kens*ten: a political blog

Archive for the ‘Economy’ Category

Our Not-Quite Shovel-Ready President

Oooh oooh, that smell... Can't ya smell that smell...

President Obama has used the term “shovel-ready” numerous times. Little did he realize the term would become a highly accurate description of his party’s chances in the 2010 midterm election.

The president used the term endlessly to push for adoption of his $862 billion plus Porkulus plan. The point of all that spending was to immediately produce jobs to stave off unemployment.

“Shovel-ready” was said to mean: Ready to go right now… this minute… this second. We have to do this or the economy will collapse!

Obama told Peter Baker of the New York Times Sunday Magazine that he was surprised to learn that these projects weren’t ready to go right now.

“But the problem is”, Obama continued, “is that spending it out takes a long time, because there’s really nothing — there’s no such thing as shovel-ready projects.”

Baker’s article is entitled, “The Education of a President”. You mean Obama needs on-the-job-training? Remember when Obamabots were saying, “He has as much experience as John F. Kennedy had before becoming president”? That was their way of saying Obama was “shovel-ready” to be president.

Ironically, just a few months ago, the Times was informing us that some of these stimulus projects were never near to shovel-ready. Maybe that is where the president first learned of the shovel-ready myth.

Congress — and the public — were told the money would start to our solve America’s all-to-real infrastructure crisis. But, it turns out much of the money went to fund liberal-favored non-infrastructure projects. Oh, and BP got $308 million to start building a power plant — about three years later.

Gee, I guess the Campaigner-in-Chief sold us a bill of goods. But, is he sorry about it?

Not so much.

According to the president, the failure of the Obamanomics linchpin stimulus effort is because his administration did not sell it properly. Forget the results — liberals always try to distract you from looking into results — this is merely a public relations failure.

Quoth Obama:

“…we were going to do the right thing, even if short-term it was unpopular. And I think anybody who’s occupied this office has to remember that success is determined by an intersection in policy and politics and that you can’t be neglecting of marketing and P.R. and public opinion.”

The White House — as expected — sent their PR flak, Robert Gibbs, out to fix the mess Obama created. But, Democrats on the hustings are said to be livid over the news, or more accurately, over the president’s admission of his rookie naiveté.

The president is not concerned about being unpopular. On this issue, he has succeeded tremendously. Perhaps, he should concern himself with not being fundamentally wrong when it comes to economics.

For such a smart man, Obama often seems to find exactly the wrong answer. No PR campaign can save a president from reality. No matter how hard he tries to ignore it.

© 2010 by kens*ten. All rights reserved.

Lynyrd Skynyrd / “That Smell”

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Landrieu Makes Obama Cry ‘Uncle’ on Drilling Moratorium

She is One Scary Senator

Politico reports that the Obama Administration ended the offshore drilling ban “a month early”.

Although this is good news for Gulf State economies, don’t be fooled into thinking their suffering prompted President Obama to proper action.

No, good old-fashioned backroom politics got it done. Senator Mary Landrieu (D-LA) placed a “hold” on the nomination of Jack Lew as director of the White House Office of Management and Budget. The action effectively held the nomination hostage until Landrieu relented.

In other words, she threw a senatorial hissy. And, more importantly, Obama caved.

Is it any wonder Ahmadinejad and Kim aren’t persuaded by Obama’s tough talk? If you can’t move Mary Landrieu off a dime, well… where are you really?

But, back to the drilling ban. As Ed Morrissey writes at Hot Air:

A month early? Try at least two months too late. A study conducted by Barack Obama’s own hand-picked commission showed that not only was the blanket moratorium no longer needed, it was never necessary in the first place.  (emphasis added)

This presidential decision had nothing to do protecting the environment. While the drilling moratorium was in place, the Obama Administration approved a $1 billion loan to Mexico for expanded operations in the Gulf. 

If the administration was so concerned with potential ecological damage, why was it permissible for Mexico to expand drilling operations in the same body of water? Does Mexican crude oil not stick to water fowl, kill fish or pollute beaches? Of course, it does. 

The offshore drilling ban was pure leftist politics on a number of levels. First, the ban was an obvious sop to environmentalist groups who questioned Obama’s commitment to the cause. Second, the moratorium was a “dead fish” message sent to the oil companies. And third, the action was based on the wealth redistribution dogma central to Obama’s political ideology.

All of that was certainly much more important to Obama than the jobs of 10,000 Americans. Aren’t those the same American workers Democrats always claim to protect? Oh well, the ends justify the means, right?

What delicious irony that the whole plan was brought down by bare-knuckled politics as practiced by a liberal Democrat who benefits from oil industry campaign donations.

That President Obama sure has them all shaking in their boots.

© 2010 by kens*ten. All rights reserved.

Congressman Hare-brained

We ain't got no stinkin' debt!

Congressman Philip Hare (D-IL 17) just does not understand what all the fuss is about.

Quoth Hare:

… every minute that I have here (Congress) is going to be spent debunking the myth that this country’s in debt and we just can’t spend.

It’s true that Hare is not the only congressman to have made a loony staement.  Earlier this year Rep. Hank Johnson (D-GA 4) expressed his concern at a congressional hearing that if the population of Guam continued to rise the island might “tip over and capsize”.

To claim a $1.4 trillion plus spending deficit is a myth — much less the $13.3 trillion structural debt — is to totally deny reality.  Heck, even the New York Times admits the US is in debt, and it  is also pretty darn high.

This is not Hare’s first collision with ignorance.  Earlier this year, Hare told a constituent — on video — that ObamaCare was constitutional, although he did not know which part of the Constitution permitted it and quite frankly, he didn’t worry about whether the laws Congress adopts are constitutional.

Jim Geraghty of National Review recently reported that Hare’s Republican opponent, Bobby Schilling, was within one percent (38-37) of Hare in a Cook  Report D+3 district.  The most salient point wasn’t that Schilling was close, but, that an incumbent in a Dem-leaning district was at only 38%!

While the poll result does not bode well for Representative Hare, it certainly reflects positively on the common sense of voters in IL-17. 

2010 by kens*ten. All rights reserved. 

Rep. Philip Hare (D-IL 17) / “The debt is a myth”

Rep. Hank Johnson (D-GA ?) / “Guam might tip over and capsize”

Great Recession Already Over… Stimulus was a Total Waste

Who Are They Trying to Fool?

More confirmation that Obamanomics is a total failure.

Not only did the chief architect Christine Romer have no idea what was going on or how to deal with the economy. But, the stimulus was totally unnecessary.

Why do I say that?

A group of elite economists, the National Bureau of Economic Researchannounced today (Monday, September 20, 2010) that the Great Recession ended in June… of 2009!

Did I miss the president pictured in front of a “Mission Accomplished” banner?

This is beyond brazen. First, Vice President Joe Biden christened this “Recovery Summer”. Then President Barack Obama announced the economy had turned a corner. Now we learn it was all unnecessary.

Why didn’t the smartest people in the world — at least that’s who the media told us inhabited the White House’s West Wing — tell the President? Why didn’t Christine Romer notice? Why didn’t the New York Times tell us — or other media outlets? Wasn’t that news fit to print?

The answer is simple: It just ain’t so. The Great Recession is rolling right along made worse by government incompetence.

Look around your community. Record unemployment, record foreclosures and record deficits. Now go out and tell your neighbors that Happy Days are Here Again. Pay no attention to the men in the white jackets with the nets.

Yet, we did learn one thing from these economic geniuses.

Now I understand why the media reports that every new piece of bad economic news is “unexpected”.

© 2010 by kens*ten. All rights reserved.

Clueless in Obamaland

Anybody Got a Flashlight?

It doesn’t require a Ph. D. in economics to figure out the economy is just plain awful.

Given recent comments by Obamanomics architect Christina Romer, an advanced degree may not aid economic understanding.

Romer, now-former Chair of the White House Council of Economic Advisers, spoke at the National Press Club. As the Washington Post reported, Romer made some interesting comments:

She had no idea how bad the economic collapse would be. She still doesn’t understand exactly why it was so bad. The response to the collapse was inadequate. And she doesn’t have much of an idea about how to fix things.

Even now, Romer said, mystery persists. “To this day, economists don’t fully understand why firms cut production as much as they did or why they cut labor so much more than they normally would”

Her defense was that “almost all analysts were surprised by the violent reaction.”

C’mon even the Post has to wonder: This is the primary expert President Obama trusted for economic advice?

Romer will take her economic know-how and hands-on experience back to Cal-Berkeley… so she can improperly train future Democrat leaders on economics. Maybe even a future president.

However, Romer’s most important role will be official Obama Administration scapegoat for the dismal economy. But, truth be told she did her job: providing economic advice. Romer may have provided bad advice — and, no doubt, exactly what the Keynesian-trained Obama wanted to hear. But, the president made the decisions.

Isn’t that why Barack Obama wanted to be President?

© 2010 by kens*ten. All rights reserved.

Welcome to the United States of Greece

The International Monetary Fund (IMF) released a report on the American financial situation in July which garnered little public attention — until this week. Each year the IMF collects and reviews economic data and then meets with government policy makers to provide their recommendations. 

This year, buried within bureaucratic econo-speak the IMF provided a rather stark wake-up call:

The United States is facing major fiscal and generational imbalances. The combination of high fiscal deficits, an aging population and rapid growth in government-provided healthcare benefits have put the fiscal accounts on an unsustainable path. (emphasis added)

Translation from econo-speak: The US government consistently spends more than it collects in taxes, and promises even more money for benefit programs it can’t possibly afford.

Since we can’t do anything about the population aging (short of death panels), the alternatives are cutting spending and ending the government-run healthcare benefits. Hmm, sounds like the Republican agenda.

The IMF Report continues:

The main drivers of the fiscal gap are rising healthcare costs that under current law will boost mandatory spending to above 18 percent of GDP by 2050. Since the federal government has historically collected about 18.4 percent of GDP in tax revenues, this means that mandatory programs may absorb all federal revenues sometime around 2050, or as early as 2026 when the cost of servicing the debt is added. (emphasis added)

 
Translation: The benefit programs the government has promised will soak up every single dollar the government collects in taxes as early as 2026 — in sixteen short years.

And now, the IMF’s coup de grâce:

The fiscal adjustment would entail significant adjustments in taxes and/or transfers.

We estimate an adjustment between 7 ¾ and 14 ½ percent of every future year’s GDP to restore sustainability and fiscal equity. (emphasis added)

Translation: Either the US government has to raise taxes in an amount equal to 7.75 to 14.5% of GDP or else cut benefits by a similar amount. Keep in mind, that the IMF found the US government already collects revenues equal to 18.4% of GDP.
 
Therefore, the IMF recommends that tax increases or benefit cuts of 43% (7.75/18.4=0.4305) to 79% (14.5/18.4=0.7880) are required to bring us back to even.
 
How does that “Recovery Summer” feel now?
 
In a Bloomberg op-ed, Boston University economics Professor Laurence Kotlikoff writes:

So the IMF is saying that closing the U.S. fiscal gap, from the revenue side, requires, roughly speaking, an immediate and permanent doubling of our personal-income, corporate and federal taxes as well as the payroll levy set down in the Federal Insurance Contribution Act.

Is the IMF bonkers? No. It has done its homework. (emphasis added)

Even assuming the best case scenario (7.75% GDP adjustment) and splitting the difference – equal parts tax increases and spending cuts — results in a 23.5% tax rise along with a similar sized benefits cut.

And this isn’t a one-time deal. The IMF is talking about an annual (i.e. permanent) commitment because we still have to pay down the huge structural debt.

Given the state of American politics, what is the probability of elected officials prescribing this foul-tasting fiscal medicine?

Answer: None at all.

Thanks to the Obamanomics response to the “Great Recession”, the United States faces the same future as Greeceminus the European Union bailout.

© 2010 by kens*ten. All rights reserved.

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Written by kensten

08/11/2010 at 8:00 pm

Dem News Flash: Bush Cut Everyone’s Taxes

I'm gonna lower all y'alls taxes.

Some Democrats have made a fascinating discovery: It turns out President George W. Bush (R-TX) cut taxes for everyone — and not just “the wealthiest Americans”.  

Those tax cuts passed in the economic downturn following the 9/11 terror attacks are set to expire. And, three Senate Democrats don’t want the tax cuts to expire. However, Senator Harry Reid (D-NV) and Representative Nancy Pelosi (D-CA) don’t agree. Neither does President Barack Obama (D-IL).  

The Bush Tax Cuts, much derided by the Obama administration and the press, lowered tax rates on all federal income tax payers. For example, the lowest bracket of 15% was lowered to 10%. If Congress doesn’t re-authorize the tax cuts the rate will revert to 15% — a 50% increase. These are families making under $35,000 per year, the “hard-working Americans” the Dems are always claiming to protect.  

The Bush Tax Cuts eliminated the marriage penalty, cut the tax rate on small business owners who pay much of their federal burden in the form of income taxes, and increased the child tax deduction. The capital gains tax cut on investment profits helped millions of retirees. All helped families and seniors — not fat cats. Each of these improvements in the tax code will expire at year-end.  

The Bush Tax Cuts were a true stimulus to the post-9/11 economy. Most liberals are pretty bad at math in that they view the economy as a “zero sum” game. To them everything is a transfer of dollars from one hand to another. In other words, they totally discount economic growth. And this is despite many decades of data which indicate that capitalism doesn’t transfer dollars — it multiplies them.  

From the day Bush proposed the tax cuts, Liberals predicted doom and gloom for the American economy. Instead, with more money in their pockets working Americans bought more goods — and their employers invested in order to make those goods — thereby growing the economy. In fact, federal tax revenues DOUBLED in the four years after the Bush Tax Cuts took effect!  

On September 12, 2008, then presidential candidate Barack Obama said:  

I can make a firm pledge. Under my plan, no family making less than $250,000 a year will see any form of tax increase. Not your income tax. Not your payroll tax. Not your capital gains taxes. Not any of your taxes.  

The payroll tax increases for ObamaCare start in January 2011. If the Bush Tax Cuts are permitted to expire, this tax hike double whammy will become painfully obvious to all those who still have jobs and pensions in April 2011.  

So that promise is on its way to the trash bin of American political history. It may prove to be Obama’s “Read My Lips” moment.  

© 2010 by kens*ten. All rights reserved.  

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Obama: “No Tax Increase” Pledge   

Written by kensten

07/31/2010 at 1:10 am