A tale of two recoveries
Filed under: American History, economy, Obama Economy, Our Dear Leader, Politics, Taxes
First let us review some history and economic theory. Now you have heard often enough that the recent recession was the “worst since the Great Depression.” This bit of disinformation is repeated by those with a poor grasp or history and/or really don’t care if their information is accurate as long as it furthers their political agenda.
The worst recession “since the Great Depression” was clearly the recession American suffered through in the late 1970s. Double digit unemployment, double digit inflation and double digit interest rates! The prime rate actually hit 21%! So even if you had a job, the cost of living was rising faster and higher than you could possible get a raise and forget about buying a house with interest rates around 20%.
So we have that lie out of the way, let us get to some actual facts. The last recession end way back in mid 2009. That is when economy when from negative GDP growth to positive GDP growth. You may ask what growth? In most of America, there are still far too many empty store fronts as small business are shutting down faster than they are opening. What growth we have had has been anemic at best. GDP growth has not been over 2% in the three and half years since the last recession ended and employment has been over 7.5% and has even hit 10% during that time as well. What you are experiencing is clearly the worst recovery since the Great Depression.
Let’s review, worst recession followed by a roaring recovering in four years. Not the worst recession, worst recovery on record with no signs of getting better. Why such a glaring difference? Well the nice folks at Forbes covered this nicely. Let us review the facts about Reaganomics vs Obamanomics.
Reaganomics had four key points.
1. Cut tax rates to restore incentives for economic growth (just like JFK)
2. Real spending reductions, nearly 5% of the federal budget
3. Anti-inflation monetary policy
4. Deregulation, which saved American consumers an estimated $100 billion per year!
This simple plan resulted in the longest peacetime expansion in American history. The American standard of living increased by close to 20% and the poverty rate declined every year.
Now let’s look at Obama’s economic, and we are being generous here, plan. It is the exact opposite of President Reagan’s plan, which was clearly very successful. In addition to the new Obamacare taxes, he is calling for a sharp increase in the federal tax rate on the Americans who already pay the majority of the federal income tax. In additions, Obama is calling for increases in:
1. The capital gains tax
2. Corporate dividends tax
3. The Medicare tax
4. The death tax
Instead of spending cuts, Obama and the democrat controlled congress opened with nearly a trillion dollars in new federal spending, most of which was borrowed money, further increasing an already high federal debt.
Then we have the double-whammy of an inflationary monetary policy (the Quantative Easing non-stimulus acts) and massive re-regulation in health care, finance, energy and pretty much anything else Obama thinks he can get away with.
Mr. Ferrara sums up the results of the two policies nicely:
As a result, while the Reagan recovery averaged 7.1% economic growth over the first seven quarters, the Obama recovery has produced less than half that at 2.8%, with the last quarter at a dismal 1.8%. After seven quarters of the Reagan recovery, unemployment had fallen 3.3 percentage points from its peak to 7.5%, with only 18% unemployed long-term for 27 weeks or more. After seven quarters of the Obama recovery, unemployment has fallen only 1.3 percentage points from its peak, with a postwar record 45% long-term unemployed.
Previously the average recession since World War II lasted 10 months, with the longest at 16 months. Yet today, 40 months after the last recession started, unemployment is still 8.8%, with America suffering the longest period of unemployment that high since the Great Depression.
This is the Obama Economy. The worst recovery from a recession since the Great Depression. To make it worse, Obama’s policies are likely to cause that record to be broken, rather than produce real, sustainable economic growth.
Update: From Forbes: One Year Later, Another Look at Obamanomics vs. Reaganomics Here is the summary, it’s still Reagan for the win. Here are some of the highlights.
Let’s start with the GDP data. The comparison is striking. Under Reagan’s policies, the economy skyrocketed. Heck, the chart prepared by the Minneapolis Fed doesn’t even go high enough to show how well the economy performed during the 1980s.
Under Obama’s policies, by contrast, we’ve just barely gotten back to where we were when the recession began. Unlike past recessions, we haven’t enjoyed a strong bounce. And this means we haven’t recovered the output that was lost during the downturn.
This is a damning indictment of Obamanomics
…
Writing in today’s Wall Street Journal, former Senator Phil Gramm and budgetary expert Mike Solon compare the current recovery to the post-war average as well as to what happened under Reagan.
If in this “recovery” our economy had grown and generated jobs at the average rate achieved following the 10 previous postwar recessions, GDP per person would be $4,528 higher and 13.7 million more Americans would be working today. …President Ronald Reagan’s policies ignited a recovery so powerful that if it were being repeated today, real per capita GDP would be $5,694 higher than it is now—an extra $22,776 for a family of four. Some 16.9 million more Americans would have jobs.
…
…As I’ve written before, Obama is not responsible for the current downturn. Yes, he was a Senator and he was part of the bipartisan consensus for easy money, Fannie/Freddie subsidies, bailout-fueled moral hazard, and a playing field tilted in favor of debt, but his share of the blame wouldn’t even merit an asterisk.
My problem with Obama is that he hasn’t fixed any of the problems. Instead, he has kept in place all of the bad policies – and in some cases made them worse.
SEIU taking lessons from ACORN
You remember ACORN, the vote fraud experts. With confessions and convictions of vote fraud in at least 24 states.
Well, it seems that another arm of the democrat party, the SEIU (the major public service union) has been taking lessons from ACORN.
SEIU members have been caught committing vote fraud.
An investigation by the Milwaukee County District Attorney’s Office has led to a subpoena of SEIU’s Washington, D.C. headquarters and has implicated the prominent labor union in a voter fraud case that threatens to lead to criminal prosecution.
Then-SEIU Senior Organizer-in-Training Clarence S. Haynes, who is no longer affiliated with the union and whose whereabouts are currently unknown, voted in the hotly contested April 2011 election for a Wisconsin Supreme Court seat despite not being a resident of Wisconsin and leaving the state shortly after voting, according to an October 19, 2012 affidavit prepared by Bruce J. Landgraf, the assistant district attorney for Milwaukee County.
It is not surprising that left fights sensible and common sense voter ID laws.
Update: democrat party officials in Maryland, NJ, NY and Massachusetts Face Prison Time for Voter Fraud
Color me completely and utterly unsurprised. Don’t expect to read this in the NY Times or hear about it on the hard far left MS-NBC propaganda arm of the DNC though.
Roundup
Filed under: Congress, Culture of Corruption, Our Dear Leader, Politics, When democrats attack
Today’s roundup post is by Jonah Goldberg:
A Democratic senator hired an unpaid intern who was an undocumented immigrant but a documented sex offender. Apparently Senator Menendez needed an immigrant to do sex offending that Americans won’t do.
Meanwhile, Representative Jim Moran is “embarrassed” by the revelation that his voter-fraud-orchestrating son smashed his girlfriend’s face into a garbage can and pleaded guilty to assault. The girlfriend appears to be doing what she can to make the story go away. But don’t worry, the phrase “war on women” may still only be used to describe people who don’t want to pay for someone else’s birth control. No word if anyone on the left will be expressing their gratitude for the Violence Against Women Act for this.
Over in Michigan, defenders of the union protestors who tore down an Americans for Prosperity tent are heading toward trutherism, suggesting that it was all a set up, the canvas-and-rope equivalent of the Reichstag fire. No word yet if anyone is claiming the Jews inside the tent got advance notice.
Oh, and after months — nay years — of rhetoric from the president and his proxies about how taxes are simply a sign of neighborliness and the dues we pay to live in this great country, we learn that Obama’s staff owe nearly a million dollars in back taxes.
And the Republicans are losing to these guys.
HT to Mr Reynolds, who is correct in his assessment. Just another example of how you would rarely loose money betting on Congressional Republicans to screw the pooch.
This post requires basic math and reading comprehension skills
Filed under: economy, Obama Economy, Our Dear Leader, Politics
The November 2012 unemployment numbers are out and, of course, the followers of the Cult of our Dear Leader are saying how wonderful those numbers are and those with basic math and reading comprehension skills are not so quick to jump in and join the cheering.
As in most cases, the truth lies between the two camps, but it’s closer to those with the basic math and reading comprehension skills.
According the federal Bureau of Labor Statistics, the U3 unemployment rate (the so-called “official” rate) dropped from 7.9% in October to 7.7% in November. That is the official government number. No books were cooked to get there. It was calculated the same way the federal BLS calculated the U3 number for the past couple of administrations. Just how the feds calculate that number is important to know. I’ll get to that later.
For a more accurate look at the health of the US labor force, you need to look at the BLS’ U6 rate, which includes the underemployed. People who can’t find full time jobs and are working part time for example. That number has been in the low to mid teens for most of the Obama regime. That fell from 14.6% in October to 14.4% in November. Moving in the right direction, but still crazy high considering the U6 rate averaged 9.2% during the GW Bush administration. That was with the declining economy he inherited, the economic recession caused by the 9/11/01 terrorist attacks, and the sub-prime housing bubble bursting! It’s even worse when you compare the Obama Economy to the Reagan Recovery, which at this point in President Reagan’s first term, the economy was producing over 800,000 new jobs a month.
The question the media should be asking is how those unemployment numbers are dropping. Yes, the economy is adding new jobs, but at a rate barely above the 125,000 new jobs a month needed to meet population growth. The numbers for October and September were revised downwards, so we should take the November number of 146,000 new jobs with more than just a few grains of salt. Even adjusting for the level of error seen in October and September, the number new jobs number is still probably over 125,000, but certainly not enough to lower the U3 and U6 numbers by two tenths of a percent in a single months time.
Now it is time to address how the federal Bureau of Labor Statistics calculates the various unemployment rates, including the U3 and U6 numbers. The key thing to know here is that this rate is based on the official federal workforce count. If you are collecting unemployment, and thus are officially looking for work, you are part of the official workforce that the federal government counts. If your benefits run out, you are no longer counted as part of that workforce, so you are not part of those BLS calculations. If you were on unemployment but start receiving other benefits, such as food stamps or welfare, you are removed from the official workforce count as well. So as the number of Americans on food stamps (which aren’t actual stamps anymore, but EBT cards) rises to record levels under the Food Stamp President, the size of the American workforce, as calculated by the federal BLS, shrinks in a corresponding fashion.
So while approximately 146,000 new jobs were added to the economy in November 2012, the size of workforce dropped by over a half million. To put it another way, the reduction in the workforce was well over three times the size of the increase in the workforce. Combine those two numbers and now that 0.2% drop in both the federal U3 and U6 rates make sense.
If the U3 rate was calculated using the same size workforce as existed when Barry Obama took office, the U3 rate would be 10.7%. Clearly, the primary goal of our Dear Leader and congressional democrats has not been job creation, but the illusion of job creation.
So what the November 2012 unemployment numbers really tell anyone willing to look past the smiling faces of the democrat operatives with press credentials, is that there are more people receiving money from the government (i.e. money obtained from tax revenues), than are people paying taxes than there were last month. That is the legacy of the Obama Economy.
Update: Since I posted this, the BLS “adjusted” the November 2012 unemployment rate upwards from 7.7% to 7.8%. Given the economic stewardship of the Obama regime, don’t expect that to get any better. The initial BLS U3 rate for December 2012 was 7.8%. I wouldn’t be surprised if that gets “adjusted” upwards as well.
Quote of the Day
“This week, CBS News became the first news organization besides Fox to ask President Obama ‘Who changed the Benghazi talking points?’ See, this is very dangerous to the White House if journalists should suddenly start asking real questions.”
Quote of the Day
Filed under: Media Bias, Our Dear Leader, Politics, Video
Former democrat party pollster and analyst Pat Caddell brings us today’s Quote of the Day:
“I am appalled right now. This White House, this president, this vice president, the secretary of state, all of them are willing apparently to dishonor themselves and this country for the cheap prospect of getting reelected, willing to cover up and lie, and the worst thing is, the very people who are supposed to protect the American people and the truth, the leading mainstream media, they have become a threat, a fundamental threat to American democracy and the enemies of the American people.”
Let’s go to the video replay…
More Obama Off Shoring
Filed under: Culture of Corruption, Our Dear Leader, Politics
The prime example of Obama sending US jobs off shore is how the US now pays the Russians to get our Astronauts on and off our own orbital space station.
Now Mark Steyn has another example:
Liberals are always going on about the evils of “outsourcing” and “offshoring” – selfish vulture capitalists like Mitt Romney shipping jobs to cheap labor overseas just to save a few bucks. How unpatriotic can you get! So now the United States government is outsourcing embassy security to cheap Welshmen who, in turn, outsource it to cheaper Libyans. Diplomatic facilities are U.S. sovereign territory – no different de jure from Fifth Avenue or Mount Rushmore. So defending them is one of the core responsibilities of the state. But that’s the funny thing about Big Government: the bigger it gets, the more of life it swallows up, the worse it gets at those very few things it’s supposed to be doing. So, on the first anniversary of 9/11 in a post-revolutionary city in which Western diplomats had been steadily targeted over the previous six months, the government of the supposedly most powerful nation on Earth entrusted its security to Abdulaziz Majbari, 29, and his pal, who report to some bloke back in Carmarthen, Wales. In the days before the attack, Joe Biden had been peddling his Obama campaign slogan that: “Bin Laden is dead, and General Motors is alive.” The first successful terrorist attack on U.S. sovereign territory since 9/11, and on the very anniversary and by al-Qaida-linked killers, was not helpful to the Obama team. And so the nature of the event had to be “politicized”: Look, over there – an Islamophobic movie! “Greater love hath no man than this,” quoth the President at Chris Stevens’ coffin, “that a man lay down his life for his friends.” Smaller love hath no man than Obama’s, than to lay down his “friend” for a couple of points in Ohio.
Yup, the Obama regime replaced US security forces with local “militias” in Benghazi, where a US Ambassador was killed in a planned terrorist attack. HT to Ed Driscoll for the Mark Steyn quote.
Another example is Mexican Billionaire and big Obama donor, Carlos Slim, who is getting richer with every Obama Phone the regime gives out, paid for by the rapidly decreasing number of Americans who pay federal taxes.
The Obama re-election strategy defined…
A.F. Branco nails the heart of the Obama re-election strategy.
Just in case you don’t recognize the reference…
Emails Show Close Coordination Between “Justice” Department and Left-Wing Agitprop Organization Media Matters
Filed under: Culture of Corruption, Our Dear Leader, Politics
HT to Ace for this one. Color me not surprised The Obama regime has been anything but “open and transparent” in their actions, legal and illegal.
Internal Department of Justice emails obtained by The Daily Caller show Attorney General Eric Holder’s communications staff has collaborated with the left-wing advocacy group Media Matters for America in an attempt to quell news stories about scandals plaguing Holder and America’s top law enforcement agency.
Let us review the Obama Economy once more
Filed under: Culture of Corruption, economy, Obama Economy, Our Dear Leader, Politics
We’ve take a couple of health checks of the economy under the Obama regime, and they haven’t looked good.
Let’s add this data point: the Obama administration projects $1.2T 2012 budget deficit.
Didn’t our Dear Leader promise to cut the deficit in half? Instead he is taking it to new record highs.
Here is another example of fiscal mismanagement by the Obama regime: GM (Government Motors) ramps Up Risky Subprime Auto Loans To Drive Sales.
Let’s review recent history, it was the federal government policy of forcing record numbers of subprime housing loans that lead to the last fiscal crisis. A policy formed by the so-called “Community Reinvestment Act” that was put in place and defended by the far left wing of the democrat party.
Can anyone see the subprime auto loan market turning out any better than the subprime home loan market?