Just a Coincidence

Hmm.  So - much like the last election year, 2012 - the unemployment rate takes a sudden drop in the last report before this election.  How convenient for Democrats….

But I’m sure it’s just a coincidence.  And if you dare to think there is even a smidgen of corruption here, you must be racist.

Downfall XXIII: GDP Down 2.9% (And a certain election last night.)

The shock 1^st Quarter GDP number released this morning – down 2.9% -- makes it more difficult for Obama to hold on to his power.  As I’ve mentioned before, if the economy is bad, voters will be less tolerant of Obama’s enormities.  (And it will be fun seeing Democrats trying to blame the bad numbers on climate change.)

But then Establishment Republicans seem intent on alienating the conservative Republican base.  As illustrated all too well in Mississippi, RINOs would rather be in league with liberal Democrats than with Tea Partiers.  And they are pretty darn open about it now.  So Obama and the Democrats still have that going for them.

I may opine more on that in due time. 

France is reaping what it has sown. (And we’re next.)

This is what happens when a morally bankrupt society elects Leftists:

At its core, France’s economic malaise is a failure of public morality. The public sector elites not only detest the private sector, but they also believe that it is a higher calling to steal money from entrepreneurs and give it to civil servants. Suffice to say this moral bankruptcy of the body politic means the situation is intractable—when the population is bombarded with propaganda that wealth creation is somehow dirty, while it is morally permissible for the state to expropriate all private gains, it will be hard to build an environment for economic growth.

Gosh, you think?

And that description of France sounds all too familiar to us Americans, does it not?

Downfall IV: The Self-Destruction of Obama – The Economy UPDATED

This morning brings the surprise news that the nation’s economy as measured by GDP shrunk by 0.1% in the fourth quarter of 2012.  The news media is stumbling all over themselves to explain this with “one-time factors” and the like.  And, of course, there are various reasons a large economy grows and shrinks.  But there is one very important one-time factor behind this shrinkage that is being ignored – the re-election of Barack Obama.

There is no question that companies, businessmen, and investors made negative decisions because of the re-election of Obama.  That included mass layoffs and hour reductions, some more publicized than others.  The inevitability of higher taxes, Obamacare, and no telling what executive orders and regulations prompted many to go into economic self-preservation mode instead of the investing, hiring, and risk-taking a healthy economy needs.

And, still, after getting higher taxes, Obama has let it be known that his idea of a “balanced approach” to reducing deficits is even more higher taxes on the evil “Rich.”  So we are back where we were in early 2009, when it seemed every week brought new Leftist attacks on economic freedom from the Obama regime. 

If Obama would just lay off (No pun intended), declare victory, and let it be known that he will henceforth leave businessmen and investors alone and not raise taxes or pile on regulations any further, at least then they would know what the playing field is and make constructive economic decisions based on that.  But Obama clearly is determined to impose his Leftist agenda without relent.  Therefore the economic playing field remains uncertain, muddy . . . and likely to get worse.

The resulting weak economy will likely be a major cause of his political downfall.  Admittedly, Americans have been more patient with Obama on the economy than I had expected, mainly because things were difficult when he came in.  But that patience is not limitless.  Another year or two of economic stagnation or worse, as this morning’s GDP may be foretelling, will sap much of the goodwill toward Obama and make the electorate more disposed to stop tolerating his diverse enormities.

As I’ve mentioned before, a good economy can make people overlook and forgive a lot from a president.  See Bill Clinton.  But a bad economy . . .

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Downfall is an ongoing series anticipating and tracking what I expect will be the self-destruction of Obama.

The first post may be found here.  The series may be found here.

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MORE:

Ed Morrissey goes yard on Obama’s malignant neglect of the economy and debunks some of the absurd blame-deflecting.  I cannot do better than him.  So get thee hence.

But I do have to add that the continued efforts by the noos media and Democrats (Forgive the redundancy.) to ignore the elephant in the room, namely that Obama’s re-election put a hit on the economy, amuse me greatly.

An Economic Reality Check

CEO David Siegal has emailed his employees and more or less told them that there will be lay-offs if Obama is re-elected.  For taxes and other costs of business have and would become so bad under Obama that working, hiring, and taking risks just isn’t worth it to him:

Obviously, our present government believes that taking my money is the right economic stimulus for this country. The fact is, if I deducted 50% of your paycheck you'd quit and you wouldn't work here. I mean, why should you? Who wants to get rewarded only 50% of their hard work? Well, that's what happens to me.

Business is at the heart of America and always has been. To restart it, you must stimulate business, not kill it. However, the power brokers in Washington believe redistributing wealth is the essential driver of the American economic engine. Nothing could be further from the truth and this is the type of change they want.

  

So where am I going with all this? It's quite simple. If any new taxes are levied on me, or my company, as our current President plans, I will have no choice but to reduce the size of this company. Rather than grow this company I will be forced to cut back. This means fewer jobs, less benefits and certainly less opportunity for everyone. . . .

You see, I can no longer support a system that penalizes the productive and gives to the unproductive. My motivation to work and to provide jobs will be destroyed, and with it, so will your opportunities. If that happens, you can find me in the Caribbean sitting on the beach, under a palm tree, retired, and with no employees to worry about.

That may sound mean.  He (along with yours truly) is more blunt than most.  But he is not alone.  There are a lot of Americans who can say with the Atlas Shrugged II trailer, “I will not be a slave.”  If you tax job creators at rates of 40%, 50% or more, that is nothing less than tax slavery.  Why take the risks and work hard if half or more of the profits of success are taxed away?  Lose, you lose; win, you only half win – that’s a sucker’s game.

And why take risks and do the things that create jobs if you think the economy is going down?  That bogus 7.8% unemployment number aside, there are numerous indicators that we are about to slip back into recession.  Just this morning, Cummins Engine announced that they expect “to reduce its workforce by between 1000 and 1500 people by the end of the year.” (And as I type this, the Jolts Survey on job openings is out and is virtually unchanged.)

My personal business is very small.  But if Obama is re-elected, I will act on the assumption that America is going to Hell.  For I am convinced it will under more Obama.  And what I intend will not help the U. S. economy (except hopefully to conserve principal to invest if and when things get better one day).  If the United States is intent on going to Hell, I do not intend to go with it.  And, again, I am not alone.

Sorry if this is not cheerful and flag waving.  But a reality check is needful here.  I, David Siegel, and countless others would much rather make economic choices that help the economy and help it soon.  But if the electorate of this country vote to go to economic Hell and turn investors and businesspeople into tax slaves, we will adjust our economic choices accordingly.  And that will contribute to tipping this country back into recession, if not worse.

Putting the Jobs Number in Perspective

The monthy (Un)employment report was released this morning.  It was so-so - 163,000 new jobs; the unemployment number up to 8.3%.

But as for the big picture of jobs under Obama, nothing I’ve seen puts matters in perspective like the following chart from Political Math:

All those calling Obama’s term the second term of Jimmy Carter can apologize now . . . to Jimmy Carter.

Obama’s Helpful Stimulus

Well, Obama’s Stimulus, all $1 trillion of it, :Anglican understatement alert: does not seem to be helping the economy much.

But, hey, the Stimulus did get guns to our Mexican drug gang friends!

You might be having a bad election year if . . .

. . . you are a Democrat and Time has you down 6 on their generic congressional ballot poll. You know it has to be even worse in the real world.

. . . liberal allies fondly want a past president to help you out: George W. Bush.

. . . the economy is still getting worse with unemployment claims surging over 500,000.

My political bloodbath prediction yesterday is looking better already.

The Economy, Santa Fe, and November

My visit to Santa Fe last week was an eye-opener. I went to visit a gallery where I bought art about a year ago and had a little trouble finding the entrance. It turns out that the owner decided to shrink her space in the past year. I asked why, and it was that business was too slow to pay for the previous space. She added that she was able to keep most of her artists. But that means she had to drop some.

At another gallery where I bought art this visit, the owner informed me she would be moving soon because her landlord was not lowering rent while others were. Now, this gallery is in a prime spot on San Francisco St. not far from the Plaza. Incredulous, I asked if rents around the Plaza were indeed going down, and she said yes.

The Plaza area in Santa Fe is a busy and prime area for upscale tourists and art (and food) lovers. If landlords feel they need to lower rents there, that says volumes about how weak the economy is. I was genuinely surprised the economy is having this much impact on the Plaza.

Since I’ve returned home, numbers, including another rise in jobless claims this morning, and the Fed statement Tuesday confirm the economy is getting worse again. And that is saying something given the economy was not exactly great earlier this year.

Shifting to politics, I had thought a slightly improved economy might help limit the damage for Democrats in November. Now that it appears the opposite might be the case, that political bloodbath I’ve said might be coming might indeed come right on schedule. To add a further weakening in the economy to all the Democrats’ provocations . . . .

Do I need to say more?

My Fool-proof 2010 Prediction for the Economy and Elections

As a close watcher of both the economy and politics, I got a prediction for you: 2010 will be a bad year for both the economy and Democrats.

What prompts me to predict this? Obama deciding to play populist by going after the banks.

Let’s see, we need to get the economy unleashed . . . so Obama openly tries to throttle the banks. Huh??

I think the near term fallout for the economy and, therefore, for the November elections is all too predictable.

And you can bank on that, pun intended.

Inflation on the Way

Mark my words: serious inflation, probably stagflation, is on the way.

Why do I so pontificate with such confidence/despair? These two charts.

You have been warned.

Obama Demagogues Chrysler Bankruptcy

The Dear Leader today just could not resist blaming bogeymen for the Chrysler bankruptcy:

In particular, a group of investment firms and hedge funds decided to hold out for an unjustified taxpayer bailout. They were hoping that everyone else would have to make sacrifices and they would have to make none.

I’m assuming Obama was referring to bond holders who did not appreciate taking pennies on the dollar while the unions who helped bring the American auto industry to its knees get much more. Blaming bondholders is absurd. They are probably the ones least responsible for Chrysler’s troubles. And normally in bankruptcies, bondholders get first dibs on the surviving company, as it should be.

But even if there is some distant element of truth to what Obama said, why couldn’t he just shut up and keep his own council instead of poisoning the atmosphere for both politics and the economy with his demagoguery? The stock market spilled 150 points almost straight down after his bout of childish finger pointing. More importantly, many companies need bondholders and their forbearance. But who will buy and hold bonds if they think Obama is out to stick it to them?

Perhaps more to the point, like others of a totalitarian bent, if Obama cannot find real villains to blame, he’ll invent them.

In any case, Obama, do the economy and financial markets a favor – SHUT UP, ALREADY!

The Real Culture War is Over Economic Freedom

Arthur Brooks has a perceptive piece in the Wall Street Journal this morning that asserts that the big culture war of this time is not over the usual social issues but over economic freedom. And as much as I care about abortion, home-schooling and such, I think Brooks is right.

The anger we see manifested in tea parties is over economic freedom. And that anger will only grow as Obama’s agenda progresses. That anger also has more tangible consequences than anger over social issues. Most of those opposed to same-sex marriage won’t crash gay weddings. But those opposed to confiscatory taxation will change their economic behavior to avoid those taxes. Most of those changes are not good for the economy.

That’s not to mention that people don’t respond well to thieves. Try burglarizing a Texan to find out about that. Being ripped off evokes a more visceral response than someone’s moral choices in Californicate. For better or worse, that's human nature.

I am heartened to see Brooks note that taxation and other economic freedom issues are moral issues. I have felt that way since supporting Ronald Reagan in my Duke days. I do not claim to know just where to draw the line, but when government’s take approaches 50%, I am convinced at least two of the Ten Commandments are broken. I know many of my Christian brothers (especially in the UK) think government is virtually incapable of breaking “Thou shalt not steal” and “Thou shalt not covet.” I beg to differ.

Unfortunately, through the years, I’ve seen very few assert that excessive taxation is theft. I’m heartened to see Mr. Brooks imply that it and other government enormities are so indeed.

He makes other interesting points I may visit at another time. For now, I commend his column to you.

Voter’s Remorse

In case some of my readers think I oppose Obama’s policies simply because I’m an evil right-winger, may I suggest they listen to some of those who once welcomed the Obama presidency.

For example, there’s Jim Cramer, you know the crazy guy on CNBC’s Mad Money. He once eagerly looked forward to the Obama Administration. But now he says Obama’s “radical agenda” is “the greatest wealth destruction I’ve seen by a president.”

Then there’s David Brooks, who also eagerly awaited the Age of Obama. Now, this oh-so-moderate is, well, rather damning:

. . . the Obama budget is more than just the sum of its parts. There is, entailed in it, a promiscuous unwillingness to set priorities and accept trade-offs. There is evidence of a party swept up in its own revolutionary fervor . . . .

So programs are piled on top of each other and we wind up with a gargantuan $3.6 trillion budget. We end up with deficits that, when considered realistically, are $1 trillion a year and stretch as far as the eye can see. We end up with an agenda that is unexceptional in its parts but that, when taken as a whole, represents a social-engineering experiment that is entirely new.

The U.S. has never been a society riven by class resentment. Yet the Obama budget is predicated on a class divide. . . .

The U.S. has always had vibrant neighborhood associations. But in its very first budget, the Obama administration raises the cost of charitable giving. It punishes civic activism and expands state intervention.

And there’s more. But, I have to admit, I find this from Mr. Brooks a little whiney: “Those of us who consider ourselves moderates — moderate-conservative, in my case — are forced to confront the reality that Barack Obama is not who we thought he was.”

Well, isn’t that special. “I’m a moderate-conservative, I really am, but Obama fooled me.” Boo! Hoo!

I got something to say to Mr. Brooks and others who are suffering and will suffer voter’s remorse. . .

I (and others) TOLD YOU SO, AGAIN AND AGAIN AND AGAIN that Obama is an effing Leftist and a liar to boot! But YOU WOULDN’T LISTEN. Instead many of you Obama voters were so foolish to think someone with such a radical background and with the most left-wing voting record in the Senate would, upon his Sacred Inauguration, become this great non-partisan, non-ideological, even moderate, uniter who would solve all our problems.

Face it. You were fools, and now we are all paying for your foolishness.

(Of course, Obama is turning out to be worse than I expected, too. But I won’t let that get in the way of a good rant.)

By the way, I predicted voter’s remorse, too.

Well, now is Lent and a good time to repent.

I will take confessions in the comments.

UPDATE: Please read this addendum to my rant.

“Obama Lied; the Economy Died.”

I commend to my readers this sharp and at times witty op-ed by Tony Blankley.

I’m heartened to see him do what so few have done – take Obama to task for telling this whopper to Congress:

As soon as I took office, I asked this Congress to send me a recovery plan by President's Day that would put people back to work and put money in their pockets. Not because I believe in bigger government - I don't.

I didn’t hear much of his speech after that because I was laughing so hard.

In light of Obama’s budget, tax, and spending proposals, that is about as big as Big Lies get.

So I heartily agree with Mr. Blankley’s conclusion:

If President Obama were to try to misrepresent his positions for the next four years, there would be nothing he could say that would approach the inaccuracy of his claim last week that he is not for big government. It is the essence of the man and his presidency. He doesn't like America the way it has been since its founding - and it will take an abusively big government to realize his dreams of converting America into something quite different. If you don't know that, you don't yet know Barack Obama.

The Madness of King Obama (and His Budget)

I can only scratch the surface with this post, but I am appalled at President Obama’s budget. Readers know my expectations for Obama were *Anglican understatement alert* not high. But his budget blueprint is worse than even I expected, far worse.

It is sheer madness. He blames Bush for the deficit he “inherited,” yet he wants to double it. Then he says he wants to cut the deficit in half, yet he proposes spending over $25,000 per taxpayer on items like doubling foreign aid and, yes, lots of earmarks Obama says he opposes. And if you think soaking the rich will pay for it, think again. One estimate: you would have to tax 100% of the income of everyone making over $75,000 to pay for Obama’s spending.

*another Anglican understatement alert* I don’t think we can afford that.

Speaking of taxes, Obama claims to be a Christian. Has he ever read, “You shall not muzzle the ox while he is threshing”? (Deut. 25:4; 1Cor. 9:9; 1 Tim. 5:18) Letting Bush’s tax cuts expire in 2010 isn’t enough for him. He’s in a big hurry to raise taxes on the eeeevil “rich”. And that includes sharply reducing itemized deductions for expenses and charitable contributions.

Does he think higher taxes will give incentive and capital to those we need to do the economic heavy lifting? It will discourage business risk and investment. It the risk taker loses, he loses. If he wins, . . . he loses to Obama’s high taxes. What sucker is going to play that game? Even oxen aren't that dumb. And what about churches and various charities, which do important work and are already hurting in this economy? Obama would put more hurt on them in order to shovel more money into his profligate spending.

It is sheer madness. I really thought Obama was smart enough to do no-brainer things like substantial infrastructure investment and backing off on taxes and leftist wish lists in order to help the economy. Instead, Obama is a walking economic disaster.

God have mercy on us.

Government Is Stopping Formation of New Banks

In this difficult economy when capital is tight, one would think the government would welcome the formation of new banks to provide more capital.

One would be wrong.

Over at RealMoney, a paid site that I can recommend to investors over at TheStreet.com, David Dvorchak posted the following:

I met a couple weeks ago with a good friend who has been in the process of starting a new bank over the last year. This is a community bank in Tennessee. Everything is ready to go-- investors lined up, senior staff, etc. Yet he is dead in the water, because the state hasn't awarded the charter yet. The state officials freely admit to him they don't have the time, because their staff is overloaded with the shutdowns they are processing.

His situation may or may not be widely prevalent, but it does illustrate an ironic problem. Much needed capital formation in the banking system is being blocked by bureaucratic sluggishness. Shutdowns must be processed, of course, but in this situation shouldn't new bank formations be the highest priority?

The answer, of course, is “YES!”

But later came this tidbit from Geoff Johnson:

Gary Dvorchak notes earlier today that the state of Tennessee is effectively blocking bank start ups due to lack of time to address their applications. Unfortunately, even if the entrepreneurs get past the Tennessee red tape, they are very likely to get blocked by Sheila Bair and the FDIC.

I've been sitting on a copy of the January 12 American Banker for weeks with a post half-tapped out on just this matter. In that issue is a front-page article noting how the FDIC officially has an unofficial policy of not approving new bank start ups for deposit insurance. Featured in the article was a group in Atlanta that spent $2M trying to launch their bank and already had approval by the Office of Thrift Supervision, but was shut down by the FDIC. I've been saving the article because I find it frustrating that the government is making a point of keeping fresh capital from entering the bank market.

So the powers that be that should be encouraging new banks and the capital they would provide are blocking their formation. Instead, taxpayers are forced to shovel out more capital into rat holes. Because Government knows best, after all.

More economic stupidity brilliancy in the Age of Obama.

Just Exactly What Will the Stimulus Package Stimulate?

When the idea of an Obama economic stimulus package was first being floated, I actually thought it a good idea. Word was there would be a lot of infrastructure spending, and I especially liked that. Our nation’s infrastructure could use some shoring up, and accelerating that in order to help the economy kills two birds with one stone. That would be both smart policy and smart politics.

But now it appears only a relatively small slice of the package will go to infrastructure. Instead hundreds of billions will go to liberal wishlists that have darn little to do with the economy.

I love how House Republican Leader John Boehner summed it up this morning:

How do you spend hundreds of millions of dollars on contraceptives, how does that stimulate the economy?

And the same could be said, in less colorful language, about increased funding for the arts, for public television, for various welfare programs, for “health”, for “education” (as if the huge increase in federal spending for education in recent decades has done any good).

Others who once were well-disposed toward a stimulus package, such as David Brooks and some Democrats, also don’t like what is emerging.

Really, if one were cynical, one would think liberals are just using the economic crisis as a pretense to get a lot of money thrown at their favorite pet causes. . . .

Yes. I am cynical.

As for Obama, he has the political capital to put a stop to this and get an adult, responsible package passed. Let’s hope he will.

“Hope.” Yeah.

MORE: Remember all that talk from Obama about a “new politics” beyond partisanship, etc. etc.? It was just talk:

During a morning meeting with congressional leaders from both parties, President Obama acknowledged the philosophical differences between his stimulus package and the Republican plan – but, sources familiar with the conversation said, Obama then noted: “I won.”…

Scumbag Price Gougers Ticketmaster Earnings Down

There is a bright side to the current economic difficulties. Ticketmaster’s earnings are down.

Now if only those price gougers would go out of business.