Obama's economy=disaster

[dario73]

The Obama administration is 0-for-3 in meeting economic expectations. In 2009, President Obama and his advisers believed the bountiful stimulus package would give the economy a strong jolt. It didn’t, and still hasn’t. In 2010, Obama declared Recovery Summer and predicted a surge in employment. The economy lost 283,000 jobs over the summer. This year, Obama expected a significant ratcheting up of jobs and growth. There’s been a ratcheting down.

The White House always has an excuse. Obama’s economic policies are never at fault. The problem in 2009, according to Obama? The economy was in worse shape than he’d feared when he took office. In 2010, economic adviser Christina Romer said the dip in jobs was unexpected. No doubt it was, but that’s a lame explanation. And Obama stubbornly refused to express regret for having proclaimed Recovery Summer in the first place.

Now, two years after the recession officially ended, the excuses for economic stagnation and puny job growth are stale and implausible. Obama didn’t offer any in an economic speech in Toledo a few hours after bad job numbers for May were released last week. Romer’s replacement, Austan Goolsbee, dismissed the 9.1 percent jobless rate as a bump “along the road to recovery.” House Democratic whip Steny Hoyer blamed the Bush administration—really, he did.

Yet Obama labors on as if his policies are working, only a bit more slowly than he’d anticipated. In two and a half years in the White House, he appears to have learned nothing about what stirs the economy and produces jobs and growth. Evidence of failure, like 1.8 percent growth in the first quarter of 2011, matters little. Rather than a midterm course correction, Obama wants more of the same, lots more.

And he’s not reticent about saying so. Obama’s desire to raise taxes is undiminished. He’s obsessed with the notion that more tax revenues can be wrung from rich people with money to spare. In Obamacare, he’s already got a hike in the Medicare tax. Last week he told House Democrats he won’t tolerate another extension of the current tax rates for high earners (more than $250,000 a year). If he had his way, the top rate on individual income would be 45 percent. Oblivious to economic history, he doesn’t see a rising tax burden as a disincentive to entrepreneurship, investment in job-creating enterprises, and a booming economy.

It’s not just Obama. Treasury Secretary Tim Geithner spoke last week to Republican House freshmen. One Republican summarized his message as “revenues, revenues, revenues.” Obama, by the way, told Democrats he’ll insist on a tax increase as part of any deal on raising the debt limit.

Obama’s economic panacea is government spending. If you thought the meager results from the stimulus would change his mind, you’re wrong. He told House Republicans that he favors “investing” in the economy. Republicans drew the reasonable conclusion he was talking about more spending by Washington.

Obama was clear about this in his April budget speech. “I will not sacrifice the core investments we need to grow and create jobs,” he said. “We’ll invest in medical research. We will invest in clean energy technology. We’ll invest in new roads and airports and broadband access. We’ll invest in education. We will invest in job training. We will do what we need to do to compete, and we will win the future.”

The president wasn’t referring to the private sector. He once told a group of money managers that incentives for private investment were old hat. His administration’s massive spending on clean energy, environmental technology, and green jobs, he said, would attract a wave of private investment sufficient to spur growth. So relax, prosperity is on the way.

Whether by design or happenstance, President Obama is the greatest proponent of crony capitalism since FDR proposed cartels under the National Recovery Act. He does big favors for corporate supplicants and recipients of government subsidies while largely ignoring small business. His pet in the business community is Jeff Immelt of General Electric, which relies heavily on federal contracts and paid no taxes in 2010. His nominee for commerce secretary is John Bryson, whose company, BrightSource, is propped up by government subsidies. Obama’s aides are now touting the bailout of General Motors as one of his greatest achievements. Chrysler, not so much.

Obama is a regulatory zealot, even as the administration is supposedly weeding out damaging regulations. (As you might expect, they’ve found few.) At his meeting with Repu blicans last week, Obama was informed of a statement by Lisa Jackson, the head of the Environmental Protection Agency, that EPA adopts policies without taking their economic impact into account—and does so on purpose.

[dario73]

The Republican who brought up the issue, Shelley Capito of West Virginia, got nowhere. Obama seemed dubious Jackson had really said this. Capito said Jackson had told her so, face to face. Obama’s response was vague, but he gave no ground.

Even where Obama seemed to agree with Republicans, he didn’t really. The president is a master of lip service. When Republicans mentioned free trade agreements, medical liability reform, and cutting the corporate tax rate, the president said amen. He’s with them. But there’s always some reason he can’t act. On trade, for instance, Obama is waiting for Congress to pass assistance to alleged victims of foreign competition before pushing to ratify deals with Panama, Colombia, and South Korea. It’s a sop to unions, nothing more.

There’s a lesson here for Republicans, and a huge opportunity. That Obama’s policies are in large part responsible for the weak recovery and high unemployment is beyond dispute. Yet Republicans haven’t made the case effectively enough that Obama’s decisions are directly to blame.

They need to. The economy is languishing, joblessness is stuck at an abnormally high rate, the housing market remains in decline, the deficit will exceed $1 trillion for every year of Obama’s term, the national debt is north of $14 trillion, and markets are anxious. There’s a connection between our troubled economy and Barack Obama. If Republicans drive home the link, they’ll oust him and win big in 2012. It’s as simple as that.

http://www.weeklystandard.com/articles/obama-economy_573249.html?page=2

[dario73]

Editorial: Jobs Slump — It's The Policy, Stupid
 
Posted 06/03/2011 07:00 PM ET
 

Recession: Two years into a "recovery," the unemployment rate leaps to 9.1% and just 54,000 new jobs are created. Is this just "bumps on the road to recovery," as the White House insists, or something more dangerous?

This has been the most miserable recovery in modern history. Not only are there not enough jobs being created, but also the economy itself looks to be stalling.

Gross domestic product grew a paltry 1.8% during the first quarter, and most economists expect something similar for the second quarter. Double dip? It's possible.

As we noted earlier last week before the new jobs data came out, the U.S. is already in a growth recession — defined as an economy that's growing too slowly to keep unemployment from rising.

Yet the Obama administration is crowing about its accomplishments as if slowing growth and rising joblessness have nothing to do with its bad policies.

"The initiatives put in place by this administration — such as the payroll tax cut and business incentives for investment — have contributed to solid employment growth overall this year, but this report is a reminder of the challenges that remain," said Austan Goolsbee, Obama's top economic adviser.

"Solid employment growth"? Since the end of last year, job growth has averaged 130,500 a month — about the number of people who enter the workforce each month. That's not "solid" enough.

By the way, the unemployment rate has been below 9% for just five months since Obama took office — and three of those months were in the first 12 weeks of his presidency, before his policies took effect.

Even so, President Obama on Friday visited Chrysler workers, lauding the government's bailout for the re-emergence of the auto industry, which has added 113,000 jobs over the last two years.

What he didn't say was that GM, the bailout's poster boy, lost taxpayers $14 billion, and the total cost of his stimulus and bailout plan has now risen to $830 billion.

Obama was unflappable. "This economy took a big hit — it's taking a while to mend," he told Chrysler workers, reciting high gas prices, Japan's earthquake and the Mideast as the "head winds" facing the economy.

How about the head wind of bad government policies that, based on Congressional Budget Office data, have cost the economy over $760 billion in lost economic output in the past two years — and millions of jobs?

This lost output is the Obamanomics growth tax. Too much tinkering, too much debt, too much spending.

"By failing to alleviate the uncertainty businesses are feeling, Washington continues to stifle hiring," said Chamber of Commerce economist Martin Regalia.

This "uncertainty," by the way, is why businesses, with their $2 trillion in cash, stay on the sidelines. At this point in a recovery, they should be adding hundreds of thousands of workers each month.

That they aren't is a damning indictment of Obama's big-spending, high-debt, Keynesian strategy that has emerged as one of the great failures of economic policy-making in modern times.

http://www.investors.com/NewsAndAnalysis/Article/574400/201106031900/US-Jobs-Hole-Just-Got-Deeper.htm

[Soul Crusher]

It's intentional.   

[Soul Crusher]

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Bailouts for Big Business, Bankruptcies for the Middle Class
Townhall.com ^ | June 4, 2011 | Rachel Alexander
Posted on June 4, 2011 9:55:14 AM EDT by Kaslin



While the Obama administration has been busy bailing out irresponsible financial institutions and big business, individual homeowners have been left with little relief, with many forced to file for bankruptcy. About the only relief Obama has doled out for the rest of us is the Home Affordable Modification Program (HAMP). Launched in early 2009, it has been a complete failure. The program was meant to lower mortgage payments by decreasing interest rates and extending loan repayment terms for mortgagors undergoing financial difficulties. A GAO study released in May found serious problems with the program, from loan servicers losing documents to taking too long to make decisions and miscalculating homeowners' income.

76% of borrowers had a “negative” or “very negative” experience with the program, and fewer than 9% found it “positive” or “very positive.” Almost half of applicants waited longer than seven months to receive a decision on their application. Nearly 75% of the time loan servicers lost documentation – which they then used to turn down applications. A Congressional oversight panel labeled the program a failure in December 2010. The Treasury Department has asked loan servicers to fix the problems but has not bothered to penalize servicers who don't comply. One Congressman, David Schweikert (R) of Arizona, is opening up the first loan modification assistance program in the country to specifically assist mortgage holders who are being given the runaround on this program by their banks.

Homeowners everywhere are applying for HAMP due to being laid off and unable to find work in this economy – no fault of their own. Meanwhile, the Treasury Department continues to bail out the banks for their poor investment decisions. Even more egregiously, the banks receiving the bailouts are not revealing how they spent the money. It is certainly not being spent to assist many homeowners with modification of their mortgage payments. Bank of America has been propped up with bailouts since 2008. They have received $210.4 billion in aid, and have only paid back $19.7 billion. States like Arizona and Nevada are now suing BofA for loan modification fraud. Goldman Sachs’ Litton Loan Servicing LP is one of the lenders being investigated after a whistle-blower’s letter reported that Litton had cleared its backlog of HAMP applications by denying all applications in one fell swoop.

The banks brought on the housing crisis a few years ago by continuing to buy and sell risky mortgages and invest in mortgage-backed securities until they were so heavily leveraged that any slight change in financial circumstance would result in everything tumbling down, which happened in 2007. Mortgage analyst Martin Andelman compares their unsafe investments to a homeowner who takes out a second mortgage in order to invest in the stock market.

The banks are foreclosing homes and sitting on them, knowing the government will bail out the cost. They have little incentive to help homeowners because they usually do not own the loans they handle, most have bought the mortgages and are only the servicers, so they do not lose money when the homes foreclose. Earlier this month, hundreds of fed-up homeowners, renters, clergy and union organizers rallied in front of Wells Fargo's corporate headquarters in San Francisco to demand the bank halt foreclosures.

U.S. homeowners have lost $9 trillion in home equity since 2006. Home values aren’t expected to go back up to pre-crash levels until 2034 in Phoenix. Almost 30 percent of homeowners nationwide are now underwater – owing more on their homes than they are worth. It makes no sense for many homeowners to stick it out in their home when they can short sell and start anew with a much cheaper home. This is grossly unfair to homeowners who continue to pay full price on their mortgages, and who are now stuck with low-valued homes next door further dragging down their home values.

With government choosing to bail out big business and unaccountable banks, enabling them to continue their reckless investments and mistreatment of homeowners, more and more struggling homeowners are left with few options other than bankruptcy if they want to keep their home. By paying off the fat cats on the backs of the middle class, the government is creating a bankrupt middle class.

Nevada has the highest rate of personal bankruptcy filings per capita currently, with 10.5 out of every 1000 people filing bankruptcy. The bankruptcy rate in states like California continues to rise. Personal bankruptcy filings have decreased this year, but the numbers are still high. 114,803 Americans filed for bankruptcy protection in May.

The good news for financially stricken homeowners is that bankruptcy generally leaves them much better off. Virtually all unsecured debt (credit cards, medical and attorney bills) is erased in a Chapter 7 personal bankruptcy, and homeowners are generally allowed to keep their house, car, and possessions as long as they are not extravagant. Credit scores usually rise about 100 points within a year after filing, due to the elimination of all the bad debt.

The federal government is on the verge of defaulting on its loans – essentially going bankrupt - while it continues to bail out unaccountable big business. The U.S. reached the debt ceiling on May 16, and is not legally allowed to borrow anymore money. Instead of sending the U.S. government over a cliff by continuing the bailouts, the government needs to let the reckless banks suffer the consequences of their poor decisions and go bankrupt. Eliminating the shoddy decision-makers will prevent this kind of economic disaster from happening again, and restore the middle class.

This is an area where blue collar workers can agree with principled conservatives. The Tea Party must champion this as its next area of fiscal reform. The cozy relationship between the Treasury Department and Wall Street must come to an end, and big business must be held as accountable as average Americans are. The reckless banks and big business that got us into this economic mess should be going bankrupt, not the middle class.