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Posts Tagged ‘Economy’

Will Obama’s and the Libs’ Failures Lead To A Second American Revolution?

by Bob in Breckenridge ( 85 Comments › )
Filed under Barack Obama, Democratic Party, Economy, Elections, Elections 2010, Elections 2012, History, Misery Index, Patriotism, Politics, Progressives, Republican Party at August 2nd, 2010 - 8:30 am

I certainly hope so, but in the way President Reagan won the cold war. This was posted on investors.com, the online journal of Investors Business Daily.

They blamed our country’s current problems on “Washington”. Nice dodge, IBD! And I don’t mean your shiny new car.

That’s bullshit, pure and simple. I’ll agree that the problem is IN Washington, but the problem is not “Washington”.

It isn’t “Washington” that’s to blame for the mess we’re in.

I’ll lay the blame exactly where it belongs: Obama and the dimocrats. They got us into this mess. But other than that, this is a great analytical observation.

Will Washington’s Failures Lead To Second American Revolution?

The Internet is a large-scale version of the “Committees of Correspondence” that led to the first American Revolution — and with Washington’s failings now so obvious and awful, it may lead to another.

People are asking, “Is the government doing us more harm than good? Should we change what it does and the way it does it?”

Pruning the power of government begins with the imperial presidency.

Too many overreaching laws give the president too much discretion to make too many open-ended rules controlling too many aspects of our lives. There’s no end to the harm an out-of-control president can do.

Bill Clinton lowered the culture, moral tone and strength of the nation — and left America vulnerable to attack. When it came, George W. Bush stood up for America, albeit sometimes clumsily.

Barack Obama, however, has pulled off the ultimate switcheroo: He’s diminishing America from within — so far, successfully.

He may soon bankrupt us and replace our big merit-based capitalist economy with a small government-directed one of his own design.

He is undermining our constitutional traditions: The rule of law and our Anglo-Saxon concepts of private property hang in the balance. Obama may be the most “consequential” president ever.

The Wall Street Journal’s steadfast Dorothy Rabinowitz wrote that Barack Obama is “an alien in the White House.”

His bullying and offenses against the economy and job creation are so outrageous that CEOs in the Business Roundtable finally mustered the courage to call him “anti-business.” Veteran Democrat Sen. Max Baucus blurted out that Obama is engineering the biggest government-forced “redistribution of income” in history.

Click here to read the whole article.

Another Hidden Zinger in Obamacare

by 1389AD ( 43 Comments › )
Filed under Barack Obama, Democratic Party, Healthcare, Progressives at July 25th, 2010 - 10:00 am

In Fundamentally Transforming the United States, Phyllis Schlafly explains how the Democrat party voter base is founded upon those who get (or hope to get) their livelihood from the federal government. It goes much further than Chicago-machine patronage politics writ large; the federal government is deliberately destroying the family structure so as to make people more dependent on the federal government and the Democrat party. Unmarried mothers are a key part of Obama’s voter base. Thus, it is in his interests to discourage men and women from getting and staying married.

How do the Democrats go about attacking the family structure? The attacks go much further than promoting gay marriage and abortion on demand, or free condoms and salacious “sex education” in the public schools. Detrimental as those things are, at least they are visible. It’s the progressives’ stealth jihad against the family that I’m talking about here.

Check out this hidden zinger in Obamacare:

Marriage Penalty in Health Care

A huge marriage penalty is hidden in Obama’s Health Control Law. This law is another federal program providing financial incentives to subsidize marriage avoidance and illegitimate offspring.

Even though all evidence shows that marriage is the best remedy for poverty, lack of health care, domestic violence, child abuse, and school dropouts, federal welfare programs continue to discriminate against marriage and instead give taxpayer handouts to those who reject marriage. This isn’t any accident; it is a central part of the Democrats’ political strategy that produced 70% of unmarried women voting for Obama for President in 2008.

Here is the approximate cost in the Health Control Law for an unmarried couple who each earn $25,000 a year (total: $50,000). When they both buy health insurance (which will be mandatory), the combined premiums they pay will be capped at $3,076 a year. But if the couple gets married and has the same combined income of $50,000, they will pay annual premiums up to a cap of $5,160 a year. That means they have to fork over a marriage penalty of $2,084.

The marriage penalty is the result of the fact that government subsidies for buying health insurance are pegged to the federal poverty guidelines. Couples that remain unmarried are rewarded with a separate health care subsidy for each income.

When the Wall Street Journal reporter quizzed the Democratic authors of the health care bill, they made it clear that this differential was deliberate. The staffer justified the discriminatory treatment because “you have to decide what your goals are.” Indeed, the Democrats have decided what their goals are. They know that 70% of unmarried women voted for Obama in 2008, and the Democrats plan to reward this group with health insurance subsidies.

The House staffer told the Wall Street Journal reporter that the Democrats can’t make the subsidies neutral towards marriage because that would give a traditional one-breadwinner married couple a more generous subsidy than a single parent at the same income level. Horrors! The Democrats certainly are not going to allow traditional marriage to be preferred over couples who just shack up!

Daniel Patrick Moynihan famously and accurately explained the disastrous results of welfare back in 1965. The welfare system created a matriarchy with millions of children lacking their father in the home. It’s no wonder illegitimate birthrates are soaring and unmarried mothers now give birth to 4 out of every 10 babies born in the United States.

Means-tested welfare programs already cost taxpayers close to $1 trillion a year (even more than national defense!), and Obamacare is projected to add another $2.5 trillion after all its provisions take effect. There’s no end in sight to the increasing costs of these entitlements. In one year, the Obama Administration will spend more taxpayers’ money on spreading the wealth to non-taxpayers than George W. Bush spent on the entire Iraq war.

Greenberg Quinlan Rosner, a liberal firm that consults for clients such as Bill Clinton and John Kerry, admitted: “Unmarried women represent one of the most reliable Democratic cohorts in the electorate . . . leading the charge for fundamental change in health care.”

It used to be that a husband was responsible for the financial support of his wife and children, but the feminists’ agenda calls for replacing husbands with Big Brother Government. The feminists call their movement “women’s liberation,” and Obamacare is one more way to help them achieve their goal.

Feminists keep tightening their control over the social policies of the Democratic Party, and Obamacare will be his third payoff to the feminists. The first bill Obama signed as President, the Lilly Ledbetter Act, enables women to sue employers years many years after any alleged workplace discrimination (when no one is still alive to defend against allegations), and the second payoff was getting Obama to give the majority of taxpayer-paid Stimulus jobs to women even though men have suffered the big majority of job losses.

Read it all.

The scavenger hunt is on

I am neither a lawyer nor an accountant nor a “policy wonk” (whatever that is supposed to be). Sorting through the huge pile of paperwork that makes up the Obamacare bill, or for that matter, the recent financial regulatory bill, and piecing together the hidden “zingers” that are poised to harm each sector of our economy and society, is beyond my capabilities. This is not a one-person job. I would like to urge everyone who is able to do so, to help complete this task by researching how those bills will affect their community and their sector of the economy, and submit that information to 2.0: The Blogmocracy.

The scavenger hunt is on, and the only prize is preserving your freedom.

Is the US headed for a lost decade?

by coldwarrior ( 122 Comments › )
Filed under Economy, History at July 23rd, 2010 - 11:30 am

Is the US headed for a lost decade? (Deflation rides a pale horse.)

The last large bubble to burst in a Western economy was in Japan in late 1989. Remember how Japan’s economy was the marvel of the world in the 1980’s? They were the export driven model of modern economics; faster, smaller, more efficient. It was brilliant to watch. But, as we know, the bubble burst.
The bubble that burst in Japan was at first an asset inflated one. During the 1980’s equity and commercial real estate prices inflated, this caused a tremendous amount of speculation in real estate and equities (stocks, etc) that was in part driven by a high savings rate in the banks and easy credit because the interest rates were so low. The banks and the speculators needed to put the money somewhere, so they gambled on commercial real estate and stocks.
Granted, we don’t have a high savings rate here in the US, we didn’t need one to get where we are. All it took was easy credit that drove the ever inflating residential real estate market. The money taken out of re-finances by consumers went for a huge spike in consumption. Paper wealth was created and spent on the actions of people using their houses like ATM machines. We over-spent fake housing equity, the banks in Japan did risky speculation with savings while simultaneously investors took cheap loans to speculate in the equities and commercial real estate markets. Both  Japan then and the US now are in the same situation; post-bubble economics.
In 1989 the Finance Ministry in Japan recognized the bubble and raised interest rates, effectively shutting off the fire hose of Yen that was fueling growth. With the flow of Yen effectively shut off, good money stopped being thrown after bad money and the stock market and commercial real estate market crashed taking many banks and companies with it. Equity values (stock market) lost 60% from late 1989 to 1992, commercial real estate and land values dropped by 70% in the 1990’s. While this collapse was occurring, the Finance Ministry then cut rates to near 0 to try to re-inflate the economy. This was too little too late, Japan then entered what Krugman calls a liquidity trap where “A situation in which prevailing interest rates are low and savings rates are high, making monetary policy ineffective. In a liquidity trap, consumers choose to avoid bonds and keep their funds in savings because of the prevailing belief that interest rates will soon rise. Because bonds have an inverse relationship to interest rates, many consumers do not want to hold an asset with a price that is expected to decline”.
How does this effect the US? We don’t have a high savings rate. Well, actually we will. As people become more frugal and learn the lessons of this bubble, they will spend less and save more. I have seen this happen with my own eyes. Everyone has fear, people are buying gold, stashing money in the mattress, paying down debt, and making/spending less money per family unit than before. The end result of this is decreased demand, which on the supply side looks the same as a high savings rate. When there is no demand, printing all of the money in the world wont cause inflation if the money just sits there and has no velocity.
Prime interest rates are near 3.25%, the Fed Fund Rate and Fed Discount rates are both <0.75%.
The flow is full on if anyone wants to borrow or lend. The problem here is that the economy is in a choke hold by the current administration. Companies are sitting on billions of dollars for expansion but wont move to expand until they see some sort of restraint from Washington DC on spending, new regulations, and confiscatory taxes. With rates this low, the Fed looses leverage in one direction, the direction of deflation. They could cut the rate to 0% like the Japanese did and still there would be no lending/borrowing. The Fed has room to move the rate upward if it sees inflation, but inflation is a very long way off.
The US could very easily enter a Lost Decade of its own. This is where the lack of a high savings rate will be more painful. In Japan the high savings rate and traditional frugality assured that consumption would be steady throughout the 1990’s. In the US, we didn’t save, so consumption will go down as a matter of course. I would argue that because of the lack of prior savings coupled with massive consumer debt and the fear that consumers have over spending now that we will see deflation well before any inflation. Deflation is caused by falling asset prices, hoarding of cash/frugality/non/less-consumption, then the collateral for backing of loans fall, which then leads to bank losses, which lead to reluctance to loan money which is compounded by borrowers fearing the unpredictable future and not borrowing to expand anyway. The economy does not expand and goes stagnant or contracts, then consumers and businesses are unable to spend, resulting in deflation.
In order to break our own trap, we have to have stability from DC and a better business climate. The monetary supply is huge, but there is no velocity of that money, so there is no inflation. The oxygen of a capitalist economy is calculated risk. That means capital is risked to expand business and create jobs. It would be nice if while we are at the FedGov could cut some regulations and taxes and pave the way for some manufacturing sector growth. If the Fed sees inflation, it can raise interest rates to kill it, Paul Volker proved that in the early 1980’s.
Be prepared for a decade of very slow growth and limited jobs until we claw our way back to the asset price and GDP peaks of a few years ago unless there is radical change from the Federal Government.

Background articles:

Saturday Morning Lecture: Milton Freidman, on the American Economy, 1977

Sometimes inflation is a good thing

UNDERemployment and the Greater Depression of 2010

by 1389AD ( 187 Comments › )
Filed under Barack Obama, Economy, Healthcare, Liberal Fascism, Media, Polls, Progressives at July 21st, 2010 - 2:00 pm

Underemployment: Obama’s dirty little secret

Depression-era photo: Free coffee for the unemployed

Even the best-qualified, highest-skilled, and hardest-working Americans are up against it these days. Yes, even those Americans who still have jobs! We all know that the official unemployment statistics are vastly understated, in that they focus only on claims for unemployment compensation. The stats do not properly account for older workers who have taken early retirement after losing a job; young workers who cannot enter the labor force; “discouraged workers” who are still looking for work, but whose unemployment benefits are exhausted; disabled persons who could work to a limited extent, but who aren’t being hired; and American citizens who have had to travel overseas, often at great sacrifice and financial loss, to find work.

But perhaps the biggest of the dirty little secrets hidden by the official unemployment statistics is underemployment. I know about this from personal experience. Despite all of my qualifications, I have not been able to find full-time employment in over two years. The reason? With all of the hidden ramifications of Obamacare looming over everyone’s heads, along with the other past and future attacks on private enterprise, nobody wants to hire full-time people at all if they can help it. Certainly nobody wants to hire someone over 55 for a full-time job where the employer will be forced to provide overpriced health insurance or be fined for not providing it. Some people may call it age discrimination, but it’s the government that is causing it, not the prejudices of private employers.

There’s no need to take my word for any of this. Look at any job board or want-ad listing and notice the proliferation of part-time, temporary, and contract assignments, and the relative absence of full-time jobs with benefits. For example, a retail store that would normally hire two or three full-time employees will instead hire five part-time employees for 15 to 30 hours per week, at minimum wage, perhaps with commissions, but no benefits. A recent Gallup Poll also reveals large-scale underemployment in the form of part-time workers who want, but cannot get, full-time employment.

The liberal elite wants it that way

Of course, the liberal establishment pretends not to know why unemployment remains so high. Case in point: NYT: Mystery for White House: Where did the jobs go? [H/T: Rodan]

That conundrum, which reclaims center stage in Washington this week, is this: Why is unemployment so high?

The whodunit has flummoxed economists in both parties for a year. In 2009, as the new Obama administration grappled with the financial crisis, joblessness rose nearly two points beyond customary recession forecasts.

Part of the uncertainty concerns why. More consequential now, as the administration and Congress determine what to do, is whether the unemployment spike reflects a short-term or permanent shift in demand for workers.

But seriously…

I have studied economics and I know this for certain: All they have to do is repeal Obozocare, resume drilling, seal the borders, and end the H-1b program, and unemployment will drop three points within a month. I guarantee it!

But none of that will happen until we somehow muster the political will to force our government to do that. Or until enough States secede and decide to govern themselves in the interest of their own citizens.

One way or another, we need to free ourselves from the predatory liberal elites who flout the will of the people and who serve only their own interests and those of our foreign enemies.

Depression-era unemployment line in NYC

The Obama administration, together with the liberal establishment in academia, the mainstream media, the NGOs, the foundations, the Ivy League, and the UN, all have reason to want unemployment to remain high. Why? Because, though it may make the Obama administration look incompetent in the short run, as it did with FDR, it will create more dependency on the government and increase centralized government power in the long run.

Dependency, the Liberals’ Natural Resource explains how this nefarious system works:

A Heritage Foundation report shows that thanks to multiple government programs, the proportion of Americans in some way dependent on government largess has suddenly jumped by 31.2% since 2001 after decades of much slower increases. Even in inflation-adjusted dollars, America now spends thirteen times more on public welfare than it did in 1965. Dependency has snowballed in health care, public welfare, and housing, and the upward trend seems likely to continue as Obama’s statist polices take hold and baby boomers retire. Indeed, the president plans to spend some $10.3 trillion in welfare over the next decades. In a nutshell, Uncle Sam is replacing the family, the church, private charities, and all other non-government sources of assistance, and this means regular jobs for the new caregivers. And it feels good to work for Uncle Sam: Benefits included, the average federal workers in 2008 earned double what those in the private sector took home. So it is hardly unexpected that since about January 2008, some 7.9 million private sectors jobs have disappeared, while 590,000 public sector jobs were created — and this trend seems to be multiplying. It’s a thoroughly modern ménage à trois of dependent citizens, well-paid government employees ministering to them, and harried taxpayers footing the bill.

Here’s what makes this “new wealth” so attractive: In today’s uncertain economy, it far outshines the old wealth of building things and selling them at a profit. For one, jobs ministering to the dependent are labor-intensive and immune to mechanization. Government jobs are also wonderfully secure. It is inconceivable, for example, that a counselor working with Vietnamese gangs in Los Angeles will be replaced by an industrial robot or that under-employed social workers will also be asked to direct rush hour traffic to trim labor costs. This is not the cost-cutting-obsessed airlines where passengers make their own reservations, print boarding passes, stow their own luggage, and bring their own food. Nor can these interventions be outsourced to foreign competition. Helping the less fortunate has a permanent “Made in USA” label attached — Toyota has no interest in tackling the pathologies of those living in Detroit.

The supply of these jobs-generating assets is also inexhaustible. America will never, never run out of this newly discovered “wealth.” We may deplete our oil and ravage our forests, but what are the odds of drug addicts, the mentally ill, young unwed mothers, and others needing intervention vanishing? Those mired in pathology are a truly renewable natural resource. Social problems do recede, but rest assured, replacements are easily found (e.g., sex addiction). In a pinch, just open the borders and receive a bountiful fresh supply. And compare the ease of setting up an in-school clinic to mentor anorexic, non-English-speaking adolescent girls with low self-esteem versus building a factory. The former is instantly shovel-ready.

Read it all.

In other words, if the government stops the private sector from offering relatively secure, remunerative, full-time employment to American citizens, that will eventually leave the government as the only source of good jobs on American soil. This is how the federal government creates a new class of Soviet-style apparatchiki. Of course, those jobs ONLY go to those who actively support the regime and do their part to enhance the careers of those already in power, while keeping everyone else down.

Now what?

Our goal is to re-empower ourselves and our families, and decentralize and take back control over everything that has been usurped from us. That means we need to go on the attack to discredit the liberal establishment and all its pomps and all its works, anywhere and everywhere it appears.

We must overcome not only economic underemployment, but the underemployment of the human spirit.

To that end, please turn your attention to this excellent article: Read the rest of this excellent article at America’s Ruling Class — And the Perils of Revolution. [H/T: doriangrey]

… Consider: The ruling class denies its opponents’ legitimacy. Seldom does a Democratic official or member of the ruling class speak on public affairs without reiterating the litany of his class’s claim to authority, contrasting it with opponents who are either uninformed, stupid, racist, shills for business, violent, fundamentalist, or all of the above. They do this in the hope that opponents, hearing no other characterizations of themselves and no authoritative voice discrediting the ruling class, will be dispirited. For the country class seriously to contend for self-governance, the political party that represents it will have to discredit not just such patent frauds as ethanol mandates, the pretense that taxes can control “climate change,” and the outrage of banning God from public life. More important, such a serious party would have to attack the ruling class’s fundamental claims to its superior intellect and morality in ways that dispirit the target and hearten one’s own. The Democrats having set the rules of modern politics, opponents who want electoral success are obliged to follow them.

Reducing the taxes that most Americans resent requires eliminating the network of subsidies to millions of other Americans that these taxes finance, and eliminating the jobs of government employees who administer them. Eliminating that network is practical, if at all, if done simultaneously, both because subsidies are morally wrong and economically counterproductive, and because the country cannot afford the practice in general. The electorate is likely to cut off millions of government clients, high and low, only if its choice is between no economic privilege for anyone and ratifying government’s role as the arbiter of all our fortunes. The same goes for government grants to and contracts with so-called nonprofit institutions or non-governmental organizations. The case against all arrangements by which the government favors some groups of citizens is easier to make than that against any such arrangement. Without too much fuss, a few obviously burdensome bureaucracies, like the Department of Education, can be eliminated, while money can be cut off to partisan enterprises such as the National Endowments and public broadcasting. That sort of thing is as necessary to the American body politic as a weight reduction program is essential to restoring the health of any human body degraded by obesity and lack of exercise. Yet shedding fat is the easy part. Restoring atrophied muscles is harder. Reenabling the body to do elementary tasks takes yet more concentration.

The grandparents of today’s Americans (132 million in 1940) had opportunities to serve on 117,000 school boards. To exercise responsibilities comparable to their grandparents’, today’s 310 million Americans would have radically to decentralize the mere 15,000 districts into which public school children are now concentrated. They would have to take responsibility for curriculum and administration away from credentialed experts, and they would have to explain why they know better. This would involve a level of political articulation of the body politic far beyond voting in elections every two years.

If self-governance means anything, it means that those who exercise government power must depend on elections. The shorter the electoral leash, the likelier an official to have his chain yanked by voters, the more truly republican the government is. Yet to subject the modern administrative state’s agencies to electoral control would require ordinary citizens to take an interest in any number of technical matters. Law can require environmental regulators or insurance commissioners, or judges or auditors to be elected. But only citizens’ discernment and vigilance could make these officials good. Only citizens’ understanding of and commitment to law can possibly reverse the patent disregard for the Constitution and statutes that has permeated American life. Unfortunately, it is easier for anyone who dislikes a court’s or an official’s unlawful act to counter it with another unlawful one than to draw all parties back to the foundation of truth.

Read it all.