provide permanent employment for the people.  (Sort of like paying them to dig ditches, then paying them to fill them back in.)  Building the things of war.  While they lived in desperate privation of the necessities of life.  A dark existence indeed.  But they kept the people occupied.  And obedient.

World War gave the U.S. a strong Export Market During and After the War

Being in favor of war spending is a bit strange.  Considering the Left’s vehement opposition to the Iraq Way, the War in Afghanistan, the Libyan War, the Vietnam War, etc.  All of these were quite costly.  And required enormous war production.  Creating near-perpetual jobs for people in the war economy.  There was a whole lot of deficit spending going on.  Just like you’d think an Orwellian socialist would like.  But no. 

Contrary to Keynesian belief, these wars did not stimulate the economy.  They were in effect paying people to dig ditches and then having them fill them back in.  Just moving money around in the economy.  Not creating anything new.  Unlike the war he refers to in that article.  The good war.  World War II

World War II was a different kind of war.  It was a world war.  Much like World War I.  Where the world’s economies were left in ashes.  Unlike America.  Who was unscathed during these wars.  Was ready and able to rebuild the world after these wars.  And feed it, too.  So not only did we have a strong export market during the war (we were the Arsenal of Democracy), we had an even stronger export market after the war. 

That’s what makes a war profitable.  When someone else pays for it.  Which is why the previously mentioned wars did not stimulate economic activity.  The United States paid for them.  Not other people.  It was just moving money around in the economy.  Not creating anything new.  Just digging ditches.  And filling them back in.

Before acting to Save the World a Keynesian would Consider its Impact on the Next Election First

Besides, do we really want Keynesians fighting our wars?  For they are more concerned in winning political battles than military ones.  No matter the costs.  Whether it threatens the fiscal solvency of the country.  Or military strategy (see Bad luck? Bad faith? by Charles Krauthammer posted 8/18/2011 on The Washington Post).

The charge [wishing to see America fail for their own political gain] is not just ugly. It’s laughable. All but five Republican members of the House — moderate, establishment, Tea Party, freshmen alike — voted for a budget containing radical Medicare reform knowing it could very well end many of their careers. Democrats launched gleefully into Mediscare attacks, hardly believing their luck that Republicans should have proposed something so politically risky in pursuit of fiscal solvency. Yet Obama accuses Republicans of acting for nothing but partisan advantage.

This from a man who has cagily refused to propose a single structural reform to entitlements in his three years in office. A man who ordered that the Afghan surge be unwound by September 2012, a date that makes no military sense (it occurs during the fighting season), a date not recommended by his commanders, a date whose sole purpose is to give Obama political relief on the eve of the 2012 election. And Obama dares accuse others of placing politics above country?

Let’s just hope that when the aliens attack we don’t have Keynesians in power.  For with them it’s about the money and the power.  And political expediency.  Who would, in the face of an alien evasion, dither about what action would benefit them most in the next election before acting to save the world.

Global Warming bringing the Final Frontier to Us?

Paul Krugman isn’t the only one thinking about alien invasions.  Climate scientists are, too (see Aliens may destroy humanity to protect other civilisations, say scientists by Ian Sample posted 8/18/2011 on the Guardian).

It may not rank as the most compelling reason to curb greenhouse gases, but reducing our emissions might just save humanity from a pre-emptive alien attack, scientists claim.

Watching from afar, extraterrestrial beings might view changes in Earth’s atmosphere as symptomatic of a civilisation growing out of control – and take drastic action to keep us from becoming a more serious threat, the researchers explain.

This highly speculative scenario is one of several described by a Nasa-affiliated scientist and colleagues at Pennsylvania State University that, while considered unlikely, they say could play out were humans and alien life to make contact at some point in the future.

This isn’t hyperbole from Al Gore.  It’s NASA affiliated.  So this must be serious stuff.

The authors warn that extraterrestrials may be wary of civilisations that expand very rapidly, as these may be prone to destroy other life as they grow, just as humans have pushed species to extinction on Earth. In the most extreme scenario, aliens might choose to destroy humanity to protect other civilisations.

“A preemptive strike would be particularly likely in the early phases of our expansion because a civilisation may become increasingly difficult to destroy as it continues to expand. Humanity may just now be entering the period in which its rapid civilisational expansion could be detected by an ETI because our expansion is changing the composition of the Earth’s atmosphere, via greenhouse gas emissions,” the report states.

“Green” aliens might object to the environmental damage humans have caused on Earth and wipe us out to save the planet. “These scenarios give us reason to limit our growth and reduce our impact on global ecosystems. It would be particularly important for us to limit our emissions of greenhouse gases, since atmospheric composition can be observed from other planets,” the authors write.

Talk about taking it up a notch.  And this after those emails leaked from the University of East Anglia.  Showing that they fudged many of the numbers they used to sell global warming.  So they changed tack.  Propose absolute gibberish that is completely independent of data.  And sanity.  Thus making it impervious to attack.  Or scientific scrutiny.

Who would have thunk it?  That global warming would bring the final frontier to us.  Where others would travel here.  In their quest to explore strange new worlds.  To seek out new life and new civilizations.  To boldly go where no man has gone before.  And possibly bring a cook book with them entitled To Serve Man

I wonder how many Trekkies were in that group at the Pennsylvania State University.

Long Lines of Communication and Costs make the odds of an Alien Invasion Slim

Let’s apply a little historical perspective on this.  Why did Napoleon not conquer Russia?  Because Russia is a very big place.  It stretched Napoleon’s lines of communication to the breaking point.  He could no longer support his Grande Armée.  And the Russian winter only compounded his misery.  He had no choice but to retreat.

Why did Hitler not conquer Russia?  Ditto.

Now let’s look at some economic history.  Why did NASA cancel Apollo missions 18, 19 and 20 to the moon?  Because they were too costly.  Why have we not landed a man on Mars?  Because it’s too costly.  Why did we cancel the Space Shuttle program?  Because it was too costly.

Put long lines of communication and costs together and what do they tell you?  The odds are slim for an alien invasion.  Because you have to benefit somehow for the costs you expend.  Hitler wanted living space.  Grain.  And Caucasus oil.  His hatred of Jews, Russians and communists was one thing.  But killing all of them meant little if he didn’t get the living space, grain and oil.  That was the desired payoff for his investment in the invasion of Russia.

“There is Nothing more Dangerous than a Wounded Mosquito”

Granted, this is pure speculation, but let’s assume invading aliens are like all other conquering people history has known.  That is, they want something.  Something real.  Food.  Resources.  Whatever.  And if they are able to conquer the space-time continuum, they’d be pretty darn smart aliens.  And resourceful.  They could probably do just about anything when it came to food and resources.  Probably even make a clothes washer that can fold and wrap clothes in a plastic wrap.  And if we become an annoyance they could probably dispatch our world before we could put the first thoughts of a starship on a drawing board.

So there is little point in expending any time, effort or money in preparing a defense for an alien invasion.  And there is little chance that our so called global warming is going to bring a Death Star to our corner of the universe.  Such talk appears to be a ruse to increase government spending.  What some would call ‘grasping at straws’.  Just another way for the Keynesians to continue their failed policies. 

The Obama administration has shown the futility of Keynesian economic policies.  And it has wounded the Keynesians deeply.  But like the mosquito, we should be careful.  For as they said on Monty Python’s Flying Circus, “There is nothing more dangerous than a wounded mosquito.”  They will find other ways to tax and spend.  No matter how silly, ridiculous or costly it is.

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LESSONS LEARNED #78: “It’s a dishonest politician that sneaks sneaky legislation into a bill.” -Old Pithy

Posted by PITHOCRATES - August 11th, 2011

The Obama Stimulus Bill was mostly Democrat Pork and Earmarks

The American Recovery and Reinvestment Act of 2009 was a huge stimulus bill to create jobs.  And put people back to work.  It cost about $800 billion.  And it didn’t work.  Some say it didn’t work because it wasn’t big enough.  Others say it didn’t work because it wasn’t stimulus but rather a 40-year Democrat wish list of pet projects.  Which the Democrats could finally enact having control of the House, the Senate and the White House for the first time in a long time.  And they took control of this bill.  As Nancy Pelosi said, “We won the election. We wrote the bill.”

So what’s in the bill?  Well, President Obama said it would contain no pork.  No earmarks.  Just spending that would create ‘or save’ jobs.  Like infrastructure projects.  Rebuilding America’s roads and bridges.  But according to the Wall Street Journal, “Some $30 billion, or less than 5% of the spending in the bill, is for fixing bridges or other highway projects.”  They further note that of all the spending in the bill little would actually create jobs.  About “12 cents of every $1…even many of these projects aren’t likely to help the economy immediately.”

Take high-speed rail, for example.  The Washington Post noted the bill included “$8 billion for high-speed rail projects, for example, including money that could benefit a controversial proposal for a magnetic-levitation rail line between Disneyland, in California, and Las Vegas…”  One thing about big rail projects, they don’t stimulate.  Building railroads takes a long, long time.  The higher the speed, the longer the time.  Because high-speed trains have more costly infrastructure.  And dedicated track.  With no grade crossings.  And before you build anything you have to do environmental impact studies.  Then survey the entire route.  Then, once you have a proposed route, you can begin the engineering.  It could be years before any ground is broken. 

If any ground is broken.  Because currently high-speed rail is all pie in the sky.  Only two lines to date operate at a profit.  One in Japan (Tokyo to Osaka line).  The other in France (Paris to Lyon line).  All others require government subsidies in one form or another.  Because these are costly to build.  And costly to maintain.  So this is stimulus that won’t stimulate.  But it will set the stage for greater future government spending.  Making it more pork than stimulus.  Snuck into the bill by the Senate.  When the House bill went to the Senate.  For their turn to steal from the treasury.

Only Schools with Union Teachers did well in Stimulus Bill

The stimulus bill also included $90 billion for the Department of Education.  But language in the bill restricted the use of that money.  Quoting from the Wall Street Journal, “the House declares on page 257 that “No recipient . . . shall use such funds to provide financial assistance to students to attend private elementary or secondary schools.””

In other words, only schools with union teachers may use this money.  Dues-paying union teachers.  And the teachers unions support Democrat candidates.  Which makes this not quite stimulus.  But politics.  Profitable politics at that.  As some of this stimulus money will make it back to Democrat coffers thanks to those union dues.

According to Certification Map, education received some $90 billion in stimulus money.  And their website breaks down the spending:

  • $44.5 billion in aid to local school districts to prevent layoffs and cutbacks, with flexibility to use the funds for school modernization and repair (State Equalization Fund)
  • $15.6 billion to increase Pell Grants from $4,731 to $5,350
  • $13 billion for low-income public school children
  • $12.2 billion for IDEA special education
  • $2.1 billion for Head Start
  • $2 billion for childcare services
  • $650 million for educational technology
  • $300 million for increased teacher salaries
  • $250 million for states to analyze student performance
  • $200 million to support working college students
  • $70 million for the education of homeless children

For a bill not containing any pork or earmarks these look a lot like pork and earmarks.  I mean, they sure ain’t ‘shovel-ready let’s rebuild the infrastructure jobs’ like we were led to believe.  Sure, they may ‘invest in our future’ so we may ‘win the future’, but it doesn’t create jobs like a stimulus bill is supposed to do. 

This isn’t stimulus.  These are just Democrat pet projects.  Added to the bill in a moment of crisis.  To take advantage of the crisis.  To get the things they’ve been unable to get during the normal legislative process.

Never let a Serious Crisis go to Waste when Writing a Stimulus Bill

When you look at the bill this is what most of it is.  Just a bunch of Democrat pet projects.  Passed when they still had control of both houses of Congress and the White House.  And a delicious crisis.  For as Rahm Emanuel said, “Never let a serious crisis go to waste.  What I mean by that is it’s an opportunity to do things you couldn’t do before.” 

Sure, they’ve always hidden things in bills before.  But rarely does $800 billion of free spending come along.  They weren’t going to attach this pork to a bill.  This pork was the bill.  And it included a little bit of everything.  Including green energy.  Green Chip Stocks list this spending on their website:

  • $2.5 billion for energy efficiency and renewable energy research
  • $1 billion energy efficiency programs including energy-efficient appliances and trucks and buses that run on alternative fuel
  • $4.5 billion to boost the energy efficiency of federal buildings
  • $6.3 billion for energy efficiency and conservation grants
  • $5 billion to weatherize old buildings
  • $2.3 billion in tax credits for energy efficiency technology manufacturers

Last time I looked ‘research’ was not a ‘shovel ready’ project.  Neither are alternative fuel programs.  Or federal renovation projects.  Or the government granting process.  (It takes forever and a day for construction projects to start when there is federal money involved.)  And tax credits only help a few people work so they can build things that won’t sell at market prices.

Again, not stimulus.  But pork.  Earmarks.  Despite everything they told us. They weren’t going to create jobs and fix the economy.  They were settling their political accounts.

Democrats took Advantage of a Crisis to sneak Pet Projects into Law

This shameless Democrat spending spree (remember what Nancy Pelosi said – “We won the election. We wrote the bill”) helped to push the deficit into record territory.  Which caused S&P to downgrade our credit.  All because the Democrats took advantage of a crisis to sneak a lot of their pet projects into law.

It just goes to show you that you shouldn’t trust politicians.  And, based on the American Recovery and Reinvestment Act of 2009, you should especially not trust Democrats.  For they are quite sneaky.  And often don’t do as they say.  For the stimulus bill wasn’t going to have any pork or earmarks.  But in reality about 88% of the bill was nothing but pork and earmarks.  Which is a lot more than none.

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The Obama Recovery is no Reagan Recovery

Posted by PITHOCRATES - February 4th, 2011

No New Jobs but the Unemployment Rate Falls.  Strange.

Unemployment fell a huge 0.4 percent.  All by adding 36,000 jobs (see Santelli Slams CNBC Panelists for Spinning Jobs Report by Julia A. Seymour posted 2/4/2011 on Business & Media Institute).

Jobs are heading up and down at the same time. The Bureau of Labor Statistics announced the morning of Feb. 4 that only 36,000 jobs were added in the month of January, but the unemployment rate dropped from 9.4 percent to 9.0 percent.

To be frank, there is no way 36,000 new jobs could move the unemployment rate 0.4 percent.  So this official unemployment rate (U3) is not giving the full picture.  It only measures the number of people without jobs who’ve looked for work within the past four weeks.  U6 would give a better measure of the economy.  This unemployment rate includes U3 plus those underemployed (i.e., working somewhere where they are overqualified) and those who have quit looking.  Because the economy is just in the toilet.  This number (U6) also went down.  But only from 16.7% to 16.1%.  Which means that the real unemployment out there is almost twice the actual number the government is reporting.

Cooking the Books on Unemployment

So how can they report the ‘official’ unemployment rate so much lower than actual unemployment?  Easy.  You just don’t count as many unemployed people (see Missing Workers: 4.9 Million Out Of Work And Forgotten by Lila Shapiro posted 2/4/2011 on The Huffington Post).

Over the last three years, nearly 5 million U.S. workers have effectively gone missing.

You won’t find their photos on the backs of milk cartons. The Coast Guard isn’t out looking for them. No missing-persons reports have been filed. These are jobless Americans who have grown so discouraged by their unsuccessful searches for work that they have simply given up the hunt. They are no longer counted among the 14.5 million Americans officially considered unemployed as of the end of last year, according to the Department of Labor.

You see, if you want to have a lower unemployment number, all you have to do is exclude a lot of the unemployed from the equation.  Of course, the question everyone must be asking is why?  Why would the government do this?  Well, there is a presidential election in less than 2 years.  And presidents find it very difficult to win reelection if you have an unemployment rate greater than 8%.  Especially when you spent a lot of money on bailouts and stimulus spending to keep the unemployment rate under 8%.  And the unemployment rate goes up instead of down.

The Ronald Reagan way was the Better Way

The Obama administration took a shellacking at the 2010 midterm elections.  Everything they’ve done to fix the economy has failed.  So Obama has been trying to go Ronald Reagan.  To make that connection to the American people.  So he can win reelection and keep pushing the same failing policies.

The urge to become a Ronald Reagan is understandable.  He was great.  And when you’re not it’s natural to aspire to be someone who is.  The problem is, President Obama is no Ronald Reagan (see Morning Bell: The Reagan Recovery vs The Obama Recovery by Conn Carroll posted 2/4/2011 on Heritage’s The Foundry).

According to the National Bureau of Economic Research, our most recent recession began in December 2007, lasted 18 months, and ended in June 2009. The last recession that lasted this long began in July 1981, lasted 16 months, and ended in November 1982. In his 1983 State of the Union Address, President Reagan described an economic situation that mirrored our own today: “The problems we inherited were far worse than most inside and out of government had expected; the recession was deeper than most inside and out of government had predicted. Curing those problems has taken more time and a higher toll than any of us wanted. Unemployment is far too high.” But where President Obama responded to an economic recession with a bigger than $2 trillion expansion of government (more than $1 trillion on health care and almost $1 trillion in economic stimulus), President Reagan passed the Economic Recovery Tax Act of 1981, which cut marginal income tax rates across the board permanently. And the differences don’t end there.

Where President Obama promised government action that was “bold and swift,” President Reagan said: “The permanent recovery in employment, production, and investment we seek won’t come in a sharp, short spurt.” Where President Obama used tax credits, subsidies, and bailouts to perpetuate industries in need of adjustment, President Reagan said: “Quick fixes and artificial stimulants repeatedly applied over decades are what brought us the inflationary disorders that we’ve now paid such a heavy price to cure.”

Reagan cut taxes.  Obama spent money.  And how do these actions compare?

According to the National Bureau of Economic Research, our most recent recession ended in June 2009, which means we are now in month 19 of the Obama Recovery. Today’s 9 percent unemployment rate marks the 21st consecutive month of unemployment at or above 9 percent, a post–World War II record. Unemployment is only 0.4 percentage points lower today than when the Obama Recovery began. Contrast those results with the Reagan recovery: 19 months into the Reagan recovery, in June 1984, unemployment stood at 7.2 percent. That is a full 3.6 points lower than when the Reagan Recovery began.

Well, the solution to our economic woes is simple.  Stop being Barack Obama.  And start being Ronald Reagan.  Because Reagan knew that government wasn’t the solution.  It was the problem.  And the sooner Obama learns this the better our economy will be.  And this isn’t theory.  It’s just history.

www.PITHOCRATES.com

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