Obama vs The Economy -- 2010

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Items on this page are in chronological order or in order of discovery.  Previous year in left column.
In America, Barack Obama Is Talking
Mark Steyn says he's talking.  Talking, talking, talking.  He talked for 90 minutes on the State of the Union.  No matter how many geckos you shoveled down your briefs, you still lost feeling in your legs.  And still he talked.  If you had an erogenous zone before, by the end, it was undetectable even to Frenchmen.  But on he talked.  As respected poverty advocate and former Sen. John Edwards commented, "After the first hour, even my malevolent genie was back in the bottle."

Like any gifted orator, Obama knows how to vary the talk with a little light and shade.  Sometimes he hectors, sometimes he whines, sometimes he demands.  "We do not quit," he said.  Boy, you can say that again!

So he did: "We don't quit.  I don't quit," he said.  But throughout the chamber, Democrats were quitting.  "I quit," says Rep. Marion Berry of Arkansas, declining to run in November.  "I quit," says Sen. Byron Dorgan of North Dakota, doing likewise.  "I quit," says Beau Biden of Delaware, son of Vice President Joseph R. Biden Jr., choosing not to run for his father's seat.

But not Barack Obama.  On he went.  As National Review Editor Rich Lowry put it after the Massachusetts vote, the public thinks Obama doesn't get it, and Obama thinks the public doesn't get it.  As he has the microphone, he's gonna keep talking at you until you do get it.  The ever tinnier, more perfunctory sophomoric uplift at the start and finish can't conceal the hope-killing, jobs-slaying, soul-sapping message in between, which has been consistent for two years.  As Obama sees it, whatever the problem, the solution is more Washington.

Simply as a matter of internal logic, this is somewhat perplexing.  After all, when he isn't blaming George W. Bush, Obama blames "Washington" -- a Washington mired in "partisanship" and "pettiness" and "the same tired battles" and "Washington gimmicks" that do nothing but ensure that our "problems have grown worse."  Washington, Obama tells us, is "unable or unwilling to solve any of our problems."

So let's have more Washington!  That raises the question:  Does even Obama listen to his speeches?

The public does -- at least to this extent:  They understand that when he's attacking the tired old Washington games, he's just playing the game, but when he's proposing the tired old Washington solutions, he means it.  That's the only Barack Obama on offer.  And everything he proposes means more debt, which at the level this guy is spending means higher taxes.

Functioning societies depend on agreed rules.  If you want to open a business, you do it in Singapore or Ireland because the rules are known to all parties.  You don't go to Sudan or Zimbabwe, where the rules are whatever the state's whims happen to be that morning.

That's why Obama is such a job-killer.  Why would a small business take on a new employee?  Obama is proposing a soak-the-banks tax that could impact access to credit.  The House has passed a cap-and-trade bill that could impose potentially unlimited regulatory costs.  The Senate is in favor of health care reform that would allow the IRS to seize your assets if you and your employees' health arrangements do not meet the approval of the federal government.  Some of these things will pass into law; some of them won't.  But all of them send a consistent, cumulative message:  There are no rules.

In such an environment, would you hire anyone?  Obama can bury it in half a ton of leaden telepromptered sludge, but the message is clear: more Washington, more regulation, more spending and no rules.

Obama and the Democrats have decided, in the current cliche, to "double down."  What's the endgame here?  Obama gave it away in his student loan "reform" proposals:  If you choose to go into "public service," any college loan debts will be forgiven because public service is more noble than the selfish, money-grubbing private sector.  C'mon, everybody knows that.  So we need to encourage more people to go into public service?

Why?  In the past 60 years, the size of America's government work force has increased five times faster than the population.  Yet Obama says it's still not enough:  We have to divert more of our human capital into the government machine.  He's explicitly telling you:  If you start a business, invent something, provide a service, you're a schmuck.  In the America he's building, you'll be working 24/7 till you drop dead to fund an ever-swelling bureaucracy.  Obama's proposals are bold only insofar as few men would offer such a transparent guarantee of disaster:  It's the audacity of hopelessness.

The end-game is simple to progressives.  When those working for the government, and for the unions, and those on the dole outnumber the rest of us, they control the country.  Doesn't matter what the Constitution says.
Obama Parts Company With Reality
John Hinderaker says the Obama administration unveiled its budget for FY 2011.  The budget ostensibly covers the next ten years, but its projections for future years are meaningless.  The only year for which it has any significance is 2011, in which it anticipates $3.8 trillion in spending and an astonishing $1.6 trillion deficit.  In 2006, the last year in which the Republicans controlled Congress, the deficit was $248 billion -- one-seventh what Obama proposes for next year.

In his budget announcement today, Obama said: "[O]ur government is deeply in debt after what can only be described as a decade of profligacy."  So he proposes to put the country far more deeply in debt through profligacy of a sort that was undreamed of just a few years ago.

Obama said: "[W]e can't simply move beyond this crisis; we have to address the irresponsibility that led to it, and that includes the failure to rein in spending...."  But his budget doesn't rein in spending, it increases it over last year's precedent-shattering total by around $100 billion.

Obama said: "[I]t would be a terrible mistake to borrow against our children's future to pay our way today...."  His budget, in just the next year, will borrow $1.6 trillion against our children's future to pay our way today.

Either Obama has completely lost touch with reality, or he thinks we have.

UPDATE: One more thing.  The Wall Street Journal estimates that Obama's proposed repeal of many of the Bush tax cuts will cost Americans who earn more than $200,000 per year $1 trillion over the next decade, assuming that Obama's tax increases are not reversed.  Obama won in 2008 with what Michael Barone called a "top and bottom coalition."  He carried lower-income voters and those with incomes over $250,000, while middle-income voters went for McCain.  Now, Obama can kiss the top part of that coalition goodbye.
A Picture Is Worth A Thousand Words
  


"Already, we have made historic strides … to cut wasteful spending." -- Barack Obama
   
We Have Made Historic Strides
In his budget message to Congress, Barack Obama said, "Already, we have made historic strides … to cut wasteful spending."  He made the comment while presenting a budget proposal that for the second year in a row would fix federal spending at a percentage of Gross Domestic Product that is higher than at any time in the past 65 years.

In both fiscal 2010 and fiscal 2011, Obama’s budgets would have the federal government spend more than a quarter of the all the wealth produced by the nation in that year.

No president since Franklin Delano Roosevelt has consumed such a large a share of the nation’s wealth through federal spending -- and FDR did it in the midst of World War II.

According to the historical tables that the White House released with Obama’s budget yesterday, the federal government will spend 25.4 percent of GDP in fiscal 2010, the federal budget year that will end on September 30.  Under the new budget that Obama is proposing for fiscal year 2011, the federal government will spend 25.1 percent of GDP in fiscal 2011, which begins on October 1.

Both of these budgets fall wholly within Obama’s term of office and would be approved by a Democratic Party that controls both houses of Congress.

By comparison, in fiscal 2002 and fiscal 2003, the first two years in which President George W. Bush presented budgets to Congress, federal spending ended up being 19.1 percent and 19.7 percent of GDP, respectively.

In the first two Obama budgets, spending has averaged 25.25 percent of GDP.  In the first two Bush budgets, spending averaged 19.4 percent of GDP.  That means that Obama, so far, is spending 30 percent more of GDP per year than Bush.

In 2008, Bush’s final full year in office, federal spending was 20.7 percent of GDP.  According to the budget projections released by the White House on Monday, federal spending will be 23.2 percent of GDP in 2012, the lowest rate for any of the four years of Obama’s term.  As the White House now calculates it, Obama will easily be the biggest spending president since World War II.

By comparison, FDR spent only 10.7 percent and 9.2 percent of GDP in 1934 and 1935, his second and third years of office, during the Great Depression.  This year, Obama will spend almost three times as much of the national wealth as FDR did in 1935

We have made historic strides … to cut wasteful spending -- is he kidding?  Is he a con man? -- deluded? -- incompetent? -- purposeful? -- one has to wonder if Obama believes his own BS?
Obama’s Deficit Dishonesty
Flopping Aces points out that Democrats try to claim it was Bush’s deficit, yet they want to use recovered TARP funds for another Obama slush fund.

If you’ve heard it once, you’ve heard it a hundred times.  Despite the fact that Obama signed the most massive spending bills EVER, he tries to blame the deficit on George Bush.
     
    
Dick Morris takes the lie apart piece by piece here . . .

And, here's a video of Sen. Gregg turning the Obama "inherited deficit" lie on it’s head when he said, "What this administration inherited is not as important as what our children will inherit."  These really are the Obama deficits and no slick speeches by Obama can change that!

Is anyone asking where that money -- a 700% increase in spending in his first year -- is going?  Look at that chart.  Does anybody know what that money is going to be spent on -- other than solidifying the power of these Obamunists -- what changed in 2009 other than the government being seized by a motley collection of Marxists and socialists.

In the next ten years, he's spending 44 times more than the previous ten years.  Obama should be able to cure cancer and buy world peace with that kind of money.  What's Obama planning to do with that money?  What just changed?
Obama's Deficit Projection


    
Obama Borrows $2,000,000,000,000
Jake Tapper is reporting that behind closed doors and with no cameras present, Obama signed into law Friday afternoon the bill raising the public debt limit from $12.394 trillion to $14.294 trillion.

The current national debt is $12.3 trillion.  Check out the National Debt Clock, which tells you your share of that -- roughly $40,000 per citizen, $113,000 per taxpayer.

The bill also establishes a statutory Pay-As-You-Go procedure requiring that new non-emergency legislation affecting tax revenue or mandatory spending not increase the Federal deficit -- in other words, any new spending or tax cuts must be paid for with new taxes or spending cuts.
Down With Small Business!

John Hinderaker notes that the "Miss me yet?" billboard of President Bush that garnered national publicity was paid for by a group of small business owners who consider the Obama administration's policies to be hostile to them.  No surprise there -- pretty much every small business owner I know feels that way.  Still, it was a bit of a shock to see these numbers in USA Today, based on a survey of 884 small businesspeople:

      

How has the Obama administration affected small-business success?

 

It has had a positive effect:  11%
It has hurt me:  77%
No effect:  13%

           

If anything like 77% of small businessmen think the Obama administration has hurt them, it's no wonder Democratic Senators and Congressmen are fleeing for the exits.

 

Small businessmen in Wisconsin paid for this sign.  Seems like a trend.

    

           
Planning To Fail
Pedro Primavera says the economy seems to have settled in somewhat from the disaster of 2008.  Every indication is the economy is poised for a rebound -- provided the right trigger is in place.

In the past, the trigger that has always got the economy back on track has been tax cuts, by Ronald Reagan, George Bush and John Kennedy -- presidents from both sides of the aisle.  And just when the economy is primed for that trigger, Obama is going in the exact opposite direction: it is as if he is sabotaging the efforts of the American people.

It would be one thing if he were just plain incompetent, like Jimmy Carter, but the evidence says otherwise.  In the same week he lectures the American people and -- presumably -- the American Congress, he signs into effect a $1.9 trillion increase in the national debt.  This is at the same time when the budget deficit is already at crisis proportions according to World Bank standards.  In effect, he is using the credit card -- even our kids' credit card -- just to pay the minimum balances on the other credit cards.

If Obama is not incompetent, then surely somebody is trying to ruin the economy while Obama is unaware, as former Virginia Governor Wilder laments.  However, somebody needs to explain Plausible Deniability to Obama.  It means having underlings doing things while you were unaware.  Sometimes it is true, sometimes a lie.  But no, Obama does the lying by himself.  And then there is his signature on all the bills.

Maybe there is something wrong with the economic models professed by most Democrats.  This much is true.  Keynesianism somehow lives on as faulty economic theory.  For instance, Keynes asserted government is flexible and business is not.  Evidence in the last 50 years shows government is a living and breathing entity that seemingly must either grow larger or die.  It should be no wonder that the best years of the post-WWII era were the Reagan years, as he openly declared war on big government.  Keynes also said full employment was gained through fiscal policy served up by -- you guessed it -- big government.

The only problem with Obama as a Keynesian is he never professed to be one.  His mentors at an early age were Marxists, he claimed to hang around Marxists in college, and he has surrounded himself with czars who at best are laughable kooks of the highest order (otherwise known as academics) who have espoused many Marxist ideals.

Obama did not lie when he said just before the election that his election could bring fundamental change within government and society.  The only problem is that nothing he is trying is new.  It is all old and demonstrably failed attempts at power struggle.  It lives only in the hallowed but hair-brained halls of academia and among the socially bitter.

If anything, Obama needs to be called to task over his economic policies.  Why is he not supporting a tax cut that could instantly call out the American consumer and spur business into action?  Why is he not supporting business that could provide millions of jobs?  However, the American media seems to fawn over the enlightened dictator as they did with Fidel Castro and others.  Instead of calling Obama to task over failed policies, they act as his propaganda machine.  They want to use their influence to support some misguided higher ideal of humanity seemingly derived from JD Salinger's A Catcher in the Rye.

It is becoming fairly obvious now to the casual observer: Obama is destroying the infrastructure of this nation purposefully.  The hard part is making it to 2012 before the damage is done.
    
Just watch Obama's Executive Orders.
USS Obama Is Sinking
J.C. Arenas says the Obama Administration continues to proclaim the strength of the nation's economy, and foreign governments are responding with a collective "yeah, right".

ABC News reports:
    

Foreign owners of US government debt reduced their holdings by the largest monthly amount ever in December, with China offloading so many Treasury securities that it is no longer the largest foreign holder.

According to new data released Tuesday morning by the Treasury Department, foreign holdings of Treasury securities plunged by $53 billion in December, a record drop. China led the sell-off, reducing its holdings by $34 billion.

    
The administration has continued to increase the government's expenditures even while it takes in less revenue -- one consequence of the Great Recession.  To shore up the hole between the revenue and expenditures, the government has to borrow money, and foreign nations serve as its lenders through purchases of U.S. Treasuries.  The administration has defended the nation's ability to service these debts, but it's becoming ever more difficult to believe its claims.  The fact that foreign governments are reducing their holdings of U.S. debt is a sign that they are paying more attention to the administration's actions than its words.

Barack Obama's inability to do anything to stem the tide of the nation's unemployment problem has forestalled any potential recovery from the recession, and the government will continue to collect less revenue.  Additionally, his $3.8 trillion budget for fiscal year 2011 has provided the latest indication that the administration has no plans to curtail spending on any meaningful level.

Thus, it should come as no surprise that Obama is losing the confidence of other nations who justifiably don't believe that the nation's financial house of cards will be in order anytime soon.  China is leading the way.  Premier Wen Jiabao first voiced his concerns over the U.S.'s debt last March, and the Chinese have been dumping their Treasury securities for the last five months.

If foreign nations continue to decrease the amount of money they loan to the government, it will find itself between a rock and a hard place.  It will either be forced to pay a higher interest rate to borrow money from other nations or it will have to print the money it needs.  If printing money becomes the only course of action, inflation will ensue, and foreign governments will find the investments they have made into the U.S. devalued.

It's difficult to see how Obama continues to tout what a great job he's doing while he watches his Democratic colleagues in the legislative branch and foreign governments invested heavily in the U.S. economy, both jump from his sinking ship.
Obama's Recovery Is A Manipulation Of The Facts
David Limbaugh says when you're president of the United States and your primary claim to fame is your economic prowess, but your economic record fails by all objective measures, what do you do?  You call on your skills as a virtuoso propagandist.

With the perceived catastrophic economic crisis of 2008-09, Barack Obama captured the presidency at the perfect time in America's modern history for him to unleash his grandiose socialist policies -- policies so ambitious that the American people would never have tolerated them under any other circumstances.

With the nation in near panic over the impending doom of the economy, Obama presented his now-infamous "stimulus plan" to artificially create government demand by spending more than $800 billion of borrowed money to "jump-start the economy."

Being a die-hard Keynesian, Obama probably believed his program would create jobs.  But given his attitude about the wealthy being undeserving of their good fortune, he probably wasn't risking too much in the event it didn't work.  The funds would redistribute wealth to those less fortunate and whom society, in Obama's view, has cheated.

It would also force allocations of money to "green" enterprises that would never be pursued if left to the sanity of private-sector consumer demand, further expand the public sector in general and provide ample slush money to reward unions and other supporters to shore up his re-election efforts.

According to Keynesian theory, as I understand it, it doesn't matter much where the government spends other people's money -- just as long as it spends it.

Continue reading here
Total Devastation
Jim Hoft says Obama and the Democrats tripled the national deficit in one year. They will likely top that this year.
    
    
But, it’s even worse then we thought.  Barack Obama’s budget will force the US debt to soar to 90% of the Gross Domestic Product.

The Washington Times reports:
    

Obama’s fiscal 2011 budget will generate nearly $10 trillion in cumulative budget deficits over the next 10 years, $1.2 trillion more than the administration projected, and raise the federal debt to 90 percent of the nation’s economic output by 2020, the Congressional Budget Office reported Thursday.

In its 2011 budget, which the White House Office of Management and Budget (OMB) released Feb. 1, the administration projected a 10-year deficit total of $8.53 trillion.  After looking it over, CBO said in its final analysis, released Thursday, that the president’s budget would generate a combined $9.75 trillion in deficits over the next decade.

"An additional $1.2 trillion in debt dumped on [GDP] to our children makes a huge difference," said Brian Riedl, a budget analyst at the conservative Heritage Foundation.  "That represents an additional debt of $10,000 per household above and beyond the federal debt they are already carrying."

    
Obama Signs Student Gift Program
Gateway Pundit blog contends that Obama just made the Student Loan Program a Student Gift Program (with your money, of course).

Barack Obama tripled the national deficit his first year in office.  It will be larger this year.  But, that won’t stop him from handing out more "free" money.

Under the Obama’s new plan to bankrupt America, students will only have to pay 10% of their discretionary income on their student loan and after 20 years the government will pay the rest off.
    

Starting July 1st, when the government issues student loans, it will bypass the banks who have traditionally provided them, and directly target borrowers.

A White House press release spells it out this way, "[A]ll new federal student loans will be direct loans, delivered and collected by private companies under performance-based contracts with the Department of Education.  According to the non-partisan Congressional Budget Office, ending these wasteful subsidies will free up nearly $68 billion for college affordability and deficit reduction over the next 11 years."

But some in Obama’s own party say eliminating the middle man also equals eliminating jobs.

But Obama’s focus today will be more about what the bill does than what it does not.

He will also talk about the provision’s less controversial expansion of Pell Grants, as well as supporting historically black and minority institutions and caps on student loan repayments.

According to the White House, "New borrowers who assume loans after July 1, 2014, will be able to cap their student loan repayments at 10 percent of their discretionary income and, if they keep up with their payments over time, will have the balance forgiven after 20 years."


From the comments section:
    

Obama does not read history.  The reason that private companies were managing student loans for the government was the FRAUD of the 70’s.  At that time, with the government running the loan program, it was actually the Universities that systematically STOLE, through bureaucratic methods, billions of dollars.

And, Just an issue of definitions here.  When they say 10% of "Discretionary" income, are they saying that after I have paid for my housing, food, clothes to work, car to get to work and my insurance, that I only have to pay 10% of THAT amount?


Related:  Obama’s student loan takeover adds $52 billion to deficit according to "Fair Value" accounting, says Congressional Budget Office.
The Looming Obama Debt Disaster
John Hinderaker asks is the United States Greece? The short answer is: not yet, but it will be if the Democrats remain in control in Washington for two more election cycles.

In the Telegraph, Edmund Conway summarizes a lengthy report by the International Monetary Fund on sovereign debt that came out today:
    

[T]he really interesting stuff is the detail, and what leaps out again and again is how much of a hill the US has to climb. Exhibit a is the fact that under the Obama administration's current fiscal plans, the national debt in the US (on a gross basis) will climb to above 100pc of GDP by 2015 - a far steeper increase than almost any other country.

    
This graphic tells the story.  Note what happened after the Democrats took control of Congress in 2007:
    
    
The United Kingdom, despite its rather weak economy, is in much better shape:
    
    
Conway writes:
    

[T]he US, according to the IMF's projections, has more to do than any other country in the developed world (apart from Japan) when it comes to bringing its debt back towards sustainable levels.  Here's the killer table.  The column to look at is on the far right: note how the US needs a 12pc of GDP chunk chopped out of its structural deficit (ie adjusted for the economic cycle).  That's $1.7 trillion.

    
The Democrats in Washington are both too stupid and too ideologically committed to read the writing on the wall.  They are leading the United States over a financial cliff, and they have no intention of turning back.  On the contrary: if they can, they will hobble our economy further by enacting a carbon tax.  There is only one way to stop them, and to save our children -- from whom greedy, selfish Washington liberals are borrowing trillions of dollars -- from a lifetime of debt.  The Democrats must be voted out in 2010, and Barack Obama must be denied a second opportunity to deconstruct the country that he doesn't much like.
Private Pay Shrinks To Historic Lows
Dennis Cauchon says paychecks from private business shrank to their smallest share of personal income in U.S. history during the first quarter of this year, a USA TODAY analysis of government data finds.

At the same time, government-provided benefits -- from Social Security, unemployment insurance, food stamps and other programs -- rose to a record high during the first three months of 2010.

Those records reflect a long-term trend accelerated by the recession and the federal stimulus program to counteract the downturn.  The result is a major shift in the source of personal income from private wages to government programs.

The trend is not sustainable, says University of Michigan economist Donald Grimes.  Reason: The federal government depends on private wages to generate income taxes to pay for its ever-more-expensive programs.  Government-generated income is taxed at lower rates or not at all, he says.  "This is really important," Grimes says.

The recession has erased 8 million private jobs.  Even before the downturn, private wages were eroding because of the substitution of health and pension benefits for taxable salaries.

The Bureau of Economic Analysis reports that individuals received income from all sources -- wages, investments, food stamps, etc. -- at a $12.2 trillion annual rate in the first quarter.

Key shifts in income this year:
    

•  Private wages.  A record-low 41.9% of the nation's personal income came from private wages and salaries in the first quarter, down from 44.6% when the recession began in December 2007.

•  Government benefits.  Individuals got 17.9% of their income from government programs in the first quarter, up from 14.2% when the recession started.  Programs for the elderly, the poor and the unemployed all grew in cost and importance.  An additional 9.8% of personal income was paid as wages to government employees.

    
Economist Veronique de Rugy of the free-market Mercatus Center at George Mason University says the riots in Greece over cutting benefits to close a huge budget deficit are a warning about unsustainable income programs.

Economist David Henderson of the conservative Hoover Institution says a shift from private wages to government benefits saps the economy of dynamism.  "People are paid for being rather than for producing," he says.
Obama Pushes New $80 Billion Stimulus
NewsMax.com is reporting that Obama is pushing a new $80 Billion Stimulus, adding to $1.6 trillion deficit -- that Barack Obama and his aides are stepping up a push for further government spending to boost the economy as signs grow of the recovery's fragility.

The White House is calling for Congress to urgently pass measures to extend jobless benefits, aid cash-strapped states and provide targeted tax breaks to encourage research and development by businesses.

Obama's Democratic allies, facing congressional elections in November, have grown cautious about additional spending.  Seizing on voter anxiety about deficits, Republicans have cast the administration's policies as fiscally reckless as they seek to challenge Democratic majorities in both houses of Congress.

"People are suffering out there.  We want to keep this economy growing faster.  We want to see an acceleration of job creation.  And we have to take some steps to continue in that direction," top White House adviser David Axelrod told NBC's Meet the Press on Sunday.

His comments came a day after Obama wrote to congressional leaders, urging them to move swiftly to approve new measures to "spur job creation and build momentum toward recovery."

Senate Democrats have introduced legislation that would renew expiring unemployment benefits, and extend business and individual tax breaks.  They would offset some of the bill's costs by raising taxes on hedge fund managers and other steps.

The bill complements one passed in the House of Representatives last month, which would authorize about $80 billion in new spending and add $31 billion to the deficit.  The cost of the Senate version has not been estimated yet.

Obama also backs a separate measure that would provide cash to states to prevent teacher layoffs but a $23 billion version of that legislation recently failed in the Senate.

"What the president is saying is, we need to expend additional dollars to make sure that we don't have significant layoffs," House of Representatives Majority Leader Steny Hoyer, a Democrat, told ABC's "This Week."

According to this report, the money would go to Obama's union and public sector allies to prop up the Democrats who are nervous about the fall elections.
Alfred E. Obama
David Limbaugh says that Observing Obama's relentlessly reckless approach to our nation's fiscal integrity is reminiscent of the signature phrase of Mad magazine's Alfred E. Neuman, "What, me worry?"  Obama struck again last week at the G-20 conference in Toronto, urging other nations to follow his Pied Piper lead into deficit spending hell.

Unlike recent U.S. presidents who recognized and touted this nation as the world's exemplar for economic growth and prosperity, Obama is turning us into a poster nation for financial irresponsibility.  While other nations at the meeting were focusing on deficit reduction, Obama was haplessly urging them to join us in Keynesian spending oblivion.

He told the conference that global economic recovery remains "fragile" and implored the nations' leaders to continue deficit spending to sustain the "recovery."  The Washington Post reports that Obama's remarks "tempered the Group of 20's headline achievement at the summit, a deficit-reduction target that had been pushed by Canadian Prime Minister Stephen Harper, the host of the meeting and a fiscal conservative."

Obama is wholly impervious to the historical record documenting the failure of FDR's pump priming during the Depression, which exacerbated rather than ameliorated the economic problems.  He is similarly detached from reality concerning the failure of his own policies to stimulate growth of any kind to save his beloved public sector and thus recommends more of the same.

In speech after speech, he takes credit for having launched an economic recovery in the United States and for achieving job growth.  Notwithstanding his economic models that stubbornly predict such results, he can point to no empirical evidence to verify his delusional boasts.

It would be bad enough if his economic policies were simply retarding our economic recovery, but they are also accelerating our trip to national bankruptcy.  Yet Obama continues to press forward with his foot smashed down on the gas pedal.

Continue reading here . . .
Another Crisis To Not Waste
Paul Mirengoff says there is rising fear that our economy is headed for a "double-dip" recession due to a slowdown in China, concern over the strength of the European banking system, and diminishing consumer confidence here in the U.S.  The drop in consumer confidence is quite remarkable.  The Conference Board's index showed a decline from 62.7 percent in May to 52.9 percent in June.  Experts had expected no change.

Confidence could fall even more when the June jobs report is issued on Friday.  Forecasters expect the jobless rate to remain at 9.7 percent.

To understand how devastating a double dip recession would be, we need only consider the consequences of the original dip, which destroyed 20 percent of Americans' wealth.  A Pew Research Center survey shows that four in ten Americans have had to tap savings and retirement accounts to make ends meet.  Almost a quarter of Americans had to borrow money from someone.  One in ten, including 24 percent of those between the ages of 18 to 29 years old, moved back in with their parents.

As for parents, 35 percent of those 62 and older who are still working say they have postponed retirement.  Six in 10 working adults between ages 50 and 61 say they may be forced to do the same.

But at least in the event of a second dip, we won't have to listen to Europeans and their admirers among the American left tell us how reckless the U.S. is compared to its betters abroad.  And perhaps Thomas Friedman will keep his admiration for the Red Chinese to himself for a while.

As for the domestic political consequences of a double-dip recession, they hardly require elaboration.  I haven't wanted to look ahead to the 2012 election; the one this fall consumes all the energy I'm able to devote to horse race politics.  But another economic hit might well leave the Obama presidency on life support.

This would be true of any modern presidency, I think.  But it seems to me that Obama has left himself particularly vulnerable.  The Pew study mentioned above shows that more than half of American adults responded to the recession by whittling down their mortgages, credit card balances, car loans and other borrowing.  Nearly half say they plan to save more and third say they plan to spend less.

But the Obama administration, in its quest to not let the crisis go to waste, responded in precisely the opposite way.  Rather than sacrificing by keeping spending under control, Obama has splurged, first through the wasteful stimulus bill and then though an unpopular health care bill that few believe is fiscally sound.

Obama, in sum, is completely out-of-step with America on the matter most important to Americans.  Many will likely forgive and forget if the economic outlook brightens substantially.  But right now that looks like a big" if."
No One's Capital Is Safe In Obama's America
Claude Sandroff says Obama's poorly coded message to investors is to take your money out of America and keep it out.  Whether through excessive taxation, suffocating over-regulation, or thuggish confiscation, the lesson to be drawn by anyone with excess capital is to look for friendlier places to put it to work.

The list of friendlier places excludes North Korea, Venezuela, and Iran for the time being, but almost everywhere else qualifies.  Russia's president spent several days in Silicon Valley recently looking for adventurous investors and came away with a $1B commitment from Cisco Systems.  For Cisco, sitting on a cash hoard of $30B, with years of experience partnering with the burgeoning Russian venture capital industry, the decision was probably not a very tortured one.  And what a perfect opportunity for Cisco's CEO John Chambers to keep his cash as far from Obama's collection agencies as possible.

President Medvedev promises Cisco a capital gains tax rate of zero; Obama promises to retire the evil George Bush capital gains rate of 15% and increase it to 20% in 2011.  Cisco is merely telecasting to anyone who wants to tune in that Russia is taking advantage of Obama's lurch towards socialism (or worse).  While Russia is portraying itself as a stable bastion for capitalists, America is increasingly seen as the land that mauled Chrysler and GM bondholders.  While erstwhile command economies are liberalizing, America under Obama is nationalizing.  The lesson is clear: Don't leave cash within the American financial system, earning minimal returns, with the fear that at any moment your assets can be confiscated or redistributed by a lawless and capricious federal government.

When will Obama decide that Cisco (or Wal-Mart, or Apple, or Google, or any other successful enterprise) is not paying its "fair share"?  Aren't the profit margins earned by Cisco on its routers -- sometimes approaching 70% -- too rich, or even obscene?  Aren't these gains, in essence, nothing but windfall profits resulting in the eventual gouging of the average American internet subscriber?  Cisco might not drill in the Gulf of Mexico for its profits, but man-made disasters could await it too, in the form of arbitrary, BP-like shakedowns of its hard-earned wealth.  Why risk shakedowns in gangland Obama when a much more competent criminal like Putin will guarantee your investments?

Cisco is not the only company sitting on a gigantic cash cushion.  All told, the balance sheet cash for the non-financial segment of the S&P 500 totals around $1 trillion.  Businesses sit on these huge asset cushions and accept earning virtually nothing in real terms because risks are too high to consider anything else.

In 2011, one of the largest tax increases in American history goes into effect.  Not only do capital gains rise, but so too does the payroll tax, the income tax, and the estate tax.  And even then, businesses large and small, while in their final financial death throes, will have nothing to look forward to other than the doom of ObamaCare and the unknown costs that Obama will attempt to afflict via cap-and-trade and a European-style value-added tax.

Continue reading here . . .
The Humbling Of Obama
Peter Wehner says, my, how the mighty have fallen.

In a speech in Wisconsin yesterday, Obama, promoting the "merits" of his stimulus bill, said this:

Now, every economist who’s looked at it said that the Recovery [Act] did its job. … The problem is, number one, it’s hard to argue sometimes, "Things would have been a lot worse."  Right?  So people kind of say, "Yeah, but unemployment’s still at 9.6 percent."  Yes, but it’s not 12 or 13 or 15.  People say, "Well, you know, the stock market didn’t fully recover."  Yeah, but it’s recovered more than people expected last year.  So part of the challenge in delivering this message about all the Recovery Act accomplished is that things are still tough, they just aren’t as bad as they could have been.  They could have been a catastrophe.  In that sense [the stimulus] worked.

There is a lot to say in response, starting with the fact that some of these statements are flatly untrue.  It is simply not correct that "every economist" who has looked at the stimulus bill says it did its job.  In yesterday’s Wall Street Journal, for example -- on the very day Obama claimed universal support among economists for his stimulus package -- Allan Meltzer, a professor of economics at Carnegie Mellon University, began his op-ed this way: "The administration’ s stimulus program has failed."  There are even Keynesian economists, like Harvard’s Jeffrey Sachs, who are critical of the Recovery Act.

But the problem for Obama goes deeper than simply this false claim.  The Obama administration itself said that if the Recovery Act passed, unemployment would not exceed 8 percent.  In fact, unemployment has exceeded what the Obama administration said would happen were the stimulus bill not passed.  Obama is the one who set the standard -- and he’s now rightfully being held to it.

Beyond even that, though, it is interesting to see how much reality has humbled Obama.  He came into office not only promising to create jobs, restore prosperity, open doors of opportunity, cut health-care costs, and reduce our "mounting debt" but also to end divisions in our politics, transcend partisanship, put an end to the blame game, provide unprecedented transparency, stop the rise of the oceans, and heal the planet.  Those were his words, his claims, his commitments.  And now he has been reduced to saying: "Things are still tough; they just aren’t as bad as they could have been."  His strongest case in his defense is that unemployment is almost 10 percent -- but it’s not 12 or 13 or 15 percent.

Talk about defining success down.

Continue reading here . . .
Obama Administration Oozes Arrogance
NewsMax.com says the Obama administration grows more arrogant, cavalier, and fundamentally dishonest every day.  In just the past few days, we've seen a number of troubling examples.  Frankly, sometimes it's hard to keep up.

During a speech in Racine, Wis., Obama bragged about how wonderful the terrible economy is.  You'll recall that during both of President George W. Bush's terms, Democrats, including Obama, castigated him for destroying the economy, despite the existence of empirically verifiable robust growth during seven of those eight years.

Now that Obama has been in office for a year and a half and his economy is failing by all objective measures, he and his Democrats demand, once again, that we ignore the empirical evidence in front of our faces and bow down to them in reverent gratitude for ensuring that things are not worse than they are.

Everyone knows Obama promised -- he was hardly tentative about his prediction -- that if the nation followed him over the cliff with his harebrained "stimulus" scheme, unemployment would not exceed 8 percent.

When unemployment soared above 10 percent, he insisted that we be patient to allow his plan to work.  Now that it stubbornly remains in the high 9s, he tells us that if he hadn't implemented his stimulus bill, the economy would be much worse (12 percent or 13 percent or 15 percent), so we not only are forbidden from criticizing him for this disaster but also must genuflect because only three of the four wheels of the economy are teetering over the edge of the cliff.

He said, "There may be some roads that not only were repaired but also were . . . linked up to create a new industrial park that would facilitate long-term economic development beyond this immediate crisis."

Can you imagine the reaction of the liberal media had a Republican president uttered such gibberish?  There "may be some roads"?  How's that for a non-statement?  That were linked up to a new industrial park to facilitate long-term growth?  How about some facts here, Mr. Intellectual?  Then again, how can you blame him for citing nebulous "facts" and failed economic theory when neither the real facts nor the economic evidence substantiates his claims.

Continue reading here . . .
Obama Announces Billions For Bogus Jobs
The Daily Caller is reporting that Obama announced that -- in the name of bringing "jobs back to the country" -- the Department of Energy has awarded $2 billion dollars to two energy companies.

Abengoa Solar and Abound Solar Manufacturing will use the money to create some of the world’s most advanced and largest solar panels and plants, Obama said.

In all, though, the billions are expected to buy just 5,000 jobs, meaning that each position will likely end up costing the federal government upwards of $392,000 per job.  Of those 5,000 jobs, the majority are expected to be temporary positions in fields like construction -- only 1500 of them will be permanent..

Observers -- including blogger Ed Morrissey -- have pointed out that, even if the employees were taxed heavily and their jobs generated significant tax revenue, Obama’s initiative would likely not pay for itself for over fifty years.

During his address to the nation weeks after the explosion at the Deepwater Horizon oil rig, Obama made a push for clean energy and discussed its importance in the wake of the disaster.
The Obama Economy Is Purposeful Disaster
Rush Limbaugh:  At Andrews Air Force Base today, President Obama cast his state of the economy in upbeat terms and we're working right now on an audio sound bite from last November of me reacting to Obama, basically saying identically word-for-word what he said today about the economy.  It's pretty illustrative.  "To every American who's looking for work, I promise you we're going to keep on doing everything we can.  I'll do everything in my power to help our economy create jobs and opportunities for all people."

So he's talking to you personally, whatever you are, wherever you are.  Then Pelosi's out there saying the best job creation job we've got is unemployment benefits.  It doesn't make sense.  It doesn't make sense in any way, shape, manner, or form, but that's what she's out there saying.  You know, we got the jobs number today.  Unemployment fell from 9.7% to 9.5%, but the reason is that 652,000 people dropped out of the workforce.  So there's a smaller universe of people who are counted; 652,000 people dropped out.  They're not even looking for work anymore.  It is a disaster.  It is an unmitigated disaster, the employment circumstances and the economy overall.  The numbers are all bent.  They're rigged and spun.

The keystone, I think, is to look at this year to year, from last June to this June.  U3 is the official unemployment rate.  U6 is where they count those 652,000 (heh, heh) who have given up work as unemployed.  That's what takes the real unemployment rate up to around 18%.  But the reported unemployment rate June of 2010 is 9.5%.  The official unemployment rate in June of 2009 was 9.5%.  U6, the real unemployment rate, in June 2010 is 16.5%.  In June 2009 it was 16.5%.  You will hear more spinners telling you how good or bad the figures are but the essential reality is that from last June to this June, a one-year arc of the almost trillion-dollar spending, there hasn't been any change.  The bottom line is zero change.  Probably it's gotten worse because of all the people who have dropped out no longer working are even looking for work.

You know, I think we need to change the terms. They call this "U3" and "U6" for unemployment three, unemployment six.  The government needs to change the titles. "FU3" and "FU6" because this is essentially what they have done to us.  The FU3 unemployment rate.  And the worst unemployment news is not even in the report.  You know what the worst unemployment news is?  Obama is still employed!  Geithner is still employed.  Bite Me is still employed.  That's what's wrong with the unemployment numbers.  Obama is not among them.  Vice President Bite Me is not among them.  Pelosi is not among them.  Dingy Harry is not among the unemployed (but that will happen soon).  Geithner is not among them.

Everybody's talking about what a surprise it was to see these numbers go down like this.  No.  In fact, the Drive-Bys are not even trying to spin this in a positive way.  They know they can't.  They're not trying to say, "This is a fizzling recovery.  We're putting a little dent in it here."  The fastest way to create jobs, as I just said, is to get rid of Democrats in November.  It's to add their names to the unemployment rolls.

Continue reading here . . .
Barack Obama:  The Great Jobs Killer
Wayne Allen Root says, to paraphrase former President Ronald Reagan, "Obama, there you go again."

The current occupant of the White House claims to know how to create jobs.  He claims jobs have been created.  But so far the score is Great Obama Depression 2.2 million lost jobs, Obama 0 -- a blowout.

Obama is as hopeless, helpless, clueless and bankrupt of good ideas as the manager of the Chicago Cubs in late September.  This "community organizer" knows as much about private-sector jobs as Pamela Anderson knows about nuclear physics.

It's time to call Obama what he is: The Great Jobs Killer.  With his massive spending and tax hikes -- rewarding big government and big unions, while punishing taxpayers and business owners -- Obama has killed jobs, he has killed motivation to create new jobs, he has killed the motivation to invest in new businesses, or expand old ones.  With all this killing, Obama should be given the top spot on the FBI's Most Wanted List.

Meanwhile, he has kept the union workers of GM and Chrysler employed (with taxpayer money).  He has made sure that most government employee union members got their annual raises for sleeping on the job (with taxpayer money).  He made sure that his voters got handouts mislabeled as "tax cuts" even though they never paid taxes (with taxpayer money).  And he made sure that major campaign contributors collected billions off government stimulus (with taxpayer money).

As far as the taxpayers -- the people who actually take risks with our own money to create small businesses and jobs and pay most of the taxes -- we require protection under the Endangered Species Act.

So who is going to pay Obama's taxes?  Not his voters.  They want government to pay them.  Who is going to create Obama's jobs?  Not his voters -- they've never created a job in their lives.

Continue reading here . . .
Like A Cancer From Within
NewsMax.com is reporting that the leaders of Obama’s own debt commission say that his administration cannot tax and spend their way out of our economic problems.  At present, available federal revenues are fully consumed by just three programs: Social Security, Medicare and Medicaid.  The rest of the federal government is being financed by China and other nations.

The heads of Obama's national debt commission painted a gloomy picture Sunday as the United States struggles to get its spending under control.

Republican Alan Simpson and Democrat Erskine Bowles told a meeting of the National Governors Association that everything needs to be considered -- including curtailing popular tax breaks, such as the home mortgage deduction, and instituting a financial trigger mechanism for gaining Medicare coverage.

The nation's total federal debt next year is expected to exceed $14 trillion -- about $47,000 for every U.S. resident.

"This debt is like a cancer," Bowles said in a sober presentation nonetheless lightened by humorous asides between him and Simpson.  "It is truly going to destroy the country from within."

Simpson said the entirety of the nation's current discretionary spending is consumed by the Medicare, Medicaid and Social Security programs.

"The rest of the federal government, including fighting two wars, homeland security, education, art, culture, you name it, veterans, the whole rest of the discretionary budget, is being financed by China and other countries," said Simpson.  China alone currently holds $920 billion in U.S. IOUs.

Bowles said if the U.S. makes no changes it will be spending $2 trillion by 2020 just for interest on the national debt.

"Just think about that: All that money, going somewhere else, to create jobs and opportunity somewhere else," he said.

Continue reading here . . .
Obama’s Economic Time-Bomb Set To Explode In 2011
Jayme Evans says that if you listen to the lies spewing forth from the Obama Administration, the US economy is improving, millions of jobs are being "saved or created" and we’re well on our way to a strong recovery.  But, the volatility of the numbers that Obama and economists in his pocket use to try and convince us that our financial situation is improving tell an entirely different story.

Ex-Clinton Democrat and co-Chair of Obama’s so-called debt commission Erskine Bowles recently warned that our nation’s debt is a fiscal cancer that threatens to devour the nation from within, if left unchecked.  The warnings from the committee he tasked with solving our economic dysfunction couldn’t be any clearer.

In spite of this dire prediction, have Obama and Congressional Progressives begun to tighten the purse strings?  To the contrary.  They’re spending like never before and show no signs of slowing down. In fact, from June 29 to June 30, 2010 in one 24-hour period alone, the US national debt ballooned $166 billion dollars.

The indications of a double-dip recession and perhaps even another depression are beginning to materialize.  Consumer confidence is sinking as fast as Obama’s approval rating and at its lowest level in a year.  People are just too scared to use their purchasing power on anything but the necessities.  While productivity may be up, businesses are now doing more with less.  There’s far too much uncertainty to hire new employees.  Corporations are hoarding their cash like never before, withholding nearly a trillion dollars from the economy out of fear.  Barring congressional action, the tax cuts enacted by President Bush will expire.  Capital gains taxes and dividend taxes are set to increase significantly next year.  This means that investment activities and realization of capital gains that would have occurred next year are occurring this year, artificially inflating this year’s already anemic economic numbers and making this alleged recovery appear far less ominous than it actually is.  It also means that any revenue gains that are realized from these tax increases will be more than offset by the deleterious effect they will have on investment and growth.

To the left of even EU socialists, when it comes to deciding whether to keep careening towards insolvency or begin belt-tightening, Barack Obama seems stuck on stupid.  Notwithstanding all of his rhetoric about the failures of the past, his economic vision is modeled after that of FDR.  He’s deluded himself into believing that Keynesian economic multipliers and wealth redistribution ended the depression, rather than the mobilization of the full industrial and economic might that was necessary to defeat Nazi tyranny and Japanese imperialism.  Digging your way out of a hole has never worked and it never will.

The deteriorating situation we find ourselves in is no accident.  It isn’t due to incompetence or inexperience.  Rather it is the direct result of premeditation.  Every single one of Obama’s policies has been cloaked as some critical reform, the practical effects of which can’t possibly be known until after implementation.  But, the benefits, Barry tells us, will be realized immediately.  Each and every one of these legislative disasters has proved to be a power grab costing far more treasure and freedom than advertised.

There were warnings as far back as 2006 that Barack Obama would wreck the country.  Fiscal disaster looms and if he does not immediately heed the warning from the commission he tasked with studying the problem, the result will be catastrophic.  Obama is solely responsible for our mounting debt, not George Bush and certainly not a Republican minority that can’t stop the train wreck.

Many believe that Barack Obama created the debt commission for political cover.  He has has no intention of heeding that body’s warnings unless forced to do so in a lame-duck session and only then by raising taxes, not cutting spending.  America really screwed up this time.  Rather than electing a self-described moderate who would have his finger on the pulse of the nation, we chose a radical, socialist community organizer who has his Jackboot planted firmly on our neck.

There are only two ways to balance a budget, increase revenues or cut spending.  You don’t need a degree in economics to understand that concept.  Any third-grader with an allowance gets it.  If Barack Obama can’t be made to understand that, then short of divine intervention, there is no stopping the result.  If that is indeed to be the case, then it would be prudent for all Americans to ensure you have adequate resources to withstand the blast wave from the economic time-bomb that’s about to explode in our faces, once the true ramifications of Obama’s destructive acts become apparent.
The Blame Game
Investors.com says the White House has gotten into the habit of blaming everything on Republicans.  Nowhere is that more evident -- or mistaken -- than in the debate over the extension of jobless benefits.

Obama, for example, leveled an attack Monday at Republican lawmakers, essentially saying they were denying extended unemployment benefits for millions of jobless Americans.  "It's time to do what's right, not for the next election, but for the middle class," he said, implying that the GOP's only concern was politics.

We're not surprised.  It's in the grand tradition of political bad-mouthing to claim the opposition is heartless and hateful.  But Obama forgets: It was the Democrats who insisted on a new system for budgeting, to make sure the deficit didn't grow.  Republicans, in fact, support the $34 billion extension of jobless benefits; they just want Congress to find an equivalent amount in cuts, as required by the Democrats' own rules.

Remember last February?  Trying to convince Americans they were the fiscally responsible party -- despite pushing the U.S. deficit to $1.4 trillion, or 10% of GDP, and adding trillions to our nation's debt -- Democrats passed a "Pay-Go" law requiring that any added spending would be offset with cuts.

They got a lot of political mileage out of that.  But before the ink on the bill was dry, they began ignoring it, spending more on health care, aid to the states, jobless benefits, expansion of the child tax credit and government loan programs for small businesses, among other goodies, with no cuts.

In short, they had it both ways -- posing as deficit-cutters while at the same time spending vast sums of money on various forms of "stimulus."  As we all know, the Keynesian stimulus has been a tragic failure, denying millions of Americans the right to meaningful work by killing off the economic growth that is the source of an expanding work force and rising wages.

Yet, incredibly, Obama's vice president now blames Republicans for the stimulus' failure.  "In order to get what we got passed, we had to find Republican votes," Joe Biden said Sunday, arguing the $862 billion stimulus was "too small" because only three Republicans supported it.

Too small?  For the record, Obama's own original estimates saw a stimulus of $775 billion to $800 billion, with unemployment topping out at 8%.  Well, the stimulus was $862 billion, and today unemployment is 9.5%.  We're still down 3.1 million jobs since the Democrats gained control of the entire federal government, and 7.5 million since the recession began.
Obama Like A "Teenager With A Credit Card"
CBS news says former Republican House Speaker Newt Gingrich criticized Obama this morning on NBC's "Today," likening his approach to the economy and unemployment to that of a "teenager with a credit card."

Gingrich issued the barb in response to Obama's comments yesterday criticizing Republicans for opposing a bill extending benefits for the unemployed. Gingrich said the bill would do little for job creation and complained its $33 billion price tag would simply add to an already inflated deficit.

"The second biggest concern of the American people after jobs is deficit spending," Gingrich said.

He added: "The president's very shallow politics [is] assuming the American people are dumb enough to follow the latest headline and don't realize the real problem with unemployment is, this is a job killing administration and a job killing Democratic Congress and that's why those people are unemployed."

Gingrich's harsh assessment of the administration will add to speculation that he may seek the Republican nomination in the 2012 presidential elections. Gingrich has already said that's he's "never been this serious" about a bid, though he made similar claims in the 2008 cycle and declined to run.

Continue reading here (with video) . . .
Obama's Economic Fish Stories
Michael Boskin says on unemployment, Obama claims that the stimulus bill was several times more potent than his chief economic adviser estimates.  Such statements hurt his credibility.

A president's most valuable asset -- with voters, Congress, allies and enemies -- is credibility.  So it is unfortunate when extreme exaggeration emanates from the White House.

All presidents wind up saying some things that make even their own economists cringe (often the brainchild of political advisers unconstrained by economic principles, facts or arithmetic).  Usually, economic advisers manage to correct these problematic statements before delivery.  Sometimes they get channeled into relatively harmless nonsense, such as President Gerald Ford's "Whip Inflation Now" buttons.  Other times they produce damaging policies, such as President Richard Nixon's wage and price controls.  The most illiterate statement was President Jimmy Carter's late-1970s plea to the Federal Reserve to lower interest rates to combat high inflation, the exact opposite of what it should do.  Not surprisingly, the value of the dollar collapsed.

Obama says "every economist who's looked at it says that the Recovery Act has done its job" -- i.e., the stimulus bill has turned the economy around.  That's nonsense.  Opinions differ widely and many leading economists believe that its impact has been small.  Why?  The expectation of future spending and future tax hikes to pay for the stimulus and Obama's vast expansion of government are offsetting the direct short-run expansionary effect.  That is standard in all macroeconomic theories.

So, as I and others warned in 2008, the permanent government expansion and higher tax rate agenda is a classic example of what not to do during bad economic times.  Worse yet, all the subsidies, bailouts, regulations and mandates are forcing noncommercial decisions on the economy, which now awaits literally thousands of new diktats as a result of things like ObamaCare and the financial reform bill.  The uncertainty is impeding investment and hiring.

Obama does not say that economists agree that the high future taxes to finance the stimulus will hurt the economy.  (The University of Chicago's Harald Uhlig estimates $3.40 of lost output for every dollar of government spending.)  Either Obama is not being told of serious alternative viewpoints, or serious viewpoints are defined as only those that support his position.  In either case, he is being ill-served by his staff.

Continue reading here . . .
Obama Extends Unemployment Benefits
Andrew Taylor says federal checks could begin flowing again as early as next week to millions of jobless people who lost up to seven weeks of unemployment benefits in a congressional standoff.

On Thursday, Obama signed into law an unfunded restoration of benefits for people who have been out of work for six months or more.  Congress approved the measure earlier in the day.  The move ended an interruption that cut off payments averaging about $300 a week to 2 1/2 million people who have been unable to find work in the aftermath of the nation's long and deep recession.

At stake are up to 73 weeks of federally financed benefits for people who have exhausted their 26 weeks of state jobless benefits.  About half of the approximately 5 million people in the program have had their benefits cut off since its authorization expired June 2.   Benefits can last up to 93 weeks in Texas, and up to 99 weeks in other states.

They are eligible for lump-sum retroactive payments that are typically delivered directly to their bank accounts or credited to state-issued debit cards.  Many states have encouraged beneficiaries to keep updating their paperwork in hopes of speeding payments once the program was restored.

In states like Pennsylvania and New York, the back payments should go out next week, officials said.  In others, like Nevada and North Carolina, it may take a few weeks for all of those eligible to receive benefits.

"Americans who are fighting to find a good job and support their families will finally get the support they need to get back on their feet during these tough economic times," Obama said in a statement issued after signing the measure.

Continue reading here . . .

Related:  The number of Americans filing for initial unemployment insurance climbed last week.  There were 464,000 initial jobless claims filed in the week ended July 17, up 37,000 from a revised 427,000 the previous week, the Labor Department said.

The number of claims was much higher than expected.
CBO Warns Obama: Exploding US Debt A Huge Risk
Dan Weil says the mushrooming U.S. government debt burden may cause a new financial crisis by spurring a sharp rise in interest rates, according to Doug Elmendorf, director of the Congressional Budget Office (CBO).

Countries such as Greece already have seen such crises, as their debt buildups sent interest rates soaring and drove away international bond investors.

The CBO projects that U.S. federal government debt will reach 62 percent of GDP by Sept. 30, up from 36 percent just three years earlier.  Only once before has that figure surpassed 50 percent, during and just after World War II.

The debt, of course, is created by massive budget deficits, with the White House projecting a gap of $1.47 trillion this year.

Elmendorf sees two possible outcomes for our current predicament -- one mild, one harsh.

As for the mild alternative, "It is possible that interest rates might rise gradually as investors’ confidence in the U.S. government’s finances declined, giving legislators sufficient time to make policy choices that could avert a crisis," he wrote in a blog on CBO’s website.

"It is also possible, however, that investors would lose confidence abruptly, and interest rates on government debt would rise sharply, as evidenced by the experiences of other countries."

Current government policies aren’t encouraging, Elmendorf notes.

Continue reading here . . .
Finger-Pointing Reaches Sell-By Date
John Hinderaker says since May 2009, Scott Rasmussen has been asking voters what or whom they blame for our economic woes.  Until now, a plurality have blamed the Bush administration more than the Obama administration.  Today, for the first time, the Obama administration edged ahead: "48% Blame Obama for Bad Economy, 47% Blame Bush."

Actually, though, that headline is misleading.  The body of the story indicates that the choice (as in prior polls) was between "Obama's policies" and "the recession that began under Bush."  So not all though who voted "Bush" blamed the recession on his administration's policies.

In any event, the inevitable has happened: Obama owns the economy.  For some time, his blaming the Bush administration for problems that have worsened since he took office has grated.  Going forward, that will be even more true.

One more notable point: here, as on nearly every issue, there is a big divide between "mainstream Americans" and the "political class."  Sixty-one percent of mainstream Americans blame the policies of the Obama administration over the recession he inherited, while 87 percent of the political class blame Bush.  That's convenient, of course.  A final populist touch: 62 percent of likely voters trust their own judgment more than Obama's on economic issues.  Makes it hard to exert a whole lot of leadership.
Presidential Self-Adulation Hits New High
Andrew B. Wilson says there's good news on the polling front.  Even though Obama's job approval ratings have plunged into negative territory in every other poll, his score on the all-important PSA Index continues to rise.  Obama's rating on this index (nothing to do with the prostate) has now reached an astonishing 97% -- up from 87% in late 2009, and is now at its highest level ever, according to White House spokesman Robert Gibbels.

The PSA Index is the official measure of Presidential Self-Approval.  It first came into existence in December of 2009, when Obama appeared on the Oprah Winfrey show and awarded himself a B-Plus for his first year in office.  To be strictly accurate, Obama provisionally awarded himself an A-Minus.  He said that the slightly higher grade would be justified if, as he expected, he secured passage of his omnibus health care/income redistribution bill in early 2010.  And of course he did.

So let's boost Obama's PSA score for year one from the high 80s to the low 90s.  Give the man a pat on the back (or stand aside as he does so himself).

At the time of the Oprah interview, Obama stopped short of giving himself a full A because of high and persistent unemployment.  But now he's conquered that problem.  Well, kind of.  So he says.

Since mid July, Obama and Biden have been on the road crowing about all the jobs they have "created or saved" -- some three million to eight million jobs in all, depending on who's talking (Biden and the administration's top economist go with the more conservative three million figure, while Obama jacks it up to eight million).  Either way, the number is way up from where it stood when Obama appeared before the nation on the Oprah Winfrey show (the administration was then claiming to have rescued only about a million jobs).

Now this is a remarkable accomplishment, given the fact that the economy (I mean the real economy) has suffered a net loss of 2.35 million jobs since the passage of the National Recovery and Reinvestment Act.  To paraphrase Marx (Groucho, that is), as the Wall Street Journal did in a recent editorial, who you gonna believe -- the White House, or your own lyin' eyes?

Continue reading here . . .
Obama’s Bogus 8 Million Jobs Saved
Conn Carroll says By the only objective standard available, Barack Obama’s $862 billion economic stimulus has been a complete failure.  His administration promised the American people that if the stimulus passed unemployment would never be higher than 8%.  It blew past that and hit 10.1% in March 2009 and currently stands at 9.5%.

Faced with this inconvenient truth Obama is now falling back on the same failed Keynesian models that betrayed him the first time to make the case that the recession would have been even worse without his policies.  So last week on The View Obama told Elizabeth Hasselbeck: "There was a report that came out by a couple of economists just today, including John McCain’s former economist, that said that had we not taken the steps that we had took, you would have actually seen millions of more jobs lost and we would be in a Great Depression."

Then on Friday, Obama repeated the same line to CBS News: "John McCain’s economist from the campaign, estimated that if we hadn’t made the decisions we’ve made, you would have had an additional eight million people unemployed, and we would be in a Great Depression."

Obama is referring to a computer simulation run by Mark Zandi, who was on a list of then-Presidential candidate John McCain’s "advisory committee of economists", and Alan Blinder, who served on President Bill Clinton’s Council of Economic Advisors.  Their unpublished working paper is very similar to the Congressional Budget Office reports which, while they claim the stimulus "saved" 1.5 million jobs, the CBO has admitted are "essentially repeating the same exercise" as their initial projections.

Commenting on the Zandi paper at his blog, Stanford University economics professor John Taylor writes:
    

"I have now had a chance to read the paper and have more to say.  First, I do not think the paper tells us anything about the impact of these policies.  It simply runs the policies through a model (Zandi’s model) and reports what the model says would happen.  It does not look at what actually happened, and it does not look at other models, only Zandi’s own model.  I have explained the defects with this type of exercise many times, most recently in testimony at a July 1, 2010 House Budget Committee hearing where Zandi also appeared.  I showed that the results are entirely dependent on the model: old Keynesian models (such as Zandi’s model) show large effects and new Keynesian models show small effects.  So there is nothing new in the fiscal stimulus part of this paper."

    
Cato Institute adjunct scholar Arnold Kling adds at EconLog:
    

"I do not think we will ever know what would have happened to the economy without the fiscal stimulus and the large monetary interventions.  My guess is that the overwhelming majority of economists would agree that we will never know the answers to those questions.  However, in the competition for public attention, Blinder and Zandi have two advantages.  First, they support a narrative in which government experts did the right thing, which is comforting to government experts and all who believe in them.  Second, at a tactical level, their use of an esoteric computer model along with those two decimals of precision, they intimidate journalists and other laymen."


Related:  A hand-picked Obama appointee has launched a $22 million program to train 3,000 IT specialists in South Asia.
9.5% In July
The Wall Street Journal is reporting that the U.S. economy shed more jobs than expected in July while the unemployment rate held steady at 9.5%, a further sign the economic recovery may be losing momentum.

Nonfarm payrolls fell by 131,000 last month as the rise in private-sector employment was not enough to make up for the government jobs lost, the U.S. Labor Department said Friday.  Only 71,000 private-sector jobs were added last month while 143,000 temporary workers on the 2010 census were let go.

Economists polled by Dow Jones Newswires were expecting total nonfarm payrolls to drop by a smaller 60,000 in July.

The June data was revised down significantly.  Payrolls fell 221,000 that month, more than the 125,000 drop previously reported, as only 31,000 jobs were added in the private sector.

Taking into account revisions to prior months this year, the U.S. economy added an average of less than 100,000 jobs a month in the first seven months, a level that's not strong enough to bring unemployment down.

The jobless rate, which is calculated using a separate household survey, held steady at 9.5% in July.

Continue reading here . . .

Related:  The truth is that the unemployment situation is 17% worse now than it was a year ago.
The Propaganda Of Incompetents
Investor's Business Daily says as the "recovery summer" turns into a nightmare, one thing has become painfully clear: This is the most economically incompetent administration since the Great Depression.

Two years into the Obama era, when the U.S. should be enjoying a booming recovery from the 2007-08 meltdown, with millions of new jobs and higher incomes for all, all we see is economic wreckage from the unbelievably foolish policies pursued by the White House and the Democrat-controlled Congress.

Whether it's the $862 billion "stimulus" that turned into a welfare program for bankrupt states and public unions, or the $700 billion TARP program that became a giant dish of pork for Democrats and their supporters, or the job-killing duo of health care and financial reform, Obama, Pelosi, Reid et al. seem oblivious to the deep and lasting damage they're doing to America's economy.

Friday's frightening jobs report was only the latest in a series of releases indicating the "recovery" is faltering.  Unemployment in July was unchanged at 9.5%, but a net 131,000 jobs were lost on top of 97,000 more than first accounted for in May and June.

"Recovery summer?" Time for another sobriquet.

The White House response?  On Friday, after release of the jobs report, Labor Secretary Hilda Solis touted the economy's "turnaround" and credited "strong and immediate action" Obama took after entering office.  The only real problem, she hinted, was Republicans who refuse to support a $26 billion bailout for state and local governments and their pampered unions.

"There is no room for partisan roadblocks when Americans are depending on their government's action and the stakes are so high," Solis said.  In this White House, economic recovery is always just one massive stimulus or bailout bill away.

Solis also repeated -- with the stock market selling off 100 points as she spoke -- the bogus claim made by the White House and uncritically parroted by its media pals that timely action "saved or created more than 2.5 million American jobs."

As we've said, this is utter nonsense.  Completely made up.  And, by the way, the official who made it up -- Council of Economic Advisers chairwoman Christina Romer -- quit on Friday to return to academia, her reputation for accuracy in tatters.

Here's the real record: America has lost 4.1 million jobs since Obama took office and 7.7 million since the recession began in December 2007.  So most of the jobs lost have been under this administration.  Whatever else you might call Obamanomics, "successful" isn't it
This Ought To Make You Sick
Jim Hoft is reporting that federal workers make more than twice as much as workers in the private sector.

While the rest of the nation suffered through Obama’s first year in office, government workers increased their salaries by over $30,000 in 2009.  And the benefit package is $41,000 per year, per federal employee, and their retirement is way, way beyond anything you'll ever see.
     
         
USA Today reported:
    

At a time when workers’ pay and benefits have stagnated, federal employees’ average compensation has grown to more than double what private sector workers earn, a USA TODAY analysis finds.

Federal workers have been awarded bigger average pay and benefit increases than private employees for nine years in a row.  The compensation gap between federal and private workers has doubled in the past decade.

Federal civil servants earned average pay and benefits of $123,049 in 2009 while private workers made $61,051 in total compensation, according to the Bureau of Economic Analysis.  The data are the latest available.

The federal compensation advantage has grown from $30,415 in 2000 to $61,998 last year.

Public employee unions say the compensation gap reflects the increasingly high level of skill and education required for most federal jobs and the government contracting out lower-paid jobs to the private sector in recent years.

    
This is theft.  Will someone please start a revolution.

Related:  The federal government is looking to fill an estimated 50,000 to 60,000 entry-level positions in the next year.

 And this doesn't even address the retirement packages for these civil servants.
America On Edge
David Paul Kuhn says that thousands of people barraged a shopping center in Atlanta Wednesday.  The goal was not to purchase the latest "it" item.  It was to attain a public housing application.  Folks cut the line.  Some children were reportedly trampled.  Riot police arrived.  The coveted housing slots are for families with an annual income below $16,000.

The same day in southern California, a man's car was being repossessed.  The unemployed man rammed a rented U-Haul truck into the tow truck.  The man proceeded to barricade himself inside his home.  The local SWAT team was called in.  Police negotiated with him for hours.  He eventually surrendered peacefully.

Two days earlier, a JetBlue flight was on the tarmac at New York's JFK airport.  A passenger rose to retrieve his luggage while the plane taxied.  Veteran flight attendant Steven Slater asked the passenger to sit down.  The passenger cursed him out.  The luggage, or bin, struck Slater in the head.  Reports vary.  The two argued.  Slater took to the intercom.  Let loose his own profane rant.  Grabbed a beer.  Opened the emergency-evacuation chute and slid away in a blaze of workingman glory.

On the other side of the country, not far from the repo-man standoff, Slater's mother was asked about the incident.  "I can understand why he snapped," she said.  So can America.

The nation feels ready to snap.  Not as a people.  But tens of millions are on edge.

Or as Peggy Noonan's column was headlined over the weekend: "America is at risk of boiling over."  No columnist captures the American psyche better than Noonan.  Yet America has felt on the cusp of boiling over all year.  It was last August that town hall meetings erupted across the nation.

That tension only seems to be building.  Perhaps it's the disconnect between the country's leaders and its people.  The ceaseless tide of foreclosures.  Or simply jobs.  Most are not coming back.

Long-term joblessness is at the highest level since the Great Depression.  Nearly 15 million Americans are unemployed.  About 11 million more adults have been relegated to part-time work or given up altogether.  Half the nation has no net worth.

Job insecurity is at record levels.  In spring, a fifth of workers told Gallup that they believe it is "very" or "fairly" likely that they will lose their jobs in the next year.  It was the highest level recorded since the question was first asked in the 1970s.

That means higher rates of personal depression, of stressed families, of physical health issues.

America is stressed out.

Continue reading here . . .
Weekly Jobless Claims Post Surprise Jump, Hit 500,000
Reuters is reporting that new U.S. claims for unemployment benefits unexpectedly climbed to a nine-month high last week, government data showed on Thursday, yet another setback to the frail economic recovery.

Initial claims for state unemployment benefits increased 12,000 to a seasonally adjusted 500,000 in the week ended Aug. 14, the highest since mid-November, the Labor Department said.

Analysts polled by Reuters had forecast claims slipping to 476,000 from the previously reported 484,000 the prior week, which was revised up to 488,000 in Thursday's report.

A Labor Department official said there was nothing unusual in the state level data. The data covered the survey week for the government's closely watched employment report for August, scheduled for release early next month.

The four-week average of new jobless claims, considered a better measure of underlying labor market trends as it irons out week-to-week volatility, rose 8,000 to 482,500, the highest since early December.

Claims for unemployment benefits have been stuck at lofty levels for much of this year, which many economists say points to unemployment staying uncomfortably high for some time.

Continue reading here . . .
Obama's Failed Stimulus Cost More Than Iraq War
Mark Tapscott says expect to hear a lot about how much the Iraq war cost in the days ahead from Democrats worried about voter wrath against their unprecedented spending excesses.
    
    
The meme is simple: The economy is in a shambles because of Bush's economic policies and his war in Iraq.  As American Thinker's Randall Hoven points out, that's the message being peddled by lefties as diverse as former Clinton political strategist James Carville, economist Joseph Stiglitz, and The Nation's Washington editor, Christopher Hayes.

The key point in the mantra is an alleged $3 trillion cost for the war.  Well, it was expensive to be sure, in both blood and treasure, but, as Hoven notes, the CBO puts the total cost at $709 billion.  To put that figure in the proper context of overall spending since the war began in 2003, Hoven provides this handy CBO chart showing the portion of the annual deficit attributable to the conflict:
    
    
But there is much more to be said of this data and Hoven does an admirable job of summarizing the highlights of such an analysis:
    

•  Obama's stimulus, passed in his first month in office, will cost more than the entire Iraq War -- more than $100 billion (15%) more.

•  Just the first two years of Obama's stimulus cost more than the entire cost of the Iraq War under President Bush, or six years of that war.

•  Iraq War spending accounted for just 3.2% of all federal spending while it lasted.

•  Iraq War spending was not even one quarter of what we spent on Medicare in the same time frame.

•  Iraq War spending was not even 15% of the total deficit spending in that time frame.  The cumulative deficit, 2003-2010, would have been four-point-something trillion dollars with or without the Iraq War.

•  The Iraq War accounts for less than 8% of the federal debt held by the public at the end of 2010 ($9.031 trillion).

•  During Bush's Iraq years, 2003-2008, the federal government spent more on education that it did on the Iraq War.  (State and local governments spent about ten times more.)

    
Just some handy facts to recall during coming weeks as Obama and his congressional Democratic buddies get more desperate to put the blame for their spending policies on Bush and the war in Iraq.
It's Best To Expect The Unexpected
Howie Carr says the national economy is in the tank -- unexpectedly.  At least it's "unexpected" by the mainstream media, and professional economists.  After all these months, these pampered pukes remain flummoxed by how clueless their hero Barack Obama has shown himself to be on economic (and other) issues.  As far as these moonbats are concerned, his utter incompetence is, well, unexpected.  And just as unexpectedly, the economy is doing "worse than expected," as Reuters reported with great shock the other day.

Do you know how many times the word "unexpectedly" has appeared in news stories about the U.S. economy in the past year?  Try 21,000.  (I thought the number would be higher.)

The Democrats are still trying to blame George Bush.  That is not unexpected.

Barack's press sycophants are in such a funk over the economy that sometimes they find themselves using the same words over and over again in the same sentence, and just not the U-word.  Unexpectedly, no editor ever catches it.  Back to Reuters earlier this week:
    

"Weaker-than-expected July orders for long-lasting U.S. manufactured goods suggested a slowdown in manufacturing and new U.S. single-family home sales unexpectedly fell in July to their slowest pace on record."

    
The recovery, the lamestream media unanimously agree, is "stalled."  A stalled recovery?  What recovery?  When George Bush had 5 percent unemployment, it was a "jobless recovery."  Barack Obama's 9.5 percent unemployment -- "the new normal."

Watching CNBC these days is like having a home where the buffalo roam -- seldom is heard a discouraging word.  Yesterday I saw this chyron -- "Negative economic data a problem" --  not the negative economy, but the negative economic data.

Here's a sampler of unexpectedly bad economic news culled from the Internet over the past few days:
    

"An unexpectedly bleak report from the National Association of Realtors" . . . "an unexpectedly large drop" . . . "unexpectedly sharp" . . . "Unexpectedly high unemployment" . . . "New claims for U.S. employment benefits unexpectedly climbed" . . . "the U.S. trade deficit in June (was an) unexpectedly large figure" . . .

    
Occasionally a renegade reporter will describe the day's bleak news as "surprising."  But mostly it's unexpected.  Last week, the Tulsa World reported that unemployment benefits "rose unexpectedly."  On the same day in Investors Business Daily and the Chicago Tribune, the same numbers "unexpectedly rose."  The McClatchy newspapers had the claims "jumping unexpectedly," while the Irish News said they "unexpectedly climbed."

But not to worry -- unemployment is but a "lagging indicator" of the happy days that will soon be here again.  At least when a Democrat is president.  When a Republican is in office, any unemployment above 2 percent is a harbinger of soup kitchens.

So yesterday the new unemployment numbers came out, and champagne corks were popping in the moonbat newsrooms because "only" 473,000 people filed for unemployment -- "better than expected."  That "sharp" decline, the AP assured us, was a hopeful sign.  But apparently not that hopeful, at least if you got down to the 16th paragraph, where Barack's hagiographers grudgingly admitted that in a healthy economy, claims generally fall below 400,000.

So much for the summer of recovery.  It didn't work out.  Unexpectedly.
Obama Seeks To End Home Ownership
Joy Tiz says the new foreclosure data is hardly a surprise.  The bulk of the bad ARMs have been flushed out of the system, but we're into a whole new round of foreclosures.  All of Obama's tax payer funded ideas for "saving" homeowners have flopped.

Now we're seeing strategic and unemployment foreclosures.  Borrowers who had good credit and adequate income are finding it difficult to rationalize throwing money into a property that has lost as much as 50% of its value–in some markets even more–and still falling.

Other borrowers are now unemployed, due in large part to Obama's War on Jobs.

Meanwhile, FHA lenders are churning out new future foreclosures with 3% down and shaky credit.  Banks trying to unload short sales and repos often pay the 3% along with closing costs giving the buyer zero down loan.  We taxpayers will be taking more losses on these.

It's not rocket science.  Until the unemployment situation improves, we'll see more foreclosures which will drive values down further.  Obama is well on his way to eliminating private home ownership.
Obama's Job Deficit
The Heritage Foundation reminds us that Obama pledged to create 3.5 million new jobs by 2010.  That would place the current total U. S. employment at 137.8 million. Using that figure as a target, Obama's jobs deficit currently stands at 7.6 million.
   

Total U. S. Employment, Targeted and Actual, in Millions of Jobs
       
Actually, Obama promised that the Stimulus would create 4.1 million jobs.
Result Of Obama's Socialist Vision Is A Double-Dip Recession
Flopping Aces says, that as Obama vacations, the economy continues to slide further into recession:
    

The sputtering economy may be headed for a double-dip recession after the government revised the nation's gross domestic product downward for the second quarter to 1.6 percent from an initial estimate of 2.4 percent.

The first quarter grew at a 3.7 percent annual rate, the second quarter 1.6 percent, and this quarter is not likely to be anything worth bragging about, with economists forecasting growth of only 1.7 percent.  GDP is the value of all goods and services produced in the U.S. and it's the key indicator of the nation's economic health.

The numbers are numbing -- not nearly strong enough to give the recovery enough stride so that employers will want to hire, consumers will have the confidence to spend, or for businesses to invest robustly in equipment.

    
As a result the Chairman of the Federal Reserve said they will do whatever "is necessary" to prevent a further slide, including the purchase of more longer-term securities and easing the interest rates it pays on bank reserves.

What they aren't admitting is that interest rates are already at their lowest level in memory and it's still not helping.  The confidence in our economy just isn't there due in large part to Obama and his policies.  The country now understands the man wants to tax everyone and their mother, except for the very poor, and give it away.  What business owner wants to put more capitol into a venture that is sure to get taxed more?

Recall that the CBO said the economy will fix itself if Government just stays the hell outta the way.  But nooooooo.  Obama's remaking of the United States into a Socialist paradise just couldn't wait.

And now we got a double-dip recession.

Thanks Obama!
Quote Of The Day
"You could take what Obama knows about small business and the mindset of the people who own them, and shove it up an ant’s ass, and it would rattle around like a marble in the Super Dome."

Neal Boortz
Obama Can't Kick The Stimulus Habit
The Washington Times says Obama's latest scheme is a $50 billion giveaway to the unions.

Move over recovery summer, it's time for fabulous fall as Obama ups the stimulus spending ante by $50 billion.  Obama announced his generosity at Monday's Laborfest pep rally in Milwaukee, Wisc.  An audience of union members cheered the plan, knowing the majority of this public cash infusion would be transferred into their own pockets.  That's just the thing to energize labor in advance of November elections that look increasingly bleak for Democrats.

Obama promised the latest bundle of cash would be spent rebuilding roads, laying new rail lines and restoring runways.  It sounds harmless until you consider that, under the Davis-Bacon Act, these public projects must pay inflated labor rates that ensure unions are the primary beneficiaries.  "The bottom line is this, Milwaukee," Obama explained.  "This will not only create jobs immediately, it's also going to make our economy hum over the long haul."

Most Americans would say the economy has been more ho-hum in the year-and-a-half since Obama signed the $814 billion in stimulus into law.  According to the administration's recovery.gov website, $210 billion in stimulus contracts, grants, loans and entitlements remains unspent.  States that receive this largesse often need a great deal of time to turn the cash into the make-work projects that offer few concrete benefits to the taxpayers who are footing the bill.

If the latest spending spree meant building new road capacity in the country's most congested regions, a case could conceivably be made for federal involvement.  Obama's words, however, were carefully chosen.  He spoke of 150,000 miles of roads that will be "repaired" or "modernized."  That means existing roads would be repaved or "improved" with congestion-causing features like bicycle lanes and traffic-calming measures such as speed bumps.  The administration's anti-growth leftists only want new construction for 19th-century passenger-rail technologies.  As demonstrated this week in London and Paris, labor unions can hold a capital hostage when commuters are forced onto government-controlled rail lines that go on strike.  The leverage in asking for higher pay and benefits is lost when employees drive themselves to work.

Such drivers in the United States can expect to pay a lot more.  The president has resurrected a proposal he once cosponsored as a senator to create a new federal agency to dole out cash to union-backed road projects on a permanent basis.  According to the text of the infrastructure bank legislation, the agency would promote the "use of smart tolling, such as vehicle miles traveled and congestion pricing, for highway, road and bridge projects."  In other words, it's a way to raise taxes on commuters without using the politically unpopular "tax" word.

Taxpayer-funded roadside billboards would also be used to boost popularity.  As anyone who took a road trip this holiday weekend can attest, America's highways are littered with orange cones and signs proclaiming that the stimulus is "Putting America to work."  When Illinois Republican Rep. Aaron Schock proposed in July to prohibit federal funding for this electioneering, only 11 Democrats voted with him.

Democratic solidarity may not last, as members grow uneasy about the prospect of voting for a costly package they will soon have to defend on the campaign trail.  As none of the previous stimulus attempts succeeded, there's no reason to believe this one will be any different.  The best way to put America back to work is to discard the Keynesian theories and realize our economic woes are caused by spending too much, not spending too little.

Related:  Robert Gibbs: Obama’s Latest $50 Billion Stimulus Is Not a $50 Billion Stimulus
Obama's Debt Greater Than All Presidents from Washington Through Reagan Combined
CNSNews.com says that in the first 19 months of the Obama administration, the federal debt held by the public increased by $2.5260 trillion, which is more than the cumulative total of the national debt held by the public that was amassed by all U.S. presidents from George Washington through Ronald Reagan.

The U.S. Treasury Department divides the federal debt into two categories.  One is "debt held by the public," which includes U.S. government securities owned by individuals, corporations, state or local governments, foreign governments and other entities outside the federal government itself.  The other is "intragovernmental" debt, which includes I.O.U.s the federal government gives to itself when, for example, the Treasury borrows money out of the Social Security "trust fund" to pay for expenses other than Social Security.

At the end of fiscal year 1989, which ended eight months after President Reagan left office, the total federal debt held by the public was $2.1907 trillion, according to the Congressional Budget Office.  That means all U.S. presidents from George Washington through Ronald Reagan had accumulated only that much publicly held debt on behalf of American taxpayers.  That is $335.3 billion less than the $2.5260 trillion that was added to the federal debt held by the public just between Jan. 20, 2009, when Obama was inaugurated, and Aug. 20, 2010, the 19-month anniversary of Obama's inauguration.

Continue reading here . . .
Obama's Cure For Malaise: More Of The Same
The Washington Times editorializes, with the nation suffering from high unemployment, tepid growth and low confidence, Obama on Friday made a bold change -- he slightly rearranged his economic team.  Austan D. Goolsbee, who has been at Mr. Obama's side since his 2004 Senate campaign, now heads the Council of Economic Advisers.  Goolsbee replaced Christina Romer, who once again is teaching at the University of California at Berkeley.

It's hard to blame her for returning to the job in which she collected $249,277 from Golden State taxpayers in 2008.  Obama's advisers, insulated from the effects of a recession that has devastated the private sector, have less reason to question the wisdom of diverting the nation's wealth into the public sector.  It's no coincidence that Goolsbee dedicated a good deal of his energy in academia to defending the claim that increased tax rates have little effect on how hard people work.  It's as if we were playthings in his economic laboratory who aren't supposed to know what's going on.

Last September, for example, Goolsbee tried to disguise the fact that ObamaCare imposed new taxes.  He insisted that the "fee" imposed on those who don't buy health insurance wasn't really a tax because whenever someone without health insurance is hurt and requires health care, that imposes costs on everyone else.  Now that ObamaCare is law, the administration has dropped the pretense, and the government's official position in a federal court case is that this ObamaCare levy, in fact, is a new tax.

Goolsbee also likes to disguise the spending side of Obama's policies by invoking former President George W. Bush.  In June 2009, Goolsbee told Fox News Sunday that "compared to the actual policies that George Bush had in place, what they call the current policy baseline, Obama is cutting the deficit more than $2 trillion over the 10 years compared with what he was inheriting."  With a federal debt of $14.3 trillion and a 2010 deficit of $1.3 trillion, Obama has little standing to criticize Mr. Bush for the $459 billion deficit posted in fiscal 2008.

The economy will not fully recover until Obama moves away from the failed tax-and-spend government stimulus policies of the New Deal era.  Entrepreneurs are not going to risk their capital so long as they know that the likes of Goolsbee will continue to advise Obama to tax away any potential reward.  It's up to voters in November to decide whether to use Congress to promote a pro-growth change that investors can believe in.
Obama’s Pitiful Legacy
Nile Gardiner says America will need another Ronald Reagan to reverse Obama’s pitiful legacy of US decline.

The Obama administration is bracing itself for more bad news this week with the release of stunning census figures which are projected to show the biggest increase in poverty in the United States since the 1960s.  As Associated Press reports:
    

The number of people in the U.S. who are in poverty is on track for a record increase on President Barack Obama’s watch, with the ranks of working-age poor approaching 1960s levels that led to the national war on poverty.  Census figures for 2009 -- the recession-ravaged first year of the Democrat’s presidency -- are to be released in the coming week, and demographers expect grim findings.

Interviews with six demographers who closely track poverty trends found wide consensus that 2009 figures are likely to show a significant rate increase to the range of 14.7 percent to 15 percent.  Should those estimates hold true, some 45 million people in this country, or more than 1 in 7, were poor last year.  It would be the highest single-year increase since the government began calculating poverty figures in 1959.  The previous high was in 1980 when the rate jumped 1.3 percentage points to 13 percent during the energy crisis.

    
The new figures are an indictment of Obama’s handling of the economy, and will add to the growing perception that his Big Government agenda has been a spectacular flop.  Despite a huge $787 billion stimulus package (with another $50 billion in spending on the way), and a wave of public bailouts, unemployment continues to rise towards 10 percent, and the housing market remains on a downward trajectory.

Added to this grim picture is a spiraling budget deficit which threatens America’s long-term economic prosperity.  As I’ve noted before, the United States is drowning under a mountain of debt, with a Greek-style financial crisis a strong possibility.  Under its alternative fiscal scenario, the Congressional Budget Office projects that US debt could rise to a staggering 87 percent of GDP by 2020, to 109 percent of GDP by 2025, and to 185 percent of GDP in 2035.

In contrast to the Coalition government in Britain, the Obama administration has no concrete plan in place to reduce borrowing and cut the budget deficit.  While Chancellor of the Exchequer George Osborne is preparing the country for cuts of 25 to 40 percent across most government departments, Obama is talking about spending even more taxpayers’ money.  While David Cameron warns the British people to prepare for sacrifice and adjust to a new era of retrenchment for the sake of long-term prosperity, Barack Obama clings to an outdated tax and spend model that even most European governments now reject as suicidal.

Under the Obama White House, economic decline, feckless borrowing and towering debts, which will rise dramatically further if hugely expensive health care reforms are implemented, are combined with a flawed foreign policy and national security strategy which is leaving America weaker on the world stage and more vulnerable to attack.  From its decision to scrap Third Site missile defenses in eastern and central Europe, to its failed policy of engagement with Iran and its timetable for withdrawal from Afghanistan, Obama is projecting dangerous weakness and compromise in the face of its enemies.

Ultimately, Obama’s legacy to America will be the decline of a great superpower, weighed down by crushing debts and massive entitlement programs, and facing an emboldened set of adversaries, from Moscow to Tehran to Pyongyang.  The damage inflicted by the Obama administration will ultimately be worse than the harm caused by the presidency of Jimmy Carter due to the scale of the long-term economic crisis now facing America.

Can this be reversed?  Yes, but it will require a Herculean effort by a US president on the level of a Ronald Reagan, as well as a United States Congress that is willing to implement the free market measures and public cuts that will be needed to revive America’s economy as well as confront the budget deficit, and restore Washington’s standing abroad.  The United States needs strong leadership based upon its founding principles of limited government and individual liberty, and driven by a sense of American greatness and exceptionalism.  Nothing short of a political revolution of the kind that swept both sides of the Atlantic in 1979 and 1980 is needed to secure America’s future and ensure it is able to lead the free world for the next century.
A Republic Is For Grown-ups
On 8 September 2010, Barack Obama said:
    

"The middle class is still treading water, while those aspiring to reach the middle class are doing everything they can to keep from drowning."

    
Terrence Moore says bad metaphors bring bad policies.  During the Great Depression Americans were told that "the pump" had to be "primed."  Despite twelve years of pump-priming, F. D. R. did not bring America out of the Depression.  Bipartisan tax cuts targeted against Truman’s "Fair Deal" did.

Roosevelt had also used the metaphor of "war," but that analogy was brought to perfection in L. B. J.’s "war on poverty."  The image is problematic.  Marines going into a battle, for example, want to know, as they are locking and loading, who the "bad guys" are, that is, whom to shoot.  Who were the bad guys in the "war on poverty?"  The impoverished?  The rich?  When Obama took office a year and a half ago, the universal call from the Democrats was to pass a stimulus package in order to "jump start" economy.  Is the American economy really an old jalopy whose owner would not dare go out for a drive without taking his jumper cables?  Yet that image was invoked countless times without a trace of irony as the government was moving in to take over parts of the auto industry.

If bad political metaphors are not exposed, bad policies invariably follow.  That is why one of the most important moments in the debate over independence was when Thomas Paine required the American colonists to rethink the idea of Britain as the "mother country."  Does a mother send an army to attack her young?  Do not children eventually grow up?  In deciding to become a republic, Americans chose not to have a permanent parent overseeing their every move and aspiration.

Having failed to "jump start" the economy, Obama and the Democrats are moving onto a new metaphor.  The people are "drowning."  Now this is an indisputably powerful image.  Who would not throw a "life line" to a person who is drowning?  Only the most unfeeling capitalist on his mega yacht (about the size of John Kerry’s) would let someone go down in the treacherous waters of the present economy.  When examined closely, though, the analogy reveals more than Obama knows.

First, Obama speaks of "classes": the middle class, those who want to be in the middle class, and so on.  Though we use this terminology all the time, there is nothing in the U. S. Constitution about classes being singled out or owed anything.  "Welfare" is connected to the modifier "general," which means everyone.  The Bill of Rights likewise protects the rights of either "the people" or "persons," not classes.  But in Obama’s swimming pool, people are permanently tethered together.  Single persons do not move through the water according to individual ability or effort and are not encouraged to do so.

Second, these classes are never characterized as being swimmers, but rather drowners.  When, according to Obama, have the American people ever been able to swim?  That is a question some astute reporter should ask him during a rare press conference.  During the Great Depression under F. D. R.?  During Johnson’s war on poverty that was never won?  Democrats never mention Carter’s abysmal one term, which is too like the present.  Even the Clinton era is problematic since a Republican Congress forced the Empathizer-in-Chief to do things he was not naturally inclined to do.  And certainly not during the horrible Bush years when unemployment was significantly lower than it is now.  The fact is, to Obama, America is and will always be a nation of drowners.

Finally, in Pool Obama the good swimmers are made to feel guilty about their talents and forced to stop swimming and help out all the drowners, whether that help is wanted or not.  Michael Phelps must give up his Olympic career in order to become an instructor at the local Y for tots and for adults who never learned to swim because they were never required to.  It is not enough for a good swimmer to inspire others to be good swimmers.  Nor can the folks in the pool be counted on to teach each other out of love or profit.  The officious lifeguard-in-chief must direct everything.

Unfortunately, the rhetoric of drowning does not hold water.  Thirty years ago this November the nation elected a man who had actually been a lifeguard in his youth.  He spent his summers watching over and saving lives.  Yet this lifeguard in his political career looked upon people as individuals, not as belonging to restrictive classes, and upon the nation as a place of swimmers, in fact good swimmers.  All they needed to be given was minimal instruction -- by parents and parts of civil society, not the government -- and a chance.  Compare the Reagan economy to the Obama economy to decide whom you would prefer as the lifeguard -- not the parent -- of the republic.
Obama's Success
Reuters is reporting that U.S. household wealth fell by $1.5 trillion in the second quarter, according to Federal Reserve data on Friday that showed the strain a slow-paced recovery and high unemployment are putting on Americans.

Household net worth fell to $53.5 trillion, well below the $64.2 trillion it had reached at the end of 2007 when the recession officially began, according to the central bank's quarterly flow of funds report.

Declines in the value of financial assets -- especially in stocks and mutual funds -- accounted for much of the decline in second-quarter net worth.  Stocks alone were down $1.9 trillion to $14.9 trillion, more than offsetting small gains in other areas like state and local government retirement funds.

Consumers pared debt at a seasonally adjusted annual rate of 2.3 percent, the ninth consecutive quarter in which they did so.  Home mortgage debt fell at an annual rate of 2-1/4 percent after a 4-1/4 percent drop in the first three months this year.

During the financial crisis that wracked the country from 2007 to 2009, trillions of dollars in housing and financial market wealth was wiped out and heavy household and financial sector indebtedness was exposed as a result of sub-prime lending.

The government has stepped in with increased spending and stimulus programs to try to spur recovery but the unemployment rate in August edged up to 9.6 percent and housing markets are still in distress.

Federal government debt expanded during the second quarter at a hefty 24.4 percent annual rate after a 20.5 percent increase in the first quarter.  By contrast, state and local government debt shrank 1.3 percent during the second quarter.

Business debt excluding financial companies was up a slim 0.1 percent following a 0.5 percent rise in the first quarter.

Data issued on Thursday by the U.S. Census Bureau similarly underlined the extent to which the financial crisis and ensuing recession has hurt household incomes.

The Census Bureau's annual look at U.S. living standards -- once the envy of the world because of the upward mobility Americans could tap into -- found the poverty rate at a 15-year high of 14.3 percent in 2009, up from 13.2 percent in 2008.
Federal Spending -- Then And Now
Maetenloch says you know you hear all kinds of statistics about the growth of the federal budget and deficit - sands on the beach, dollar bills to the moon, blah, blah, blah -- but even if you care about government spending it's easy to lose track of just how fast it's been growing recently.  This kind of stuff just seems perfectly designed to make your eyes glaze over.  Well get a load of this graph:
    
    
You can see that from the late 60's up until 2000 federal spending was pretty much a straight line relative to the median household income.  Then jumps to a new higher growth rate around 2002 (most likely due to 9/11).  But look at what happened in 2007 when the Democrats took over the House.

Ho-ly crap!

Not only did federal spending shoot up but median income actually fell.  This isn't just new unsustainable growth -- this is an effin death spiral where spending has become completely decoupled from people's incomes.  This is the kind of graph you see in engineering when a system is heading into failure.  A few more years of this and we will be in Greek bankruptcy territory.

So if you're looking for a single chart that crystallizes the current greatest danger to the US and why the Tea Party has appeared, this is it.
Obama Administration Has Been An Academic Exercise
Ed Carson says that a day after Obama declared that his administration is not "some academic exercise," Lawrence Summers announced plans to step down as director of Obama’s National Economic Council and return to Harvard University. Christina Romer just left her post as head of the White House Council of Economic Advisers to go back to the University of California, Berkeley.

The current administration has suffered from a historic lack of private-sector experience, from Obama on down. There’s almost no one on the White House payroll who’s actually ever had to meet a payroll.
    
    
That lack of real-world experience helps explain why the White House thought that a big expansion of long-term federal spending and sweeping and unknown regulatory changes for finance, the environment and health care, would be good for the private sector. And when business owners, faced with highly uncertain economic and regulatory conditions, were reluctant to add on new workers, the administration and its allies scolded firms as chicken and even committing "economic treason."

At the current anemic pace, the U.S. won’t recoup all the 8.36 million jobs lost during the recession until September 2017. Short term, unemployment seems headed back up to 10%.

As for Summers and Romer, they can return to their tenured positions, where no one expects results.
The Windmills Of His Mind

Scott Johnsons says the electorate's disillusion with Obama has something to do with the state of the economy, Obama's policies themselves have retarded economic growth.  And the disillusion also relates to Obama's emergence as a man of the left.  The tiger hasn't changed his stripes; they have just become more visible to those who were inclined to believe the post-partisan rhetoric of the Obama campaign.  The voters' will to believe overcame the evidence of Obama's record and associations.

 

The Wall Street Journal's Jonathan Weisman reports on Obama's effort to reconnect with voters in advance of the impending elections.  Weisman followed Obama to a backyard townhall meeting in Des Moines at the home of Jeff and Sandy Clubb.

 

A somewhat more detailed account from the local Iowa press is here.  The White House has posted the full text of the backyard event here.

 

The prospect of an electoral hanging in a fortnight or two has concentrated Obama's mind wonderfully.  Obama gave prepared remarks on the depredations of the Bush era and took questions from the group in attendance.  Weisman found this in the Clubb backyard:

 

Mary Stier -- attending Obama's second of three small "town hall" meetings on a four-state swing this week -- told Obama of her 24-year-old son, who "campaigned fiercely" for him in 2008, graduated from Simpson College a year and a half ago and still is "struggling to find a job."

    

"They are losing their hope," she said in the backyard of Jeff Clubb, a social studies and religion teacher at a Des Moines Catholic school, and Sandy Clubb, the athletic director of Drake University.

    

The question, and Obama's long answer about the depths of the Great Recession, mirrored the exchange he had last week with Velma Hart, a supporter who told him she was "exhausted" from defending him.  Coming the morning after an ebullient political rally in Madison, Wis., it underscored the difficulty Democrats are having mobilizing the voters that propelled them to victory in 2008.

 

Something about the "change" wrought by Obama has dimmed the "hope" he peddled during the campaign.

 

Continue reading here . . .
Racial Predatory Loans Fueled U.S. Housing Crisis
Reuters is reporting that predatory lending aimed at racially segregated minority neighborhoods led to mass foreclosures that fueled the U.S. housing crisis, according to a new study published in the American Sociological Review.

Poorer minority areas became a focus of these practices in the 1990s with the growth of mortgage-backed securities, which enabled lenders to pool low- and high-risk loans to sell on the secondary market, Professor Douglas Massey of the Woodrow Wilson School of Public and International Affairs at Princeton University and PhD candidate Jacob Rugh, said in their study.  "By definition, segregation creates minority dominant neighborhoods, which, given the legacy of redlining and institutional discrimination, continue to be underserved by mainstream financial institutions," the study says.

The U.S. economy is still struggling with the effects of its longest recession since the 1930s, which was triggered in large part by the housing crisis, which was in part triggered by the crash of the subprime loan market.  Subprime lending refers to loans made to consumers with poor credit and others considered higher risk. They tend to have a higher interest rate than traditional loans.

The study, which used data from the 100 largest U.S. metropolitan areas, found that living in a predominantly African-American area, and to a lesser extent Hispanic area, were "powerful predictors of foreclosures" in the nation.  Even African-Americans with similar credit profiles and down-payment ratios to white borrowers were more likely to receive subprime loans, according to the study.

"As a result, from 1993 to 2000, the share of subprime mortgages going to households in minority neighborhoods rose from 2 to 18 percent," Massey and Rugh said.

This report is a lie, and the study behind it is a lie, but what do you expect from a progressive professor from the Woodrow Wilson School of Public and International Affairs at Princeton University.  The subprime loan market wasn't created by "predatory lenders," it was created by Barack Obama, ACORN, and the Congressional Black Caucus.

 In a 1995 case known as Buycks-Roberson v. Citibank, Obama and his fellow attorneys charged that Citibank was making too few loans to black applicants and won the case.  As one commentator noted in May 2008, legal "successes" such as this were probably responsible for the sub-prime mortgage crisis of 2007 AND 2008.  That is, banks were not loaning to blacks whose credit was poor.  When the law forced them to lend money anyway, the inevitable collapse occurred."

Obama played a major role in the lawsuit that started the government on a course of forcing lenders to give more loans to those who had poor credit.  Lending companies were forced to come up with imaginative ways of fulfilling the quota that was required.  Sub-prime lending was born as a result.  The mortgage crises was forecast by many who were able to look beyond the quota.

This 1999 New York Times article (.pdf) describes Fannie Mae's role, and clearly forecast the mortgage meltdown -- two years before Bush was sword in.

In a move that would help increase home ownership rates among minorities and low-income consumers, the Fannie Mae Corporation eased the credit requirements on loans that it will purchase from banks and other lenders, ... under increasing pressure from the Clinton Administration.

"Fannie Mae has expanded home ownership for millions of families by reducing down payment requirements," said Franklin Raines, Fannie Mae's chairman and chief executive officer.  "Yet there remain too many borrowers whose credit is just a notch below what our underwriting has required who have been relegated to paying significantly higher mortgage rates in the so-called subprime market."

Demographic information on these borrowers is sketchy.  But at least one study indicates that 18 percent of the loans in the subprime market went to black borrowers, compared to 5 percent of loans in the conventional loan market.
Obama Says U. S. Fiscal Situation Untenable
NewsMax.com is reporting that Barack Obama said the United States was facing an "untenable fiscal situation" and would have to get serious about tackling its federal deficit.

The U.S. budget deficit is forecast at a record $1.47 trillion in the fiscal year that ended on Sept. 30, 2010.

Obama said that emergency government spending measures he took to support growth and hiring when he took office last year had temporarily added to the funding gap, but the deficit had to be tackled going forward.

"I realize that we are facing an untenable fiscal situation," he told a meeting of his economic recovery advisory board to discuss strengthening the partnership between community colleges and the private sector.  "What I won't do is cut back on investments like education."

Obama's Democrats, who face punishment in upcoming Nov. 2 congressional midterm elections from voters worried about the country's high deficit, argue their Republican Party rivals would cut spending on education.
    
         
If the Republican Party should take control of Congress, they need to cut spending across the board -- and get rid of all government employee unions.
The Deficit Is Bad But You Can’t Cut Spending
Sweetness & Light is reporting that Barack Obama said the United States was facing an "untenable fiscal situation" and would have to get serious about tackling its federal deficit.

The U.S. budget deficit is forecast at a record $1.47 trillion in the fiscal year that ended on September 30, 2010.

Obama said on Monday that emergency government spending measures he took to support growth and hiring when he took office last year had temporarily added to the funding gap, but the deficit had to be tackled going forward.

"I realize that we are facing an untenable fiscal situation," he told a meeting of his economic recovery advisory board to discuss strengthening the partnership between community colleges and the private sector.  "What I won’t do is cut back on investments like education."

Obama’s Democrats, who face punishment in upcoming November 2 congressional midterm elections from voters worried about the country’s high deficit, argue their Republican Party rivals would cut spending on education.

This is the typical howl from the left whenever anyone mentions spending cuts.  You can’t cut teachers or firemen or policemen.  Obama is just doing it on a national scale.
    
     
But look at the graph above. Somehow the United States survived for decades without any federal spending on education.  And, since we have started spending federal money, education seems to have only gotten worse.
U.S. Unemployment At 10.1% In September
Unemployment, as measured by Gallup without seasonal adjustment, increased to 10.1% in September -- up sharply from 9.3% in August and 8.9% in July.  Much of this increase came during the second half of the month -- the unemployment rate was 9.4% in mid-September -- and therefore is unlikely to be picked up in the government's unemployment report on Friday.
    

      
Certain groups continue to fare worse than the national average.  For example, 15.8% of Americans aged 18 to 29 and 13.9% of those with no college education were unemployed in September.

The increase in the unemployment rate component of Gallup's underemployment measure is partially offset by fewer part-time workers, 8.7%, now wanting full-time work, down from 9.3% in August and 9.5% at the end of July.

The government's final unemployment report before the midterm elections is based on job market conditions around mid-September.  Gallup's modeling of the unemployment rate is consistent with Tuesday's ADP report of a decline of 39,000 private-sector jobs, and indicates that the government's national unemployment rate in September will be in the 9.6% to 9.8% range.  This is based on Gallup's mid-September measurements and the continuing decline Gallup is seeing in the U.S. workforce during 2010.

However, Gallup's monitoring of job market conditions suggests that there was a sharp increase in the unemployment rate during the last couple of weeks of September.  It could be that the anticipated slowdown of the overall economy has potential employers even more cautious about hiring.  Some of the increase could also be seasonal or temporary.

Further, Gallup's underemployment measure suggests that the percentage of workers employed part time but looking for full-time work is declining as the unemployment rate increases.  To some degree, this may reflect a reduced company demand for new part-time employees.  For example, employers may be converting some existing part-time workers to full time when they are needed as replacements, but may not in turn be hiring replacement part-time workers.  Another explanation may relate to the shrinkage of the workforce, as some employees who have taken part-time work in hopes of getting full-time jobs get discouraged and drop out of the workforce completely -- going back to school to enhance their education, for example, instead of doing part-time work.  It is even possible that some workers may find unemployment insurance a better alternative than part-time work with little prospect of going full time.

Regardless, the sharp increase in the unemployment rate during late September does not bode well for the economy during the fourth quarter, or for holiday sales.  In this regard, it is essential that the Federal Reserve and other policymakers not be misled by Friday's jobs numbers.  The jobs picture could be deteriorating more rapidly than the government's job release suggests.

Related:  Job losses in 2009 likely bigger than thought -- Obama administration overstated employment by 902,000 jobs.

Translation -- the Obama administration lied, lied, lied.
U.S. Won’t Recover Lost Jobs Until March 2020
Ed Carson says the U.S. economy lost 95,000 jobs in September, far worse than expectations for no change in employment.  More Census-related temp jobs ended, as expected, but state and local governments slashed staff far more than predicted.

So far in 2010, the U.S. has added just 613,000 jobs -- for a monthly average of 68,111.

Employment bottomed in December 2009 at 129.588 million -- two years after peaking at 137.951 million.  At this year’s pace, the U.S. won’t recoup all those 8.36 million lost jobs* until March 2020 -- 147 months after the December 2007 high.
    
    
That would obliterate the old post-World War II record of 47 months set in the wake of the 2001 recession.

The current jobs slump is the deepest of any in the post-war era, with payrolls down as much as 6.1%.  They are still 5.6% below their December 2007 level.

With state and local governments likely to shed workers for at least the next year or two as budget woes continue, the hiring burden will fall entirely on the private sector.

Private employers did add 64,000 workers last month, but that was a little less than consensus forecasts and far below what’s needed.

The U.S. needs to create 125,000-150,000 jobs each month just to absorb new workers and prevent unemployment from rising.  So returning to the old peak employment a decade later would hardly suggest a healthy labor market.

(Unemployment held at 9.6% last month as the separate household employment survey reported an increase in jobs.  But the underemployment rate rose 0.4 point to 17.1%, matching the 2010 high.)

The bottom line: It’s quite possible that the next recession will hit before the U.S. returns to old employment highs.
    

*  The Labor Department said employers may have cut 366,000 jobs more than previously reported in the year through March 2010. A final estimate will be issued in February. That suggests job losses were deeper than expected in 2009 and/or early 2010 hiring was weaker than previously expected. Both would suggest an even-longer return to full employment.

    
Obama The Alien
Larry Kudlow says to be so completely disconnected from political reality and the investor class, Barack Obama must be from another planet.  Believe it or not, with jobs falling for four consecutive months and unemployment stubbornly high near 10 percent, Obama is out on the campaign trail bashing businesses and promoting class warfare.  Huh?  Oh my gosh is he off message.

He’s slamming the Chamber of Commerce for allegedly using foreign money in campaign ads, even though there’s not one shred of evidence of this.  Huh (again)?  Is the Chamber really a big election-year issue?  Is it causing high unemployment?

Of course, Obama never mentions the unions, including the SEIU and AFL-CIO, and all their foreign money from their big international affiliates.  Instead, he extends his own cast of villains, attacking special interests, Wall Street banks, corporations, the oil industry, the insurance industry, credit-card companies, AIG, and ExxonMobil.  ExxonMobil?  What did they do?  Oh, they’re an oil company.  Phew!  Kind of anti-business, wouldn’t you say?

Obama then blasts millionaires and billionaires, waging war on capital and investors, too.  Next he talks about getting young people, African Americans, and union members to the polls.  Even more division.  Even more class warfare.

All this, of course, from the "post-partisan" politician who was going to bring us all together for change, but what’s truly incredible about Obama’s pre-election performance is how it totally misses the mark on the issues that really matter, like high unemployment, low growth, big-government spending, ObamaCare, and tax hikes.  That’s the stuff people are really talking about.  It’s as though Obama is from another planet, completely disconnected from the political reality as we march toward November 2.

A series of investor-related polls shows how totally detached Obama is from the nearly 100 million folks who directly or indirectly own stocks.

A survey conducted by Citigroup Global Markets of 100 mutual-fund, hedge-fund, and pension-fund managers finds that institutional investors fear a government policy mistake far more than inflation, terrorism, a housing double-dip, poor earnings, or any other potential risk to the economy.  (Hat tip to CNBC producer John Melloy.)  One-third of the survey’s participants list government policy missteps as their biggest worry, ahead of the more than 15 percent who cite protectionism, but these investors believe the chances of a big policy error will decrease if Republicans take back the House of Representatives in November.

In another poll conducted by Reuters, 75 percent of respondents believe the employment situation is the most important issue for Wall Street, followed by 41 percent who point to consumer confidence.  Fleshing out the survey, nearly two-thirds of respondents say extending the Bush era tax cuts should be a high priority; just over a third say the budget deficit is the main concern; more than two-fifths say interest rates will start to rise and the dollar will weaken more if the deficit is not addressed; more than a quarter want ObamaCare repealed; and only one-fifth say additional action by the Fed is crucial.

Then there’s a new poll from Investor’s Business Daily.  It shows 56 percent of respondents saying they want tax cuts extended even for households with more than $250,000 in income.  Only 39 percent in the poll want the rich to pay more, while support for making tax cuts for the rich permanent hit 63 percent for both Republicans and independents.  By solid majorities, that includes taxes on capital gains, dividends, and estates, all to be frozen at current rates.

These polls reveal how utterly alien Obama is to the investor class.  And it’s worth noting that investors are among the most likely voters to turn out for elections.

But the absolute key point here is that while Obama is bashing businesses, rich people, and all the rest, and while he continues to wage class warfare, he is talking about issues that are not on anyone’s mind.  It’s the economy, stupid, and the low-spending, low-taxing, and minimal- regulating policies that would set the stage for a stronger economy, lower unemployment, and more confidence.

It’s as though Obama is stuck in a 1930s time warp.  His policies have failed to rejuvenate economic growth, but he will not address this.  That’s his political failing.  And that’s why he is going to suffer a huge shellacking on November 2.
Another Record
Jim Hoft says the Obama Administration set another record today.  For the second year in a row they passed the trillion dollar deficit mark.
    
    
Don’t expect this chart to make it in any front page story.

For the second year in a row the Obama Administration pushed the national deficit above the Trillion dollar mark, further proof that Obamanomics are a complete failure.

Preliminary figures from the Congressional Budget Office (CBO) show that Washington ran a $1.291 trillion deficit in 2010, just slightly less than last year’s $1.416 trillion.

To put these figures in perspective, the annual budget deficit between 1789 and 2008 never reached $500 billion.  As a percentage of the gross domestic product (GDP), the past two years’ deficits of 10.0 and 8.9 dwarf all other deficits since World War II.

Recession-damped revenues continued to contribute to the budget deficit, coming in at 14.7 percent of GDP.  However, low revenues are only a temporary contributor to the budget deficit.  CBO data shows that once the recession ends, revenues should converge back toward their historical average of 18 percent of the economy.

The surging spending will likely be permanent.  Federal spending this past year reached 23.6 percent of the economy, which, along with last year’s 25.4 percent, are the highest spending levels in American history outside of World War II.  And Obama’s budget would permanently maintain federal spending at these high levels.

Putting these revenue and spending trends together shows that long-term deficits will be driven exclusively by above-average spending.  After all, if revenues revert back to their historical average, yet spending remains 5–6 percent of GDP above its historical average, then it will not take a mathematician or economist to determine which variable is driving the deficit upwards.

Spending dipped 2 percent in 2010, from $3.520 trillion to $3.453 trillion.  Unfortunately, this was not the result of actual, repeatable spending restraint.  After costing $154 billion in 2009, repayments to TARP lead to a $108 billion "profit" this past year.  The cost of bailing out Fannie Mae and Freddie Mac dropped from $91 billion to $40 billion.  Deposit insurance costs declined $55 billion.  Each of these savings represents one-time offsets from the cost of previous financial bailouts.  These better-than-projected results should not, however, be confused with good policy.
It’s Official:  Obama Has Now Borrowed $3 Trillion
CNSNews.com says, it's official!  The Obama administration has now borrowed $3 trillion, according to the U.S. Treasury Department.

It took from 1776, when the United States became an independent country, until 1990, the year after the Berlin Wall fell signaling victory in the Cold War, for the federal government to accumulate a total of $3 trillion in debt, according to the Treasury Department.  It only took from Jan. 20, 2009, the day President Barack Obama was inaugurated, until Oct. 15, 2010, for the Obama administration to add $3 trillion to the federal debt.

The overall debt of the federal government, according to the Treasury Department, is now $13.666 trillion.

Each business day, in the afternoon, the Treasury Department’s Bureau of the Public Debt publishes the exact amount -- to the penny -- of total federal debt as of the close of the previous business day.

At the close of business on Jan. 20, 2009, according to the bureau, the total debt of the federal government was $10,626,877,048,913.08. On Oct. 15, 2010, the federal government borrowed an additional $58,979,549,154.06, bringing the total federal debt at the close of Friday’s business day to $13,665,926,643,255.96 -- an increase of $3,039,049,594,342.88 since Obama’s inauguration.

As calculated by the Bureau of the Public Debt, the total federal debt includes two major components: debt held by the public, which includes publicly traded securities such as Treasury bonds, and intragovernmental debt, which is money the government borrows from theoretically dedicated funds within the government itself, such as the Social Security trust fund.

The overwhelming majority of the $3.039 trillion increase in the debt under Obama has come in the form of debt held by the public as opposed to intragovernmental debt.  Debt held by the public has increased $2.75196 trillion since Obama was inaugurated, according to the Bureau of Public Debt, while intragovernmnetal debt has increased $287.0889 billion.
The Unemployed


        
In a report sure to cause consternation at the White House and in the offices of the Democratic Leadership in Congress, "60 Minutes" provided an in-depth report on the realities of the unemployment situation in America today.

When you take into account the underemployed as well as the unemployed, the national rate hits 17% and California a staggering 22%.

To put a face on the realities of the underemployed in America under Obamanomincs, reporter Scott Pelley spoke with a fiber-optics engineering manager who has been looking for work for over a year.  He just took a job working at a Target. 20% of the unemployed in America have college degrees.

According to the report, 1/3 of the unemployed have been out of work for over a year.  This hasn’t happened since the Great Depression.

Airing one week before the mid-term elections, this report explains better than anything, exactly what is at stake for our country on November 2.   
Obama's Currency War
John Paul Rathbone says Brazil, the country that fired the gun on the so-called "currency wars," is girding itself for further battle.

Brazilian officials from the president down have slammed the Federal Reserve’s decision to depress US interest rates by buying billions of dollars of government bonds, warning that it could lead to retaliatory measures.

"It’s no use throwing dollars out of a helicopter," Guido Mantega, the finance minister, said on Thursday.  "The only result is to devalue the dollar to achieve greater competitiveness on international markets."

Related:  Obama: a resounding failure keeps bludgeoning the economy

Related:  Brazil ready to retaliate for US move in "currency war"

Related:  China warns fed move a huge risk

Related:  Germany Concerned
    

Jim M, an Obama File subscriber has this to say about that:

 Buying government bonds with government money is known by the technical term of monetizing one’s own debt.  It’s like taking a draw on your VISA card’s line of credit to pay down your AMWX card

 When asked if it would lead to inflation, he responded, "unfortunately, yes," but the intent is to get the banks more liquid so that they can loan money."  Will it work?  Who knows?  But it is quite risky, having never been done on his scale before.

         
Obama Redefines America's Gift To The World
Andrew B. Wilson says America's gift to the world isn't freedom or democracy.  It isn't the example of a free market that has created unparalleled prosperity for the nation over more than 200 years.  It isn't the generosity of the American people or their willingness to go to the defense of others threatened with tyranny.  And it isn't baseball, football or basketball… or any of the exports of Hollywood and American popular culture.  No, it is none of those things.

According to Barack Obama, America's gift to the world is spending.  More precisely, it is our willingness to spend beyond our means -- in the happy thought that we (or if not we, they, the Obama administration) are spending someone else's money.

Margaret Thatcher got it right when she said that all socialist governments would go on spending -- and spending -- until they ran out of other peoples' money.

According to Obama, we make the world a better place by continuing to live beyond our means.  This enables people in other, less fortunate parts of the world to lift themselves up by the bootstraps by lending us the money we need to buy their products -- or by accepting payment in deliberately devalued dollars.  What a deal!  The latest wrinkle in this narrative is the U.S. Federal Reserve's decision to print enough new money to purchase another $600 billion in long-term government bonds.

That is how Obama explained things to skeptical (or make that outraged and rebellious) fellow leaders in the Group of 20.  "The United States will do its part to restore strong growth, reduce economic imbalances and calm markets," he explained in a letter prior to the G-20 meeting beginning on Thursday in Seoul, Korea.  "A strong recovery that creates jobs, income and spending [emphasis added] is the most important contribution that the United States can make to the global recovery."

Yes, let's go out and "create" some more spending by creating more money -- out of thin air…money which can used to inflate away our IOUs (and our savings) at a later date.  We can then pretend that in doing so we have also "created or saved" a few million jobs, even though the actual effect will be truly to pave the way to another great depression.

With his trademark rhetoric (filled with false, Kennedy-like parallelisms), Obama went on to say: "When all nations do their part -- emerging no less than advanced, surplus no less than deficit -- we all benefit from higher growth."

That sounds like Karl Marx -- "to each according to his need, from each according to his talents."  Only in this case, the United States, as one of the richest countries in the world and, until recently, one of the most entrepreneurial, is also the neediest and the least able to cope for itself.

What a shameful thought!  What a repudiation of everything that "America's gift to the world" used to mean.

By a resounding margin in the November 2 elections, American voters rejected this thought.  Without a doubt, it will be similarly rejected at the G-20 meeting.
Everyone Hates Obama
Emily Zanotti says that you might have a difficult time believing that Sarah Palin was right on the whole "quantitative easing (QE) is a really bad deal" thing, Barack, but would you believe, say, the entire G-20 summit when it turns out they aren't so excited about your plan to print tons of money and keep the value of the dollar so as to gain the upper hand in international trade.
    

Leaders of 20 major economies on Friday refused to endorse a U.S. push to get China to let its currency rise, keeping alive a dispute that has raised the specter of a global trade war amid criticism that cheap Chinese exports are costing American jobs. ...

The biggest disappointment for the United States was the pledge by the leaders to refrain from "competitive devaluation" of currencies.  Such a statement is of little consequence since countries usually only devalue their currencies -- making it less worth against the dollar -- in extreme situations like a severe financial crisis.

    
Yeah, obviously the world isn't thrilled with this development.  There's a reason we're always pissed at China's refusal to devalue the Yuan and it has absolutely nothing to do with the fact that they are hoarding the shit out of the world's lumber.  It's because, as Nobel-prize winning economist Joseph Stiglitz pointed out at a competing forum in Hong Kong, QE might strengthen America, not because it's increasing our growth capacity or legitimately increasing our competitiveness, but only because it f***s over basically everyone else, especially emerging economies that we're friends with like South Korea and Taiwan.  It's definitely not making us friends with people who expect us to float their economies by gobbling up their overpriced, shoddy consumer goods.  Yes, Stiglitz is kind of a socialist, who'd prefer that the US issue a second stimulus to build high-speed rail, but that's cool.  He still makes sense.  Plus, let's face it, the last person we should be taking economic advice from is China, which is the general opinion of the G-20.
    
    
This sucks for other reasons, too.  It means that, on the world stage, we're not exactly viewed as economic superstars.  It also means that everyone sort of hates him.  Peeps don't want his autograph on dog-eared copies of his book, they'd rather not hug him if they don't have to, and he's been ticking off lists of people who still might like him to world reporters.  If the world is just one big high school cafeteria, Obama's the kid eating alone in the corner with the pants that are too short.  Some might even say that there's been a quantitative easing of someone's personal as well as federal currency.

The question is pretty obvious: is it better to have the world hate you because you stab them in the back of because you're just flat out crazy?  Does it matter if you're trapped in a currency war that could cause everyone to throw up crazy tariffs and send us careening back into the great depression?

I have no idea.
Top Holder Of U.S. Debt
Rob Port says this is not a joke.  The monetization efforts by Ben Benanke and the Federal Reserve have resulted in the United States taxpayer edging out China as the largest holders of our own debt.
    
    
So how exactly can our country be indebted to itself?  Easy.  Our country prints more of its own currency, and then loans that currency to itself.  This would be the equivalent of you creating your own currency, printing up batches of that currency and then loaning it to yourself to pay your bills.

We, as individuals, can’t do that because it’s an absurd concept.  The government, however, can do it because they’re the government and can print all the money they want.  Which is why our money supply shouldn’t be controlled by the government.
What Happens When You Don't Let A Crisis Go To Waste
John Hinderaker says the motto of the incoming Obama administration in 2009 was "Never let a crisis go to waste."  The Democrats saw the economic turmoil of the time as an opportunity to pass left-wing proposals that had been on their wish list forever, but that now would become viable because of the financial crisis.  They didn't seriously think that most of these proposals would help the economy, and some undeniably would damage it, but the Democrats were confident that the economy's underlying strength would soon assert itself, recovery would inevitably take place, and they would get the credit.  This, the Obama administration thought, would put the Democrats in clover for a generation.

Things didn't work out that way.  2009 was not 1930.  Americans, to the Democrats' surprise, did not hunger for big government solutions.  Moreover, the Democrats' motives were transparent, in part because they arrogantly trumpeted their "Never let a crisis go to waste" strategy.  Voters wanted the Democrats to address the economy, not pay off their union allies through bailouts and try to nationalize the health care industry.  And most voters do not share Obama's insouciant (and economically ignorant) conviction that wasteful government spending is just fine, since "spending equals stimulus."

Hence the midterm election blowout.  Now the Democrats face the sobering reality that their policies have completely failed to solve the economic problems that they were elected to address.  On the contrary, matters have gotten worse on their watch.  Today's bad news -- "unexpected" as always, as Glenn Reynolds likes to point out -- demonstrates that the administration and its Congressional allies are still at square one when it comes to stimulating economic growth.  The French news agency, AFP, can't hide its schadenfreude at today's jobs report: "US unemployment surges to 9.8 percent in November."
    
    
US unemployment rate surged to 9.8 percent in November, the Labor Department reported Friday, in a hammer blow to hopes for the US jobs recovery.  The economy created many fewer jobs than expected and the unemployment rate rose dramatically from the 9.6 percent seen in October, to its highest level since April.

A measly 39,000 jobs were created, well short of the 130,000 predicted by economists and well beneath the levels needed to make a dent to unemployment rates.

How do you say "measly" in French?  How do you say "failure"?  The Obama administration and Congressional Democrats are perilously close to the point where, even if the economy does recover between now and 2012 -- which I think nearly everyone expects -- voters will deem their policies to have failed.  In part, at least, this is what happens when you tell the world that you view the nation's economic crisis as an opportunity to advance partisan ends.

Paul Mirengoff adds; The words, I believe, are "echec" and "miniscule."  And they are apt.  In addition to the figures John cites, there is this: For blue-collar workers -- "production and nonsupervisory employees" -- aggregate hours fell, aggregate payrolls fell, average weekly hours fell, average hourly earnings fell, and average weekly earnings fell.  And in the household survey, an alternative way of estimating unemployment, employment actually declined.
Net Job Effect of the Obama-Pelosi $814 Billion Stimulus:  Zero
Jim Hoft has an item that says a new study by Daniel J. Wilson of the San Francisco Federal Reserve discovered that the net job effect of the $814 billion Obama-Pelosi Stimulus was zero jobs created or saved.

But it did add another Trillion dollars to the US national deficit:
    
    
The American Thinker reported:

A study by Daniel J. Wilson of the San Francisco Federal Reserve Bank, suggests that the net job creation from the $814 billion stimulus bill passed in February, 2009, was zero by August 2010.  In the first year, the stimulus "saved or created" 2 million jobs (not 4 million as repeatedly claimed by the Administration), but this number proved to be short lived, paying for temporary jobs, at a very high cost of $400,000 per job "saved or created."

By August, 2010, the impact of the stimulus on net job creation had disappeared.  This is an astounding result, which destroys the Paul Krugman argument that the economy would be so much better right now, if only Congress had approved much more spending in February 2009.  Double the initial spending, double the number of temporary jobs, with likely the same net result by this point in time, or a trivial number of "permanent jobs created.  In fact, the unemployment rate is at a substantially higher percentage rate today at 9.8% than when the stimulus bill was passed.
Obama's Mourning In America
The Washington Times says Obama's policies aren't just harmful to the economy, they're undermining America's morale.  On Tuesday, Obama referred to congressional Republicans as "hostage-takers" for resisting White House efforts to increase taxes.  He then gave in to GOP demands, explaining, "I think it's tempting not to negotiate with hostage-takers, unless the hostage gets harmed."  One can only hope that Osama bin Laden was unable to tune in to a press conference in which the Obama delivered the weakest appraisal of how to handle a hostage situation since the mansion at 1600 Pennsylvania Avenue was inhabited by a Georgia peanut farmer.

The weakness extends to the world stage where Obama has apologized for America's failure to appreciate Europe's "leading role in the world."  He bows before foreign leaders, including a Saudi king, a Japanese emperor and China's President Hu Jintao.  It's no wonder, then, that on Wednesday a National Journal poll found that Americans mistakenly believe our economy lacks the strength found in China's.  According to the survey, only one out of five Americans rated the United States as the world's strongest economic power; nearly half thought that honor belonged to the Middle Kingdom.

Never mind that the output of 310 million Americans far exceeds the wealth generation capacity of the 1.6 billion souls living in Japan, China and Germany combined.  What the U.S. public sees is Obama, who talks down his own country's greatness and talks up that of our largest creditor.  China currently owns $1 trillion in U.S. debt in the form of Treasury bonds and notes.  While this certainly is a large sum, it's not even a third of the staggering $3,211,613,265,584.56 in red ink added to the nation's ledgers under Obama's watch.

A new Republican majority in the House of Representatives and a powerful bloc of Tea Party-inspired freshman in the Senate have a chance to do something about this state of affairs.  In February, Congress set the limit on the amount of money the U.S. government could borrow to $14.3 trillion, an amount that -- at current spending levels -- will be exhausted before the end of March.  That gives Republicans a unique opportunity to block further deficit spending by refusing to authorize any further borrowing.  It is a nuclear option.

Even Ronald Reagan as president didn't dare risk the full faith and credit of the United States by allowing a default on the federal government's debt obligations.  Democrats at the time used this to their advantage, securing significant spending and tax-hike concessions from the Gipper.  Now that the tables are turned, Republicans should hold firm against raising the debt ceiling without a legally binding commitment to bring spending across the board down to 2005 levels -- the amount needed to bring the books into balance.  Doing so will eliminate the need for further long-term borrowing.

While the left will prattle about how spending "only" $2.5 trillion of the public's money would constitute a devastating blow to education and "the poor," the reality is America cannot continue the present spending spree.  Going into this budgetary showdown, Republicans who hold firm can count on a singular advantage that guarantees victory: They know how Obama deals with hostage situations.
This Man Is An Idiot
RealClearPolitics.com has a video, in which Obama says that unemployment benefits are the "biggest boost" to the economy.
    

"This tax package does a couple of things immediately for economic growth in Florida.  Number one, for those folks looking for work right now, it extends their unemployment benefits.  Two million people across the country would lose their unemployment benefits at the end of this month if we did not move forward on this tax agreement.  And economists say that not only is that good for those families, it's good for the entire economy.  It's probably the biggest boost that we can give an economy because those folks are most likely to spend the money with businesses, and that gives them customers," Obama told Tampa Bay's Channel 8.

    
Obama's plan for the economy.  Put everyone on unemployment, and just print money.  That's the ticket! 
Stimulus Price Tag: $2.8 Trillion
CNNMoney.com says that since the recession began three years ago, Congress has poured a total of $2.8 trillion into the economy in an effort to spur hiring, get people spending again and prop up industries struggling to stay afloat.
    
    
While the $858 billion package of tax cuts passed last week was the biggest slice of stimulus yet, it accounts for less than a third of all the money spent since the start of 2008, according to multiple cost estimates prepared by the nonpartisan Congressional Budget Office over the last three years.

The rest came from a combination of the $700 billion Troubled Asset Relief Program, the $787 billion stimulus bill passed in the early days of the Obama administration, and various smaller stimulus programs.

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