“GM has recalled more cars this year than it has sold in the last five. ‘Hell of a job, Barack!’”
— Shamelessly stolen from Steve Hortwitz’s Facebook
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— Shamelessly stolen from Steve Hortwitz’s Facebook
… The legislation Obama lavishly praised redistributes wealth upward by raising prices consumers pay. Vincent Smith of Montana State University says small non-farm businesses are almost 30 times more likely to fail than farms, partly because the $956 billion farm legislation continues agriculture’s thick safety net. The geyser of subsidies assures that farm households will continue to be 53 percent more affluent than average households.
Certain payments are, however, restricted. People making more than $900,000 annually are ineligible.
Seventy percent of Agriculture Department spending funds food services. Nearly 48 million people — almost as many live on the West Coast (in California, Oregon and Washington) — receive food stamps. This dependency, inimical to upward mobility, is assiduously cultivated by government through “outreach initiatives” to “increase awareness” and “streamline the application process.”
Between 2000, when 17 million received food stamps, and 2006, food stamp spending doubled, even though unemployment averaged just 5.1 percent . A few states have food stamp recruiters. An award was given to a state agency for a plan to cure “mountain pride” that afflicts “those who wished not to rely on others.”
Nearly two-thirds of households receiving food stamps qualify under “categorical eligibility” because they receive transportation assistance or certain other welfare services. We spend $1 trillion annually on federal welfare programs, decades afterDaniel Patrick Moynihan said that if one-third of the money for poverty programs was given directly to the poor, there would be no poor. But there also would be no unionized poverty bureaucrats prospering and paying dues that fund the campaigns of Democratic politicians theatrically heartsick about inequality.
The welfare state, primarily devoted to pensions and medical care for the elderly, aggravates inequality. Young people just starting up the earnings ladder and families in the child-rearing, tuition-paying years subsidize the elderly, who have had lifetimes of accumulation. Households headed by people age 75 and older have the highest median net worth of any age group.
In this sixth year of near-zero interest rates, the government’s monetary policy breeds inequality. Low rates are intended to drive liquidity into the stock market in search of higher yields. The resulting boom in equity markets — up 30 percent last year alone — has primarily benefited the 10 percent who own 80 percent of all directly owned stocks. Charles Wolf writes in the Weekly Standard: “The financial sector’s profits rose from 18 percent of total corporate profits preceding the recession in 2007 to 23 percent in 2013.”
Richard Fisher, president of the Federal Reserve Bank of Dallas, says the total reserves of depository institutions “have ballooned from a pre-crisis level of $43 billion to $2.5 trillion .”
And? “The store of bank reserves awaiting discharge into the economy through our banking system is vast, yet it lies fallow.” The result is a scandal of squandered potential:
“In fourth quarter 2007, the nation’s gross domestic product (GDP) was $14.7 trillion; at year-end 2013 it was estimated to be $17.1 trillion. Had we continued on the path we were on before the crisis, real GDP would currently be roughly $20 trillion in size. That’s a third larger than it was in 2007. Yet the amount of money lying fallow in the banking system is 60 times greater now than it was at year-end 2007.”
The monetary base having expanded 340 percent in six years, there is abundant money for businesses. But, says Fisher, the federal government’s fiscal and regulatory policies discourage businesses from growing the economy with the mountain of money the Fed has created. This is why “the most vital organ of our nation’s economy — the middle-income worker — is being eviscerated.” And why the loudest complaints about inequality are coming from those whose policies worsen it.
Related: How Government Hurts the Poor
Nearly $30 of government intervention to create $1 of economic growth.
"The failure of the stimulus was a failure of the neo-Keynesian belief that economies can be jolted into action by a wave of government spending. In fact, people are smart enough to realize that every dollar poured into the economy via government spending must eventually be taken out of the productive economy in the form of taxes. The way to jolt an economy to life and to sustain long-term growth is to create more incentives for people to work, save and invest. Let’s hope Washington’s next stimulus plan is aimed at reducing the tax and regulatory burden on American job creators."
President Obama lamenting the effects of automation on unemployment. I forgot that he actually said this, on camera, in total seriousness. It was early on in his presidency and one of the moments where he accidentally let slip that he actually has no idea what is going on or what he is doing.
President Obama should read Henry Hazlitt who put this economic fallacy to bed all the way back in the 1960s in his essay, “The Curse of Machinery”:
Among the most viable of all economic delusions is the belief that machines on net balance create unemployment. Destroyed a thousand times, it has risen a thousand times out of its own ashes as hardy and vigorous as ever. Whenever there is long-continued mass unemployment, machines get the blame anew. This fallacy is still the basis of many labor union practices. The public tolerates these practices because it either believes at bottom that the unions are right, or is too confused to see just why they are wrong.
If it were indeed true that the introduction of labor-saving machinery is a cause of constantly mounting unemployment and misery, the logical conclusions to be drawn would be revolutionary, not only in the technical field but for our whole concept of civilization. Not only should we have to regard all further technical progress as a calamity; we should have to regard all past technical progress with equal horror. Every day each of us in his own capacity is engaged in trying to reduce the effort it requires to accomplish a given result. Each of us is trying to save his own labor, to economize the means required to achieve his ends. Every employer, small as well as large, seeks constantly to gain his results more economically and efficiently—that is, by saving labor. Every intelligent workman tries to cut down the effort necessary to accomplish his assigned job. The most ambitious of us try tirelessly to increase the results we can achieve in a given number of hours. The technophobes, if they were logical and consistent, would have to dismiss all this progress and ingenuity as not only useless but vicious. Why should freight be carried from New York to Chicago by railroads when we could employ enormously more men, for example, to carry it all on their backs?
Fans of economic policy may recall that during one of the many recent debt ceiling showdowns, the idea to mint a trillion-dollar platinum coin came to the fore. It turns out that the Obama administration took the idea seriously enough to have the Justice Department’s Office of Legal Counsel draft memos pertaining to its legality, a fact belied by the White House’s out-of-hand dismissal of the option in January.
I wish I was surprised by this.
President Obama has been decrying the growing gap between rich and poor. But his own policies have produced record levels of income inequality.
It makes sense when you have the fed handing billions of dollars to big banks and tax rates that fall increasingly on the middle class. Big government is expensive and those that benefit from its growth are the wealthy, politically connected. Wealth is literally redistributed from the bottom up.
Four out of 5 U.S. adults struggle with joblessness, near-poverty or reliance on welfare for at least parts of their lives, a sign of deteriorating economic security and an elusive American
The Obama recovery has been by far the worst recovery from economic recession/depression in history.
Time Obama spent in meetings/deliberation on the economy: 474.4 hours
Time Obama spent on golf/vacation: 976 hours
The report, “Presidential Calendar: A Time-Based Analysis,” used the official White House calendar, Politico’s comprehensive presidential calendar, and media reports through March 31, 2013 to calculate its results.
GAI’s findings may actually understate Obama’s recreational hours.
Last year, Obama told CBS News that playing golf is “the only time that for six hours, I’m outside.” But instead of six hours, GAI counted a round of golf as taking just four hours. Likewise, for presidential vacation hours, researchers attributed just six hours of any day of vacation to leisure activity.
RICHMOND, Va. — Many adjunct instructors at Virginia’s 23 community colleges will see their hours cut starting this summer thanks to Virginia’s response to the new federal health reform law, a change that could cripple or kill livelihoods teachers like Ann Hubbard worked hard to build.
The Affordable Care Act mandates that employers with more than 50 workers provide coverage for any full-time worker, with full-time defined as 30 hours a week or more. This has presented a problem for many large employers. It’s not just Virginia that’s slashing hours; many big companies are doing the same thing.
As USA Today reports, “Many businesses plan to bring on more part-time workers next year, trim the hours of full-time employees or curtail hiring because of the new health care law, human resource firms say.”
Granted, all of these are “responses to the new federal health reform law.” By the same token, a stampede for the exits is a response to a fire in a movie theater. But the stampede is only a proximal cause. The ultimate cause is the fire. And the ultimate cause of the hour-cutting is not Virginia’s response — it is Obamacare.
Cato Institute’s Fact Checking of Obama’s SOTU
The Bureau of Labor Statistics released jobs numbers for January Friday showing that nonfarm payroll employment increased by 157,000 and the unemployment rate rose to 7.9 percent.
Lost in these headline numbers was another rise in the number of people not in the labor force.
This number now stands at a staggering 89 million, up from 80.5 million when President Obama took office.
This means that there are currently 8.5 million more Americans not in the labor force than just four years ago.
Also, the U-6 measure of unemployment which is viewed as a more accurate measure because it takes into account part-time workers and those who left the labor force, has unemployment at 14.4%
So the number the White House and the media jump on is 7.9% because it’s smaller. But if you take into account all the people who want more hours, any hours, or people who have given up on their search for work, the number spikes to 14.4%.
Obama in 2006: “The fact that we are here today to debate raising America’s debt limit is a sign of leadership failure. It is a sign that the U.S. government cannot pay its own bills.”
Obama in 2013: “To even entertain the idea of this happening [not raising the debt ceiling], of the United States of America not paying its bills, is irresponsible. It’s absurd.”
There’s been lots of discussion lately regarding the minting of a “trillion dollar platinum coin.” The scheme was first promoted by Krugman less than a week ago, and has been discussed heavily the last few days - with “progressive” statists diligently supporting the cause.
House Speaker John A. Boehner said Wednesday that the House will pass his bill that would raise taxes on millionaires but extend tax cuts for everyone else, and said it’s then up to President Obama to either accept that plan or be responsible for a tax increase on everyone.
"The president will have a decision to make. He can call on the Senate Democrats to pass our bill, or he can be responsible for the largest tax increase in American history," Mr. Boehner said as he briefly appeared before reporters to respond to Mr. Obama’s press conference earlier in the day.
I don’t think people fathom how much taxes need to go up in order to accomodate our “new normal” of spending levels. Let the tax rates go up on millionaires so that in 2 months we can get back to talking about the 17 trillion dollar debt, 2 trillion dollar annual budget deficits and exploding entitlement spending. This tax increase solves nothing even though it’s the largest one in American history (referring to the tax increases following the sequestration in the event of a no “compromise” solution). This “compromise” bill Boehner is bragging about is a drop in the bucket.
The stimulus cost American taxpayers 831 billion dollars and allegedly “created” about 2.5 million jobs. If these numbers are true then the federal government spent approximately $332,400 per job created.
And supposedly that’s a wonderful success for America. To me that’s an incredible failure.