When you accuse someone of stupidity, it’s probably wise to avoid saying something stupid yourself while doing so. Sadly, E.J. Dionne fails to avoid that trap.
Our discussion of the economic stimulus is another symptom of political irrationality. It’s entirely true that the $787 billion recovery package passed last year was not big enough to keep unemployment from rising to over 9 percent.
But this is not actually an argument against the stimulus. On the contrary, studies showing that the stimulus created or saved up to 3 million jobs are very hard to refute. It’s much easier to pretend that all this money was wasted, although the evidence is overwhelming that we should have stimulated more.
Very hard to refute? That’s nonsense on stilts. Mr. Dionne may be so smart that rays of light emanate from his brow, but the paragraph above is an extraordinarily foolish position.
First, any statement of any jobs “created or saved” requires that we perform the impossible task of modeling how the economy would have performed in an alternate universe where a different policy mix was applied. We literally have no idea–nor any way to construct a testable hypothesis–that models how the economy would have reacted in the absence of the stimulus. Even the Congressional Budget Office, while rather supinely delivering a report that ostensibly supported the administrations claims about job creation, was careful to note:
…it is impossible to determine how many of the reported jobs would have existed in the absence of the stimulus package.
Second, the methodology was extremely suspect. In making its predictions of post-stimulus recovery, the administration simply plugged in an assumption about the multiplier effect of government spending. They assumed that X amount in spending would result in Y% increase in aggregate demand, resulting in Z jobs. What the CBO did in checking up on that prediction, was to plug essentially the same assumptions into their model, which, unsurprisingly, “confirmed” the predictions. Even the CBO seemed a bit embarrassed about that.
But the CBO, to its credit, has been fairly forthcoming about its methods and their limitations. In response to a question at a speech earlier this month, CBO director Doug Elmendorf laid out the CBO’s methodology pretty clearly, describing the his office’s frequent, legally-required stimulus reports as “repeating the same exercises we [aleady] did rather than an independent check on it.” CBO tweaks its models on the input side, he says—adjusting, for example, how much money the government has spent. But the results the CBO reports—like the job creation figures—are simply a function of the inputs it records, not real-world counts.
Following up, the questioner asks for clarification: “If the stimulus bill did not do what it was originally forecast to do, then that would not have been detected by the subsequent analysis, right?” Elmendorf’s response? “That’s right. That’s right.”
In other words, the CBO’s regular, legally-mandated reports, are estimates based on an economic model that doesn’t actually take inputs from the real world. They simply take the same estimates the administration used to create their predictions, then apply them to the monthly spending report, coming up with a number of jobs “created or saved” that is, unspurprisingly, exactly what the administration predicted.
Please note: this has no actual relationship to the number of real-world jobs that exist. The only thing the CBO reports prove–by its own admission–is that it is possible to replicate the administration’s predictions by duplicating the assumptions.
So, not only is it untrue, as Mr Dionne asserts, that “studies showing that the stimulus created or saved up to 3 million jobs are very hard to refute,” the CBO director explicitly refutes that notion by agreeing that “[i]f the stimulus bill did not do what it was originally forecast to do, then that would not have been detected by the subsequent analysis.”
But, let us say, arguendo, that Mr. Dionne is right, and the $787 billion did, in fact, create 3 million new jobs. The price tag then, comes to $262,333.33 for each job created. That seems like a relatively steep price.
Happily, we know more or less precisely how many people are employed in the country, and how the size of the labor force has changed. We know this, because the Bureau of Labor Statistics releases those figures on a monthly basis, and they are publicly available at the BLS web site. If we assume March 2009 to be the first month of the stimulus, we see that there were a total of 140,854,000 Americans over the age of 16 employed, including farm employment. As of Jun, 2010, there were 139,119,000 Americans working. That tells me that there are 1,735,000 fewer Americans working today, than there were when the stimulus was passed. If we exclude agriculture, and look at only non-farm payrolls, we see that there were 132,070,000 people employed in March, 2009, vice 130,470,00 in June, 2010. Again, that’s a net loss of 1,600,000 payroll jobs.
I’m not seeing any net job creation there.
In at least one sense, though, Mr. Dionne is quite right. Since the administration’s claims of 3 million jobs “created or saved” is empirically disprovable, they can tout them as much as they’d like, even in the face of 1.6 million jobs actually disappearing under the stimulus. After all, they can always say, “There would have been 3 million fewer jobs if we hadn’t acted. And if you don’t believe me, prove me wrong!” It is, after all, so comforting to be able to take refuge in an unfalsifiable hypothesis.
The situation in California is critical with government there facing a 19 billion dollar shortfall and the budget yet to be passed. It pits an admittedly "moderate" Republican governor against a Democratically dominated legislature and their differences on how to close that huge budgetary hole.
The lack of a budget is forcing furloughs and the possibility of the state again issuing IOUs instead of payments to vendors, etc.
Until the governor and legislature negotiate that budget, not much will change. And the fight is classic:
Schwarzenegger has proposed slashing spending to balance the state’s books, an approach rejected by Democratic lawmakers. Their leaders in the state Senate and Assembly are trying to draft a joint plan likely to include proposals for tax increases to rival the governor’s budget plan.
There it is. Where the governor sees government as having to yeild and reduce itself, the legislature views government – at the size and scope it now occupies – to be a nonnegotiable necessity and entitled to more taxpayer cash to preserve it as is.
Funny that the "conservative" position in this fight – i.e. the attempt to maintain the status quo – is that of the "progressive" party in California.
However, the cut spending/more taxes fight is, in a nutshell, the difference between the two parties right now. I used to say there isn’t a dime’s worth of difference between the two (and on many issues that’s still true) but in terms of how to balance a budget, the “reduce government/ reduce spending” approach seems to now be solely owned by the GOP.
Whether or not they’ll actually do that should they again find themselves in the position of power to do so is obviously another question entirely.
In the case of the Democratic party – they’re now a wholly owned subsidiary of government unions, and their pandering to these unions is both short-sighted and destructive. The party that used to be able to claim the mantle of the working man’s party is now almost exclusively the government union worker’s party. And of course that means keeping government large and well funded.
It’s going to be interesting to see how this fight comes out – but even with Schwarzenegger representing the GOP side of things, it is clear which side is the taxpayer’s friend.
Democrats and President Obama have been talking the talk about deficit reduction – yesirree. Why to hear them talk about what has to be done, you’d think they were the second coming of the Republican caucus.
But when it comes to walking the walk? Not so much:
A new White House forecast predicts that the federal budget deficit, which hit a record $1.4 trillion last year, will exceed that figure this year and again in 2011.
The $1.47 trillion budget gap predicted for 2010 — when 41 cents of every dollar spent by the federal government would be borrowed — represents a slight improvement over the administration’s February forecast. The estimated gap for next year, $1.42 trillion, is larger than what was predicted in February, primarily because of a drop in expected tax receipts from capital gains.
So here the government is in one of the biggest fiscal holes it has ever dug for itself, and the answer the Democrats come up with is “let’s dig it deeper and call it ‘fighting the deficit’”.
How else do you explain budgets like the one offered by the Obama administration and especially in light of Tim Geithner’s pronouncement yesterday (see below) that it was time for the private sector to start investing? Forty one cents of every dollar spent under this budget from President Obama will be borrowed.
Of course, Obama has told us that the goal is to balance the federal budget by 2015. That’s what he’s said – and for what its worth, that’s certainly a worthy goal. But you have to do more than try to talk it down. The action taken have to reflect that goal. And this budget doesn’t. Nor, really, do his future ones.
The Committee for a Responsible Federal Budget reviewed this year’s presidential budget proposal and the deficit reduction plan and this may come as a surprise to you, but it is all smoke and mirrors.
The budget proposes $3.8 trillion in spending and receipts of $2.6 trillion, resulting in a deficit of $1.3 trillion – or 8.3 percent of GDP. This is higher than the 7.4 percent deficit projected from the Administration’s proposals in its August Mid-Session Review (MSR) and significantly higher than the 6.0 percent deficit projected under their “current law” (BEA) baseline. It is a decrease from the 9.9 percent deficit in FY 2009, and the projected 10.6 percent deficit in FY 2010.
Over the ten year window from 2011 through 2020, deficits are estimated to total $8.5 trillion – or 4.5 percent of GDP. This is significantly higher the $5.5 trillion (2.8 percent of GDP) deficit projected under “current law” which assumes expiring policies would end as planned.
Or under the “current law”, deficit stays at 6% of GDP (still too much) but under the “deficit reduction/balanced budget” plan of the administration, it balloons up to 8.3% GDP (way freakin’ too much).
So we’re being sold a load of unicorns with this totally misleading nonsense being spouted by Obama and Democrats. Their budgets do only one thing for deficits (and the debt) – they add to them. And, if followed, by 2020, here is what the debt will be:
Under OMB’s new estimate of the President’s budget, the debt held by the public would grow continuously as a share of the economy, passing 60 percent this year, 70 percent in 2012, and 77 percent in 2020.
Now someone, anyone – tell me how this plan of theirs reduces the important number in all of this – the debt? Obviously it doesn’t. They’re talking about spending less borrowed money than they have previously, that’s all. And when you are spending trillions in deficits, dropping it down to 900 billion in deficit spending is “deficit reduction”.
Don’t let them sell you the bill of goods they’ve prepared here.
Cut spending, cut it now and do what is necessary to reduce the debt.
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hat do you do if you’re a politician and you promised that if you did something good results would be assured. And then you did it and, in fact, things got worse?
Well that’s the situation the administration faces. It claimed that the "stimulus" was a bit like a FedEx package – something that absolutely, positively had to be done or we would be facing horrific unemployment – over 8%. So the Democratic Congress (alone) jammed through a pure pork package of almost a trillion dollars and sure enough unemployment which was below 8% at the time, eventually shot to 10% (and has now receded to 9.5% "officially").
Faced with that, what the administration has decided to do is run Tim Turbo Tax Geithner, the Secretary of Treasury, out there and pretend like the “stimulus” worked. No, seriously, that’s their plan – damn the facts, go out and essentially say they’ve got the economy in good enough shape that they can now step back and let the private sectors take over:
Treasury Secretary Timothy Geithner said the economy has now recovered sufficiently for government to begin to make way for private business investment.
Mr. Geithner’s comments on Sunday, which echo previous sentiments expressed by President Barack Obama, reflect a turning point in the government response to the worst economic downturn since the Great Depression, a period marked by deep federal intervention in the financial, housing, auto and other industries.
“We need to make that transition now to a recovery led by private investment,” Mr. Geithner said Sunday on NBC’s “Meet the Press.”
Now that takes some stones. To pretend that government intervention has done much of anything requires Hillary Clinton’s “willing suspension of disbelief”. The GDP is limping along in the 1 to 2% growth area, debt has shot through the roof, unemployment remains stubbornly high (and higher than when government “stimulated” the economy) and legislation passed by this administration – and its legislative agenda – has businesses sitting on the sidelines with a pile of money and refusing to participate because of the unsettled business climate.
However, running this meme allows the administration to step back from its failure by calling it a success and passing the blame, now, to the private side. This can have a two-fold effect for them if they can successfully run this bluff.
For one, they can claim the private sector is to blame for continued weakness. That’s very useful to them. Why? Because it sets up what they really want – a second stimulus and more government control.
“There’s going to be a good case for the government preserving some type of guarantee to make sure people have the ability to borrow to finance a house even in a very damaging recession,” he said on “Meet the Press.”
He said the administration would begin developing such a program very soon. “We’re going to take a careful look at a set of reforms that are going to be good for the country going forward and don’t leave us vulnerable to this kind of crisis in the future,” Mr. Geithner said.
And it provides something this administration desperately wants and needs: a scapegoat.
Of course, with midterms coming soon, this may end up being an attempt that is too little and too late. But frankly I don’t think it will take. It is far too cynical an attempt to sell something that already smells terribly rotten. Just as the majority saw through the attempt by Obama to claim that the “stimulus” didn’t have a gram of pork in it (as stated earlier, it was pure pork), they’ll see through this attempt to sell “the economy is better and it’s because of the “stimulus”” that Geithner is attempting here.
This, as usual, is more about political posturing and meme creation than it is about reality. And with this administration, that’s something people have already come to recognize and dismiss.
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You may have figured out by now that I think we pay much too much to government in taxes and that I’m usually all in favor of anyone who figures out how to dodge them legally.
However, there are exceptions to that rule, and all politicians are one of them. If they’re going to make tax law, pass tax law and stick it to all of the "little people", then they should strictly abide by those laws at all levels and not seek to dodge taxes. Especially if they’re the type who have never met a tax they didn’t like.
Call it part of the price they must pay – literally and figuratively – for that power.
John Kerry, or as Jules Critenden calls him, Thurston Howell III (from Gilligan’s Island) has apparently decided that taxes are strictly for the little people and, by the way, job opportunities aren’t his responsibility.
Mr. Howell, er Kerry (who, it is rumored, once served in Vietnam), recently purchased a luxury yacht. The Senator from Massachusetts, however, won’t be docking the yacht there. Instead Rhode Island is his port of choice:
News that Kerry was docking the 76-foot custom-built sloop in Newport, R.I., was first reported in the Herald Friday. Sources told the Herald the yacht cost $7 million, meaning Kerry would owe the state more than $500,000 in excise and sales taxes.
Tsk, tsk – is that a good example to set, sir? And that’s not all that’s rankled the good folks of Massachusetts (who, by the way, with Romneycare, have the highest insurance premiums in the US). The yacht was foreign made, while ship builders in Massachusetts claim that it could have just as easily been built there:
With the nation enduring a nasty economy, painful joblessness and extreme belt-tightening, word of the luxury yacht’s foreign construction – as Americans yearn for work – could create a political tempest for Kerry.
“The message is, ‘The American boat builders aren’t good enough, and the Massachusetts people aren’t good enough to maintain it.’ It’s just a bad message all around,” said Connecticut boater Steve Potter, who docks in Charlestown.
Mr. Kerry’s reaction? Why the great and powerful Oz works in mysterious ways:
When asked to respond to criticism of Kerry’s decision not to buy American, his state director, Drew O’Brien, said: “When it comes to creating and preserving jobs and economic opportunity in Massachusetts, no one has worked harder in Washington than John Kerry. Sen. Kerry is using smarts, clout and good old-fashioned hard work to make the Massachusetts economy grow and prosper.”
Yeah, it’s really hopping, isn’t it? With an unemployment rate over 9%, I guess that’s good enough that the additional jobs "created and preserved” by having the yacht built in his home state just didn’t qualify as “smarts”.
Great example set there, Mr. Kerry. If this is an example of the “smarts” you employ, everyone should be on their knees thanking the deity of their choice for the fact that you lost the presidential election and didn’t get anywhere near the Oval Office.
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Of course you an find “experts” who will point to each and say that’s our future. USA Today has a list of them in an article which explores the title question. It appears most believe it will be the latter – a slow recovery. But some are worried about signs that the present situation compares very closely with the 1930s.
And, in many ways it does. We continue to see weakness everywhere. And it appears until we get the housing market squared away (housing starts down 5% this month) and some other areas cleaned up, plus get some hiring going on, it is going to continue to be rough out there.
Jobs continue to be key to the recovery (we are a consumer driven economy – no job, no money. No money, no consumption) so the faster we can employ the jobless, the faster we see the recovery take off. However, that’s a huge undertaking:
The national unemployment rate stands at 9.5%, or more than 14 million Americans, says the Department of Labor, far below the peak unemployment rate of 25% during the Great Depression. But those numbers don’t fully convey the jobs weakness. Another 8.6 million people are working part time because they can’t get full-time jobs. And 3.8 million, discouraged by the dearth of job opportunities, are out of work but were not counted as unemployed.
So while not at 25%, we’re most likely somewhere in the 14% range in real terms (not the politically motivated U3 of 9.5%).
"If you’re not making money, it’s pretty hard to spend it," or pay bills, Johnson says. "There’s no fuel in the economic engine to make it grow. People are spending less and saving more."
This, of course, is where the impetus comes from to claim if the people can’t spend, the government should. We’ve seen, first hand, how that’s worked out – unemployment went up and stayed up. And “more” wouldn’t have made any difference as is now being argued.
The answer isn’t government spending – not in a consumer driven economy. No, the way you help solve this problem, if you’re government, is to incentivize business expansion and thereby hiring to drive consumer spending. Instead, the policies of this administration, at least to this point, have businesses on the sidelines sitting on both their hands and their money.
Further crimping the outlook for future growth is the fact that cash-rich U.S. companies, despite improving profitability, are still leery of the recovery and are reluctant to deploy that money to grow or hire new workers.
"Companies have pared their expenses dramatically, upgraded their technology, improved their profit margins," Johnson says. "But they are not hiring more people, because they would have to see greater demand to do so."
Once again, the government can’t create that “greater demand” via “stimulus”. That demand has to come from consumers. Those are the customers businesses rely on to generate demand, and with about 14% in the unemployment/underemployment mix, that demand simply isn’t there – or, at least, not enough to expand and hire.
Catch 22? In a way. So what can government do?
Cut business taxes. Get out of the way. Provide incentives to expand and hire (accelerate capital equipment depreciation for instance, if bought now).
There are lots of ways short of spending us into oblivion that the government can positively effect the market and the business climate. Unfortunately, as Mort Zuckerman has stated and the business community as a whole believe, we have an “anti-business” administration in charge right now – and that further unsettles the situation. Perception being reality, as long as the business community believe that, not much is going to change.
So, there’s your day’s sunny outlook on the economic front. As Donald Luskin says:
"The only way to get out of debt is to earn money," Luskin says. "The only way to get out of recession is to grow. If you kill growth, you are" in trouble.
And right now, we’re in trouble.
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Apparently Joe Biden is the one chosen to carry the story that the reason the $862 billion “stimulus” plan failed is because of the stingy GOP.
Ed Morrissey pulls that apart like a kid pulling the wings off a fly. First Biden:
“There’s a lot of people at the time argued it was too small,” he said. “A lot of people in our administration…even some Republican economists and some Nobel laureates like Paul Krugman, who continues to argue it was too small.”
“But, you know,” Biden told Tapper, “there was a reality. In order to get what we got passed, we had to find Republican votes. And we found three. And we finally got it passed,” Biden said.
But if it wasn’t for the legislative reality, Biden explained, “I think it would have been bigger. I think it would have been bigger. In fact, what we offered was slightly bigger than that. But the truth of the matter is that the recovery package, everybody’s talking about it [like] it’s over. The truth is now, we’re spending more now this summer than we — I’m calling this…the summer of recovery,” the Vice President said.
"Legislative reality" at the time consisted of prohibitive majorities on the Democrats side in Congress. They ddin’t need a single GOP vote – not one. And, in fact, as Morrissey points out, the original package was to be $775 billion and the final package was $862 billion pig we got stuck with. In fact it was bigger than what had been asked for by Biden and company. You have to love the revisionist history, don’t you?
Of course Biden is pretty sure the victory in Iraq is possibly one of the "greatest accomplishments" of this administration so it’s no like he’s new at rewriting history. Morrisey also provides us with a couple of Obama quotes that sort of kick the Biden contention in the gut:
February 5th, 2009:
While efforts have been under way in the Senate to whittle the plan back to $800 billion or less, Mr. Hoyer said he believed it should be higher, at like $880 billion. Earlier on Air Force One, Mr. Obama was asked by pool reporters traveling with him about the size of the proposal …
Asked if the figure should be $800 billion and not more, Mr. Obama said: “Well, I gave you a range. I think we’re in range.”
And February 9th, 2009:
“It is the right size, it is the right scope. Broadly speaking it has the right priorities to create jobs that will jump-start our economy and transform it for the 21st century,” Obama said of the more than $800 billion bill at a rally in Elkhart, Indiana.
If the stimulus was too small (it wasn’t), it had zip to do with the GOP. And Joe and company isn’t fooling anyone but those who want to believe fantasy over reality. As usual, the Democrats blame-game runs into reality and facts and comes out second-best.
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Mort Zuckerman, a former Obama supporter, has again gone after the President’s economic policies as the primary source of the economic non-recovery. In a long opinion piece, Zuckerman spells out the exceptionalism of American business through our history and why it has been able to weather financial storms of the past and come out in much better shape than other countries.
The ‘storm’ metaphor is apt, since Zuckerman likens the Obama policies to “our economic Katrina”. Not the economic problem itself, but the administration and Democratic Congress’s answer to the problem. Here’s his summation:
The unique danger today is the possibility that we may face longer-term stagnation as a consequence of relying too heavily on borrowed money. When the housing and credit bubbles burst in 2007 and 2008, the unemployment rate soared to double digits and caused a cascade of shock throughout the credit markets and the banking system. Washington’s ability to initiate a resurgence is now limited by the long-term dangers of our deficits and our debts.
But one unfortunate pattern that has emerged in the last 18 months is to lay all the blame for our difficulties only on the business community and the financial world. This quite ignores the role of Congress in many areas, but most glaringly in forcing Fannie Mae, Freddie Mac, and the Federal Housing Administration to back loans to people who could not afford them. And not to mention the role of the Securities and Exchange Commission, which in 2004 sanctioned higher levels of leverage for financial firms, from 12 times equity to over 30 times equity.
This predilection to blame business is manifest in the unnecessary and provocative anti-business sentiment revealed by President Obama in a recent speech that was supposed to be seeking the support of the business community for a doubling of exports over the next five years. "In the absence of sound oversight," he said, "responsible businesses are forced to compete against unscrupulous and underhanded businesses, who are unencumbered by any restrictions on activities that might harm the environment, or take advantage of middle-class families, or threaten to bring down the entire financial system." This kind of gratuitous and overstated demonization of business is exactly the wrong approach. It ignores the disappointment of a stimulus program that was ill-designed to produce the jobs the president promised—that famous 8 percent unemployment ceiling.
But it’s not just the rhetoric that undermines the confidence the business community needs to find if it is to invest. Consider the new generation of regulatory rules, increased bureaucracy, and higher taxes created by the Obama administration. For example, the new financial regulation bill includes nearly 500 "rule-makings," studies, and reports, compared with just 14 in total for the controversial Sarbanes-Oxley bill, passed after the financial scandals of Enron and WorldCom. The disillusionment has spread to the Business Roundtable, the U.S. Chamber of Commerce, and the National Federation of Independent Business (NFIB), which represents small businesses that normally account for roughly 60 percent of job creation.
The chief economist of the NFIB, William Dunkelberg, put it clearly: Small business owners "do not trust the economic policies in place or proposed." He also said, "The U.S. economy faces hurricane force headwinds and the government is at the center of the storm, making an economic recovery very difficult."
Our economic Katrina, in short.
Note that even Zuckerman recognizes the government role in the economic turmoil that was generated in late 2008, but also notes that they simply have ignored the government role in favor of blaming business. Half a trillion dollars have been quietly pumped into Freddie and Fannie and both have been delisted from the stock exchange so investors can no longer monitor them.
Instead the focus has been on blaming the private sector and clamping down on perceived problems with hundreds if not thousands of new regulations. The regulations, of course, will put a new, onerous and costly burden on the business community even while it is that community which is critical to recovery and employment.
In fact, it seems that the administration and Congressional Democrats talk out of one side of their mouths about how jobs are their number one focus (actually unemployment benefits seem to constitute the entirety of the focus) while out of the other side they talk about how “Wall Street and the banks” are the prime villains in our economic woes.
In that atmosphere, as unsettled as any category 5 hurricane can accomplish, business is battening down the hatches, moving everything inside and abandoning the marketplace until the instability subsides and a more pro-business administration is in place.
Instead of doing what it can to settle the market place and put policies in place that encourage and provide incentive to businesses to expand and hire, this Congress and administration continue to wage war on the private economic engine of the country.
And the results remain plain for anyone with a pair of eyes to see. Stagnation, no growth, high unemployment and the real possibility of a double dip recession. All to purse the “progressive” anti-business agenda and gain more control over the private economy. Clearly they simply refuse to let this crisis go to waste, and have chosen to further cripple our ability to recover instead of aiding and abetting it.
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Gallup’s latest poll brings us back to reality:
Gallup Daily tracking finds Americans’ confidence in the economy significantly lower so far in July than in June. And confidence in June was, in turn, down from May. The Gallup Economic Confidence Index for July 1-13, at -35, is lower than any monthly average in more than a year.
Recovery summer isn’t off to a very blazing start. If the administration and its spinmeisters think they’re selling the recovery, they need to “reset” their calculation:
The decline in confidence seen in recent months is owing primarily to mounting public skepticism with the economy’s direction. Thus far in July, 30% of Americans, on average, have said the economy is getting better and 65% have said it is getting worse, for a net -35 economic outlook score. This is down sharply from -13 in April.
Economic confidence is a critical key to any recovery. Once consumers are sold on the economy’s recovery, positive growth is usually the result. The opposite is also true. That’s because consumers who have lost confidence in the economy are more likely to put off buying anything but necessities. The obvious economic repercussions of that sort of thinking is to slow growth and thus delay (or kill) any recovery.
The political problem here (I think the economic problems should be obvious to all) is that the confidence of the consumer in the economy is heading down while all the spin is telling us we’re recovering quite well, thank you very much.
In other words, the political sales job on the economy and recover – critical to Democrats going into the mid-term elections – isn’t taking. Consumers hear the pitch, look around them and not seeing what is said to exist, are rejecting it for the reality they are seeing and living.
Bad mojo for Dems looking at an election in 4 months. That’s has caused all sorts of inter-party whining, wailing and fighting. Meanwhile companies do what companies do when they lack confidence in the economy (and the policies of the government) – nothing.
Economically, without a true miracle, things will not begin to turn around sufficiently in the economy to be of any help to Democrats in November. It appears it isn’t a question of whether or not they’ll lose seats, it is a question of how many. With the numbers we’re seeing in various polls about how the electorate views the Democratic Congress and Obama administration’s economic policies, it’s clear that most have decided that giving the GOP another chance is the least of their bad choices for this coming election.
Whether that has much of any impact, given the demonstrated obstinate nature of this administration, in the new Congress (and assuming they take control of at least on house in Congress) remains to be seen. But if the Republicans take the House, the great blame-shifter in the White House will have a new entity on which to blame any continued economic failure.
Or, shorter for the GOP, be careful of what you wish for.
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he NY Post reminds us that the Joe Biden/Christina Romer dog-and-pony show now currently touring and touting some amazing "magical" job creation numbers are the same crew that gave us other estimates of job creation in the past:
Last year, when they touted their jobs figures, they wound up backtracking — after it turned out that hundreds of jobs were included from congressional districts that didn’t even exist.
Biden later admitted the data were flawed, noting that "further updates and corrections are going to be needed."
Then he and Obama bragged about new job numbers for May — some 430,000 of them. Except that 411,000 were temporary, part-time positions created by the Census Bureau.
Now the claim is that somehow, despite the unemployment numbers, they’ve managed to “create” or “save” anywhere from 2.5 million to 3.6 million jobs with their excellent management of the financial and economic crisis.
Of course no one can put a finger on what jobs were “created” or, really, what jobs were “saved.” Says Romer, apparently trying desperately to keep some shred of professional integrity in tact:
"There’s obviously a lot of uncertainty about any jobs estimate," Romer acknowledged.
Really? That’s certainly true of the estimates this administration has put forth. However, as the Post points out, the timing of this estimate is perfect. This estimate shows an increase of 20% over the last estimate that was found to be based in fraudulent numbers. As the Post notes, this estimate arrives just as Obama’s poll numbers are down.
All that anyone really needs to know is that this all started within the administration when it promised that the massive pork bill of nearly a trillion dollars it passed early in its tenure would keep the unemployment rate under 8%. It didn’t. In fact it didn’t even come close. And the figure is now around 9.5% and shows no indication of falling anytime soon. Where these magic jobs are and why they haven’t had any impact remains a mystery.
Of course the entire point is to understand that they can (and are) claim whatever they wish and it’s pretty hard to check. But skeptics, like myself, aren’t going to be convinced by mere claims. Hard numbers that can be checked and verified will have to follow. And it is my contention that when they do, we’ll see a repeat of the previous two attempts at pulling the wool over the eyes of the America people for political reasons – something this administration shamelessly attempts pretty consistently on a number of fronts.
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