I particularly enjoyed this non sequitur today in my inbox, from one of my favorite news providers, BusinessInsider.com:
“The G20 has agreed to pursue programs of austerity while also preserving and enhancing the recovery.”
When I clicked on the link, I got the real headline:
“G20 Officially Reveals Its Total Pointlessness.”
Yes, the politicians are stymied. The only good thing going for them is that they are finding lots of occasions to practice their talent for talking out of both sides of their mouth. But the straight-talking intellectual academics aren’t faring much better.
A few blogs ago, I described this slow-motion movie we’re all watching as this recession unfolds. The movie’s climax will approach when the Federal Reserve finds itself in front of a dilemma: They must withdraw central bank assistance to maintain credibility in the U.S. bond and dollar, but when is the right time to begin?
Their problem is that no one seems to know. Bernanke and his colleagues are reportedly hunkered down as I write, trying to figure out how to handle what is looking increasingly like another slowdown, or to be precise the second V in the W. But this is not what they expected to happen. This is not AT ALL what they expected to happen.
At the White House website, the biography of Bill Clinton illustrates the successes of his administration, most notably:
During the administration of William Jefferson Clinton, the U.S. enjoyed more peace and economic well being than at any time in its history.
It’s true. The Clinton years were some of the most prosperous years that the United States has ever seen. Was that the result of massive government spending and initiatives? Of course not. Clinton’s first major initiative - health care reform - failed, resulting in a Republican takeover of Congress and Clinton shifting to rhetoric such as ”the era of big government is over.”
The actual successes of the Clinton years were very right wing ones - welfare reform, free trade agreements and a robust innovative economy fueled by the ingenuity of software entrepreneurs. Spending was down, and Bill Clinton left office with a huge surplus. This was certainly the result of a lack of spending from the federal government, a foreseeable result of having two diametrically opposed political parties in power at once. The fact that the low-spending Clinton years (years in which the government actually shut down for nearly two months) resulted in economic prosperity, while high deficit eras like the pre-war terms of Franklin D. Roosevelt and the Bush-Obama years resulted in depression and recession, makes one of the strongest cases for libertarianism.
So contends Lev Nazrozov. He writes:
Out-of-control predatory capitalists have perpetrated a worldwide economic depression. Capitalism’s degenerate character is now extraordinarily visible during this time of multiple crises.
On each side of the page there is a picture of a miserable emaciated proletarian who carries on his back a huge pack of money, with a bourgeois seated atop of the pack and smoking a cigar.
By simply allowing the government to dominate every sector of the polity, by embracing totalitarianism, we might be able to avoid the woes of economic recession? Historical study makes such a conclusion seem ridiculous. While totalitarian economies did not suffer from “depressions”, per se, one could argue that consumers and citizens lived under a system which continuously mimicked the effects of depression.
Classic parody of an infomercial offering common sense we could all benefit from.
This video would be much funnier if it wasn’t fairly accurate. But this satirical argument addresses a very real issue in DC. There’s no discussion on whether money should be taxed, borrowed and spent, just how it will be wasted by our irresponsible, ineffecient government.
The October jobs report surprised analysts, many of whom thought that the government shutdown would have a negative impact on the economy. Not only were 204,000 jobs added last month, the two previous months were revised upward by 60,000.
The bad news is that the unemployment rate ticked up slightly to 7.3%, as did the U-6 unemployment rate, now at 13.8%. The worse news is that number of workers not in the labor force exploded by 932,000 in October, according to Zero Hedge, bringing the labor participation rate to 62.8%. Not only is this the lowest rate since the aftermath of the 2007-2008 recession, it’s the lowest since 1978.
The Employment Policy Institute (EPI), a leftist think tank, offered a rather grim take on the jobs report and the long-term outlook.
Rep. Alan Grayson (D-FL) says that “stealth socialism” has been “created” in the United States through the Federal Reserve’s bond buying program, which essentially monetizes the government’s debt. What’s more he’s happy about it.
“The one good thing that’s happened in the past five years, in the sense of making people hopeful that the economy might survive a collapse, is that the Federal Reserve’s unconventional monetary policy put us back on a low-level track toward growth,”Grayson, a far-leftist firebrand, told Salon.com in a recent interview. “They showed that monetary policy in extremis can work to some degree.”
In a surprise move, the Federal Reserve announced last week that it would continue the bond buying program, known as “quantitative easing,” in hopes that it would stimulate an economy that is still struggling to recover from the 2008 recession. This is the third round of quantitative easing (QE3) since 2009, bringing the Federal Reserve’s balance sheet, according to the Los Angeles Times, “to nearly $3.7 trillion from about $900 billion in mid-2008.”
“We’ve had a government takeover of the bond market. Stealth socialism’s been created. Government simply ends up owning more and more and more,” he said. “If government had taken over the steel industry, maybe it would have been more noticeable. They’ve taken over the financing of housing industry as well, with a desired result.”
During a speech on Monday marking the fifth anniversary of the 2008 financial crisis, which ushered in the “Great Recession,” President Barack Obama once again repeated calls for more tax revenue to flow into federal government coffers.
President Obama praised several parts of his post-recession economic agenda, including ObamaCare, financial reform, and heavier spending on infrastructure projects, and then shifted to the tax hikes that went into effect at the beginning of the year.
“We also changed a tax code that was too skewed in favor of the wealthiest Americans. We locked in tax cuts for 98 percent of Americans,” he said. “We asked those at the top to pay a little bit more.”
“As I said before, our deficits are falling fast. The only way to make further long-term progress on deficit reduction that doesn’t slow growth is with a balanced plan that includes closing tax loopholes that benefit corporations and the wealthiest Americans at the expense of the middle class,” he added later, transitioning to tax reform. “That’s the only way to do it.”
While President Obama is pushing for higher taxes, it’s worth noting that the United States Treasury has collected a record amount of tax revenues through the first 11 months of the year, notes CNS News, which adjusted the numbers for inflation:
The surge in part-time hiring is beginning to catch the attention of some in the media. Reuters reported on the phenomenon yesterday and explained that there are a couple different reasons for it — ObamaCare’s employer mandate and an economy that has yet to fully recover from a recession that officially ended in four years ago:
Faltering economic growth at home and abroad and concern that President Barack Obama’s signature health care law will drive up business costs are behind the wariness about taking on full-time staff, executives at staffing and payroll firms say.
Employers say part-timers offer them flexibility. If the economy picks up, they can quickly offer full-time work. If orders dry up, they know costs are under control. It also helps them to curb costs they might face under the Affordable Care Act, also known as Obamacare.
This can all become a less-than-virtuous cycle as new employees, who are mainly in lower wage businesses such as retail and food services, do not have the disposable income to drive demand for goods and services.
Obamacare appears to be having the most impact on hiring decisions by small- and medium-sized businesses. Although small businesses account for a smaller share of the jobs in the economy, they are an important source of new employment.
Some businesses are holding their headcount below 50 and others are cutting back the work week to under 30 hours to avoid providing health insurance for employees, according to the staffing and payroll executives.
Washington doesn’t have a spending problem, according to House Minority Leader Nancy Pelosi (D-CA). During an interview yesterday on Fox News Sunday, the former Speaker of the House told Chris Wallace that Congress has already cut spending and called for more tax revenue to flow to Washington:
House Minority Leader Nancy Pelosi says the tens of billions of dollars of spending cuts under sequestration that kicks in on March 1 can be avoided through eliminating tax subsidies for oil companies.
“The fact is we’ve had plenty of spending cuts, $1.6 trillion in the Budget Control Act. What we need is growth,” Pelosi said in an interview on “Fox News Sunday.” Slashing spending indiscriminately, she said, would hurt growth prospects for the U.S. economy.
“It is almost a false argument to say we have a spending problem,” the California Democrat asserted.
As you can see in the chart below from the Heritage Foundation, there is still a river of red ink following from Washington, Despite what Pelosi said yesterday:
What planet is Pelosi living on?