Big Frick Dot Com » economy

Clueless Joe

Big Frick — Mon, 19 Jul 2010 02:45:02 +0000

Well, that makes it pretty simple.

Pundits are debating a litany of causes for the deep angst and anger being displayed in the current voter polling data. Voters are mad as hell and while even the most liberal minded of the so called experts accept the anger, they differ on their opinions of the root-cause for it.

The list of possibilities is pretty long. From ObamaCare to the economy. From jobs (or the lack thereof) to the mishandling of the gushing oil well in the Gulf. From casualties in Afghanistan to gays in the military. From outrageous and unsustainable government spending to pending cap and trade legislation. And on and on and on.

Suffice it to say that voters are livid and there are plenty of possible reasons for it.

But Barack Obama’s right hand man, the man who’s breath has the ever-present scent of shoe polish, has it all figured out. The reason Americans are furious, according VP Joe “Foot-In-Mouth” Biden, is that we just don’t understand. Plain and simple, America you just don’t get it.

Biden is just coming off his latest round of contemptibly attempted damage control where he not only stated emphatically that the trillion dollar non-stimulating stimulus spending has created several million jobs (or was it ten million, or was it a gazillion), but he did it with a straight face. Like most Americans after hearing his prevarication regarding the number of jobs supposedly created by this mistake to the trillionth power, in an economy that is shedding jobs faster than Nancy Pelosi molting in the spring, I kept waiting for the punch line. But when he was done it dawned on all of us that, Holy Crap!!! He seriously believes we are going to buy this.

And that dear readers, is going to be the focus of the upcoming election season. If the facts don’t match the hype, ignore the facts and switch the blame.

It’s not that the Democrats have lost all sense of reason and responsibility. It’s not that the tried and true standards by which the economy is rated are indicating complete and total failure on a plan that never had a chance in hell of working. It’s not that the Democrat leadership in the House, the Senate and the White House have no clue as to what they are doing. No. That’s not the problem. The problem is that all of us left holding the unpayable bills racked up by this inept community organizer and his band of economic neophytes just don’t understand how truly smart these guys really are.

"These are gigantic packages to deal with a gigantic problem we inherited," Biden said "I don’t think they (the American people) know the detail of what’s going on…"

They presented the country with a 647 page supposed stimulus bill that spent $1 trillion. With the accompanying legislation, pork barrel amendments and earmarks the bill was over 2000 pages. They presented the country with the ObamaCare package. Another $1 trillion in spending buried amongst the 1990 pages of lost healthcare choices, tax increases and union giveaways. While the taxes for this debacle start now the supposed coverage starts to kick in sometime in 2014.

But you’re wrong Joe. Even with the 4000 plus pages you have created to misdirect us, Americans understand what you’ve done. We may not understand how the healthcare bill that couldn’t pass on its own merits became law anyway through the reprehensible use of cloture, but we do understand the damage you’ve done. And we also understand how to put a stop to it.

November is trundling down the road. As November 2^nd, the day of the midterm election, draws near we will hear more and more of how clueless the voters are. It’s up to us to prove Big Joe wrong or to prove him right.

For me, the prospect of Change has never inspired more Hope.

Is He Smarter Than a Fifth Grader

Big Frick — Sun, 13 Jun 2010 23:58:16 +0000

The beauty of math is that there is no gray area.

In this day and age of the Great Barack Obfuscation where nothing adds up and numbers don’t matter, an economic scholar named Daniel B. Kline conducted a survey regarding economic fact versus opinion. The results were printed in the Wall Street Journal on June 8^th under the title “Are You Smarter Than a Fifth Grader?”

Rather than trying to interpret the results I will simply share this most revealing article with you.

By DANIEL B. KLEIN

Who is better informed about the policy choices facing the country—liberals, conservatives or libertarians? According to a Zogby International survey that I write about in the May issue of Econ Journal Watch, the answer is unequivocal: The left flunks Econ 101.

Zogby researcher Zeljka Buturovic and I considered the 4,835 respondents’ (all American adults) answers to eight survey questions about basic economics. We also asked the respondents about their political leanings: progressive/very liberal; liberal; moderate; conservative; very conservative; and libertarian.

Rather than focusing on whether respondents answered a question correctly, we instead looked at whether they answered incorrectly. A response was counted as incorrect only if it was flatly unenlightened.

Consider one of the economic propositions in the December 2008 poll: "Restrictions on housing development make housing less affordable." People were asked if they: 1) strongly agree; 2) somewhat agree; 3) somewhat disagree; 4) strongly disagree; 5) are not sure.

Basic economics acknowledges that whatever redeeming features a restriction may have, it increases the cost of production and exchange, making goods and services less affordable. There may be exceptions to the general case, but they would be atypical.

Therefore, we counted as incorrect responses of "somewhat disagree" and "strongly disagree." This treatment gives leeway for those who think the question is ambiguous or half right and half wrong. They would likely answer "not sure," which we do not count as incorrect.

In this case, percentage of conservatives answering incorrectly was 22.3%, very conservatives 17.6% and libertarians 15.7%. But the percentage of progressive/very liberals answering incorrectly was 67.6% and liberals 60.1%. The pattern was not an anomaly.

The other questions were: 1) Mandatory licensing of professional services increases the prices of those services (unenlightened answer: disagree). 2) Overall, the standard of living is higher today than it was 30 years ago (unenlightened answer: disagree). 3) Rent control leads to housing shortages (unenlightened answer: disagree). 4) A company with the largest market share is a monopoly (unenlightened answer: agree). 5) Third World workers working for American companies overseas are being exploited (unenlightened answer: agree). 6) Free trade leads to unemployment (unenlightened answer: agree). 7) Minimum wage laws raise unemployment (unenlightened answer: disagree).

How did the six ideological groups do overall? Here they are, best to worst, with an average number of incorrect responses from 0 to 8: Very conservative, 1.30; Libertarian, 1.38; Conservative, 1.67; Moderate, 3.67; Liberal, 4.69; Progressive/very liberal, 5.26.

Americans in the first three categories do reasonably well. But the left has trouble squaring economic thinking with their political psychology, morals and aesthetics.

To be sure, none of the eight questions specifically challenge the political sensibilities of conservatives and libertarians. Still, not all of the eight questions are tied directly to left-wing concerns about inequality and redistribution. In particular, the questions about mandatory licensing, the standard of living, the definition of monopoly, and free trade do not specifically challenge leftist sensibilities.

Yet on every question the left did much worse. On the monopoly question, the portion of progressive/very liberals answering incorrectly (31%) was more than twice that of conservatives (13%) and more than four times that of libertarians (7%). On the question about living standards, the portion of progressive/very liberals answering incorrectly (61%) was more than four times that of conservatives (13%) and almost three times that of libertarians (21%).

The survey also asked about party affiliation. Those responding Democratic averaged 4.59 incorrect answers. Republicans averaged 1.61 incorrect, and Libertarians 1.26 incorrect.

Adam Smith described political economy as "a branch of the science of a statesman or legislator." Governmental power joined with wrongheadedness is something terrible, but all too common. Realizing that many of our leaders and their constituents are economically unenlightened sheds light on the troubles that surround us.

Mr. Klein is a professor of economics at George Mason University. This op-ed is based on an article published in the May 2010 Econ Journal Watch, which he edits.

Printed in The Wall Street Journal, page A17

The Audacity Of Memory

Big Frick — Fri, 19 Feb 2010 02:58:29 +0000

It really is getting harder and harder to maintain at least a modicum of decorum in these essays.

Just how long this White House thinks they can continue to blame the Bush administration and get away with it remains to be seen. It has become apparent that passing the buck is in fact the only thing the Obama administration has been successful at through its first year in power.

In a letter to Congress that was designed far more for the national media than for his minions on Capitol Hill, the president said of his economic agenda “I can report that over the past year, this work has begun. In the coming year this work continues.” The president then went on to say “But to understand where we must go in the next year and beyond, it is important to remember where we began one year ago.”

The latter quote was a none-too subtle attempt to snipe at the previous administration, but if you take the words at their face value, I actually agree. It is indeed important to remember where we were one year ago.

One year ago our national debt was 300% less than it is today. Our unemployment was 35% less and well under today’s 10% mark, a mark that candidate Obama ominously warned would be the ruin of the country and only occur if John McCain was elected. A year ago it was all about his plan and how wrong the Bush administration was, a year and nothing but negative results later, it’s still about his plan and how wrong the Bush administration was.

Speaking personally, I have far less money than I did a year ago. The manufacturing sector, which has supported me and my family for over 30 years, is far more depleted than it was a year ago. And I feel far less secure than I did a year ago both financially and physically.

A year ago the Obama administration dropped the use of the term “War on Terror”, but the terrorists never really cared what we called it anyway and have continued their mission of death and destruction. We changed the way we referred to them, but “Death to America” is still the phrase they use to refer to us.

A year ago consumers weren’t spending out of fear. Today consumers aren’t spending out of increased fear. American consumers are saving their money at a consistently higher rate than they were a year ago. Estimates are that American’s are now saving at between 5 and 7 percent. That’s not a prudent savings for a rainy day, that’s a panicked savings for a coming tsunami.

A year ago bank credit was tight. Today bank credit is even tighter and getting to the point of strangling the economy. And what is the plan to help ease this massive retraction in lending? Charging unconstitutional federal fees to a handpicked group of 15 banks. This will only cause these 15 banks to pull back their lending even further to insure proper capital reserves and cause the others to do the same out of fear of who’s next on the presidential hit list.

A year ago the Big Three Automakers were in shambles. A year later only one of the fabled three has been able to pull itself out of the death spiral and actually make money. Which one was able to do this seemingly impossible feat? Ford Motor Company. The one that thanks to the leadership of CEO Alan Mulally decided not to sell its soul to the devil and took no federal bailout money. Mulally saw firsthand from his time as executive vice-president of Boeing just what a bad business partner the federal government can be. Ford won by passing on the Obama plan, the other two were not as insightful and are still paying the price.

A year ago Obama was just making up imaginary numbers to support his plan.

A year later…well…I guess some things will never change.

The State Of Dis-Union

Big Frick — Fri, 29 Jan 2010 00:39:14 +0000

Women and children first.

Captain Hope E. Changey delivered his first State of the Union address last night and basically gave a pep talk to all the terrified passengers who are scrambling for the rail of the severely listing USS Obama. Don’t panic, was his message, I’m still in control here. Unfortunately that is exactly why so many of his once ardent admirers are now looking for a new Messiah. Or at least a way to save their own skin while this captain goes down with his socialist ship into the turbulent and icy waters of public disapproval.

The president once again tried to tie his failures to the previous administration, laying out the deficit and unemployment numbers he was faced with on day one of his reign. He brought up the debt incurred by “fighting two wars” and also erroneously claimed the Bush tax cuts were responsible for the current deficit. The problem with the Democrats continuing to hang onto that “last 8 years” mentality is that if my memory serves me correctly George W. Bush got reelected during that time, fighting two wars and cutting taxes. Both of those issues were hammered repeatedly by his then opponent John Kerry who, having been soundly defeated by the voters, has since been sent back into both obscurity and the Botox Club waiting room.

The other problem with the Obama approach is that just hours after he arrived in Washington as a US Senator he began to campaign for the job he now holds. That campaign spanned two full years plus during which time he constantly beat the deficit drum claiming the Bush deficit would bankrupt the country. The American voters are not necessarily outraged that he has not eliminated the old deficit but rather that he has tripled it in less than a year. There was, of course, no reasonable explanation for those inconvenient mathematical truths other than to once again use magic numbers to create a deceptive figure of ambiguous heritage regarding the jobs supposedly saved by the hundreds of millions spent on rehabbing the habitat of the California jumping blue tit mouse and installing tattoo removal machines on the gang riddled streets of L.A..

"Somewhere along the line, the White House lost its way. Instead of focusing on solutions to help America’s families wade through the wreckage of the worst economic crisis since the 1930s, Washington has wasted valuable time wrestling with partisan politics in an effort to rush through drastic reforms that do not directly address our most immediate needs."

That quote is not part of the Republican response to the president’s address. No, that quote comes from Democrat Congressman Ike Skelton of Missouri. Skelton added: "The president’s address has lent us all hope – hope that the administration is finally heeding our concerns. It’s about time." The comments of Skelton and other Democrats puts the exclamation point at the end of the sentence that reads – Things are not going well in the land of Pelosi and Reid!

Congressional Democrats are scared, as is their less than fearless leader Barack Obama, who displayed his concern by chiding Republicans to not use their newly elected vote in the Senate to thwart his agenda. An agenda so fraught with untenable spending and oppressive government restrictions that he was unable to accomplish it even when he had filibuster proof rubber stamp.

But the most telling moment for me came when the president scolded the US Supreme Court for their recent ruling on corporate campaign spending. With all the Justices seated right in front of him this say anything community activist qua president was caught in yet another bold faced lie when he claimed their ruling would allow even foreign companies to spend on campaigns without limits. "With all due deference to the separation of powers," he said, the Supreme Court last week "reversed a century of law that I believe will open the floodgates for special interests – including foreign corporations – to spend without limit in our elections."

Well, with all due deference Mr. President, if you’re going to lie about what somebody actually did it would be best of you did it without them sitting there on camera to reply “simply not true” as was done by an obviously perturbed Justice Samuel Alito.

No Mr. President, with all due deference, the Supreme Court acts in accordance with the U.S. Constitution.

You might want to try it sometime.

A Problem Of Semantic Proportions

Big Frick — Mon, 07 Dec 2009 22:56:49 +0000

Perhaps the problem is in the semantics.

In a speech this past December 8^th, President and economic guru Barack Hussein Obama said he was putting the finishing touches on his jobs creation plan. Showing a penchant for the same cost cutting that has been displayed by most major corporations, Obama used the same talking points he used for the 2 years he spent running for the office he now holds. He said “We need to grow jobs and get America back to work as quickly as we can.” One might have expected that seeing as he has been saying this for the past 36 months he might have actually had these “finishing touches” competed prior to the one year anniversary of his election.

But along with being tardy in actually having a plan, the plan he is set to announce is fraught with misconceptions.

According to the White House the president is looking at sending federally collected tax revenues to cash strapped states that have experienced a devastating decline in their tax-money coffers. This exchange of taxpayer dollars from the left pocket to the right pocket is intended to prevent further job cuts of state employees. To the extent that more state workers will continue to receive a paycheck it is, in the loosest possible sense, a jobs plan. But as far as actually stimulating job growth this portion of the plan will be completely fruitless. It will simply allow states that currently follow the federal guidelines for financial mismanagement to continue practicing fiscal negligence until this hand out runs out.

Another major portion of the president’s plan is more funding for road construction projects. The beautiful thing about this portion of the plan is that it really won’t matter where you build the roads as nobody is going anywhere anyway. The construction workers building these new highways will likely be the only employed people using them as it will, once again, do nothing to stimulate job growth. Eventually we could pave the fruited plains from sea to shining sea but it still won’t stimulate sustainable employment for most of the 20% of Americans that are actually unemployed.

A minor portion of the president’s plan will give tax incentives to small businesses that hire new employees. This may be the only portion of the plan that is actually workable, but small businesses will not hire new workers strictly because of a tax incentive alone. They need new customers to justify additional payroll.

If the president is serious about creating new jobs he need look no farther than the past 50 year history of the American economy. Even an economic neophyte could see that the times of the greatest job creation is after a reduction in taxes on the American workforce. Sending tax refunds to people who don’t pay taxes may help get some debt off the books at the quickie loan places and may buy Columbian drug lords some new Rolexes, but it does nothing to stimulate the greater economy. Cutting taxes for people who pay taxes stimulates spending which in turn stimulates hiring.

The first move should be to eliminate the penalty for early withdrawal of funds from 401K’s and other retirement accounts. The money could be taxed as income, but the additional 10% penalty places undue hardship on people forced to withdraw funds just to keep their head above water. The second move should be to reinstate all the previous Bush-era tax cuts and make them permanent. Let wage earners decide where to spend their money and jobs will be created by the additional spending. Additional spending will create additional tax revenues and the roads will get built anyway. This approach will mean a complete reversal of the Obama administrations damning of wealthy Americans, but the reality that when wealthy people spend, poor people benefit must be eminently clear by now.

As stated earlier; the Obama approach to stimulating is an unfortunate example of misinterpreted semantics. Some may find getting a large quantity of smoke blown up their kilt quite stimulating.

The economy, unfortunately, does not react the same way.