The Obama Bus Tour Steers Clear of Black Communities, Focuses on 2012 Election instead of Jobs

Posted by PITHOCRATES - August 17th, 2011

The Professor Lectures and Scolds on the Listening Tour more than he Listens

Once again President Obama emulates George W. Bush.  First he attacked a Muslim country like Bush.  Now he bought Canadian-built buses for a pro-America jobs tour (see GOP attacks Obama bus, but Bush did same by Rick Pearson posted 8/17/2011 on the Chicago Tribune).

As President Barack Obama traveled to the first of two “town hall” stops in western Illinois today, top national and state Republicans criticized his campaign-style visit and criticized his use of a taxpayer-funded Canadian-manufactured bus as part of a jobs tour.

But no mention was made by Republican National Chairman Reince Priebus or Illinois GOP Chairman Pat Brady that a re-election seeking President George W. Bush used a bus from the same manufacturer, Quebec-based Prevost, for a spring 2004 “Yes, America Can” campaign tour through the Midwest.

Hey, if it was okay for Papa it’s okay for Obama.  I’m sure that’s what the President believes.  So he used these imported buses for a 2012 campaign tour.   Just like his surrogate papa did.

The bus tour, which included the states of Minnesota and Iowa that Obama won in 2008, has had a distinctive campaign appearance though the White House has described the three-day event as a listening tour.

Oh, it’s not a campaign tour.  It’s a listening tour.  Funny.  Because he didn’t want to listen to Ryan Rhodes.  In fact, he got rather professorial with the impertinent Rhodes.  Who asked the president why his vice president, Joe Biden, called the Tea Party people terrorists.  Obama said he never said any such thing (even though Biden did call them terrorists).  They talked about the balance budget amendment.  Or tried to.  The president grew impatient.  Wasting his time talking to someone clearly undeserving of his time (see The Props Talk Back to Obama posted 8/16/2011 on Rush Limbaugh).

It doesn’t sound like you’re interested in listening.

A funny thing for someone to say while on a listening tour.  It makes perfect sense on a campaign tour.  But not a listening tour.  Because on a campaign tour you want the people to listen to you.  On a listening tour, though, the president is supposed to listen to the people.  Not scold them for talking.    

Obama skips the Black Communities because he’s Sure they’ll Vote for the Black Guy Anyway

So it’s clear Obama has no time for the Tea Party people.  You know who else he doesn’t have time for?  Black people (see Black caucus: Tired of making excuses for Obama by Byron York posted 8/17/2011 on The Washington Examiner).

During a sometimes-raucous session of what’s being called the “For the People” Jobs Initiative tour, a key member of the Congressional Black Caucus told an audience in Detroit Tuesday that the CBC doesn’t put pressure on President Obama because he is loved by black voters.  But at the same time, Rep. Maxine Waters said, members of the CBC are becoming increasingly tired and frustrated by Obama’s performance on the issue of jobs. Even as she expressed support for the president, Waters virtually invited the crowd to “unleash us” to pressure Obama for action.

“We don’t put pressure on the president,” Waters told the audience at Wayne State Community College.  “Let me tell you why. We don’t put pressure on the president because ya’ll love the president. You love the president. You’re very proud to have a black man — first time in the history of the United States of America. If we go after the president too hard, you’re going after us.”

So the president can do anything he wants because he’s black?  Apparently so.  Even if his economic policies are bad for the country.  Giving above national average unemployment rates in these black communities.  It doesn’t matter.  The Congressional Black Caucus still gives him unconditional support.  Simply based on the color of his skin.  Not by his actions.  Or words.  And yet they’re perplexed why he isn’t spending more time in the black community.

The problem, Waters said, is that Obama is not paying enough attention to the problems of some black Americans.  The unemployment rate for African-Americans nationally is a little over 16 percent, and almost twice that in Detroit.  And yet, Waters said, the president is on a jobs-promotion trip through the Midwest that does not include any stops in black communities.  “The Congressional Black Caucus loves the president too,” Waters said.  “We’re supportive of the president, but we’re getting tired, ya’ll.  We’re getting tired. And so, what we want to do is, we want to give the president every opportunity to show what he can do and what he’s prepared to lead on. We want to give him every opportunity, but our people are hurting. The unemployment is unconscionable. We don’t know what the strategy is. We don’t know why on this trip that he’s in the United States now, he’s not in any black community.  We don’t know that.”

Well, based on everything Waters said the answer is obvious.  He’s not spending any time in any black community because he doesn’t think he has to.  That it’s a given that they’ll vote for the black guy in 2012.  So he’s spending time where he has to work for the vote.  The Midwest.  Especially the white Midwest.  Who are just as disgruntled as the black communities.  And the Congressional Black Caucus.  But are less likely to vote for him based on the color of his skin.

As she discussed her dilemma — frustrated with the president but hesitant to criticize him lest black supporters turn on her — Waters asked the crowd for its permission to have a “conversation” with the president.  “When you tell us it’s alright and you unleash us and you tell us you’re ready for us to have this conversation, we’re ready to have the conversation,” she said.  Some members of the crowd immediately voiced their approval.

“All I’m saying to you is, we’re politicians,” Waters continued.  “We’re elected officials.  We are trying to do the right thing and the best thing. When you let us know it is time to let go, we’ll let go.”

“Let go!” some in the audience yelled.

Let go indeed.  Actually the black communities may be more in line with the white Midwest.  Who both care about jobs.  And are both frustrated with the failure of the Obama administration to create jobs.  For the American electorate is colorblind on this one issue.  White.  And black.           

Keynesian Economic Policies dominated the Seventies and created Stagflation

And it really doesn’t look good on the jobs front.  In fact, it looks rather Jimmy Carter (see Editorial: That ’70s Show — Stagflation Returns posted8/17/2011 on Investor’s Business Daily).

Stubbornly high unemployment isn’t the only thing ailing this recovery. Inflation keeps rising even as growth stagnates, raising the specter of 1970s-style “stagflation.”

The word had been banished from the economic lexicon for decades. But as the Fed commits to easy credit through mid-2013, new data suggest it may be making a comeback.

Keynesian economic policies dominated the Seventies.  And created stagflationPaul Volcker attacked stagflation.  By attacking inflation.  Starting in the last year of Carter’s administration, he reversed the Fed‘s easy credit.  This gave Reagan a nasty recession to start his term.  But he fixed that with explosive economic growth courtesy of Austrian school Reaganomics.  The growth was so great Keynesians call the Eighties the Decade of Greed.

Consumers already are squeezed. With real incomes falling, they cut their spending in June for the first time in 20 months. Household spending barely grew for the entire April-June period, inching up just 0.1% for the worst showing since the recession ended in 2009.

Enter stagflation, a term coined in the ’70s to describe a new economic malaise of continuing inflation and slumping business activity, together with high unemployment. Then as now, energy and gold prices soared.

Right now this is our more likely future.  Unless we sweep the Keynesians out of office in 2012.  And return to more Reaganesque policies.

Enough of the Hope and Change already, where are the Jobs?

Obama is on a listening tour where he prefers not to listen to the people.  Because it’s not so much a listening tour as a campaign tour.  Driving through the white Midwest where his approval numbers have dipped below 40%.  He doesn’t bother with the black communities.  Because he doesn’t think he has to.  Confident that they will vote for the black guy in 2012.  No matter how his economic policies destroy the economy.

The president may be racist in this view.  But the electorate isn’t.  They want jobs.  White and black alike.  Who aren’t buying the old campaign line.  Enough of the hope and change already, they say.  Where are the jobs?

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Reaganomics beats Keynesian Stimulus Spending every Time

Posted by PITHOCRATES - July 6th, 2011

Obama’s Policies Failing because they’re too Ronald Reagan

So President Obama is a supply-sider.  Just like Ronald Reagan.  Who’s a thunk it?  Funny, he doesn’t appear to govern like Ronald Reagan.  In fact, I believe Obama has said that we can’t go back to the failed policies of the past.  I’m pretty sure that meant Reaganomics.  But I could be wrong.  Because apparently the faltering economy is faltering because of supply-side economics (see The final nail in the supply side coffin by Andrew Leonard posted 7/6/2011 on Salon).

Ever since Ronald Reagan first attempted to make supply-side economics a reality and proceeded to inaugurate an era of persistent government deficits and growing income inequality, it has become harder and harder to make the trickle-down argument with a straight face. But we’ve never seen anything quite like the disaster that’s playing out right now.

Those persistent government deficits of Ronald Reagan?  They were about $200 billion.  The deficits under the Obama administration have been in excess of $1,300 billion (or $1.3 trillion).  The current projection for 2012 is $1,600 billion (or $1.6 trillion).  So the Obama deficits are over 5.5 times the Reagan deficits.  Or an increase of approximately 550%.  So deficits are worse under Obama.  Far worse.

As far as income inequality, the gap has grown consistently from Richard Nixon through Barack Obama (see The United States of income inequality by Andrew Leonard posed 9/28/2010 on Salon).  That included the 4 years of Jimmy Carter, the 8 years of Bill Clinton and about a year of Barack Obama.  Three Democrat administrations.  So the gap between the rich and poor is greater under Obama.  Far greater.

During the six quarters since the recession technically ended in the second quarter of 2009, real national income in the U.S. increased by $528 billion. But the vast majority of that income was captured as profit by corporations that failed to pass on their happy fortunes to their workers.

First of all, that’s now how business works.  They are not in business to produce wealth for their employees.  They pay employees to help them create wealth.  And they pay them whatever it takes to keep their employees from quitting to find a higher paying job.  If you think that’s wrong let me ask you something.  When you choose a store to shop at, do you pick the one with the highest prices so that store can pay their employees more?

What makes this “recovery” so different? Perhaps the simplest answer is that labor has been broken as a force that can put pressure on management, so there’s little incentive for employers to turn profits into wage hikes or new jobs. Instead, employers are squeezing more out of the workers that they’ve got, and investing in equipment upgrades and new technology instead of human assets — labor productivity has risen sharply since the end of the recession.

GM and Chrysler did not break labor.  Labor broke them.  Those generous UAW contracts saddled these companies with legacy costs that left them uncompetitive.  And insolvent.  The auto bailout screwed the bond holders and rewarded labor.  By giving them seats on the board of directors and stock to fund their underfunded pension funds.  This is why employers prefer investments in productivity.  They’re less political.  And are less likely to come back and bite you in the ass.

Globalization also plays a potent role — and not just as a source of cheap labor to undermine the bargaining power of American workers. The Journal notes that many companies “are benefiting from demand from emerging markets, where they are deriving an increasing share of their sales.” Job creation is probably following the sources of new demand. If the Chinese and Brazilians and Indians are the ones buying American goods and services, then it makes sense to staff up overseas. But with American consumers still shellshocked by the economic crash and dutifully obsessed with paying down their debts while trying to hold on to their homes, domestic demand is hardly a force to be catered to.

Interestingly, the emerging markets noted are making great strides toward free market capitalism.  Countries that are moving towards supply-side economics.  While the U.S. moves away from it.  Those emerging economies are doing well.  The U.S. is not.  It would appear, then, that a move towards supply-side economics is a move in the right direction.  And yet the pundits on the left continue to belittle the success of Reaganomics.  So you be the judge.  Let’s summarize Reaganomics as follows:

1.  Reduce Growth of Government spending.
2.  Reduce Income Tax and Capital Gains Tax.
3.  Reduce Government regulation.
4.  Control the money supply to reduce inflation.

Which president would you say followed these policies more?  Ronald Reagan?  Or Barack Obama?  The one who did would be the supply-sider.  And the one who didn’t would not.

The answer is clear.  President Obama is neither a conservative nor a student of the Austrian School of Economics (i.e., supply-side).  He’s a Keynesian.  His policies are Keynesians.  And Keynesians spend.  As demonstrated by his massive stimulus spending.  That failed to stimulate.   This economic train-wreck in the U.S. is a lesson in Keynesian economics.  Not supply-side economics. 

Keynesian Stimulus Spending is Wasted Money

Let’s take a closer look at Keynesian economics.  The theory that government can spend the economy into prosperity.  By looking at the Obama’s 2009 Stimulus.  One part of which was to expand broadband Internet into rural areas (see How Effective Was The 2009 Stimulus Program? by Nick Schulz posted 7/5/2011 on Forbes).

In an important and eye-opening new paper, Jeffrey Eisenach and Kevin Caves of Navigant Economics, a consulting firm, recently examined ARRA’s subsidization of rural broadband. The ARRA stimulus funds for broadband constitute “the largest Federal subsidies ever provided for broadband construction in the U.S.” An explicit goal of the program was to extend broadband access to homes currently without it.

Eisenach and Caves looked at three areas that received stimulus funds, in the form of loans and direct grants, to expand broadband access in Southwestern Montana, Northwestern Kansas, and Northeastern Minnesota. The median household income in these areas is between $40,100 and $50,900.  The median home prices are between $94,400 and $189,000.

So how much did it cost per unserved household to get them broadband access?  A whopping $349,234, or many multiples of household income, and significantly more than the cost of a home itself.

That’s a lot of money.  It would have been cheaper to buy these people a satellite Internet connection at their homes.  I’m not sure what it would cost, but I’m guessing it wouldn’t have cost more than their house.   

Sadly, it’s actually worse than that. Take the Montana project. The area is not in any meaningful sense unserved or even underserved. As many as seven broadband providers, including wireless, operate in the area. Only 1.5% of all households in the region had no wireline access. And if you include 3G wireless, there were only seven households in the Montana region that could be considered without access. So the cost of extending access in the Montana case comes to about $7 million for each additional household served.

Back in the 1980s there was an uproar over wasteful Pentagon spending. The Air Force spent $7,622 on a coffee maker and the Navy spent $640 per toilet seat. That’s extremely wasteful, but at least the Pentagon arguably needed coffee makers and toilet seats. The seven households in Montana for whom taxpayers just spent $7 million each to extend broadband access probably don’t even want it.

It just goes to show you that government can’t do anything well.  From buying coffee makers to buying toilet seats to providing broadband Internet access.  It just seems like they spend a whole lot more money than necessary.  Pulling more money out of the private economy.  And saddling the American people with more debt.  And for what?  What exactly did that stimulus do?  Not much.  Except make some broad Internet contractors very wealthy.  Which they no doubt are if they’re charging $7 million per installation.

This is Keynesian economics.  Wasteful government spending.  And a jobless economic recovery.  Which is only a recovery by the greatest stretch of the imagination.

Barbara Boxer Lies about Clinton Economy and Budget Surplus

And yet they still argue for more of the same.  In fact, they even go further.  They rewrite history.  And say that Bill Clinton’s tax hikes stimulated the economy and produced budget surpluses (see Barbara Boxer’s blatant rewriting of history by Glenn Kessler posted 7/1/2011 on The Washington Post).

“I think we ought to go back to the people and the party that was the only party and the only people to balance the budget in 40 years. I hate to break it to my Republican friends, but that is the Democratic Party. We are the ones who did it. We did it when Bill Clinton came into office. We did it after hard work. We did it after painful cuts. We did it with smart investments.”

— Sen. Barbara Boxer (D-Calif.), June 29, 2011

‘Investments’ is code for ‘tax hikes’.  As important as they are they still have to lie about them.  You’d think if tax hikes did everything she said they did that they wouldn’t lie.  They’d call them what they are.  Tax hikes.  And not investments.

Actually, neither Bill Clinton nor the Democrats meant to balance the budget in his 1993 budget deal.  Because before the 1994 midterm elections, he was still a liberal Democrat.  Don’t forget, they were still working on HillaryCare (the plan to nationalize U.S. health care) in 1993.

But here’s the important point: the Clinton plan was never intended to achieve a balanced budget. After the bill’s passage, the Congressional Budget Office estimated that the deficit would decline modestly — from $290 billion in 1992 to $200 billion in 1998. In the phrase of the era, there were still “deficits as far as the eye could see.”

He was still a big time Keynesian at this point.  And Keynesians spend money.  That’s why his projected deficits were as big as the Reagan deficits.  But then came the 1994 midterm elections.

Fast forward to 1995. The Democrats lost control of the House and the Senate, largely because of bruising budget battle. Clinton’s fiscal year 1996 budget again proposes $200 billion deficits every year for the next five years. So, again, the target in 1998 (when surpluses later emerged) was a deficit of $196 billion.

But Republicans immediately set the goal of achieving a balanced budget within seven years. After resisting for a few months, Clinton shocked many fellow Democrats by announcing that he, too, would embrace the idea of a balanced budget.

As The Washington Post editorial page put it at the time, Republicans had forced Clinton’s hand: “Mr. Clinton’s new position on the budget is much better than the old one. He should have taken it six months ago. The Republicans have driven him to say that he too wants, if not to balance the budget, at least to get the deficit into the neutral zone.”

The 1994 midterm elections were a huge vote of no confidence.  Which was a problem with the presidential election only 2 years away.  Enter Dick Morris.  Who pulled Clinton to the center.  Away from Big Government Keynesian spending.  Of course he had little choice with the Republicans in charge of both houses of Congress.  And then something happened.  He fell ass-backwards into some very opportune economic developments.

…the government ended up with a gusher of revenue that had little to do with Clinton’s 1993 budget deal:  capital-gains taxes from the run-up in the stock market, as well as taxes paid on stock options earned by technology executives. 

Clinton, in essence, was lucky to become president just as a revolution in computer and information technologies was unleashed.

From 1992 to 1997, CBO estimated, revenue increased at an annual average of 7.7 percent in nominal terms, or about 2.4 percentage points faster than the growth of the gross domestic product, the broadest measure of the economy. CBO Deputy Director James L. Blum in 1998 attributed only 1 percentage point of that extra tax revenue to the 1993 budget deal. The rest, he said, came from capital gains.

This is a very important point.  Where did that tax revenue come from that produced those surpluses?  Well, 1% came from the Clinton 1993 budget deal.  About 99% came from luck.  And the good luck just kept coming.

There were other factors as well, such as lower than expected health costs that reduced an expected drain on the budget. Clinton’s predecessor also had kicked in motion a huge decline in defense spending (which Clinton accelerated) and also had overseen a painful restructuring of the banking industry. Even a potential shock, such as the Asian financial crisis in 1997, brought the silver lining of lower oil prices that bolstered the U.S. economy.

The stars must have really aligned during the Clinton administration.  Because a lot of things well out of his control happened, giving him an extraordinary economy.  He truly fell ass-backwards into good times.  Which is why the Fact Checker basically calls Barbara Boxer a liar. 

Boxer literally wipes away any Republican contribution to the process — and also claims credit for creating 23 million jobs while ignoring broad historical changes in the U.S. economy that had little to do with inside-the-Beltway sausage-making. This is more than just spin; it is a rewriting of history that borders on the absurd.

Absurd indeed.  So is she lying?  Or is she just stupid?  It has to be one or the other.  As it must be for all of the other Democrats repeating this lie.

Stimulus Spending doesn’t Stimulate

Reagan’s supply-side policies posted some great economic numbers.  Keynesians point to the Clinton years as vindication for their policies.  But his economy had a lot more to do with the Republicans in Congress and dumb luck.  Barack Obama has outspent all Keynesian presidents to date and has the worst economy since the Great Depression

Even though the Great Recession has officially ended, they’re calling the recovery a jobless recovery.   Which should be comforting to those who are still unemployed.  The question is, of course, where are the jobs?  If government stimulus spending creates jobs, where are the jobs?

You can’t find them because they’re not there.  Because stimulus spending doesn’t stimulate.  It just makes a few people rich (like broadband Internet contractors in Montana).  Tax cuts stimulate.  And reducing government regulation stimulates.  Every time it’s tried.  In other words, supply-side economics stimulates.  Every time it’s tried.  And Keynesian economics fails every time it’s tried.  Including its latest failure under Barack Obama.

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