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Obama's Cloud Economy The economy is flying without instruments because of the White House's policy choices.
By DANIEL HENNINGER
http://online.wsj.com/article/SB10001424052702303745304576359570364488858.html#articleTabs%3Darticle
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You just know the American economy is out there somewhere. If only someone knew which buttons to push to retrieve it from the storage cloud.
Here are three headlines that floated by on yesterday morning's screens alone:
"U.S. Manufacturing Growth Slows Substantially"
"Housing Imperils Recovery"
"Private Sector Added Few Jobs in May"
Let it be noted for the record that presidents normally do not take ownership of a weak economy. Jimmy Carter owned the 1980 election-year economy. George H.W. Bush owned the 1992 election-year economy. Both were one-term presidents. Happily for his opponents, Barack Obama has taken ownership of the 2011 economy, a full year and half before he has to face the voters. The Obama self-confidence is famously limitless.
Still, a doubter might ask if President Obama hasn't suffered his John McCain moment on the economy.
John McCain's presidential bid blew up for good when he announced in September 2008 that he was suspending his campaign and returning to Washington to address the national financial crisis. In the event, Mr. McCain had nothing to contribute, and the White House passed to Barack Obama.
Mr. Obama's McCain moment—raising expectations of economic seriousness and then dropping them over the cliff—was his hyperpartisan deficit speech at George Washington University in April.
Daniel Henninger says the economy is flying without instruments because of the White House's policy choices.
Podcast: Listen to the audio of Wonder Land here. The day before that speech, all Washington expected Mr. Obama to make a major policy statement about the big deficit-reduction debate then unfolding. Agree or disagree, Paul Ryan's budget released the week before was all about policy. The Republicans were actually offering to take part-ownership of the economy by spending the year in dense discussions about the deficit and spending.
Expectations raised, the president contributed nothing. Instead he dumped ridicule and derision on the Republican leadership seated before him. With that speech, Mr. Obama kicked off his 2012 presidential campaign, and in so doing politicized the economy.
The timing was not good. Whether it's this week's report that consumer confidence has fallen to a six-month low or anecdotal conversation ("So what do you think happens when QE2 ends?"), the sense grows that people are starting to freak out over the economy—over persistently high unemployment and persistently weak growth.
With the U.S. economy, a Lazarus rising is always possible (or was). But the informed betting is going the other way. Private forecasters have reduced their estimates for economic growth the rest of the year well below the 3%-plus the Federal Reserve predicted in April. The Fed's 2012 growth forecast runs as high as 4.2%. They must be using high-powered telescopes.
It's ironic indeed that Barack Obama, in a slap at his predecessor, routinely said that his policies would be "smart" this or "smart" that. A "smart" economy would at least have the virtue of clarity for the purposes of planning and capital investment. The Obama economy does not. Economic decision-makers—from 401(k) investors to Fortune 500 CFOs—are flying instrument-less through the clouds because that is where the policy choices made by this White House have left them.
The policy most explicitly intended to reboot the economy was 2009's $814 billion stimulus and successive budgets that raised federal spending to 25% of a $14 trillion economy. In this year's first quarter, the economy grew at 1.8%. Liberal economists, such as former Obama economic adviser Christina Romer, argue the stimulus should have been bigger, $1.2 trillion. Others wanted $2 trillion. We leave that to a generation of seminars in macroeconomics. Barack Obama, believing that $800 billion of injected "demand" would lift the economy, decided to devote his political capital and congressional majorities to reorganizing two major American industries, health care and finance.
Merits aside, both creations rose from the table as 2,000-page laws. Hundreds of thousands of economic actors across the country now wait while the bureaucracies struggle to interpret 4,000 pages of "smart" legislating. What evidence do liberals cite for their vestigial faith that these industries, employing millions of people in complex daily activities, can grow long term at greater than 3% from beneath the morass of Dodd-Frank and the Obama health-care law?
The housing sector, a monumental and intractable mess, chokes the economy. No matter. The president allowed (or told) "adviser" Elizabeth Warren of the new Consumer Financial Protection Bureau to engulf banks and mortgage servicers in negotiations over a complex regulatory scheme whose goal, literally, is to fix their "business model."
The White House now says the free trade agreements with Colombia, Panama and South Korea will be delayed absent payouts of more money for "trade adjustment assistance." Ergo, the past two years of uncertainty for trade commitments will be extended.
It is sometimes unfair to tag presidents with blame for an underperforming economy. Not this time. This president made conscious policy choices during a deep recession to reorder vast swaths of American industry. Strong-performing economies need clarity. Barack Obama has given ours indecision stretching to the horizon. And economic growth, like a long gray day, sits still below 3%.
Write to henninger@wsj.com
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O's jobs-export economy
Businesses afraid to hire here
Last Updated: 3:26 AM, June 3, 2011
More Print Charles Gasparino
Wall Street economists I speak to feel pretty confi dent that -- for all the news about housing prices falling, gas prices rising and the stock market zig-zagging and a possible downgrade of US -- the chances of a "double dip" recession are pretty remote. After all, companies are still profitable two years after the financial collapse, and judging by the job listings even at banking basket-case Citigroup, people are finding work on Wall Street.
But that doesn't mean the broader economy, defined by how many people are working, is getting noticeably better anytime soon. In fact, don't expect any major hiring sprees by corporate America in the next two years -- and, if policies don't change in Washington, possibly not in our lifetimes.
Angel Chevrestt
Well, Wall Street's doing fine: Much of the private sector, like this store in Harlem, is finding it harder to get buy.
The problem for the average American worker: Businesses have learned to make money by cutting costs (i.e., jobs) or relocating to China and India. And it's not merely that it's cheaper to operate overseas; a huge part of the problem is the fear that it's going to keep getting more expensive to hire here.
Both small-business owners, and analysts who cover these companies tell me that many American businesses would like to stay here, but they see no letup in sight in the endless stream of taxes and regulations coming from an administration most of them consider anti-business.
And now the weakness of the Republican presidential field raises the chances for President Obama's re-election in 2012 -- and even more Washington-imposed woes.
Veteran analyst Peter Sidoti covers the stocks of small corporations -- those that have traditionally been the engines of hiring and growth, particularly coming out of a recession. He points to the experience of AT Cross Co., the manufacturer of the famous Cross pen.
Sidoti, who covers Cross' stock, notes that the company shut down one of its manufacturing plants in Rhode Island a few years back, and set up shop in China. "The move seemed so unnecessary," he says. "The plant was small and it costs money to relocate to China." That is, until Sidoti began adding up the costs of staying in a high-tax state like Rhode Island: Not just federal ones, but state and local, too.
And those problems have only been compounded now: ObamaCare's on track to add serious costs; the administration may yet give us some crazy energy plan; the president's reaffirmed his desire to reverse the Bush-era tax rates, which would amount to one of the largest tax-hikes in history.
Sidoti's actually an example of the problem. With federal, state and city taxes, Sidoti & Co. gets hammered with around a 75 percent tax rate. With his health-care costs rising 10 percent alone this year, he estimates that the first $1 million his company earns goes toward paying those costs.
"That's why I'm looking to open an office in Austin, Texas, where taxes are lower," he tells me.
He adds: "Washington has to decide what they want the country's future to be. Is it going to be Detroit, which did nothing to help business, so people and capital have fled, or will it be Texas, which at least for the moment is attracting people and capital because taxes are low?"
If there's good news in any of this, it's that more businesses can recover -- it's easier than ever to move a factory to China or the Philippines and slash your operating costs. Stocks of these companies will rise as they become more efficient. Take a look at a one-year stock chart of Cross pen and you'll see what I'm saying.
The bad news is that not everyone in this country is wealthy enough to own stocks or can afford to move to China for a factory job.
Charles Gasparino is a Fox Business Network senior corre spondent.
Read more: http://www.nypost.com/p/news/opinion/opedcolumnists/jobs_export_economy_68cw8tK1iwVYYEd2dJUxmL#ixzz1ODAE4IhM
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Nothing wil change until obama is gone at the minimum. He is the tyhoid mary of the economy.
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In fairness the jobs number today was not near as bad as was originally thought, but still not good enough to make any kind of serious dent in the unemployment rate. - 160,000 jobs.
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It was 54k and the rate rose.
What a friggen disaster this admn is.
Hope and change bitches - you morons voted for this.
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He's so arrogant..
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Terrible combo of ignorance, incompetence, arrogance, illiteracy, and unwarranted self assuredness.
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It was 54k and the rate rose.
What a friggen disaster this admn is.
Hope and change bitches - you morons voted for this.
Oops. Your'e right. My bad. I dont know where I read that today that it was 160,000. I guess that is what they were expecting. Man, that really sucks. Make no mistake, this is a piss poor recovery.
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Bump for anyone to tell me what policy Obama has enacted that has helped the economy.
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It was 54k and the rate rose.
What a friggen disaster this admn is.
Hope and change bitches - you morons voted for this.
Not only that, but half them were McDonald's jobs.
Barack Obama - fixing America's economy one minimum wage, burger-flipping job at a time.
Here's to hoping Blacken was one of those lucky few who gets to wear the uniform with the golden arches.
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Not only that, but half them were McDonald's jobs.
Barack Obama - fixing America's economy one minimum wage, burger-flipping job at a time.
Here's to hoping Blacken was one of those lucky few who gets to wear the uniform with the golden arches.
I have been screaming about these crazy policies forever and now the chickens are coming home to roost.
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I have been screaming about these crazy policies forever and now the chickens are coming home to roost.
Yup. The Obama regime has clearly shown that they haven't the faintest fucking idea what they're doing. And when that becomes apparent then it's time to go.
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Obamacare alone is causing massive economic chaos.
If businesses now have to pay a shot load more to cover part time people - guess what happens?
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Obamacare alone is causing massive economic chaos.
If businesses now have to pay a shot load more to cover part time people - guess what happens?
Obama and the left thinks they can force business to hire by putting a gun to their heads. :-\
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Obama and the left thinks they can force business to hire by putting a gun to their heads. :-\
They take their ball and go to another field.
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They take their ball and go to another field.
That's far too complex a concept for your typical Dem to comprehend.
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The near collapse of the banking industry is what caused this problem and the glut of foreclosures and the strict credit market continues unabated.
let's hear what a Republican POTUS would have done differently to address these issues
keep in mind that I think the Dodd Frank legislation sucks but the Republican POTUS would have had to do something to address these problems regardless
Let's hear the solution to this very easy problem
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I'd rather hear the Dems present a budget of their own to counter Ryan's. Or is that too hard for the left?
Typical leftist like Straw Man: "Big budget numbers scary and hard to read. Credit cards good. Repubs evil. Spend, spend."
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The near collapse of the banking industry is what caused this problem and the glut of foreclosures and the strict credit market continues unabated.
let's hear what a Republican POTUS would have done differently to address these issues
keep in mind that I think the Dodd Frank legislation sucks but the Republican POTUS would have had to do something to address these problems regardless
Let's hear the solution to this very easy problem
Obama has spent trillions so far straw. Other than cap and trade he got everything he wanted. Blaming bush considering Obama appointed summers geithner bernake liu et al is ridiculous.
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Obama has spent trillions so far straw. Other than cap and trade he got everything he wanted. Blaming bush considering Obama appointed summers geithner bernake liu et al is ridiculous.
Modus operandi for the left. They've got nothing left. No accomplishments to tout, no economic recovery to reference. Nothing but OBL to praise and Bush to vilify.
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The near collapse of the banking industry is what caused this problem and the glut of foreclosures and the strict credit market continues unabated.
let's hear what a Republican POTUS would have done differently to address these issues
keep in mind that I think the Dodd Frank legislation sucks but the Republican POTUS would have had to do something to address these problems regardless
Let's hear the solution to this very easy problem
LMFAO wtf did obama do to address those issues?
finreg?
really?
tell me how finreg is going to help...
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Obama has spent trillions so far straw. Other than cap and trade he got everything he wanted. Blaming bush considering Obama appointed summers geithner bernake liu et al is ridiculous.
he did ?
the stimulus was less than ~ 900 billion and as of Jan 2011 only about 429 billion had been spent.
http://projects.propublica.org/recovery/
Maybe you're thinking of TARP or the Auto Bail Outs or the Wars
All of which were costs incurred by the Bush Administration
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Obama and the Dems won't even present a budget, let alone do anything to actually fix the economy. They're much more content to keep taking the billions China hands out to keep their unions and other benefit-leeches in check.
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I'd rather hear the Dems present a budget of their own to counter Ryan's. Or is that too hard for the left?
They SHOULD but they won't.
Politically, it's better for Dems to just let the repub hang themselves with the Ryan plan, and not introduce their own plan which can be criticized. Morally, it's corrupt, but this is the political board and not the morals board :)
Just like the repubs never got behind an alternative to obamcare for 12 years - they just shit on the dem version.
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LMFAO wtf did obama do to address those issues?
finreg?
really?
tell me how finreg is going to help...
it didn't
I've always said that
you're an idiot if you think otherwise
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it didn't
I've always said that
you're an idiot if you think otherwise
I agree, so you agree that obama did nothing to help the issues you talked about then?
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They SHOULD but they won't.
Politically, it's better for Dems to just let the repub hang themselves with the Ryan plan, and not introduce their own plan which can be criticized. Morally, it's corrupt, but this is the political board and not the morals board :)
Just like the repubs never got behind an alternative to obamcare for 12 years - they just shit on the dem version.
The Repubs aren't hanging themselves with the Ryan plan. All they have to do, which they have been, is say that it's a start. They're getting the ball rolling. They're out there throwing ideas around.
As long as Obama the Dems continue to stay silent while asking to spend more money it will only backfire.
Funny you mention Obamacare and the Repubs because that obviously backfired on them. But you think the Dems staying silent on the budget won't? I read quite a bit of comments on various sites yesterday after reading the job numbers report. The overwhelming majority of them weren't very positive with regards to the Messiah and the left. They're on a ship that is fast sinking.
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The Repubs aren't hanging themselves with the Ryan plan. All they have to do, which they have been, is say that it's a start. They're getting the ball rolling. They're out there throwing ideas around.
As long as Obama the Dems continue to stay silent while asking to spend more money it will only backfire.
Funny you mention Obamacare and the Repubs because that obviously backfired on them. But you think the Dems staying silent on the budget won't? I read quite a bit of comments on various sites yesterday after reading the job numbers report. The overwhelming majority of them weren't very positive with regards to the Messiah and the left. They're on a ship that is fast sinking.
I hope the Repubs keep pushing foward with the Ryan plan
I think that's a great idea
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I hope the Repubs keep pushing foward with the Ryan plan
I think that's a great idea
They're not pushing forward with the Ryan plan. They're pushing forward with the claim that they're serious about fixing the economy and the deficit. The Ryan plan was a start. It was an idea. It was final nor was it concrete. But it showed that the Repubs are at least serious about their claims towards the economy, unlike the Dems.
Meanwhile, more and more people are becoming aware that Obama never talks about the economy and that Piglosi and co. are only concerned with spending as much as they can.
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It's amazing they are still on the blame bush mantra.
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They're not pushing forward with the Ryan plan. They're pushing forward with the claim that they're serious about fixing the economy and the deficit. The Ryan plan was a start. It was an idea. It was final nor was it concrete. But it showed that the Repubs are at least serious about their claims towards the economy, unlike the Dems.
Meanwhile, more and more people are becoming aware that Obama never talks about the economy and that Piglosi and co. are only concerned with spending as much as they can.
nice attempt at spin but they are in fact pushing the Ryan plan (Repubs in both the House and Senate have voted in favor of it) and their suddent concern about the deficit is hard to believe since they've taken actions to increase the deficit
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nice attempt at spin but they are in fact pushing the Ryan plan (Repubs in both the House and Senate have voted in favor of it) and their suddent concern about the deficit is hard to believe since they've taken actions to increase the deficit
::)
It's funny that you're talking about increasing deficits when you're the same twat that consistently advocated that Obama wasn't spending enough and who now refuses to even acknowledge that he said it, let alone defend it.
Bay-Area economists = worshipers of Keynesian economics without understand anything of the concepts.
What's funny is that you think you have some credibility here when the world's top economists not named Paul Krugman have been arguing against everything you trumpet. :D
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nice attempt at spin but they are in fact pushing the Ryan plan (Repubs in both the House and Senate have voted in favor of it) and their suddent concern about the deficit is hard to believe since they've taken actions to increase the deficit
S and P downgrade anyone?
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S and P downgrade anyone?
I posted an article a few weeks ago asking Straw Man to refute the IMF's claims that Obama and the dems have no plans for fixing the economy and that our reckless spending is destroying the economy and he has avoided it like a little bitch.
Apparently he knows better than Moody's, IMF and the rest of the economic experts out there. He is from the Bay-Area, after all. They know EVERYTHING.
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I posted an article a few weeks ago asking Straw Man to refute the IMF's claims that Obama and the dems have no plans for fixing the economy and that our reckless spending is destroying the economy and he has avoided it like a little bitch.
Apparently he knows better than Moody's, IMF and the rest of the economic experts out there. He is from the Bay-Area, after all. They know EVERYTHING.
Except how to fund their pensions.
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June 6, 2011
Obama Tunes Out, and Business Goes on Hiring Strike
By Michael Barone
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Last week, I noted that various forms of the word "unexpected" almost inevitably appeared in news stories about unfavorable economic developments.
You can find them again in stories about Friday's shocking news, that only 54,000 net new jobs were created in the month of May and that unemployment rose to 9.1 percent.
But with news that bad, maybe bad economic numbers will no longer be "unexpected." You can only expect a robust economic recovery for so long before you figure out, as Herbert Hoover eventually did, that it is not around the corner.
Exogenous factors explain some part of the current economic stagnation. The earthquake and tsunami in Japan caused a slowdown in manufacturing. Horrendous tornados did not help. Nor did bad weather, though only a few still bitterly cling to the theory that it's caused by manmade global warming.
But poor public policy is surely one reason why the American economy has not rebounded from recession as it has in the past. And political posturing has also played a major role.
Barack Obama and the Democratic congressional supermajorities of 2009-10 raised federal spending from 21 percent to 25 percent of gross domestic product. Their stimulus package stopped layoffs of public employees for a while, even as private sector payrolls plummeted.
And the Obama Democrats piled further burdens on would-be employers in the private sector. Obamacare and the Dodd-Frank financial regulation bill are scheduled to be followed by thousands of regulations that will impose impossible-to-estimate costs on the economy.
That seems to have led to a hiring freeze. The Obama Democrats can reasonably claim not to be responsible for the huge number of layoffs that occurred in the months following the financial crisis of fall 2008. And Treasury Secretary Timothy Geithner and Federal Reserve Chairman Ben Bernanke did manage to help stabilize financial markets.
But while the number of layoffs is now vastly less than in the first half of 2009, the number of new hires has not increased appreciably. Many more people have been unemployed for longer periods than in previous recessions, and many more have stopped looking for work altogether.
It's hard to avoid the conclusion that the threat of tax increases and increased regulatory burdens have produced something in the nature of a hiring strike.
And then there is the political posturing. On April 13, Barack Obama delivered a ballyhooed speech at George Washington University. The man who conservatives as well as liberal pundits told us was a combination of Edmund Burke and Reinhold Niebuhr was widely expected to present a serious plan to address the budget deficits and entitlement spending.
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Instead, the man who can call on talented career professionals at the Office of Management and Budget to produce detailed blueprints gave us something in the nature of a few numbers scrawled on a paper napkin.
The man depicted as pragmatic and free of ideological cant indulged in cheap political rhetoric, accusing Republicans, including House Budget Committee Chairman Paul Ryan, who was in the audience, of pushing old ladies in wheelchairs down the hill and starving autistic children.
The signal was clear. Obama had already ignored his own deficit reduction commission in preparing his annual budget, which was later rejected 97-0 in the Senate. Now he was signaling that the time for governing was over and that he was entering campaign mode 19 months before the November 2012 election.
People took notice, especially those people who decide whether to hire or not. Goldman Sachs' Current Activity Indicator stood at 4.2 percent in March. In April -- in the middle of which came Obama's GW speech -- it was 1.6 percent. For May, it is 1.0 percent.
"That is a major drop in no time at all," wrote Business Insider's Joe Weisenthal.
After April 13, Obama Democrats went into campaign mode. They staged a poll-driven Senate vote to increase taxes on oil companies.
They launched a Mediscare campaign against Ryan's budget resolution that all but four House Republicans had voted for. That seemed to pay off with a special election victory in the New York 26th congressional district.
The message to job creators was clear. Hire at your own risk. Higher taxes, more burdensome regulation and crony capitalism may be here for some time to come.
One possible upside is that economic bad news may no longer be "unexpected." Another is that voters may figure out what is going on.
‹‹Previous Page |1 | 2 |
Copyright 2011, Creators Syndicate Inc.
Page Printed from: http://www.realclearpolitics.com/articles/2011/06/06/obama_tunes_out_and_business_goes_on_hiring_strike_110094-full.html at June 06, 2011 - 04:40:05 AM PDT
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Bushs' fault
Koch Brothers
Plutocratic CT
Palin's fault.
CT against black potus.
Did I miss any other obot excuses?
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June 6, 2011, 2:40 p.m. EDT
Firms halting coverage as reform starts: survey
30% of companies say they’ll stop offering health plansStories You Might Like
By Russ Britt, MarketWatch
http://www.marketwatch.com/story/firms-halting-coverage-as-reform-starts-survey-2011-06-06
LOS ANGELES (MarketWatch) — Once provisions of the Affordable Care Act start to kick in during 2014, at least three of every 10 employers will probably stop offering health coverage, a survey released Monday shows.
While only 7% of employees will be forced to switch to subsidized-exchange programs, at least 30% of companies say they will “definitely or probably” stop offering employer-sponsored coverage, according to the study published in McKinsey Quarterly.
The survey of 1,300 employers says those who are keenly aware of the health-reform measure probably are more likely to consider an alternative to employer-sponsored plans, with 50% to 60% in this group expected to make a change. It also found that for some, it makes more sense to switch.
Click to Play Are profit forecasts too optimistic? A 4% economic-growth rate for 2011 now looks like a pipe dream. In that case, assumptions about corporate earnings may be high, especially with the Federal Reserve's latest bond-buying program winding down. Kelly Evans discusses.
“At least 30% of employers would gain economically from dropping coverage, even if they completely compensated employees for the change through other benefit offerings or higher salaries,” the study says.
It goes on to add: “Contrary to what employers assume, more than 85% of employees would remain at their jobs even if their employers stopped offering [employer-sponsored insurance], although about 60% would expect increased compensation.”
A number of competitors will emerge in the insurance market once reform provisions start to take effect, according to the McKinsey Quarterly study. These firms will be needed to provide a transition for those moving from employer-sponsored insurance to other coverage options.
Insurers will have to adapt to new realities and look for ways to keep the policy holders they have, the study says, but that shouldn’t be difficult. “Our research shows that more than 70% of employees would stay with their insurer if it offers a seamless transition and appropriate products. Each payer also must understand how changing employer-benefit strategies will shift the risk profile of its membership and set prices appropriately.”
Russ Britt is the Los Angeles bureau chief for MarketWatch.
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The Campaign Spot
Election-driven news and views . . . by Jim Geraghty.
http://www.nationalreview.com/campaign-spot/268876/can-obama-overcome-obamanomics
Can Obama Overcome Obamanomics?
June 6, 2011 10:52 A.M. By Jim Geraghty
USA Today: “Now, preparing for next year’s re-election campaign, Obama is moving to refurbish a political brand that has been defined for the worst by his Republican opponents, dented by the realities of governing and battered by a faltering economy. He is going on the road to Americans’ workplaces to argue he’s made tough decisions that will pay off over time.”
Pay off in the future… like the next Recovery Summer.
Since January 2009, American businesses have faced at least three big potential risks to their bottom line besides the lingering effects of the 2008 crash: A) the possibility of tax hikes B) the possibility of greater costs for health care to employees imposed by government and C) the possibility of much higher costs for energy use triggered by cap-and-trade legislation or some sort of tax aimed at reducing carbon emissions. A GOP-held House can obviously block most legislative efforts in this area, but as long as Obama is president, the threat of these policies being enacted, or similarly deleterious ones through the regulatory process, is nonzero.
Our current housing market crisis stems in large part from the jobless crisis. No matter how much you refinance, a homeowner with no income cannot pay his mortgage. The only thing that will create lots of jobs on the scale we need is a hiring spree by American businesses, who have spent the last two and a half years watching (and fighting) a group in Washington with little private sector experience push to impose these new costs. (The president’s defenders will probably be quick to argue he hasn’t raised taxes, or that he’s only raised a few here and there (tobacco, tanning beds). But 2009, as the recession raged, state and local governments enacted the highest tax increases ever, and 2010 wasn’t much better. When their constituents were struggling and could afford it least, state and local governments reached deeper in their pockets and took even more – which illuminates why so many Tea Party folks are furious about taxes even though Obama has not been able to repeal the Bush tax cuts yet.
While many of its rules have yet to take full effect, Obama health care plan’s impact on businesses can be seen in at least two ways right now. In the not-too-distant future, companies with more than 50 employees will face a penalty of at least $2000 per employee if any worker is collecting federally-subsided insurance through an exchange. If you have less than 50 employees, this rule is moot. If you’re a company with 40something employees, how eager are you to hire more, cross the threshold, and take on those additional potential costs?
Secondly, a business or union or other entity can avoid all of these mandates if the Secretary of Health and Human Services likes them and grants them a waiver. Somehow it is less than surprising to learn half the waivers are to unions and 20 percent have been given to Nancy Pelosi’s district in San Francisco. The lesson of this waiver system is that expensive regulatory burdens are waived for the politically well-connected – another element of risk and a diversion of business energy, attention and funds from their true job (serving their customers and shareholders) to somehow buttering up Kathleen Sebelius.
As long as voters ignore the impact of Obamanomics on their lives, his reelection is assured.
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Obama's Egghead Economic Saboteurs
Townhall.com ^ | June 8, 2011 | Michelle Malkin
Posted on June 8, 2011 5:58:16 AM EDT by Kaslin
Official motto of the White House economic team: Those who can, do. Those who can't, fantasize in the classroom, fail in Washington and then return to the Ivy Tower to train the next generation of egghead economic saboteurs. Life is good for left-wing academics. Everyone else pays dearly.
Take Austan Goolsbee, please. President Obama's "fresh-faced" University of Chicago econ professor arrived in Washington in December 2008 to fill two slots: chief economist/staff director of the president's Economic Recovery Advisory Board and member of the Council of Economic Advisers. In September 2010, he replaced CEA head and fellow academic Christina Romer, who retreated to the University of California at Berkeley last August when unemployment hit 9.5 percent. (She infamously projected that the Obama stimulus would hold the jobless rate below 8 percent.)
Goolsbee's primary task: translating all of the administration's big-government theories for us dummies. As Goolsbee put it to his university's student newspaper: "We've certainly seen in previous crises that it's quite important to explain things to non-experts. The American people can confront any challenge if they're comfortable with the approach."
And what exactly was the nature of Goolsbee's vaunted expertise? Making money as a business rescue-and-recovery expert without ever having had to meet a payroll.
Goolsbee, the 15th wealthiest member of the Obama administration, has raked in assets valued at between $1,146,000 and $2,715,000. He also pulled in a University of Chicago salary of $465,000 and additional wages and honoraria worth $93,000, according to Washingtonian magazine. As I've noted before, the government research fellow and Obama campaign adviser was a champion of extending credit to the un-creditworthy. In a 2007 op-ed for The New York Times, he derided those who called subprime mortgages "irresponsible." He preferred to describe them as "innovations in the mortgage market" to expand the pool of homebuyers.
Goolsbee's most recent "innovation": the "White House White Board," a weekly video lecture teaching everyone else how to hitch what remains of America's free-market system to the wagon of the state and how much (or rather, how little) we should make doing it. He illustrated his grand interventionist strategy to pick and choose "Startup America" winners by drawing a trough of broken light bulbs (symbolizing entrepreneurial ideas) piling up in a "Valley of Death" because they lacked government support.
A comical choice of imagery given the Democrats' enviro-nutty ban on incandescent bulbs. But I digress.
When Goolsbee joined Team Obama, the unemployment rate was at around 6 percent. When he announced his resignation on Monday, the jobless rate stood at 9.1 percent. Romer and Jared Bernstein (former chief economist to Vice President Joe Biden) had predicted unemployment would drop every single month after August 2009 due to the Obama stimulus. Bernstein bailed on the administration in April 2011 for the sanctuary of a liberal think-tank. He'll also now ply his failed wares as a financial pundit.
These hapless command-and-control ideologues were preceded by Peter Orszag, who hung his "Mission Accomplished" banner over the White House budget office in June 2010 after fewer than two years on the job, and by former National Economic Council head and hedge fund manager Larry Summers, who was caught sleeping on the job -- literally -- more than once during his brief tenure. Summers packed his bags in September. He was followed by Princeton economics professor and former top Obama Treasury Department official Alan Krueger in October 2010.
White House aides have lamented that the economic team is "exhausted." Apparently, Obama is tired of hearing from them, too. The Hill newspaper reports that he has stopped receiving daily economic briefings that were once treated with the same emergency status as national security briefings. So, the central planners continue to be paid to fail -- while their boss looks the other way at the destruction, whistling into what he calls America's temporary "head winds."
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The Economy Is Worse Than You Think
Expect more bad news until someone enacts a plan to bring deficits under control without raising taxes..Article Comments more in
By MARTIN FELDSTEIN
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The policies of the Obama administration have led to the weak condition of the American economy. Growth during the coming year will be subpar at best, leaving high or rising levels of unemployment and underemployment.
The drop in GDP growth to just 1.8% in the first quarter of 2011, from 3.1% in the final quarter of last year, understates the extent of the decline. Two-thirds of that 1.8% went into business inventories rather than sales to consumers or other final buyers. This means that final sales growth was at an annual rate of just 0.6% and the actual quarterly increase was just 0.15%—dangerously close to no rise at all. A sustained expansion cannot be built on inventory investment. It takes final sales to induce businesses to hire and to invest.
The picture is even gloomier if we look in more detail. Estimates of monthly GDP indicate that the only growth in the first quarter of 2011 was from February to March. After a temporary rise in March, the economy began sliding again in April, with declines in real wages, in durable-goods orders and manufacturing production, in existing home sales, and in real per-capita disposable incomes. It is not surprising that the index of leading indicators fell in April, only the second decline since it began to rise in the spring of 2009.
The data for May are beginning to arrive and are even worse than April's. They are marked by a collapse in payroll-employment gains; a higher unemployment rate; manufacturers' reports of slower orders and production; weak chain-store sales; and a sharp drop in consumer confidence.
How has the Obama administration contributed to this failure to achieve a robust and sustainable recovery?
The administration's most obvious failure was its misguided fiscal policies: the cash-for-clunkers subsidy for car buyers, the tax credit for first-time home buyers, and the $830 billion "stimulus" package. Cash-for-clunkers gave a temporary boost to motor-vehicle production but had no lasting impact on the economy. The home-buyer credit stimulated the demand for homes only temporarily.
As for the "stimulus" package, both its size and structure were inadequate to offset the enormous decline in aggregate demand. The fall in household wealth by the end of 2008 reduced the annual level of consumer spending by more than $500 billion. The drop in home building subtracted another $200 billion from GDP. The total GDP shortfall was therefore more than $700 billion. The Obama stimulus package that started at less than $300 billion in 2009 and reached a maximum of $400 billion in 2010 wouldn't have been big enough to fill the $700 billion annual GDP gap even if every dollar of the stimulus raised GDP by a dollar.
In fact, each dollar of extra deficit added much less than a dollar to GDP. Experience shows that the most cost-effective form of temporary fiscal stimulus is direct government spending. The most obvious way to achieve that in 2009 was to repair and replace the military equipment used in Iraq and Afghanistan that would otherwise have to be done in the future. But the Obama stimulus had nothing for the Defense Department. Instead, President Obama allowed the Democratic leadership in Congress to design a hodgepodge package of transfers to state and local governments, increased transfers to individuals, temporary tax cuts for lower-income taxpayers, etc. So we got a bigger deficit without economic growth.
A second cause of the continued economic weakness is the president's emphasis on increasing tax rates. Although Mr. Obama grudgingly agreed to continue the Bush tax cuts for 2011 and 2012, his budget this year repeated his call for higher tax rates on upper-income individuals and multinational corporations. With that higher-tax cloud hanging over them, it is not surprising that individuals and businesses do not make the entrepreneurial investments and business expansions that would cause a solid recovery.
A third problem stems from the administration's lack of an explicit plan to deal with future budget deficits and with the exploding national debt. This creates uncertainty about future tax increases and interest rates that impedes spending by households and investment by businesses. The national debt has jumped to 69% of GDP this year, from 40% in 2008. It is projected by the Congressional Budget Office to reach more than 85% by the end of the decade, and to keep rising after that. The reality is even worse since ObamaCare alone will cost more than $1 trillion in its first 10 years. The president's boast that his health legislation would not "add a dime" to the national debt was possible only by combining that increased spending with proposed new taxes and with projected cuts in Medicare spending that will never occur.
Finally, there is the administration's incoherent position on the international value of the dollar. The Treasury repeats the slogan that "a strong dollar is good for America" while watching the real value of the dollar fall by 7% over the past year, and while urging the Chinese to allow the dollar to fall more quickly relative to the yuan. The lack of a consistent dollar policy adds to the uncertainty that limits business investment and hiring.
The economy will continue to suffer until there is a coherent and favorable economic policy. That means bringing long-term deficits under control without raising marginal tax rates—by cutting government outlays and by limiting the tax expenditures that substitute for direct government spending. It means lower tax rates on businesses and individuals to spur entrepreneurship and investment. And it means reforming Social Security and Medicare to protect the living standards of future retirees while limiting the cost to future taxpayers.
All of these things are doable. But the Obama administration has not done them and shows no inclination to do them in the future.
Mr. Feldstein, chairman of the Council of Economic Advisers under President Ronald Reagan, is a professor at Harvard and a member of The Wall Street Journal's board of contributors.
http://online.wsj.com/article/SB10001424052702303657404576363984173620692.html#
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He left a ton out.
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The Repubs aren't hanging themselves with the Ryan plan. All they have to do, which they have been, is say that it's a start. They're getting the ball rolling. They're out there throwing ideas around=Cut taxes annnnnnnnnnnnnnd........ .Thats about it
As long as Obama the Dems continue to stay silent while asking to spend more money it will only backfire.
Funny you mention Obamacare and the Repubs because that obviously backfired on them. But you think the Dems staying silent on the budget won't? I read quite a bit of comments on various sites yesterday after reading the job numbers report. The overwhelming majority of them weren't very positive with regards to the Messiah and the left. They're on a ship that is fast sinking.