Free Markets, Free People

Jim Geraghty


Supercommittee failure

Question: is anyone – and I mean anyone – somehow surprised that the Supercommittee failed?

Seriously?  Is there anyone who actually thought that this collection of ideologically loyal representatives handpicked by leaders on each side was ever going to compromise and try to work something out?

I’m not suggesting that compromise was the right or best thing to do – I’m simply asking a question about the make up of the committee and how anyone who knows anything about how Washington DC works could have or would have expected success.

And, as Michael said in the podcast, there was no incentive for them to succeed.  There was every incentive to do exactly what happened, fail to reach any sort of consensus.

So, as Jim Geraghty quips in today’s Morning Jolt, they now get back to what they do best:

After the Supercommittee, Congress returns to its core competency: finger-pointing

And we will certainly see much of that in the next few weeks.  Already some in the media are trying to spin it a certain way.

The imminent failure of the congressional deficit “supercommittee,” which had a chance to settle the nation’s tax policy for the next decade, would thrust the much-contested Bush tax cuts into the forefront of next year’s presidential campaign.

Why do I consider that “spin”?  Because the “much-contested Bush tax cuts” are simply the current tax rate, nothing more.   Tax rates have changed over the many years of income taxation and never has one rate, which has been in effect for years, been referred too as a “tax cut”.  They certainly didn’t refer to tax increases under Bill Clinton as the “much-contested Clinton tax increases” did they?

No, they were simply the new tax rates.

So as with many things, the media has bought into the description that one side has put out there to keep attention focused in a negative way on the so-called “rich”. Rarely do they point out the amount of the total taxes these “rich” pay when they parrot the politicians call for the rich to pay their “fair share”.  Nor do they bother to point out that even if the “rich” pay 100% of their earnings in taxes it won’t solve the deficit problem.

Presented as the unchallenged panacea to all that is wrong is this tax increase.

Note what isn’t mentioned.  Spending.  In fact, we’ve quietly slipped past $15 trillion cumulative national debt in the last week.  That means that in less than a year, another trillion in spending borrowed money has occurred.  We’ve now managed to run up a debt equal to 100% of our nation’s GDP.

That should be what we’re talking about in the 2012 presidential campaign.  How we managed in 3 short years to push the debt from $9 trillion to $15 trillion.  It certainly wasn’t the “rich” who did that, nor would increasing taxes on them have stopped it.

While at some point revenue increases may end up being something the Congress will discuss, the problem to this point remains the fact that Congress has done absolutely nothing to stem the red ink that keeps running our national debt through the roof.

And the sequestration cuts supposedly triggered by the failure of the Supercommittee take place when?  2013 of course.  After the election and when a new Congress, which can’t be held to the cuts made by a former Congress, comes into existence.

In reality, this is nothing more than a new fangled way for our politicians to kick the can down the road while they squabble about something which really has no bearing and would have little effect on the primary problem: out-of-control spending.

~McQ

Twitter: @McQandO


Debt limit talks — DC Math and political theater mask the lack of seriousness concerning out-of-control spending

Speaker of the House Boehner’s plan for deficit and debt reduction was shown to be an exercise in “DC Math”.   The CBO scored the proposal and determined that the 1.2 trillion “savings” over 10 years actually cut only $1 billion in actual spending next year.

The first installment of $900 billion is contingent on enacting 10 year caps on annual appropriations which the leadership had hoped would save well over $1 trillion. But CBO late Tuesday came back with a report showing the legislation would reduce deficits by $850 billion when measured against the agency’s most current projections for spending.

Yeah, I think we want significantly deeper cuts in spending than that.  And of course, keep in mind most Democrats were even opposed to that.

But at least Boehner actually had a plan CBO could score.  From Jim Geraghty’s  “Morning Jolt” we learn of this conversation in the White House press room (Weekly Standard):

[Chuck] Todd asked Carney about the White House’s reluctance to release its plan to deal with the national debt and raising the debt ceiling. Carney acknowledged the White House was playing games. "We’re showing a lot of leg," he said. When Todd pressed for details — "Why not just release it?" — Carney seemed surprised. "You need it written down?"

What a difference two years makes. In the spring of 2009, with Republicans in the minority in the House of Representatives, the White House and its Democratic allies were demanding specifics. The House GOP had to produce an alternative budget, the White House demanded, in order to show that they were serious about governing.

Geraghty also points to a wonderful rant by Guy Benson over at Townhall concerning the demand for an actual plan:

Yes, actually, we do need "something printed." Since his unmitigated failure of a budget was unanimously defeated in the Senate, this president has refused to offer a specific plan of his own on virtually anything at all. Instead, he talks about "visions" and "contours" and "frameworks" — and tries to blame his opponents when his poor leadership is exposed. Over the last five days, the president has (a)undermined a bargain with John Boehner by introducing an unacceptable eleventh-hour condition, (b) rejected "out of hand" a bipartisan compromise that he found to be politically unpalatable, and (c) delivered a speech that painted his opponents as the intractable extremists. In light of this behavior, it’s entirely reasonable for Americans to wonder what, precisely, Barack Obama’s proposed solution might be. Today, the White House dismissively waived off that question as a GOP talking point and condescendingly inquired if the journalist who dared to ask it was capable of taking notes.

I’ll close with an unsolicited word of advice, and a friendly reminder from the CBO director. The advice: When you’re already plumbing new depths of unpopularity, dialing up your arrogance isn’t a winning strategy. Even David Brooks finds it unseemly.

By the way, Harry Reid’s plan is purported to show about $2 trillion plus in savings by assuming the wars we’re involved in will cost hundreds of billions a year for 10 years, knowing full well that those wars are wrapping up and wrapping up soon (well except for Libya which seems to have shifted from “weeks not months” to “months not years” at this point).

In other words the usual nonsense from Washington DC.  Math tricks which say to anyone who is on to them, “these guys aren’t serious”.

~McQ

Twitter: @McQandO


Quote of the day–just not true edition

In a townhall meeting, President Obama was confronted with a situation by a former federal worker.  I won’t say she was confronting him per se, but she was laying out a less than happy result, for her and her family, of the economic downturn and asking, rhetorically what the President would advise her to do:

Karin Gallo, who jokingly described her job at the National Zoo as "non-essential employee number seven," said she had taken a job in government "thinking it was a secure job" – but that now, she feared for her family’s future.

"I am seven months pregnant in a high-risk pregnancy, my first pregnancy," Gallo told Mr. Obama. "My husband and I are in the middle of building a house. We’re not sure if we’re gonna be completely approved. I’m not exactly in a position to waltz right in and do great on interviews, based on my timing with the birth."

"And so, I’m stressed, I’m worried," she continued. "I’m scared about what my future holds. I definitely need a job. And, I just wonder what would you do, if you were me?"

Obama essentially ignored the personal “what should I do” part of the question to spin an answer that Jim Geraghty at NRO calls “epically wrong”.

The reason for the spin is obvious – it’s a way to throw a scare into the voting population by pretending two things that haven’t happened are happening.  And here is the “epically wrong” quote:

"The reason the unemployment rate is still as high as it is, in part, is because there have been huge layoffs of government workers at the federal level, at the state level, at the local level," he said. "Teachers, police officers, firefighters, social workers– they have really taken it in the chin over the last several months. And so, what we’re trying to do is to see if we can stabilize the budget."

"I do want to make a larger point to people, though, that folks like Karin provide vital services," Mr. Obama continued. "And so, when we have discussions about how to cut our debt and our deficit in an intelligent way, we have to make sure that we understand this is not just a matter of numbers – these are people."

Well of course they’re people.  So are the 6+ million or so not working in the private sector right now.  But let’s get to the numbers shall we? Geraghty provides them:

First, let’s look at the numbers for private-sector employment. All figures come from the U.S. Department of Labor’s Bureau of Labor Statistics:

Recent peak of private-sector employment, June 2007: 116,603,000.

Total private-sector employment in the month Obama became president, January 2009: 109,084,000.

Recent low of private-sector employment, January 2010: 104,933,000.

Total private-sector employment, April 2011: 108,494,000 (Seasonally adjusted: 108,862,000).

So note, we are about 8 million away from the most recent peak in private-sector employment.

Now, let’s look at total government employment (at all levels) for those four months:

June 2007: 22,176,000.

January 2009: 22,471,000.

January 2010: 22,376,000.

April 2011: 22,594,000 (preliminary).

As you can see, in terms of total number of Americans employed in government, there has been no real discernible recession. In fact, the number has increased slightly.

Now let’s look at the number of people employed in state government during these months:

June 2007: 4,918,000.

January 2009: 5,116,000.

January 2010: 5,053,000.

April 2011: 5,253,000 (preliminary).

Again, not only pretty stable, but slowly climbing.

Now let’s look at employment in local government:

June 2007: 14,514,000.

January 2009: 14,583,000.

January 2010: 14,478,000.

April 2011:  14,492,000 (preliminary).

Geraghty updates his numbers when a commenter points out he used seasonally adjusted numbers in one place but not another.  It still doesn’t really change the picture or the point that Obama’s just wrong about this:

In the comments, Reno Dave notes that in one case I used seasonally-adjusted numbers instead of non-seasonally adjusted numbers. I have added the non-seasonally-adjusted number for consistency. He notes that using the seasonally adjusted numbers, the total government workforce has varied slightly differently in the selected months:

June 2007: 22,218,000.

January 2009: 22,582,000.

January 2010: 22,488,000.

April 2011: 22,166,000 (preliminary).

You end up with 300,000 or so fewer government workers in the past 16 months. (Notice that the Census hiring effects these numbers a bit; the number of Census employees went from 24,000 in January 2010 to 564,000 in May 2010 all the way down to 1,000 in October 2010. More details here.)

The fact is there has been no significant drop in government employment at all in the past 5 years – none. And of course, who did Obama cite as being the first out the door of these mythical “huge” layoffs? Why "teachers, police officers, firefighters, social workers", of course.

Bullsquat.

Where did Karin Gallo work?

"My main message to you is that the work you’ve done at the National Zoo’s important," he said. "Every child that you see who comes by and is amazed by those animals, you know, they’re benefiting from your work."

Really?  So does that make her a “teacher”?  This is the “vital work” Obama was trying to tout earlier?

No offense to Ms. Gallo, and my sympathies to her and her family about her loss of employment – honestly. (Remember that almost $900 billion “stimulus” the prez said would keep unemployment under 8%, Ms. Gallo?)  But you know, I went through the same thing last October.  I survived and am beginning to thrive.  I didn’t even apply to unemployment, although I was eligible. 

What Mr. Obama should have said was, “this is a great land and I’m sure you have many talents.  Why not look around, assess your strengths and weaknesses and then consider starting a business of your own?”

Instead he tries to sell big government as a huge necessity in which government employed zoo workers do “vital work”.

Yeesh.

~McQ

Twitter: @McQandO

michael kors outlet michael kors handbags outlet michael kors factory outlet