Daily Archives: September 28, 2011
Today’s economic statistical releases:
Last week, mortgage rates dropped, and the Fed announced a switch to longer term treasuries. This sparked a rush of refinancing, as well as new mortgage applications. The Mortgage Bankers Association reports that mortgage applications rose by 9.3%, led by a 11.2% rise in re-fis, and a 2.1% increase in purchases.
Durable goods order fell –0.1% last month, both overall and ex-transportation, though they were still 12.3% higher than last year.
How many times have we said the government shouldn’t be involved economically in picking winners and losers? And how many times have we seen examples of the government doing precisely that and the program ending up a disaster.
Solyndra, for instance. But political agendas rarely yield to the laws of economics so it is fairly easy to predict how they’ll end. The Obama administration’s “green jobs” agenda – again see Solyndra for the latest prime example – is a consummate failure. And a look at where that agenda is headed serves as an example of why what has been said right here (and many other places) continues to be true.
But in case you’ve missed it or are inclined to wave off what we might say here, here’s a guy from CATO:
Jerry Taylor, senior policy analyst for the free-market Cato Institute, says the whole program shows that the federal government should not be picking private-sector winners and losers.
"It’s a lot of money for very few jobs if you do the math," Taylor said. "If nobody in the private sector is willing to invest their capital, that’s a pretty good signal."
What is he talking about? Take a look at the chart.
Yes, those are Department of Energy numbers for the number of jobs that will be created for $6.5 billion in loan guarantees for the 9 companies in question. That’s right, $6.5 billion in guarantees will create 283 permanent jobs. That’s $23 million of your dollars (or borrowed money) per job.
Where’s the private investment? Why are these companies having to seek federal loan guarantees so they can get loans? If they’re viable, as Jerry Taylor points out, the private sector should be willing to invest in them.
Why aren’t they?
In fact, why, given that it appears the private sector is not willing to do so, is the DoE even considering these loans?
Because there’s an agenda at stake here. This isn’t about market viability or sound economics, it’s about trying to save an agenda that promised 5 million green jobs, remember.
And this is what you get. A failed Solyndra and 9 companies the private sector won’t invest in which may create 283 jobs. May. Government estimates about programs it supports have never been known to be overly optimistic, have they?
$23 million a pop for 283 jobs that may or may not materialize.
The fact that they’re even considering these loan guarantees tells you all you really need to know about how clueless they are.
And there are people that still wonder why there is a growing body of us out here wanting smaller, less costly and less intrusive government that binds itself to the limits of the Constitution?
One of the enduring truths about national political elections in the US is you can’t win with just the support of your party base. There just aren’t enough of them. Roughly 30% on the left consider themselves to be Democrats and about the same on the right call themselves Republicans. Even if a candidate got every vote, he or she is going to be shy of the majority needed to win the office. So another enduring truth is you must win the independent vote – that big, supposedly moderate 40% in the middle – to win an election. That’s why you hear people talk about politicians “running to the middle”.
So when you’re looking at a presidential race or polling, the most interesting demographic are the “independents”, because where ever they’re going or whatever they’re saying is likely to determine the election.
Since early last year, that demographic has been increasingly deserting the Democrats in general and Barack Obama specifically. To put it succinctly, they’re not at all happy with the condition of the country, it’s direction or his policies even while many of them find Obama to still be likeable.
In 2008, Obama carried independents by a decisive 52% to 44% margin and took 30 states. In 2004, John Kerry narrowly won independents over George Bush 49% to 48%, reversing Bush’s 47% to 45% win against Al Gore in 2000.
In only nine of the last 32 months has the IBD/TIPP Presidential Leadership index been above 50, and the positive months were all in 2009. Since January 2010, the index has stayed in the negative territory (below 50). The averages were 57.5, 44.2 and 44.6 for 2009, 2010 and 2011, respectively.
Independents also believe the country is headed in the wrong direction. Only 19% of them are satisfied with America’s direction and 80% are not satisfied.
But will likeable be enough in 2012? Not likely.
An overwhelming share of independents (74%) like Obama personally, and 59% believe he has the vision to be president. A similar share (58%) also believe the president cares about the needs of people like them, and 59% think he’s worked hard to bring about change compared with 40% who say that he has mostly talked about it.
On the other hand, 62% disapprove of his policies, and by 63% to 35% they think he lacks the experience to be an effective president. A majority of independents (51%) do not believe that he is someone they would be proud to have as president; only 42% would be proud.
Reality is a stark reminder that performance, not rhetoric is what counts. And likeability will only carry you so far. Good intentions are laudable but only if they lead to solid results. Also of note is most people are willing to give a politician a chance to accomplish things and are even appreciative of hard work and that the politician “cares”. But the bottom line is that only results get someone re-elected. To this point, Obama simply hasn’t provided those. Independents may like him for the most part, but his job performance has not impressed the majority:
Only 15% give Obama an A or B for his handling of the economy, 16% give him good grades for managing the federal budget, and just 12% see him favorably for creating jobs and economic growth.
These low grades more than cancel out Obama’s non-economic successes, including the killing of Osama bin Laden. Nearly eight in 10 (79%) independents say his handling of the economy weighs more in their minds than getting the al-Qaida leader and mastermind of 9/11 (11%).
Funny and ironic … in his run for the presidency, his lack of a resume was probably his biggest strength. What was to criticize? What was there to assess? He sounded great.
Now, on the other side of winning the presidency, he has to finally run on his record. And, given this poll’s results, it isn’t a good one.