October 2013 Employment Situation Summary

Posted by PITHOCRATES - November 11th, 2013

Economics 101

Although there were 204,000 New Jobs in October 720,000 Workers left the Labor Force

The worst economic recovery since that following the Great Depression continues (see Employment Situation Summary by the Bureau of Labor Statistics posted 11/8/2013).

Total nonfarm payroll employment rose by 204,000 in October, and the unemployment rate was little changed at 7.3 percent, the U.S. Bureau of Labor Statistics reported today…

Both the number of unemployed persons, at 11.3 million, and the unemployment rate, at 7.3 percent, changed little in October…

The civilian labor force was down by 720,000 in October.

If the Obama administration was an employment agency that found people jobs someone would have fired the management team by now with numbers like this.  204,000 new jobs for 11.3 million unemployed people is a success rate of 1.81%.  Worse, although there were 204,000 new jobs 720,000 workers left the labor force.  Which means that for every new job we lost 3.5 existing jobs.  So for one step forward in fixing the economy the administration takes 3.5 steps backwards.  Which means we’re moving in the wrong direction with the economy.

After a near-trillion dollar stimulus bill and quantitative easing up the wazoo what do we have to show for it?  Not a whole hell of a lot.  Other than more debt.  And inflationary pressures just waiting to be unleashed.  Taking us back to the stagflation and misery of the Seventies.  The heyday of Keynesian economics.

Solid Economic Growth starts at Raw Material Extraction

Before John Maynard Keynes gave us Keynesian economics the economy hummed along based on classical economic principles.  Including, but not limited to, thrift.  Savings.  Investment.  A sound banking system.  And a strong currency.  People saved their money.  Banks accumulated their savings into investment capital.  Banks made this capital available to investors.  And interest rates were determined by our savings rate.  The more we saved (i.e., the more thrifty we were) the lower interest rates were.  These are the economic principles that made the United States the number one economy in the world.

Another key concept of classical economics is the stages of production.  From the extraction of raw materials to manufacturing to wholesale goods to retail goods.  In a healthy economy there is growth at all stages.  And solid economic growth starts at raw material extraction.  For this feeds manufacturing.  Which feeds wholesale goods.  Which feeds retail goods.  Where consumers spend their money.  The fatal flaw of Keynesian economics is that it focuses only on consumer spending.  Not at these higher-order stages of production.  And when Keynesians try to end a recession while ignoring them they fail.  And get job numbers like these.

Employment in retail trade increased by 44,000 in October, compared with an average monthly gain of 31,000 over the prior 12 months…

Manufacturing added 19,000 jobs in October, with job growth occurring in motor vehicles and parts (+6,000), wood products (+3,000), and furniture and related products (+3,000). On net, manufacturing employment has changed little since February 2013…

In October, employment showed little or no change elsewhere in the private sector, including mining and logging, construction, wholesale trade, transportation and warehousing, information, and financial activities.

This is not the picture of an improving economy.  Consumers are spending money.  Thanks to low interest rates and a record amount of government benefits.  But the economic activity is greatest at the consumer level.  As evidenced by the largest increase in jobs at the retail level.  There are fewer job gains at manufacturing.  And even less at the whole sale level and raw material extraction.  Meaning the new economic activity is greatest at the consumer level.  Because of cheap (and free) money.  But there are no new jobs at the highest stage of production.  Raw material extraction.  Because they see no real economic recovery.  Only Keynesian ‘hot’ money that will cause a surge in consumer spending.  And a surge in inflation.  Leading to a continued sluggish economic recovery.  Or a fall back into recession.  And the last thing they want should that happen is higher costs.  Or more debt.  So they don’t spend more or invest during periods of Keynesian stimulus.

President Obama’s Greatest Supporters are suffering some of the Greatest Unemployment

The October 2013 Employment Situation Summary paints a grim economic picture.  People continue to leave the labor force.  And the government’s efforts to stimulate economic activity isn’t stimulating anything above the consumer level.  As the higher stages of production fear the coming inflation.  And possible recession.  This after 5 years of President Obama’s Keynesian economic policies.  Further proving the futility of Keynesian economics.  And the failure of the Obama administration.  Whose policies have stalled new hiring.  And pushed people from full-time to part-time.

The number of persons employed part time for economic reasons (sometimes referred to as involuntary part-time workers) was little changed at 8.1 million in October. These individuals were working part time because their hours had been cut back or because they were unable to find a full-time job.

Those individuals who had their hours cut or can’t find a full-time job are in large part due to the Affordable Care Act (Obamacare).  Which is not only destroying any economic recovery.  But the Affordable Care Act is also making health insurance unaffordable.  Which will make these economic numbers worse as the carnage spreads to employer-provided health insurance.  As people will have to both pay for health insurance AND pay for all of their health care out-of-pocket thanks to those high deductibles.  Which won’t help the unemployment numbers.  For as consumer spending falls so does hiring.

Among the major worker groups, the unemployment rates for adult men (7.0 percent), adult women (6.4 percent), teenagers (22.2 percent), whites (6.3 percent), blacks (13.1 percent), and Hispanics (9.1 percent) showed little or no change in October. The jobless rate for Asians was 5.2 percent.

It is interesting, or rather ironic, that the president’s greatest supporters are suffering some of the greatest unemployment.  Teenagers.  Blacks.  And Hispanics.  Who seem to never lose their faith.  No matter how much President Obama’s policies favor old white men and women.  And Asians.  It’s not for the lack of spending, either.  For the Obama administration has spent more domestically than any other president.  But it is only his rich Wall Street cronies who are doing well.  And other rich people.  Not the rank and file Obama supporters.  Yet they remain Obama supporters.  So far, at least.  These continual bad job numbers AND the unaffordable Affordable Care Act may change things.  Especially when these continue to fall disproportionally on teenagers, blacks and Hispanics. 

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2012 Endorsements: Karl Marx

Posted by PITHOCRATES - October 29th, 2012

2012 Election

Because Workers just don’t Spontaneously Join Together into a Functioning Business they need Capitalists

Karl Marx is the father of socialism.  And communism.  He was also the author (along with Friedrich Engels) of the Communist Manifesto.  The 19th century book that said, “Let the ruling classes tremble at a Communistic revolution.  The proletarians have nothing to lose but their chains.  They have a world to win.  WORKINGMEN OF ALL COUNTRIES, UNITE!”  Some people heeded his advice.  Vladimir Ilich Lenin, Joseph Stalin, Mao Zedong, Kim Il-sung, Fidel Castro, Ho Chi Minh and Pol Pot, to name a few.  The greatest mass murderers of all time.  No ideology has killed more than communism.  Not even the socialist Adolf Hitler, leader of the National Socialist German Workers’ Party (more commonly known as the Nazi Party) killed more.

According to Marx the history of society has been a class struggle.  Before his time it was the landed aristocracy oppressing the peasants in feudalism.  Then came along capitalism.  Where the new oppressor was the bourgeoisie.  The capitalist.  The employer.  The person that paid others to work.  And kept the profits of their labors.  Basically that means your boss.  Who you may hate while you’re working.  But if business is slow and layoffs are coming you desperately hope it’s someone else and not you.  And should you lose your job you desperately look for someone else who will pay you to work.  Because that’s the only way you know how to feed yourself and buy yourself nice things.  Like a home.  A cup of coffee at Starbucks.  Or a smartphone.  Marx called this oppression.  While most everyone else would call that being happy to have a job.  Because most workers don’t have a clue on how to run a business.  Let alone build one out of nothing.  For workers just don’t spontaneously join together into a functioning business.  They need capitalists.  For without capitalists there would be no jobs for workers.

So who does the bourgeoisie oppress?  The proletarians.  The laborers.  The employees of the bourgeoisie.  The people that actually do the work.  In his day that meant the factory workers.  Who were ruthlessly exploited in sweatshop conditions toiling away at monotonous tasks beneath the dignity of a human being.  The bourgeoisie was turning man into little more than a machine.  That worked until exhausted.  And what did they get for their labors?  Barely enough to survive.  Interestingly, whenever these cruel capitalists turned to actual machines to free these workers from this inhumane labor they cried out against this capitalist greed.  For replacing workers with machines was greedy.  And destroyed jobs.  So on the one hand these jobs oppressed the working class.  But on the other they were the best thing that ever happened to the working class.

Karl Marx summarized his Theory of Communism in One Tenet: The Abolition of Private Property

That’s something else Marx didn’t like.  Change.  The bourgeoisie was always changing things.  Updating their factories.  Installing new machinery.  Forcing the people that did things the old way out of a job.  Much like President Obama blames much of our economic woes on today.  And our high unemployment.  ATMs have put bank tellers out of a job.  Self-serve checkout lanes have put cashiers out of a job.  One man and a trenching machine put hundreds of ditch diggers out of a job.  The electric light put gas lighting workers out of a job.  And gas lighting put kerosene lighting workers out of a job.  And kerosene lighting put whale oil workers out of a job.  And whale oil lighting put candle makers out of a job.  It’s this modernization that Marx doesn’t like.  It disrupts labor.  Making the old worker obsolete.  So unions come in to protect these old jobs.  Allowing people to earn high wages without having advanced skills.  So instead of learning the skills to do the new jobs of the future they can keep doing the jobs of the past.  President Obama talks about bringing back high-paying manufacturing jobs.  Where workers toil away in those monotonous tasks that are beneath the dignity of a human being.  The kind of jobs the parents of college graduates toiled away at to put their kids through college.  So their kids wouldn’t have to do what they did.  Because the new jobs are better than the old jobs.  They’re easier.  Safer.  And offer higher pay.  But the downside is that they take more education and training.  Where some people will be better than others.  Which is unfair to those who aren’t as good.

Of course to help these factory owners pay these old jobs high wages they need to sell their goods at high prices.  Often at higher prices than the market price.  So they have to unlevel the playing field.  Governments pass minimum wage laws.  Union requirements.  And minimize the competition.  Either by restricting other domestic competitors by high entry costs.  Such as licensing fees.  Or by placing tariffs on lower priced foreign imports.  Raising their prices so they don’t cost less than the higher priced domestically produced goods.  Allowing these few factory owners to pay their employees these higher wages.  By forcing the general public to spend more money than they would have without these protections.  And thereby having to make sacrifices in their lives because they have less of their earnings for their own families.  For these reasons Marx called free trade exploitation.  Because free trade made it difficult for unskilled workers to earn high wages.

Marx summarized his theory of communism in one tenet: The abolition of private property.  For it was the bourgeoisie’s accumulation of private property that exploited the working class.  So no one can own anything.  Even laborers.  Because whatever private property the laborers accumulated came from only one place.  From the exploitation of other workers.  And that’s not the only thing Marx wanted to abolish.  He also wanted to abolish the past.  Even though he held on to the jobs of the past.  Marx advocated abolishing tradition, customs, institutions and religion.  Even families.  He wanted to replace education with communist indoctrination.  Much like they did in Nazi Germany.  In the Soviet Union.  In communist China.  North Korea.  Cuba.  Cambodia.  In a socialist/communist society everyone is equally subordinate to the state.  Where there is no private property.  No bourgeoisie.  Just a dictatorship of the proletariat.  A workers’ paradise.  A communist utopia.  Where no one looked anywhere but to the state for all of their needs.

If Karl Marx were Alive Today he would Likely Endorse the Democrat Candidates Barack Obama and Joe Biden

So what would it be like in this communist utopia?  This dictatorship of the proletariat?  There would be a heavy progressive tax.  (The US has a progressive tax rate.  And the Democrats want to raise tax rates higher yet at the high end.)  No right to inheritance.  (Democrats want to raise inheritance taxes.)  Confiscation of the property of emigrants.  (The Democrats want to highly tax/seize money invested outside of the United States that is trying to escape that heavy progressive tax.)  A central bank.  (The Federal Reserve is a central bank.)  Centralization of the means of communication into the hands of the state.  (The three television news networks have a Democrat bias.  Most newspapers have a Democrat bias.  And the two areas that don’t, talk radio and the Internet, the Democrats want to regulate.)  Free public education.  That indoctrinates our children.  (Public education tries to turn our children into Democrat voters.  By teaching the unfairness of capitalism.  America’s sins.  And by scaring our children about global warming.  And that only government can protect us from global warming by regulating private industry more.  Generous tuition subsidies help continue this work at our colleges.)

The Democrats further this class struggle, or rather create one, with their endless class warfare.  The top 1% isn’t paying their fair share of taxes.  The Democrats embraced the Occupy Wall Street movement.  Pitting the 1% against the 99%.  The Democrats employ racism.  Tuning any criticism of President Obama into a racist attack.  The Democrats try to scare women by warning them of the Republican war on women.  Saying ‘women should buy their own birth control’ is code for Republicans hate women and will oppress them if elected.  The Democrats constantly divide us.  Putting one group against another.  Trying to keep the people agitated.  And angry.  So they will welcome more government into their lives.  And the abolition of the capitalists’ private property through that heavy progressive tax.  The empowerment of unions.  Both private and public.  The restriction of our liberties through radical egalitarianism.  By punishing achievement.  So no one can rise to a higher level of success.  Or to a higher level of wealth.  So everyone is equally miserable in their workers’ paradise.

So if Karl Max were alive today who would he support in the 2012 election?  The party that includes a lot of Marxist doctrine in it all ready.  Marx would feel at home in the Democrat Party.  In fact it would be hard not to see a bit of communist revolution in it.  Especially with communist Fidel Castro and socialist Hugo Chávez already endorsing the Democrat Party candidates.  So it isn’t much of a leap to say that if Karl Marx were alive today he would likely endorse the Democrat candidates Barack Obama and Joe Biden.

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‘More Taxes, Regulations, Uncertainty and Spending’ is the Mantra of the Obama Administration

Posted by PITHOCRATES - September 21st, 2011

Obama’s Proposed Aviation Fees will Fall Predominantly on the People who can Least Afford It

In Obama‘s deficit reduction plan he plans to tax the rich.  Those who can most afford it.  Rich people.  And by rich people he means anyone who has any money to spend (see Airline groups attack Obama proposals to boost fees for aviation security, air traffic control by Associated Press posted 9/21/2011 on The Washington Post).

The aviation fees are part of Obama’s deficit-cutting plan that was released Tuesday. The plan would:

— raise the passenger security fee — now $5 to $10 per round trip — to $15 by 2017 and give the Homeland Security Department the power to push it higher.

— impose a surcharge of $100 per flight to help pay for air traffic control.

But college students fly.  Middle class families fly on vacation.  Non-rich people everywhere fly to visit family members that have moved away.  A lot of people fly.  And an interesting tidbit about the flying public?  They’re not all rich.

The rich people that Obama wants to tax?  Because they can most afford it?  Those well-to-do folk who fly those private jets?  Well, a lot of them do just that.  Fly private jets.  And, therefore, do NOT fly on commercial planes.  So they won’t be paying these new taxes/fees.  So these taxes/fees will fall predominantly on the people who can least afford it.  Imagine that.

The Air Transport Association, which represents large airlines, said it’s unfair for airlines and passengers to pay for security against terror attacks that target the U.S. and not the airlines themselves. The trade group says a typical $300 round-trip ticket already includes $60 in taxes and fees.

The Regional Airline Association, a group of smaller carriers, said the fees could lead to a loss of flights to smaller cities. The group’s president, Roger Cohen, said the $100 surcharge would cost more than regional airlines earned last year, threatening service to smaller cities.

The groups also complained that some of the money raised from airlines and passengers would be used to pay down the federal budget deficit and not to improve the air-travel system.

The airlines have a vested interest in protecting their planes.  Because they bought them.  And planes that blow up or crash in terrorist attacks don’t help the bottom line.  There’s the loss of an expensive airplane.  And the future revenue from that airplane.  The cost of replacing that airplane.  And the lost business from passengers who tend to shy away from an airline whose planes are easy pickings for terrorists.

So let them hire a security contractor to secure their planes.  Using the Israeli model.  Ask very pointed questions and observe people’s responses.  It works well for the Israelis.  Couldn’t be any worse than what the TSA is doing.  I mean, what passengers are going to complain about being groped less?

The administration estimated that boosting passenger security fees will raise $24.9 billion over 10 years. It proposed to spend $15 billion of that to reduce federal debt.

This is telling.  The airlines did not run up that federal debt. So there’s something really troubling about this.  Taking $15 billion from the airlines under the auspices of national security.  Just so they can continue their irresponsible spending ways in Washington.  This is no different than an addict stealing from his mother’s purse to support his habit.

This is Washington’s problem.  Not the airlines.  Washington has a spending problem.  And they can’t stop spending.  Or simply choose not to.  Instead they look for other people to steal from.  Like an addict.  While denying that they have a problem.  And always blaming others.  Like the rich who don’t pay their fair share.  And by rich they mean anyone that has any money to spend.

Tax Cuts Stimulate, not Keynesian Stimulus Spending Funded by Taxes

So how bad is this spending?  How much of a debt problem has it given us?  That the president is shaking down the airlines for $15 billion (see Committee Searches for Economic ‘Tipping Point’; Prefer Not to Find It by Jim Angle posted 9/20/2011 on Fox News)?

“We know that the debt is now 100 percent — approximately 100 percent of (gross domestic product),” said Allan Meltzer, a professor of political economy at Carnegie Mellon University in Pittsburgh. “That doesn’t include the unfunded liabilities. It doesn’t include (mortgage lenders)Fannie Mae and Freddie Mac. It doesn’t include a number of other things.”

By unfunded liabilities, Meltzer means entitlement programs. Social Security and Medicare alone have $46 trillion in unfunded liabilities, meaning that much more is promised in benefits than the government — and taxpayers — have as a plan to pay for them.

Oh.  It’s that bad.  We owe a dollar for every dollar our economy produces.  But it’s even worse than this.  All of those unfunded liabilities that don’t appear in the official budget.  Fannie and Freddie.  And let’s not forget the Social Security and Medicare trust funds.  Which are filled only with IOUs from Uncle Sam.  Because Uncle Sam spent our money.  That money we put aside with each paycheck.  Those FICA and Medicare withholdings.  That money they forced us to save.  Because we were untrustworthy with our own money.  As they apparently are, too.

Chris Edwards, Director of Tax Policy Studies at the Cato Institute, a libertarian think tank in Washington, argues that U.S. debt is so far out of control that it must be contained soon.

“We’ve had five trillion (in) deficit spending since 2008, the most enormous sort of Keynesian stimulus you can imagine, and yet we’ve had slower growth than any time since World War II. So I don’t think spending helps.”

So the government owes more money than taxpayers can fund.  And yet that didn’t stop them from spending $5 trillion more.  For stimulus.  Which is just code for throwing money at political cronies.  I mean, it’s obvious that it didn’t stimulate anything.  Because the economy is still in the toilet.

And there’s a very good reason for that.  Because tax cuts stimulate.  Not Keynesian stimulus spending funded by taxes.

Meltzer pointed to three “fiscal changes that really did enormous good.” One was the tax cuts from the Kennedy and Johnson administrations, the most effective part of which were business tax cuts.

“They got the biggest bang for the buck,” he said.

The second were the Reagan-era tax cuts which came in two rounds and boosted a flagging economy. Meltzer said a completely different option worked well too.

“(The) third policy that gave people confidence were the Clinton tax increases, which assured people that their future tax rates were not going to go up, that they had seen what they were going to have to take, and there wouldn’t be anymore.”

Meltzer said the increases gave people certainty about what tax rates would be, which reassured businesses they wouldn’t go higher, allowing employers to plan and create jobs with confidence.

The Clinton tax increases?  That’s not why the Nineties were booming.  It was because of greedy capitalists.  Looking to strike it rich in the dot-com boom.  The economy was smoking hot because of irrational exuberance.  Not higher taxes.  And the budget went into surplus when all those dot-com people cashed in their stock options.  And they paid a boatload of capital gains taxes.  Before the dot-com bubble burst.  And threw the economy into recession.

But he’s right on the Kennedy and Reagan tax cuts.  Both used good Austrian supply-side economics.  Which exploded economic activity.  And similar policies could do that again.  If we would just stop with the Keynesian nonsense.  And the belief that crippling regulations will spur economic growth.

Business Owners Hate Uncertainty because, Unlike Uncle Sam, they can’t Print Money

And speaking of regulation, remember the Dodd-Frank act?  Have you read it?  Probably not.  For I doubt anyone in Congress has read it in its entirety (see Dodd-Frank and Uncertainty by Veronique de Rugy posted 9/20/2011 on National Review).

Remember how President Obama promised that the Dodd-Frank bill would provide certainty, stability and growth…?

It’s 1,623 pages long. It is very heavy. If it could fit it in my purse, I could use it as a protective weapon. Whatever else this will do, however, it will not make lending cheaper or credit more readily available, and it will not protect us from another financial crisis. And it will not protect consumers or taxpayers.

What it will do, and already does, is continue injecting gigantic uncertainty into the economy, paralyzing entrepreneurship and job creation. Imagine how long it will take for all the rules to be written and for U.S. businesses to figure out how they are supposed to operate from now on. The vagueness of the law as written means that even business owners and consumers who have the courage to pick up this book and try to figure out what’s in their future won’t get the answers they are looking for.

Really, is there any doubt that some of the $2 trillion in cash that companies are sitting on is a direct result of this uncertainty?

That’s right.  If you don’t know what tomorrow may bring you save your money.  You deleverage.  Pay down debt.  And hoard cash.  Because cash is king.  It’s the only thing you can pay your employees with.  The only thing you can pay your suppliers with.  The only thing you can pay for your insurance with.  And it’s the only thing you can pay Uncle Sam with.  So if you don’t have enough of it around during bad times you may not be around for the good times.  When they return.  If they return.

Business owners hate uncertainty.  Because, unlike Uncle Sam, they can’t print money.  So they have to be very careful with what they have.  To survive things like recessions.  Depressions.  And Dodd-Frank.

In these Tough Economic Times, it is the People that are Suffering, not Rich Liberals

‘More taxes, more regulations and more uncertainty’ is the mantra of the Obama administration.  And, of course, more spending.  Always more spending.  Is it any surprise the economy is not responding well to Obama’s policies?

There is no way businesses will grow in this environment.  Or create jobs.  And without new jobs the economy will never recover.  People understand this.  That’s why Democrats are losing elections.  Even in New York.  It’s a repudiation of Obama.  And the liberal Democrat agenda.

For though the mainstream media has been a loyal propaganda outlet for the liberal elite, the people aren’t buying it anymore.  For in these tough economic times, it is the people that are suffering.  Because of Obama’s policies.  While rich liberal elitists are living well everywhere.  And continue to fly on their private jets.  While the common people will be paying Obama’s new aviation fees.

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Team Obama Lying to Scare Americans to Increase the Debt Limit so they can Continue their Orgy of Spending

Posted by PITHOCRATES - July 10th, 2011

Talking up the Horrible Economy in 2010

Back in August of 2010, Timothy Geithner took to the New York Times to tell everyone how wonderful the economic recovery was (see Welcome to the Recovery by Timothy Geithner posted 8/2/2010 on The New York Times).

The recession that began in late 2007 was extraordinarily severe, but the actions we took at its height to stimulate the economy helped arrest the freefall, preventing an even deeper collapse and putting the economy on the road to recovery…

Private job growth has returned — not as fast as we would like, but at an earlier stage of this recovery than in the last two recoveries. Manufacturing has generated 136,000 new jobs in the past six months…

Wow.  In only 6 months their policies have created 136,000 new jobs.  And their swift and bold action prevented the freefall loss of gosh knows how many jobs.  That’s good.  So how bad was that freefall?

The new data show that this recession was even deeper than previously estimated. The plunge in economic activity started an entire year before President Obama took office and was accelerating at the end of 2008, when G.D.P. fell at an annual rate of roughly 7 percent.

Panicked by the collapse in demand and financing and fearing a prolonged slump, the private sector cut payrolls and investment savagely. The rate of job loss worsened with time: by early last year, 750,000 jobs vanished every month. The economic collapse drove tax revenue down, pushing the annual deficit up to $1.3 trillion by last January.

Okay, first he has to get the obligatory blame George W. Bush first out of the way.  So then we get to the good news.  The amount of damage they prevented.  We were losing 750,000 jobs every month.  Which would be 4,500,000 in a 6-month period.  Humph.  Getting back 136,000 of the 4,500,000 jobs lost is being on the road to recovery?  That’s like one job back for every 33 lost.  Are you sure this is a recovery? 

Oh, and that $1.3 trillion deficit?  It wasn’t from a lack of revenue.  It was from an orgy of spending.

The economic rescue package that President Obama put in place was essential to turning the economy around. The combined effect of government actions taken over the past two years — the stimulus package, the stress tests and recapitalization of the banks, the restructuring of the American car industry and the many steps taken by the Federal Reserve — were extremely effective in stopping the freefall and restarting the economy.

According to a report released last week by Alan Blinder and Mark Zandi, advisers to President Bill Clinton and Senator John McCain, respectively, the combined actions since the fall of 2007 of the Federal Reserve, the White House and Congress helped save 8.5 million jobs and increased gross domestic product by 6.5 percent relative to what would have happened had we done nothing. The study showed that government action delivered a powerful bang for the buck, and that the bank rescue on its own will turn a profit for taxpayers.

A powerful bang for the buck?  I don’t know.  Saying how great your actions were by what didn’t happen is a bit spurious.  I mean, I could say that thanks to George W. Bush and the policies he implemented after 9/11 he saved the lives of 8.5 million Americans that would have otherwise died in terrorist attacks.  Simply by scaring a lot of bad guys from trying anything now that there was a new sheriff in town.  It’s as plausible as that Blinder and Zandi report.  You can’t prove either.  Or disprove either.  So it’s a license to lie.

Still Talking up the Horrible Economy in 2011

It’s almost been a year since Geithner’s NYT piece.  If he was right things should be a whole lot better now.  The Obama administration took full credit then for the ‘recovery’.  So the current economic numbers are now theirs.  Which means they can’t blame George W. Bush anymore.  And how are those numbers?  Still horrible (see You are what your record says you are by Conn Carroll posted 7/10/2011 on The Washington Examiner).

Last month, David Gregory tripped up new DNC Chair Debbie Wasserman Schultz up with a chart detailing President Obama’s economic record. It showed unemployment up 25 percent since Obama was inaugurated, debt up 35 percent, and gas up more than 100 percent. Wasserman Schultz lamely tried to argue that the economy was getting better, to which Gregory replied: “Americans don’t believe that’s the case.”

This Sunday was Treasury Secretary Tim Geithner’s turn and he fared no better. At one point he even blamed the weather for Obama’s terrible economic record.

The numbers are horrible now.  And they were horrible a year ago.  There’s been no recovery.  And all of the administration’s actions haven’t done anything but explode the federal debt.  Which is at a record high.  As are the deficits under Obama.  And what does Team Obama want to do about that?  Why, borrow some more.  To spend some more.  Of course.

The U.S. isn’t close to Running out of Money

Despite the great economic news last August and the current great news (per the Obama administration, not per reality), things are pretty bad on the debt front.  In fact, those rascally Republicans with their opposition to raising the debt limit may place this glorious economic recovery into jeopardy.  Worse, they may destroy America as we know it (see ‘No delaying’ deadline to lift US debt ceiling posted 7/10/2011 on the BBC).

The US faces running out of money and defaulting if Congress does not allow the government to take on more debt.

If no agreement is reached, the government would be unable to pay civil servants, government contractors, pensioners or holders of government debt.

Economists and the White House have warned that such a default could push the US back into recession and have a global economic impact.

This is actually BS.  And I don’t mean Barbara Streisand.  The federal government is awash in cash.  Just not enough to further increase spending.  How much?  Well, let’s look at some of the numbers per the Tax Policy Center.  Tax receipts (i.e., actual cash dollars the government collects) for the years 2008, 2009 and 2010 were $2.5 trillion, $2.1 trillion and $2.2 trillion, respectively.  That doesn’t include any borrowing.  That’s pure cash on the barrelhead.  That’s a lot of cash that can pay a lot of bills.  It’s in the neighborhood of $180 billion a month.  And the projection for 2011?  Holding steady at about $2.2 trillion.  Again, that’s cash flowing into Washington from taxpayers.  Nothing borrowed.  Or printed.

Despite this staggering amount of cash raining down on Washington it’s not enough.  For the years 2008, 2009 and 2010, the deficits were $458 billion, $1.4 trillion and $1.2 trillion, respectively.  And the projected deficit for 2011 is $1.6 trillion.  Again, it’s the orgy of spending that is the problem.  It’s not a revenue problem.  The U.S. isn’t close to running out of money.  Team Obama is just lying to try and scare the pants off of people to get them to hate Republicans.  And to pressure them to raise the debt limit.  So they can borrow more.  And go on another spending bender.

Green Energy can only Survive when heavily Subsidized by the Government 

So what, exactly, did they spend all that money on?  Well, there was the stimulus.  The financial and auto bailouts (which should have been left to the bankruptcy courts).  And all their tweaking of the private sector economy.  Especially the green one.  For that’s America’s future.  Green energy.  And they were going to help make it happen.  By subsidizing the crap out of it (see Michigan town shows promise and pitfalls of job retraining by Don Lee posted 7/10/2011 on The Los Angeles Times).

Uni-Solar began with a hiring surge that by 2009 had climbed to 422 workers… But the Greenville plant’s primary market is Europe, and when sales in Italy and France declined as a result of the recession and other factors, Uni-Solar cut back…

Greenville and Uni-Solar also were hurt because state and federal policies simply weren’t in place to support them. Unlike the United States, for instance, Canada subsidizes consumers who adopt solar power, but only if they buy solar panels with domestically manufactured contents…

Canada is not alone in adopting comprehensive programs of subsidies, tax provisions and other incentives to foster domestic industries. Germany has an elaborate program to support automobile, electronics and other manufacturing and to discourage its companies from moving operations overseas.

That’s right, the green energy sector can only survive when heavily subsidized by the government.  To help the green energy market compete with the more reliable and less expensive fossil fuel market.  In the U.S.  As well as in Europe.  Worse, all this government help has only created a green energy bubble.  Created a lot of supply for a demand that wasn’t there.  Just like this plant in Greenville, Michigan.

The only way to make Green Energy practical is to make Consumers pay more for Electricity

The U.S. should consider itself lucky that their government is cutting subsidies.  Because it at least gives consumers a chance at a better economy.  Perhaps Washington will cut its spending.  And let the taxpayers keep more of their money so they can make it in an economy with rising prices.  Unlike in the UK (see Power bills to soar by 30% in ‘green’ reforms by Rowena Mason and David Barrett posted 7/9/2011 on The Telegraph).

Costly new incentives to encourage energy companies to invest in renewable power sources such as wind farms will put an extra £160 a year on the average household bill over the next 20 years…

Mr Huhne is expected to announce on Tuesday that energy companies, such as Centrica and EDF, will get a fixed price for electricity generated from nuclear power and wind farms, which will be higher than the market price.

The financial incentives will be funded by consumers, who will see their electricity bills rise by 30 per cent over the next 20 years from an average of £493 per year to £655 per year.

You see, renewable energy is a money losing investment.  It’s just too costly.  So power companies won’t venture into these green markets unless someone makes it worth their while.  And in the UK the government is doing just that.  By giving them lucrative cash incentives.  Which the government will pay for via higher electricity bills.  Leaving the consumer with less money to live on in an economy with rising prices.

The costly package due to be outlined in full this week is designed to reassure generation companies that Britain is an attractive place to build nuclear power stations and wind farms.

Mr Huhne admitted in an interview with The Sunday Telegraph last year that there was no money available for direct state subsidies for a new generation of nuclear plants, so this week’s announcement sets out how consumers will shoulder the cost of incentives directly.

Yes, the only way to make green energy practical is to make consumers pay more for electricity.

The changes to be outlined by Mr Huhne this week will hand billions of pounds in subsidies to the energy companies and kick-start a construction programme creating thousands of jobs.

But combined with further green taxes, such as the European emissions trading scheme, and upgrades to Britain’s national grid the measures could see Britain’s gas and electricity bills rise by 50 per cent – or £500 per average household bill – according to Ofgem, the energy regulator.

Create ‘thousands of jobs’ by making all consumers live on less.  At least those who use electricity.

By the time you factor in the other costs of green living the average Briton could see a 50% increase in their utility costs.  Which is a staggering cost to pay for a few thousand jobs.  The economy, and the consumer, would be better off with coal.  It’s more reliable.  It’s cheaper.  And one plant out of site can provide power to hundreds of thousands.  Which is better than dotting the landscape with windmills as far as the eye can see.  To produce power only when the wind blows.

The Government has a Spending Addiction

Team Obama has made a mess of things with their orgy of spending.  More than tripled the deficit since coming into office.  Requiring ever more borrowing to ‘save the country’.  Which is, of course, a lie.  Washington is awash in cash.  Over $2 trillion a year.  And if that isn’t enough to pay the bills then this administration should just resign.

The economy is stalled.  The recession never ended.  Money poured into the green energy sector was money wasted.  And is only creating a green energy bubble by building supply for demand that isn’t there.  Like in Greenville, Michigan.  Yes, supply can create demand per Say’s Law.  If that supply is something that people want.  And that’s the problem.  People don’t want more expensive and less reliable energy.  Especially in an economy with rising prices.

The facts and figures all confirm one thing.  The U.S. has a spending problem.  Not a revenue problem.  The government is like an addict with a spending addiction.  Who will lie and say anything to satisfy that addiction.  Only this addict is worse than your run of the mill junkie.  For if Team Obama overdoses it will take a nation with it.  In fact, this administration is in such denial that perhaps an intervention is in order.  Which is really what the budget debate is.  The Republicans need to be strong.  For Obama.  And the nation.  They have to hold the line on the debt limit.  Do not give them more money to spend.  Because with over $2 trillion a year, they have enough already.

www.PITHOCRATES.com

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