On Friday, the Bureau of Labor Statistics released the November jobs data. Holiday cooking isn't the only cooking that is going on, as the books are continued to be cooked when it comes to job data. The sycophants in the mainstream media touted the 146,000 jobs added in November, and the drop in the 'official' unemployment rate to 7.7% as signs that the economic recovery is real. ABC Radio News led the announcement with - 'Despite Hurricane Sandy's impact, the economy added nearly 150,000 jobs and the unemployment rate dropped to 7.7%....'
The LA Slimes leaps to tout the numbers with this example of rhetorical gymnastics...
"The nation's employers added an unexpectedly large but still moderate 146,000 jobs in November, despite the disruptions caused by severe storms in October."
Unexpectedly large, but still moderate. Sounds so much like 'Fake, but accurate'.
What wasn't mentioned in the mainstream media's 'celebrations' of the November jobs report was that the 146,000 jobs added (after seasonal adjustment) barely covers our population growth. On top of that, the only reason the 'official' unemployment rates dropped were because BLS decided to drop 546,000 from the labor pool - bringing the labor participation rate to 63.6%. This is just 0.1% higher than the 2012 low - and represents a 30 year low in the labor participation rate - and well below the rate that existed in January 2009 when Barack Obama took office. If we were using the same labor participation rate as in January 2009, we would be looking at a 11% 'official' unemployment rate.
Even more quietly announced than the over half a million Americans dropped from the labor pool were the downward revisions of the September and October job creation numbers. The BLS dropped the October numbers by 20% (33,000 fewer jobs) and the September numbers by 11% (16,000 fewer jobs). How convenient that after the Presidential election we find out that Barack Obama's economy created nearly 50,000 fewer jobs than they took credit for.
CNBC's Rick Santelli took to the airwaves to also highlight another critical fact that is buried within the BLS numbers - that 73% of ALL THE NEW JOBS CREATED IN THE LAST 5 MONTHS are in GOVERNMENT....
"They love to lie about statistics...."
Even a former Obama Economics Adviser is starting to highlight the obvious - that the decline in the unemployment rate is due entirely to the drop in labor force participation...
In another example of a stagnating economy, Gallup is reporting that small business hiring, the fuel for the economic engine, has fallen to a FOUR year low. This is the lowest level of small business hiring since November 2008 - in the midst of the 2008-2009 recession. Adding to the grim picture are 21% of the country's small business owners who expect to decrease the number of jobs they have in 2013.
Not only is government hiring providing the only 'spark' on the job creation front, the spending of the federal government has also increased. We're only 2 months in the 2013 Fiscal Year for the Federal Government, but the Obama Administration has already borrowed $292 billion in order to fund the massive expansion of government. This puts us well on the path towards our 5th consecutive year with an annual budget deficit in excess of $1 trillion. We're borrowing $4.8 billion every day - a spending level equal to that of 2009 - and on path for a $1.4 - $1.5 trillion deficit that is well above the $1.1 trillion deficit the Obama Administration projected for 2013.
One of the biggest impacts on the massive spending is the ongoing unprecedented expansion of the federal welfare sate.
"The amount of money spent on welfare programs equals, when converted to cash payments, about "$168 per day for every household in poverty", the minority side of the Senate Budget Committee finds."
In the QH for Dec. 6th, I talked about the entitlement 'iceberg' that we are steaming full speed towards - a crash that makes the 'Fiscal Cliff' 22 days off seem far smaller...
These entitlements focus primarily on the three major drivers - Social Security, Medicare, and Medicaid....but welfare spending is slated to soar under the Obama Economic Plan...
Much of my previous QH post focused on the fact that we do not have a revenue issue - but a spending issue that is one of the most key drivers towards the 'cliffs' that this country faces. In my discussion around the Obama solution to the January 2013 Fiscal Cliff, I talk about the President's core beliefs and principles which are in plain view in his 'solution'. I reference his background as a disciple of Saul Alinksy - and how he's fully implementing the Alinsky plan in his 'solution'. Another blogger has picked up on this linkage...
When one strictly adheres to the principles of Saul Alinsky, you don't negotiate, you intimidate. You don't take a stand, but make the other guy take a stand and then you demonize it. You create so much static with class warfare rhetoric that it drowns out reason and fact. A good case in point is the President's insistence that the wealthy do not pay their fair share. He has been saying this for so long, it is almost an accepted fact by some. The real truth is that the top one percent of wage earners have gone from paying 20% of the total tax burden in the 1980s to 40% today. The percentage of the total income they earn is around 25%. If one extrapolates out the tax burden to include the top 10% of wage earners, the total share of the tax burden paid by that group is 70%. Their total percentage of the income earned is around 38%. These facts come straight from current IRS data. No fair-minded person could conclude from the empirical evidence laid out in the previous paragraph, that the wealthy in this country are not paying their fair share. And yet, the President spews out this categorically false narrative and a certain percentage of the population laps it up like kittens lapping milk from a bowl. This is also what followers of Saul Alinsky practice, repeat a lie often enough and it becomes the truth in the minds of the masses.
Columnist Charles Krauthammer's December 7th column hammers the President's 'plan' -
Obama has never shown interest in genuine debt reduction. He does nothing for two years, then spends the next two ignoring his own debt-reduction commission.Obama sees the cliff - as an opportunity, not a problem. An opportunity for to 'fundamentally change' the country.
In less than four years, he has increased U.S. public debt by a staggering 83%. As a percentage of GDP, the real marker of national solvency, it has spiked from 45% to 70%.
Obama has never once publicly suggested a structural cut in entitlements. On the contrary, he created an entirely new entitlement — ObamaCare — that, according to the CBO, will increase spending by $1.7 trillion.
What's he thinking? Doesn't Obama see looming ahead the real economic cliff — a European-like collapse under the burden of unsustainable debt?
A close examination of the Obama 'solution' highlights that not only will this 'solution' expand government spending via a new 'stimulus' program, but it also fails to highlight just where all of the $1.6 trillion in new tax revenue will come from. As noted before on these pages, taxing the 'wealthy' their 'fair share' will only generate about $400 billion (best case) in new revenues.
Even the New York Times is starting to wonder where the additional $1.2 trillion in tax revenues will come from...
Even if Republicans were to agree to Mr. Obama’s core demand — that the top marginal income rates return to the Clinton-era levels of 36 percent and 39.6 percent after Dec. 31, rather than stay at the Bush-era rates of 33 percent and 35 percent — the additional revenue would be only about a quarter of the $1.6 trillion that Mr. Obama wants to collect over 10 years.So where will the other 75% of the additional tax revenues come from? The President has not explained that. He, and his Congressional allies, are unwilling to say. They don't support reforming the tax code - that is one of the core GOP positions. Just about the only place these additional funds can come from is from EVERYONE else - the Middle class and the Poor.
Which makes me also wonder why people aren't finally starting to pick up on another massive canard spread by Barack Obama and his sycophants - that the Bush 'tax cuts' "only benefited the rich".
We've been told this for the last 4 years - that the Bush tax cuts only benefited the rich.
Just how does a 10% across the board tax reduction for every tax payer only benefit the rich? Every single person who pays personal income taxes got the same 10% reduction in 2001 / 2003. And if the 10% across the board tax reduction done in 2001 / 2003 only benefited the rich - why did their percentage of the federal income tax receipts increase after the rates were dropped? Isn't paying a greater percentage of the federal income tax receipts right in line with 'paying their fair share'?
No wonder the media isn't talking about this. The President and his supporters have been trapped by their own rhetoric in their argument over the solution for the 'fiscal cliff' - and are exposed as hypocrites.
Barack Obama, Harry Reid, Nancy Pelosi, Chuck Schumer, and Dick Durbin are out speaking to whomever who will listen that the GOP's refusal to surrender to Obama's 'solution' is going to hike taxes on the middle class when the 10% across the board tax reduction enacted during the Bush Administration, and extended by the Obama Administration in 2010 expires.
But if it didn't benefit the Middle Class - then how are the Middle Class going to be damaged by its expiration? And if the Middle Class will be damaged by the expiration of the 2001 / 2003 tax rates - then how does the establishment of those rates only benefit the 'rich'?
The Obama Administration is not serious in wishing to address either the January 2013 'fiscal cliff' - or the other cliffs that we face as a result of our soaring spending and national debt. Unfortunately, neither are the GOP leadership under Speaker John Boehner who don't want to stop the bleeding - just slow it down a bit.
In another step that will screw over the American people, in particular the middle class and poor, the Administration is considering in maintaining the current withholding tables in the event no deal is reached and personal income taxes increase across the board by 10% on January 2, 2013. The 'justification' for this decision is to prevent people from seeing the impact of the tax increase in their paychecks. The problem is that this only masks the effect via withholding. When taxpayers sit down in early 2014 to prepare their 2013 Income Tax Returns - they are going to see the impact of the Administration's shell game when they have to write checks to the IRS to cover the difference between their tax obligations and the amounts withheld by the IRS.
Keeping on the subject of the 'Big Lies' advocated by the Obama Administration and their sycophants and economics, we have one of MSNBC's most moronic hosts, Lawrence O'Donnell, trying to advocate the 'Big Lie' around the canard that the Clinton 1993 tax increase sparked the 1995-2000 economic boom while appearing on NBC's 'Meet the Press'.
Unfortunately for the clueless O'Donnell, Newt Gingrich was also on the program. The former Speaker then schooled O'Donnell in the simple truth of the matter - that it was the balanced budget / spending controls plus a drop in the capital gains tax rate pushed by the GOP Congressional Majority and signed onto by President Clinton, combined with the Internet bubble, that sparked the economic growth - not higher tax rates.
In fact, the Gross Domestic Product shrank in the first year after the Clinton tax hikes to an annual rate of 2.9 percent down from 1992's 3.4 percent.Also not referenced - federal government revenues post the 2001 / 2003 'Bush Tax Cuts' were greater than than the revenues the federal government received during the higher Clinton tax rates. FY2007 set a record for federal revenues at $2.7 trillion.
That's right: the economy as measured by GDP was better the year before Clinton took office and raised taxes than it was the year after.
By far the best years under Clinton came after the Republican tax cuts when the GDP grew annually by 4.5 percent, 4.4 percent, 4.8 percent, and 4.1 percent from 1997 to 2000.
The best job creation also occurred after the Republicans took over Congress with less than seven million new jobs created in 1993 and 1994 compared to over sixteen million in the next six years.
As for the fiscal impact of the Clinton tax hikes, the left always ignores that we ran budget deficits in his first term. It was only after the Republican tax cuts that surpluses occurred.
Which reminds me - the President also still hasn't told us how he intends to average $4.7 trillion in federal government revenues over the next decade in order to limit the growth in the national debt to just under $7 trillion. We hit our record revenues 5 years ago - and just how the hell are we to exceed that record by $2 trillion per year when we have sub-2% annual GDP growth and a real unemployment rate of over 11%?
Remember reading all those progressive newspapers touting the end of California's fiscal crisis with the passage of Proposition 30 - hiking the state sales tax by .5% and raising the top state income tax rate to 13.3%? Well, reports of the end of the fiscal crisis are, unsurprisingly very premature. State tax revenues are in freefall - running 10.8% below the November budget predictions and spurring concerns that California is going to learn the same lesson the French, British, New Yorkers, Marylanders, and others who punitively hiked taxes on the wealthy - that the wealthy taxpayers will leave in order to avoid the punitive tax.
Gas prices are dropping across the country - down an average of 46 cents per gallon in just the last two months. Fueling the price drop is substantially lower demand for gasoline - on par with the level of demand we saw in the winter of 2001. This is an untimely blow for MSNBC loon Chris Hayes, last seen denigrating the American service members, who believes that energy prices are far too low. Hayes wants the President to substantially hike gas prices so that renewable (green energy) alternatives become immediately economically viable despite the negative impacts such a move would have on the economy and in particular the poor and middle class.
Speaking of the government picking winners and losers in green energy, A123 Systems, a battery manufacturer for electric cars which received over $500 million in government grants and tax subsidies before filing for Chapter 11 bankruptcy, was sold to a Chinese company today for about $247 million.
In another example of government incompetence, we have the School Board for Poway, California who will pay $1 billion in order to retire their $100 million bond...
These bonds in question are known as Capital Appreciation Bonds (CABs), and they are unlike typical bonds because they allow "districts to defer payments well into the future — by which time lots of interest has accrued."As the article notes - this is not an isolated example of fiscal irresponsibility inside California.
California's State Treasurer Bill Lockyer has determined that nearly 200 school districts in the state have borrowed nearly $3 billion in CABs and are on the hook for a combined $16 billion.
According to NPR, Lockyer said such bonds are the “the school district equivalent of a payday loan or a balloon payment” where “you have a spike in interest rates that's extraordinary."
Lockyer is "poring through" a database to determine which districts are at most risk but has come to the conclusion that most of these bonds cannot even be refinanced. One such district is West West Contra School District, which is just outside of San Francisco. In 2010, the district took a $2.5 million bond in order to get $25 million to build an elementary school, which seemed like a net gain of $22.5 million for the district at the time.
Not so fast.
That $2.5 million bond will ultimately cost the district a whopping $34 million to pay over its term.
California is not, despite the massive need to, invoke similar reforms to those done in 2010 by Wisconsin to reduce the power and control of unions. However, Michigan's legislature is enacting legislation to make the state the next 'Right to Work' state. Unions in the state are promising massive disruptions, protests, and political turmoil if the Governor moves forward and signs the legislation into law. They are pointing to the discord and division they promoted in 2010-2012 in Wisconsin and insisting they will do the same in Michigan. OK - as I am sure that those in Michigan are also hoping that the what happened in Wisconsin, economically, also happens in Michigan - a major fiscal turnaround.
We'll wrap this weekend's edition of QH with Bill Whittle's latest 'Afterburner' edition - Unserious People...