Christmas has passed and we approach the New Year, so it is time for some resolutions.
Not for me. For Uncle Sam.
Mine are the same old ones: lose weight and avoid going broke.
Uncle Sam needs a lot more than that, so here goes with what I think they should be (in part):
1. BALANCE THE BUDGET!
Now. Not 10 years from now; not 5 years from now. Do it NOW!
How to do it? Cut spending. How about cutting the budget to where it was on September 1, 2008? That was before the bailouts started. A good start. But not enough.
Restore Federal employment to the level of September 1, 2008, then cut it 10% across the board, except for the uniformed military.
Taxes? Tax rates don't need to be raised. Just do away with all of the tax shelters that the very wealthy use to avoid paying taxes.
No more tax subsidies for anything. If it is not profitable without tax breaks, then let the resources go to something that is. (this would include the oil and gas depletion allowance, something dear to my heart, among other things).
Stop subsidies as well, for the same reason. (this would include farm subsidies, and the ethanol subsidy, also very dear to close friends).
If that has not insulted everyone, I could continue. The point is that nothing should be sacred except preserving our economy and our freedom. Everyone will have to pay up. It has to be an equal opportunity cutting contest, with no sacred cows. Everything must be on the table.
It has to be done, so get started..
2. Pass a Balanced Budget Amendment to the Constitution that would require a balanced budget every year unless a super majority of Congress and the President declared a national emergency. There needs to be teeth in it so the politicains can't ignore it. 'Nuff said.
3. Do away with Too Big to Fail.
If a financial institution or large corporation is that big, the law should require that they be broken up. Think Teddy Roosevelt.
A corollary to that would be to reenact the Glass-Steagall Act, or something that accomplishes the same thing.
The big banks and bankers are getting fatter and fatter, while our middle class shrinks.
Go back and strengthen the extraordinarily weak regulation of financial institutions that was passed last year. Congress let the perps write their own rules. Ridiculous!
With the above, outlaw bailouts of corporations (and states, and municipalities) that go broke.
4. Enact a Sunset Act which would subject every Federal agency and program to expiration if not renewed every 10 years. No exceptions.
Texas has one that is pretty good. Model it on theirs, but stronger.
5. Reform Social Security.
Gosh, where to start? Begin by extending the age of eligibility to 70 years gradually, like it was previously extended to 67. Then index the eligibility age to life expectancy in the US.
Remove the Social Security tax from the general revenue budget, and restore the trust fund ( really too late. That horse is out of the barn.).
Establish a way to begin changing Social Security to a defined contribution plan rather than a defined benefit plan, like the private sector is doing.
6. Reform Medicare and Medicaid.
I have to admit that I do not have a clue about these.
Obviously, the benefits will have to be reduced. There just have to be limits, particularly on end of life payments. Tough choices there, but they have to be made. It needs to be made the right way, by doctors, patients, and families, not bureaucrats. Although the right is critical of Medicare supporting end of life counselling, my view is that it is necessary to encourage families to plan ahead for that eventuality. My family has. We have medical powers of attorney, living wills, and the like. Everyone should.
Premiums and deductibles for Medicare will have to be raised. The same for Medicaid.
While we are on health care, Obamacare needs to be replaced with something less intrusive. Some reform was needed, but the bill went WAY too far.
Other suggestions are quite welcome.
7. Bring the boys (and girls) home.
No great power has ever pacified Afghanistan, and we can't do it now. If we did, what would we accomplish? There is nothing there that is worth the expenditure of lives and money that is required. Declare victory soon, and bring them home.
Keep the carrier strike groups in the Persian Gulf, however. We will need them when Iran makes their first nuclear weapons. That could be another resolution, but I will resist.
8. Secure the borders now.
When that is accomplished, and only then, we can make some strides on a humane way to deal with the illegal immigrants that have been here for a good while. But there should be no blanket amnesty.
We can also then reform our immigration policies to make immigration more available to other than those who come illegally. Our current rules are way too restrictive. We need to be a bit picky about who we let in as well, but based upon skills and education, not race.
Before anything else the borders must be well secured first. And soon.
This is just a few of many things that are needed. Both political parties have contributed to a terrible situation that is a real threat to our country in many ways.
They have both sold out to the big money folks and the big labor unions. Campaign contributions are far more important to our elected officials than doing the right thing.
The big banks, labor unions, and politicians are thriving, while the middle class and the lower class is suffering.
It is time for a change, but for the RIGHT change.
This is not a complete list of what I think should be done, and I am not married to all the details. But the overall resolutions are quite necessary, in my opinion.
Clearly, the economy is not singled out for a resolution. The government just needs to get out of the way of the economy, and the other resolutions will help that quite a bit.
Other suggestions are welcome, either on this site or on Facebook.
Fire away. Let the conversations begin.
Saturday, December 25, 2010
Wednesday, April 21, 2010
Bill Clinton and the Tea Party
Former President Bill Clinton, best known for having soiled a blue dress in the Oval Office, weighed in on the Tea Party menace a few days ago.
He is afraid the limited government rhetoric of the Tea Partiers will lead to another act of domestic terrorism like the Oklahoma City bombing.
Naturally, he leaves out the really pertinent point: that McVeigh bombed Ok City in response to Bill Clinton's mangement of the seige at Waco.
You can read a good story on the subject by Tony Blankley here.
At the same time that he was trying to trash the Tea Party, a real incident of domestic violence was taking place.
A young woman staffer for the Republican Governor of Louisiana and her date were leaving a function in New Orleans when they were set upon by left wing thugs, viciously assaulted and hospitalized. This for wearing Sarah Palin pins. More on that here. And parts of the police reports are here.
Of course, there has been no media coverage, and certaily no comments from Clinton or other Democrats who are so concerned about violence in the political sector.
Double standard?
Trashing the Tea Party won't work.
Mr. Clinton needs to slither quietly back under his rock.
He is afraid the limited government rhetoric of the Tea Partiers will lead to another act of domestic terrorism like the Oklahoma City bombing.
Naturally, he leaves out the really pertinent point: that McVeigh bombed Ok City in response to Bill Clinton's mangement of the seige at Waco.
You can read a good story on the subject by Tony Blankley here.
At the same time that he was trying to trash the Tea Party, a real incident of domestic violence was taking place.
A young woman staffer for the Republican Governor of Louisiana and her date were leaving a function in New Orleans when they were set upon by left wing thugs, viciously assaulted and hospitalized. This for wearing Sarah Palin pins. More on that here. And parts of the police reports are here.
Of course, there has been no media coverage, and certaily no comments from Clinton or other Democrats who are so concerned about violence in the political sector.
Double standard?
Trashing the Tea Party won't work.
Mr. Clinton needs to slither quietly back under his rock.
Friday, April 16, 2010
Musing On a Rainy Friday Afternoon
There has been a lot of moisture out here in West Texas the last few months. Right now, we are at about 2 1/2 times normal, and our rainy season has just begun. I suppose its the El Nino that has been in progress, but the Winter sure felt like Global Cooling.
That does bring to mind the issue of Global Warming that all the liberals were panicked about. We have not heard a lot about that lately, since the science has been shown to have been unscientific. It appears that a lot of it was based upon scientists wanting to be politically corrrect so they could get more government money for research. The rest was based upon doctored evidence that was never disclosed, and "conveniently" lost before it could be checked.
Poor Al Gore. It now appears he will not make the billions of dollars he would have made if the "cap and trade" fiasco had passed.
The problem is, the globe does warm and does cool, and we should be prepared for it. Right now there appears to be temporary cooling, but by the time we really establish that, it may well be warming again.
That is what the earth does. It warms for a while, then it cools. In the last 100,000 years we have had several cycles of warming and cooling. Humans have always adapted to it. We need to be prepared to adapt to it again. We can't stop it, and to try would be foolish.
Back to the rain. It caused the postponement of the Tax Day Tea Party on Thursday. Too bad. I was going to go, as I did last year.
It has been very interesting to see how our political left and their minions in the media have treated the Tea Partys over the last year.
At first they were "right wing extremists" then moved on to be racists and Nazis. That did not work, of course, because none of it was true. They also tried to set up some individuals as "leaders" of the Tea Party and tried to tear the Partiers down by attacking those "leaders." That didn't work, either, mainly because the Tea Party groups are all local folks. Its a movement, not an organization.
The lastest is a New York Times/CBS poll that asserts they are rich and well educated, and not representative of a cross section of the citizenry. That will fail as well, because its not true. Obviously, the media has not covered the actual Tea Partys enough to have a clue about them. Or they don't care about the truth.
I wonder what they will try to come up with next.
That does bring to mind the issue of Global Warming that all the liberals were panicked about. We have not heard a lot about that lately, since the science has been shown to have been unscientific. It appears that a lot of it was based upon scientists wanting to be politically corrrect so they could get more government money for research. The rest was based upon doctored evidence that was never disclosed, and "conveniently" lost before it could be checked.
Poor Al Gore. It now appears he will not make the billions of dollars he would have made if the "cap and trade" fiasco had passed.
The problem is, the globe does warm and does cool, and we should be prepared for it. Right now there appears to be temporary cooling, but by the time we really establish that, it may well be warming again.
That is what the earth does. It warms for a while, then it cools. In the last 100,000 years we have had several cycles of warming and cooling. Humans have always adapted to it. We need to be prepared to adapt to it again. We can't stop it, and to try would be foolish.
Back to the rain. It caused the postponement of the Tax Day Tea Party on Thursday. Too bad. I was going to go, as I did last year.
It has been very interesting to see how our political left and their minions in the media have treated the Tea Partys over the last year.
At first they were "right wing extremists" then moved on to be racists and Nazis. That did not work, of course, because none of it was true. They also tried to set up some individuals as "leaders" of the Tea Party and tried to tear the Partiers down by attacking those "leaders." That didn't work, either, mainly because the Tea Party groups are all local folks. Its a movement, not an organization.
The lastest is a New York Times/CBS poll that asserts they are rich and well educated, and not representative of a cross section of the citizenry. That will fail as well, because its not true. Obviously, the media has not covered the actual Tea Partys enough to have a clue about them. Or they don't care about the truth.
I wonder what they will try to come up with next.
Wednesday, April 14, 2010
On a Personal Note
Back when I started this blog, I knew little about it, but did so because a friend of mine did it, and I thought it might be fun to do.
At the time, knowing that there is nothing really anonymous on the Internet, I determined that I would not hide my identity, and that I would scrupulously abide by the Texas Code of Judicial Conduct.
As a result, I have kept my commentary entirely on political issues of national interest, and have not posted on any issues that might ever come before me when sitting by assignment.
I welcome and encourage comments on the issues presented on this blog. I know that there are many who do not agree with my viewpoint, and welcome your input.....as long as it is on issue.
Lately I have been having another kind of commenter......some who would use the comments to anonymously criticize rulings or decisions I have made. These comments are not welcome, and have been, and will continue to be deleted.
All I can say to those people is that if you do not agree with me, just appeal the case.
If you wish to complain to me, then call me. I probably will not discuss any case with anyone, but at least you can honestly express your opnion before I hang up.
Those who would be cowardly and try to hide behind anonymity.....well, reread the second paragraph.
At the time, knowing that there is nothing really anonymous on the Internet, I determined that I would not hide my identity, and that I would scrupulously abide by the Texas Code of Judicial Conduct.
As a result, I have kept my commentary entirely on political issues of national interest, and have not posted on any issues that might ever come before me when sitting by assignment.
I welcome and encourage comments on the issues presented on this blog. I know that there are many who do not agree with my viewpoint, and welcome your input.....as long as it is on issue.
Lately I have been having another kind of commenter......some who would use the comments to anonymously criticize rulings or decisions I have made. These comments are not welcome, and have been, and will continue to be deleted.
All I can say to those people is that if you do not agree with me, just appeal the case.
If you wish to complain to me, then call me. I probably will not discuss any case with anyone, but at least you can honestly express your opnion before I hang up.
Those who would be cowardly and try to hide behind anonymity.....well, reread the second paragraph.
Monday, March 15, 2010
The Ides of March
This year the Ides of March bring the new "final" push by the Democrats to impose Obamacare on a very reluctant nation.
Rasmussen says that the current bill (to the extent anyone knows what is in it) is supported by 43% of the country, while 53% are opposed.
They do not appear to have the votes to pass the bill by ordinary means, so we are seeing all kinds of manipulations in the House to try to force it through.
We will see how many House Democrats are willing to walk the plank for Obama and Nancy Pelosi.
Meanwhile, Paul Ryan, a Republican Congressman, has an excellent article up in the Washington Post today. Read the whole thing. Its good.
His analysis, in part, includes the following:
Rasmussen says that the current bill (to the extent anyone knows what is in it) is supported by 43% of the country, while 53% are opposed.
They do not appear to have the votes to pass the bill by ordinary means, so we are seeing all kinds of manipulations in the House to try to force it through.
We will see how many House Democrats are willing to walk the plank for Obama and Nancy Pelosi.
Meanwhile, Paul Ryan, a Republican Congressman, has an excellent article up in the Washington Post today. Read the whole thing. Its good.
His analysis, in part, includes the following:
"...Through any analytical lens, the legislation will not address the central problem of skyrocketing health-care costs. The Congressional Budget Office estimates that families' premiums could rise 10 to 13 percent; private-sector actuarial estimates top these already high numbers. The higher costs are driven by federalizing the regulation of insurance, narrowing consumers' options and reducing competition among providers. The health-care market would be dominated by government programs and the largest insurance companies, operating as de facto government utilities........"
"This legislation includes a range of job-killing tax hikes and controls on all Americans -- to fund this new entitlement and to penalize employers and individuals who don't play by Washington's new rules........"
The bill is a bad one that really does not address the real concerns that the public has about health care. Rising costs are not solved.
So what are the real purposes of the bill? Ryan explains:
"....If this debate had actually been about health care, we could have worked together to get a grip on costs, make quality care more accessible, address exclusions for preexisting conditions and realign the incentives of insurance companies with those of patients and doctors. Yet this process -- including its embarrassing conclusion -- demonstrates that the debate has never been about health-care policy but, instead, paternalistic ideology....."(emphasis mine)
His conclusion:
"...Should the Democrats' health-care train wreck make it to the president's desk, it will be a pyrrhic victory, and its devastating consequences will take their toll on our health-care system, our budget and our economy."
I emphatically agree. But a bright side of all of this is that the legislation, the way it has been forced on Congress by the Democratic leadership, and all of the shenanigans involved in its passage, will likely doom the Democratic Party to minority status for some time to come.
Now what we need to see is a Republican Party that will step up. So far, when given the chance, they have failed to do so.
Maybe some of the young leaders like Paul Ryan will be the Republican Party of the future.
The leaders of the past have largely failed.
Sunday, February 14, 2010
Don't tell us......
On February 19, 2009, a guy named Rick Santelli, a CNBC business news broadcaster, set the Internet afire with a rant about taxpayers having to bail out defaulting mortage holders. A Youtube version of the rant spread over the Internet like wildfire. You can find it here.
In it he called for a Chicago Tea Party to protest the bailouts.
Boy did the idea catch on. All over America, mad citizens determined to protest what was happening in our government. It was a spontaneous movement, not created or led by anyone, unless you want to credit Mr. Santelli with it. He, of course, had no idea how his rant would catch on with the people.
Now in its second year politicians and press from all sides of the spectrum seem to amazed, even frightened by the movement. They should be.
Many are even setting up strawmen in the movement to tear it down. We see the press trying to set up a lot of people as "leaders" of the movement, then attempting to discredit the movement by being critical of the "leaders." (Some of the people they have described as "leaders" or "founders" of the tea party are pretty bad people, others very controversial.)
This is an attempt by them to discredit a grassroots citizens' movement falsely and by design.
There is no particular leader, although there are many activists who speak up. Most who claim to be leaders are doing so for their own purposes. So don't believe it.
But on to the title point.
A dear friend of mine, who happens to be a liberal, sent me two articles today from Politico.com, a reputable online source for political news.
One titled Republicans woo wary tea partiers dicusses how GOP Chairman Steele is engaging with 50 "leaders" of the tea party in hopes of enticing them into the Republican Party. For most of them, that will not work.
The other article was entitled Conservative manifesto coming soon. This is a story about a large group of Republican leaders and thinkers are getting together a new manifesto describing the basic Republican mission statement. This is also a response to the tea party movement.
I want to break the news to Mr. Steele and the other Republicans and to the Democrats: you people have had your chance. You had the chance to govern well and you blew it. Badly. Both parties.
The time is over for you to tell the people how and what you will or will not do. No more top down pontificating and then continuing on as usual. That day is over for now.
It is time that political power again starts flowing from the citizens to the politicians rather than the reverse.
What we want to see from you is actions. Your words are not meaningful. So listen instead of talk. Act instead of pontificate.
Show us.
In it he called for a Chicago Tea Party to protest the bailouts.
Boy did the idea catch on. All over America, mad citizens determined to protest what was happening in our government. It was a spontaneous movement, not created or led by anyone, unless you want to credit Mr. Santelli with it. He, of course, had no idea how his rant would catch on with the people.
Now in its second year politicians and press from all sides of the spectrum seem to amazed, even frightened by the movement. They should be.
Many are even setting up strawmen in the movement to tear it down. We see the press trying to set up a lot of people as "leaders" of the movement, then attempting to discredit the movement by being critical of the "leaders." (Some of the people they have described as "leaders" or "founders" of the tea party are pretty bad people, others very controversial.)
This is an attempt by them to discredit a grassroots citizens' movement falsely and by design.
There is no particular leader, although there are many activists who speak up. Most who claim to be leaders are doing so for their own purposes. So don't believe it.
But on to the title point.
A dear friend of mine, who happens to be a liberal, sent me two articles today from Politico.com, a reputable online source for political news.
One titled Republicans woo wary tea partiers dicusses how GOP Chairman Steele is engaging with 50 "leaders" of the tea party in hopes of enticing them into the Republican Party. For most of them, that will not work.
The other article was entitled Conservative manifesto coming soon. This is a story about a large group of Republican leaders and thinkers are getting together a new manifesto describing the basic Republican mission statement. This is also a response to the tea party movement.
I want to break the news to Mr. Steele and the other Republicans and to the Democrats: you people have had your chance. You had the chance to govern well and you blew it. Badly. Both parties.
The time is over for you to tell the people how and what you will or will not do. No more top down pontificating and then continuing on as usual. That day is over for now.
It is time that political power again starts flowing from the citizens to the politicians rather than the reverse.
What we want to see from you is actions. Your words are not meaningful. So listen instead of talk. Act instead of pontificate.
Show us.
Wednesday, February 10, 2010
We Have Met the Enemy............
Yes, POGO had it right all the time. Its us. We did it to ourselves. Can't blame anybody else.
What, you ask? The answer is a huge mountain of debt as high as one can see.
Last week, the Congress of the United States passed an amendment raising the debt limit by $1,900,000,000,000.00. That is $1.9 TRILLION.
The debt is already in excess of $14,000,000,000,000.00. That is $14 TRILLION.
But that is not all. There is an additional $60,000,000,000,000.00 ( $60 TRILLION) in unfunded future liabilities for things like Social Security, Medicare and other so-called entitlement programs.
We can't pay it.
We have about $2.5 Trillion in tax revenues coming into the Federal Government annually. The Federal budget for the upcoming fiscal year is in excess of $3.8 TRILLION. For the first time in history, the Social Security tax will not bring in enough to pay current obligations. Left unchanged, it probably never will again.
None of this even counts the huge debts of states like California, or the huge consumer debt load that exists.
Who will pay for all of this? How will they pay it?
There are those who blame the politicians for the mess. There is a lot of blame to go around, certainly. The situation in Washington is corrupt, dysfunctional, and overly partisan. Both political parties have bought into spending money that we don't have. Each side wants to reap the rewards of power and have the free rein to funnel public money or tax and regulatory breaks to their friends and contributors. Almost every one of the elected officials in Washington should be thrown out for having bought into that system
But its too easy to just blame the politicians. Our country is pretty evenly split between folks who are "conservative" and want low taxes and smaller government, and "liberals" who want higher taxes and more government.
Usually, there is a healthy tension between the sides that keeps the government more or less to a center course. But since the politicians of both sides are committed to spending rather than saving, we get more debt.
Let a liberal want to raise taxes to help pay for all of this, and every taxpayer gets riled. If a conservative wants to cut spending and cut taxes, then the other side gets riled.
We the people put a lot of pressure on Congress to preserve our pet spending programs or tax breaks or regulatory scheme.
The result has often been cutting taxes and increasing spending. Sometimes its been raising taxes and raising spending.
It just doesn't work. We need a new paradigm in Washington.
We are in such deep trouble that we must come together and make some changes. Everyone is going to have to give up something in order to cure the problem.
Spending will have to be cut; taxes will have to be raised. Everyone will have to pitch in. We just can't go on this way.
Nothing will get done unless everyone is called upon to make the sacrifices necessary.
If we don't stop, we become a Banana Republic, and our children and their children will suffer greatly.
What, you ask? The answer is a huge mountain of debt as high as one can see.
Last week, the Congress of the United States passed an amendment raising the debt limit by $1,900,000,000,000.00. That is $1.9 TRILLION.
The debt is already in excess of $14,000,000,000,000.00. That is $14 TRILLION.
But that is not all. There is an additional $60,000,000,000,000.00 ( $60 TRILLION) in unfunded future liabilities for things like Social Security, Medicare and other so-called entitlement programs.
We can't pay it.
We have about $2.5 Trillion in tax revenues coming into the Federal Government annually. The Federal budget for the upcoming fiscal year is in excess of $3.8 TRILLION. For the first time in history, the Social Security tax will not bring in enough to pay current obligations. Left unchanged, it probably never will again.
None of this even counts the huge debts of states like California, or the huge consumer debt load that exists.
Who will pay for all of this? How will they pay it?
There are those who blame the politicians for the mess. There is a lot of blame to go around, certainly. The situation in Washington is corrupt, dysfunctional, and overly partisan. Both political parties have bought into spending money that we don't have. Each side wants to reap the rewards of power and have the free rein to funnel public money or tax and regulatory breaks to their friends and contributors. Almost every one of the elected officials in Washington should be thrown out for having bought into that system
But its too easy to just blame the politicians. Our country is pretty evenly split between folks who are "conservative" and want low taxes and smaller government, and "liberals" who want higher taxes and more government.
Usually, there is a healthy tension between the sides that keeps the government more or less to a center course. But since the politicians of both sides are committed to spending rather than saving, we get more debt.
Let a liberal want to raise taxes to help pay for all of this, and every taxpayer gets riled. If a conservative wants to cut spending and cut taxes, then the other side gets riled.
We the people put a lot of pressure on Congress to preserve our pet spending programs or tax breaks or regulatory scheme.
The result has often been cutting taxes and increasing spending. Sometimes its been raising taxes and raising spending.
It just doesn't work. We need a new paradigm in Washington.
We are in such deep trouble that we must come together and make some changes. Everyone is going to have to give up something in order to cure the problem.
Spending will have to be cut; taxes will have to be raised. Everyone will have to pitch in. We just can't go on this way.
Nothing will get done unless everyone is called upon to make the sacrifices necessary.
If we don't stop, we become a Banana Republic, and our children and their children will suffer greatly.
Friday, January 29, 2010
Good News?
The headline story on Drudge this morning was about the reported 5.7% increase in GDP this morning. If it were real, that would be very good, and an important improvement in the economy.
Unfortunately, its a statistical gimmick more than anything else.
All but 2.2% of the improvement was because inventories have stopped declining so fast.
"About 60 percent of the fourth quarter's growth resulted from a sharp slowdown in the reduction of inventories as firms began to rebuild stockpiles depleted by the recession."
The best of it was a large increase (from a very low level) in exports, but that was tempered by a decrease in the growth of consumer spending.
The elephant in the room, of course, is employment and wages. My view has always been that there is no real economic recovery without employment improving. So far that is not on the horizon.
Megan McArdle, over at The Atlantic, says it pretty well:
"But man cannot live by GDP alone. I'd argue that the better measure of whether the economy has returned to health is employement--at least, that's when the improvement starts to translate into improvements in peoples' real lives. Prolonged unemployment is one of the most crippling things that can afflict people in the modern world."
Ed Yardeni in an article at the Washington Post, commented before the numbers came out:
"A lot of it is the arithmetic of inventories," said Yardeni, who is expecting a 6.5 percent jump in the GDP number. "Even if there is a very strong number for the fourth quarter, if it's [all because of] inventories, it will raise real questions about the strength of the economy in 2010."
There will be more reaction to the GDP release. I will try to keep updating this post as more comes out.
UPDATE:
The Wall Street Journal has reported on wages for 2009:
"Wage and benefit costs, both before and after adjusting for inflation, grew more slowly 2009 than any year since the U.S. government began tracking data in 1982 as double-digit unemployment weakened workers’ ability to command higher pay.
"Over the past 12 months, the cost of wages and benefits for workers other than those employed by the federal government rose 1.5%, according to the Labor Department’s employment cost index. Over the same period, consumer prices rose 2.7%."
There can be no recovery in the economy until good paying jobs come back.
UPDATE 2:
The Economic Policy Institute points out that the measure of demand from US households and businesses is still decelerating:
"A measure of the strength of demand coming from U.S.-based households and businesses (final sales to domestic purchasers, a measure that excludes export growth and includes import growth) grew at only a 1.7% rate in the quarter, actually decelerating from the third quarter growth rate of 2.3%. In fact, this quarter saw the largest divergence since 1987 between the overall GDP growth figure and the growth rate of domestic demand. In short, nothing about today’s report should lead to upward revisions in forecasts for economic growth over the next year, which generally hover around the 3% mark. This projected pace of growth would likely not even drive the unemployment rate below 10% by the end of 2010."
It appears that some parts of the economy may have some improvement, but its not yet reaching Main Street.
UPDATE 3:
Mish Shedlock finishes off the day with:
"Digging beneath the surface there is nothing to cheer about in the GDP numbers. Moreover, this weakness is in the face of the largest stimulus measures the world has ever seen, not just in the US, but globally. Money supply in China is growing at 30% and housing bubbles are likely to pop in Australia, Canada, and the UK. Problems in Greece, Spain, and Iceland continue to mount."
And:
"GDP is a mirage of sand blowing in the wind. So is global growth. It is a mistake to believe government spending can possibly provide a solid foundation for a lasting recovery."
It should also be noted that the huge pop in the commercial real estate bubble that is impending cannot support a recovery absent another huge bailout of the banks by the taxpayers.
I will repeat my view: There will not be a real recovery without jobs. Anything else will be smoke and mirrors.
Unfortunately, its a statistical gimmick more than anything else.
All but 2.2% of the improvement was because inventories have stopped declining so fast.
"About 60 percent of the fourth quarter's growth resulted from a sharp slowdown in the reduction of inventories as firms began to rebuild stockpiles depleted by the recession."
The best of it was a large increase (from a very low level) in exports, but that was tempered by a decrease in the growth of consumer spending.
The elephant in the room, of course, is employment and wages. My view has always been that there is no real economic recovery without employment improving. So far that is not on the horizon.
Megan McArdle, over at The Atlantic, says it pretty well:
"But man cannot live by GDP alone. I'd argue that the better measure of whether the economy has returned to health is employement--at least, that's when the improvement starts to translate into improvements in peoples' real lives. Prolonged unemployment is one of the most crippling things that can afflict people in the modern world."
Ed Yardeni in an article at the Washington Post, commented before the numbers came out:
"A lot of it is the arithmetic of inventories," said Yardeni, who is expecting a 6.5 percent jump in the GDP number. "Even if there is a very strong number for the fourth quarter, if it's [all because of] inventories, it will raise real questions about the strength of the economy in 2010."
There will be more reaction to the GDP release. I will try to keep updating this post as more comes out.
UPDATE:
The Wall Street Journal has reported on wages for 2009:
"Wage and benefit costs, both before and after adjusting for inflation, grew more slowly 2009 than any year since the U.S. government began tracking data in 1982 as double-digit unemployment weakened workers’ ability to command higher pay.
"Over the past 12 months, the cost of wages and benefits for workers other than those employed by the federal government rose 1.5%, according to the Labor Department’s employment cost index. Over the same period, consumer prices rose 2.7%."
There can be no recovery in the economy until good paying jobs come back.
UPDATE 2:
The Economic Policy Institute points out that the measure of demand from US households and businesses is still decelerating:
"A measure of the strength of demand coming from U.S.-based households and businesses (final sales to domestic purchasers, a measure that excludes export growth and includes import growth) grew at only a 1.7% rate in the quarter, actually decelerating from the third quarter growth rate of 2.3%. In fact, this quarter saw the largest divergence since 1987 between the overall GDP growth figure and the growth rate of domestic demand. In short, nothing about today’s report should lead to upward revisions in forecasts for economic growth over the next year, which generally hover around the 3% mark. This projected pace of growth would likely not even drive the unemployment rate below 10% by the end of 2010."
It appears that some parts of the economy may have some improvement, but its not yet reaching Main Street.
UPDATE 3:
Mish Shedlock finishes off the day with:
"Digging beneath the surface there is nothing to cheer about in the GDP numbers. Moreover, this weakness is in the face of the largest stimulus measures the world has ever seen, not just in the US, but globally. Money supply in China is growing at 30% and housing bubbles are likely to pop in Australia, Canada, and the UK. Problems in Greece, Spain, and Iceland continue to mount."
And:
"GDP is a mirage of sand blowing in the wind. So is global growth. It is a mistake to believe government spending can possibly provide a solid foundation for a lasting recovery."
It should also be noted that the huge pop in the commercial real estate bubble that is impending cannot support a recovery absent another huge bailout of the banks by the taxpayers.
I will repeat my view: There will not be a real recovery without jobs. Anything else will be smoke and mirrors.
Thursday, January 28, 2010
The State of the United States
No, not the speech, although I will get to it later, perhaps.
The state of our country is not good. We are mired in a deep recession with high and growing unemployent, and only the huge institutions that were bailed out by the government are showing profits. Main Street still suffers.
We are in a situation caused by a huge expansion of credit wherein large financial institutions, both private and semi-public engaged in wild speculation, creating a bubble in real estate, and then the bubble popped.
This had the effect of destroying much of the capital of the financial institutions, but also the capital of the general public.
With the bubble gone, the US Government under George W. Bush stepped in to socialize the huge losses of the financial institutions, but not, of course, the huge losses that had been imposed upon the general public. (I call this the Golden Rule) In fact, the general public will end up paying for the financial institutions' losses as well as their own.
Hope and Change gets elected and promptly nationalizes General Motors and to some extent, Chrysler.
Relief for the general public? Hardly.
Next is a huge "stimulous" bill that goes primarily to large Democratic political constituencies, adds nearly a trillion to the deficit, and accomplishes nothing but add further burdens on the general public.
We then get a Cap and Trade Bill that is rushed through the House without being read. This bill would add hundreds of billions to the costs of energy....to be ultimately paid by whom? You got it. The general public.
With the first of these matters a movement began to form: The Tea Parties. The public was awakening. But the politicians ignored them or put them down as extremists. Who were the partiers? The general public.
After Cap and Trade passed the House, the Pelosi crowd began to attempt to socialize our country's medical care. Behind closed doors.
It was if the Iron Curtain was rebuilt right there in Washington, D.C. Everything was done behind closed doors. In secrecy. Few know what kind of deals were made to buy "support" for the bill, but what is known is that it was terribly unfair to.........the general public.
A similar bill is now pending in the Senate, where the majority party is still trying to push it through, in spite of the opposition of....the general public.
So here we are after one year of Hope and Change. We have no hope, and only a change for the worse.
Elections in Virginia and Massachusetts have given the general public a chance to be heard, but from the State of the Union speech last night, it is clear that the lessons have been lost by the politicians in our government.
Maybe they should all watch and listen to the ad that newly elected Senator Scott Brown ran during the campaign in Massachusetts. It is one of the very best I have heard in my over fifty years in politics.
You can find it here. If you do nothing else, go to this ad.
The public will get little, if any, relief from the policies spoken of by the President last night.
But we can get relief in November when we have the opportunity to throw all the rascals out. There is Hope, after all.
Who will lead the revolution?
The state of our country is not good. We are mired in a deep recession with high and growing unemployent, and only the huge institutions that were bailed out by the government are showing profits. Main Street still suffers.
We are in a situation caused by a huge expansion of credit wherein large financial institutions, both private and semi-public engaged in wild speculation, creating a bubble in real estate, and then the bubble popped.
This had the effect of destroying much of the capital of the financial institutions, but also the capital of the general public.
With the bubble gone, the US Government under George W. Bush stepped in to socialize the huge losses of the financial institutions, but not, of course, the huge losses that had been imposed upon the general public. (I call this the Golden Rule) In fact, the general public will end up paying for the financial institutions' losses as well as their own.
Hope and Change gets elected and promptly nationalizes General Motors and to some extent, Chrysler.
Relief for the general public? Hardly.
Next is a huge "stimulous" bill that goes primarily to large Democratic political constituencies, adds nearly a trillion to the deficit, and accomplishes nothing but add further burdens on the general public.
We then get a Cap and Trade Bill that is rushed through the House without being read. This bill would add hundreds of billions to the costs of energy....to be ultimately paid by whom? You got it. The general public.
With the first of these matters a movement began to form: The Tea Parties. The public was awakening. But the politicians ignored them or put them down as extremists. Who were the partiers? The general public.
After Cap and Trade passed the House, the Pelosi crowd began to attempt to socialize our country's medical care. Behind closed doors.
It was if the Iron Curtain was rebuilt right there in Washington, D.C. Everything was done behind closed doors. In secrecy. Few know what kind of deals were made to buy "support" for the bill, but what is known is that it was terribly unfair to.........the general public.
A similar bill is now pending in the Senate, where the majority party is still trying to push it through, in spite of the opposition of....the general public.
So here we are after one year of Hope and Change. We have no hope, and only a change for the worse.
Elections in Virginia and Massachusetts have given the general public a chance to be heard, but from the State of the Union speech last night, it is clear that the lessons have been lost by the politicians in our government.
Maybe they should all watch and listen to the ad that newly elected Senator Scott Brown ran during the campaign in Massachusetts. It is one of the very best I have heard in my over fifty years in politics.
You can find it here. If you do nothing else, go to this ad.
The public will get little, if any, relief from the policies spoken of by the President last night.
But we can get relief in November when we have the opportunity to throw all the rascals out. There is Hope, after all.
Who will lead the revolution?
Saturday, January 23, 2010
Election Lessons
Neither side gets it.....yet.
The election of Scott Brown to the US Senate from Massachusetts has been the big election story of the past week.
Republicans are ecstatic and they think that this was a triumph for Republicans.
Democrats are, of course, very disheartened, but blame the loss on a poor campaign, not their policies.
They are both wrong. It was a victory for the great political center of our country.
What is occuring is that the political center of the country is , to paraphrase Finch's yell from Network, mad as Hell, and they aren't going to take it any more.
In 2008, Barack Obama campaigned as a "post-partisan" who was going to bring change in the way Washington works. He promised more transparency and a bi-partisan approach.
This was what the center wanted to see, John McCain represented the old ways, so they moved into the Democratic column and voted largely for Obama.
Of course, the economy was headed into the tank and the Bush administration had started a huge Federal bailout of the very people who caused the problem, and that had everyone unhappy as well.
Hope and change seemed to be a good thing, so Obama won the election handily.
Almost by the time of his inauguration, it had become clear that hope and change meant more of the same. A huge and mostly wasteful stimulus bill was rushed through Congress, and it became apparent that the United States was facing huge deficits as far as one could project. Cap and Trade was pushed through without any debate and without anyone knowing exactly what was in the bill. And the huge bailouts continued.
All that could be discerned was that the Cap and Trade bill was going to be extremely costly to ordinary Americans, but that the owners of the trading markets, such as Al Gore, were going to get very rich.
So the Tea Party movement started....and grew and grew.
During the Summer of 2009 the ObamaCare bills started to be crafted....in the dark. Rather than transparency, we saw secrecy. People became more outraged, and appeared at Town Hall meetings to protest.
Democrats in the House and Senate were very disparaging of the folks that were protesting.
Tone deaf.
The gubernatorial election in Virginia followed wherein a huge turnaround from the vote in 2008 occurred and a Republican was elected. The Democrats remained tone deaf and continued to try to ram ObamaCare through Congress.
So we get to the election to fill Ted Kennedy's seat. A liberal Democrat runs in the traditionally liberal Democratic state, and is deemed a shoe in. She even took a vacation in the midst of the campaign!
Her opponent, running on the Republican ticket was not a conservative. It was, after all, Massachusetts. But he did tap into the anger of the regular folks.
And he won.
In the aftermath, both political parties remain tone deaf.
The Democrats think they ran a poor campaign and they did not sell their program very well.
The Republicans think the election means a turn toward conservative Republican principles.
Both are wrong.
Each party has its right or left wings, but both of them have to attract the center to govern. Both of them need to understand what the center does and does not want, and neither seem to have a clue that what they have both been offering is not what is wanted. Or needed.
Bush fooled them, and Obama fooled them.
My suspicion is that incumbents of either party are going to have a hard time. They should.
It is time that both parties get a clue, or there will be a party that comes along that will.
The election of Scott Brown to the US Senate from Massachusetts has been the big election story of the past week.
Republicans are ecstatic and they think that this was a triumph for Republicans.
Democrats are, of course, very disheartened, but blame the loss on a poor campaign, not their policies.
They are both wrong. It was a victory for the great political center of our country.
What is occuring is that the political center of the country is , to paraphrase Finch's yell from Network, mad as Hell, and they aren't going to take it any more.
In 2008, Barack Obama campaigned as a "post-partisan" who was going to bring change in the way Washington works. He promised more transparency and a bi-partisan approach.
This was what the center wanted to see, John McCain represented the old ways, so they moved into the Democratic column and voted largely for Obama.
Of course, the economy was headed into the tank and the Bush administration had started a huge Federal bailout of the very people who caused the problem, and that had everyone unhappy as well.
Hope and change seemed to be a good thing, so Obama won the election handily.
Almost by the time of his inauguration, it had become clear that hope and change meant more of the same. A huge and mostly wasteful stimulus bill was rushed through Congress, and it became apparent that the United States was facing huge deficits as far as one could project. Cap and Trade was pushed through without any debate and without anyone knowing exactly what was in the bill. And the huge bailouts continued.
All that could be discerned was that the Cap and Trade bill was going to be extremely costly to ordinary Americans, but that the owners of the trading markets, such as Al Gore, were going to get very rich.
So the Tea Party movement started....and grew and grew.
During the Summer of 2009 the ObamaCare bills started to be crafted....in the dark. Rather than transparency, we saw secrecy. People became more outraged, and appeared at Town Hall meetings to protest.
Democrats in the House and Senate were very disparaging of the folks that were protesting.
Tone deaf.
The gubernatorial election in Virginia followed wherein a huge turnaround from the vote in 2008 occurred and a Republican was elected. The Democrats remained tone deaf and continued to try to ram ObamaCare through Congress.
So we get to the election to fill Ted Kennedy's seat. A liberal Democrat runs in the traditionally liberal Democratic state, and is deemed a shoe in. She even took a vacation in the midst of the campaign!
Her opponent, running on the Republican ticket was not a conservative. It was, after all, Massachusetts. But he did tap into the anger of the regular folks.
And he won.
In the aftermath, both political parties remain tone deaf.
The Democrats think they ran a poor campaign and they did not sell their program very well.
The Republicans think the election means a turn toward conservative Republican principles.
Both are wrong.
Each party has its right or left wings, but both of them have to attract the center to govern. Both of them need to understand what the center does and does not want, and neither seem to have a clue that what they have both been offering is not what is wanted. Or needed.
Bush fooled them, and Obama fooled them.
My suspicion is that incumbents of either party are going to have a hard time. They should.
It is time that both parties get a clue, or there will be a party that comes along that will.
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