Free Markets, Free People
Let’s see … if I’m a CEO and I can cut my corporate taxes by about 14% by moving overseas, why wouldn’t I?
Feel free to answer that question. And when you do, then perhaps you can figure out one thing that the politicos could have done a loooong time ago to keep corporations here and to spur business expansion and create jobs but haven’t?
Here are today’s statistics on the state of the economy:
The Chicago PMI fell slightly to 53, but this is eclipsed by the new orders index jumping 2 points to 54.8.
The consumer sentiment index rose 0.7 to end at 74.3 this month, but the future expectations index is declining as gas prices rise.
Factory orders snapped back from June’s decline with a 2.8% increase for July. The big jump is led mainly by a 4.8% increase in durable goods from transportation orders for airplanes and autos. Ex-transportation, durables orders were up 0.7%. Capital goods orders show a big dip when aircraft orders are excluded. Despite the aircraft orders skewing the numbers, however, the overall report points to modest economic growth.
Clint Eastwood is 82 and an American icon. It’s that simple. He’s sort of the John Wayne of this era. And he’s always been more “Republicanish” than the usual Hollywood crowd.
Last night he gave a speech, or a talk, or, well, whatever you’d like to characterize it as. It was both interesting and at time hilarious. That is, if you “got” what he was trying to do.
He said two things that to me are not said enough. If for no other reason, I liked his speech (which, by the way, is the only speech I’ve watched) because he said them. They are reminders that should be repeated over and over and over again.
The first is in the title. “We own this country”. Frankly, it’s time we started acting like it. Because there are those who would weaken that ownership to the point of non-existence. In fact, for the most part, that intrinsically American principle gets mostly lip service from our employees.
And yes, that’s the second line. Government and politicians are our employees. They work for us. Not the other way around, although you wouldn’t really know that the way things are going. When they’re not up to the job, we should fire them.
Anyway, Eastwood’s speech is getting the expected shredding in the press. Breitbart points out that there are already 25 plus stories (5 in Politico alone) on Eastwood’s speech. I don’t think anyone with any experience around politics and how it is covered today is the least bit surprised. They don’t like seeing “the one” they helped elect mocked.
But despite the negative claims of the media, was the speech effective? Well, I like Richard Fernandez’s take. He does a nice job of laying out why, at least to the “common folk” it was likely a hit.
It was an old man’s delivery, but overstatedly so for effect. It was a cutting delivery and for that reason delivered in low key. But for all of Clint Eastwood’s rhetorical cleverness at the Republican convention it derived its effectiveness precisely because it wasn’t one of those “I take this platform tonight with pen in hand, bearing in mind the immortal words of Clancy M. Duckworth” type orations. It wasn’t the speech of someone who was running for office.
Rather it might have come from Mr. Weller down at the corner office musing on simple things to not very important people. How it wasn’t good form to mess things up continuously. How one might lose faith in a man who made one broken promise too many. How at the end of the day everyone either did the job or quit out of decency. Even Presidents.
There was no malice in it. Just a tone of regret. But it was redolent of memory too. Of simple things a world away from the Mountaintop; of sentiments a light-year from dramatic arcs, and of ordinary happiness in a universe apart from grand bargains and high-flown rhetorical visions. They were truths that everyone who has ever worked knows but has somehow forgotten because it was so ordinary.
But they were never known to those who had never worked a real job in their lives. And that is the wonder. That they never knew them. Thus the speech was at once us versus them; it was the check in the mail against the certainties of the heart. Every true challenge is built on the bricks of memory. And there were as many challenges in the Eastwood speech as the stones we stand on.
So will it resonate? I think so. For the very reasons I outline above. Simple truths given by a man without a script, reminding us of the reality of the day. Straight talk, no apologies, no waffling, even using a symbolic device (empty chair) to make his point without having to say it.
Political professionals on the left, liberal bloggers and the press will savage it for days. But for those who saw it or will see it, my guess is they’ll pay little attention to those attacking him and more likely identify with the authenticity of the man they’ve “known” for decades. He’s one of us, they’ll think. He’s up there saying what we’d like to say if we had the podium and the ability to do it. It wasn’t polished, but it was real.
That’s what folks are looking for these days.
Frankly, it was refreshing.
We have been saying for, oh I don’t know, forever, that when the goal of government run health care is to make it less costly and better, you can only have one of the two. They are naturally conflicting goals. And anyone who thinks government can make anything less costly or better isn’t a student of history. Finally, whether anyone likes to admit it or not, “less costly” means rationing. Period.
The latest example of the point is our usual whipping boy – the UK’s National Health Service. Seems it wants it’s pregnant patients to take one for the state:
Family doctors are being told to try to talk women out of having Caesareans and very strong painkillers during birth to save the NHS money.
New guidelines drawn up for GPs urge them to encourage women to have natural labours with as little medical help as possible.
But for many women the prospect of giving birth without the painkillers is unthinkable.
And critics have said the move has been made without any thought for the women themselves.
The guidelines also remind doctors to tell women to consider having their babies outside hospital in midwife-run units or in their own homes.
Of course the “move” is being made “without any thought for the women themselves”. The job of bureaucrats isn’t to please patients. It is to “save money”. So guess where the priority and focus shift. Not to those they’re ostensibly serving, but instead to numbers.
The result? Well given the last sentence, a move back to the 19th century.
If there is anything “natural” it is the inevitability of this outcome given the goals of the system. It isn’t about patient care. It is about “saving money”. Result? Well right now its a suggestion. At some point, it may move beyond that. Ignore the advice, however, and it may become more than a suggestion.
Of course, by handing over your health care to unaccountable nameless and faceless bureaucrats, that should have been expected, huh?
Interest rates on bonds, CDs and money market accounts — staples of the retirement crowd’s portfolio — are at historic lows. (I’m always shocked to see what banks are touting. Really? 0.35% — that is, 35/100 of a percent — on a money market? 0.90% on a CD? Yep.) Stocks are nothing to write home about, still well below their highs of five years ago. As for those real estate investments? Forget about it.
The squeeze is real. Some years ago, when earning say 5% on your money was realistic, a $360,000 portfolio of CDs would produce $18,000 a year in interest — that’s $1500 a month. Couple that with an unexceptionalSocial Security payment of about the same amount, and that’s $36,000 a year, $3,000 a month. Nothing fancy, but enough to get by.
Now change that 5% to 0.9% and you’re earning $3,240 per year, or about $270 a month. Add that to $1,500 a month in Social Security and you’ve got $1,770 a month to live on; just $21,240 a year. That’s a brutal 41% cut in income. And it is why many senior citizens around the country are being forced to draw down savings to make ends meet.
Now, you’re saying, well yeah, got it but is that the President’s fault? In a political system that considers all things that happen under a president’s watch to be “his”, yes. If president’s are going to claim responsibility for good occurrences, then they also get the responsibility for the bad things as well. And if I remember correctly, the current president promised to fix all this stuff. But, this is reality:
The Federal Reserve’s low interest rates are a boon to overextended banks and to the borrowers who owe them money. (As well as the world’s greatest debtor, the U.S. Treasury). But these benefits come at the expense of savers — both those who hope to see their savings grow enough that they can retire someday, and those who have already retired expecting to live on interest at rates far higher than those that prevail today. The low rates are, basically, a tax on savers for the benefit of borrowers and those who made bad loans.
Couple that with the spendthrift ways of the past few years, with little to show for it, and you sort of have the perfect political storm don’t you.
The point about the seniors is their retirement income has been materially effected. That’s totally real to them – they live with it daily. And, frankly, they’re going to blame someone. 4 years ago they probably blamed Bush. But now, well now they’re going to blame the guy who has had ample time, in their estimation, to do something about this … and hasn’t.
And who is the guy on the hook? Right or wrong it’s the prez.
As if what is described above isn’t bad enough, there’s more:
For senior citizens, it’s a double squeeze. While incomes for retirees are going down, costs are going up. Gasoline is now roughly double what it was whenPresident Obama took office and, in many places, it’s back up in the neighborhood of $4 a gallon.
According to the Bureau of Labor Statistics, ground beef recently hit a national average of more than $3 a pound, the first time in history it’s reached that level. (When Obama was inaugurated, it was $2.35). Anyone who has spent time in a grocery store knows that this sort of thing is happening on every aisle — coupled with “shrinkage,” as manufacturers reduce the amount of product in a box while keeping the price the same, a way of hiding price increases from (they hope) inattentive consumers. And it’s going to get worse, according to the Department of Agriculture, when this summer’s drought hits food prices in a few months.
Heard anything about all of this? Yeah, me neither. Glenn Reynolds hasn’t either and he’s pretty sure he knows why:
In fact, with this double squeeze, we have the makings of a major national crisis. There’s only one thing missing: the kind of news media attention you’d usually get with this many senior citizens suffering in an election year.
I’ve been watching these developments for a while, and by now you’d expect a lot of sad news coverage about old people who diligently saved for retirement being squeezed by high prices and federal policies, being forced to choose between medicine and food or having to let go of pets and move in with children because things have just gotten too expensive, living on cat food and the like. But actually, we’re not hearing much.
And we all know why? When the 4th Estate becomes a 5th Column, you’re unlikely to hear much about the things that might reflect on their chosen one.
Report it or not, it remains a real problem and those suffering from this turn around are likely to want to point the finger at someone. And usually that someone is whoever is in charge on election day.
The following US economic statistics were announced today:
Personal income rose 0.3% in July, while personal spending rose 0.4%. The PCE price index was unchanged at both the headline and core levels. Year-over-year, the PCE shows 1.3% inflation, with the core rate, which doesn’t count food or energy costs, at 1.6%.
Initial Jobless claims were unchanged at 374,000. The 4-week moving average rose slightly to 370,250. Continuing claims fell 5,000 to 3.316 million.
Following last month’s strong results, today’s sales reports from chain stores are good to mixed, and, on net, slightly higher than last month.
The Bloomberg Consumer Comfort Index remains weak, rising only 0.1 to -47.3, following a 6-week decline in the index.
The Kansas City Fed manufacturing index rose to 5 in July from 3 in June, indicating a slightly better growth rate. That headline hides some underlying weakness, however, as the production index fell from last month’s 12 to 2 in July. New orders are also declining, though at a slightly slower rate than last month, as the index rose to -4 from -7.
We’ve talked in the past about why these “wave” elections, as they’re called, are happening with increasing frequency.
Well one of the reasons, I would assert, is people are tiring of the same old promises – promises that are rarely if ever kept – with the same old results – business as usual with vituperative partisan sniping and finger pointing, while we spend ourselves into oblivion.
No matter who is put into power, nothing substantive happens. So voters keep switching the sides in hope that some group they put in there will “get it”.
So along come this poll, which is quite interesting. No matter how “popular” Obama is alleged to be, it seems the party he is associated with is now at their popularity nadir.
Today’s Gallup Poll, "GOP Favorability Matches 2008 Pre-Convention Level," shows the pre-convention favorability ratings of the two Parties going back as far as 1992. For the very first time, the favorable/unfavorable ratios are now higher for the Republican Party than for the Democratic Party. For the first time ever, the Democratic favorability ratio, which has always been within the range of 1.20 to 1.56, is now below 1. It is a stunningly low .83, which is 31% lower than the prior Democratic Party low of 1.20, which was reached in 2004.
The Democrats find themselves at John Kerry territory in terms of popularity. Gee I wonder why (*cough* ignore the voters and pass ObamaCare, unemployment at 8.2%, economy in the crapper, etc., *cough*)?
But before Republicans celebrate because they’re better than Democrats, they should realize they’re only marginally better.
By contrast, the Republican ratio is now .88, which compares with the 2008 ratio of .80, which was that Party’s lowest-ever ratio, reached at the end of the Bush Presidency. Prior to 2008, the ratio was 1.16 in 2004, 1.41 in 2000, 1.16 in 1996, and 1.36 in 1992.
Those figures compare with the Democratic ratios of 1.38 in 2008 (compared with the Republican .80), 1.20 in 2004 (vs. 1.16), 1.56 in 2000 (vs. 1.41), 1.50 in 1996 (vs. 1.16), and 1.42 in 1992 (vs. 1.36).
So? So right now, Republicans seem to be enjoying a slightly better level of “popularity” than are Democrats. But both should note that their relative popularity is near the bottom of their historic range.
What does that say?
It says to me that voters are truly considering the lesser of two evils. That their “popularity” is a function of there being no other choice but these two and there being little if any confidence in either doing what is necessary to turn this mess around. But, at the moment, they are inclined to give the Republicans a shot, simply because the Democrats have been so lousy.
Another “indicator” poll. Expect the media’s full court negative press to continue unabated. We now know more about Mitt Romney than we’ve ever known about the President of the United States (of course that’s partly because Romney has actually run things and done things prior to running and has an actual record to examine).
Meanwhile voters seem inclined toward the Republicans, but not such that anyone in the GOP should get arrogant or cocky by any means. This is all touch and go at the moment.
But here’s a key which is hard to ignore, speaking of Obama’s “popularity”:
The Democratic brand has thus suffered more (down 39%) under Obama than the Republican brand suffered under either of George W. Bush’s two terms (-16%, then -31%).
Democrats have reason to be worried.
The following US economic statistics were announced today:
The National Association of Realtors’ pending home sales index rose a strong 2.4% in July t0 101.7. The year-on-year rate of 12.4% is the highest since 2010.
US corporate profits in the second quarter decreased to $1.648 trillion annualized, compared to $1.671 trillion in the first quarter, falling an annualized 5.3 percent.
The Commerce Department’s initial revision to 2nd quarter GDP growth was 1.7% on an annualized basis, up from the initial estimate of 1.5%.
The Mortgage Bankers’ Association reports mortgage applications fell -4.3%, with purchases up 1.0% and refinancings down 6.0%.
UPDATE: The Federal Reserve’s Beige Book report on the state of the US economy says that economic activity "continued to expand gradually" in the current period. Retail sales and real estate were mainly positive. Six of the Fed districts had modest growth; five were moderate; two were slower; and one was mixed.
9 years ago today, QandO was launched on the Blogger platform. Jon Henke started it up by putting up a two or three line post about “first post” jitters. Since then we’ve migrated to many different platforms, literally thousands of posts have been written, over 60,000 comments have been made and over 8 million have viewed QandO’s pages.
This blog has been a labor of love for all those associated with it. By far not the biggest of the blogs out there, it is one of the older ones (think dog years as a metaphor for blog years). We started back when there were just hundreds of us. Now, there are literally millions of blogs.
Thanks from the QandO gang to all our loyal readers and commenters. You’re the incentive that keeps us writing.