Here are today’s statistics on the state of the economy:
The NFIB Small Business Optimism Index fell a point in June to 93.5.
Thanks to the long holiday weekend, ICSC-Goldman is reporting retail sales rose 3.0% last week, up 2.9% from last year. Redbook also shows retail sales strength, with 3.6% year-over-year sales growth.
Consumer credit rose a sharp $19.6 billion in May, the largest gain in a year.
It really is that simple. And you don’t need a PhD to figure that out. It is a “Human Nature 101″ course. If there’s no incentive for you to behave correctly and every incentive not to (i.e. no punishment), then why behave correctly?
Now, consider the government we have today and all the various scandals. Who is the last person who blatantly violated the public trust that you’ve seen frog-marched to jail? Hmmm. But it takes a bunch of academics to again remind us that human nature still rules:
In a new study, Stern School of Business assistant professor of economics Vasiliki Skreta and co-authors, Karthik Reddy of Harvard Law School and Moritz Schularick of the University of Bonn, examine statutory immunity provisions that obstruct or limit the criminal liability of politicians, and which exist throughout much of the modern democratic world.
…The researchers quantified the strength of immunity protection in 74 democracies and verified that immunity is strongly associated with corruption on an aggregate level. They also developed a theoretical model that demonstrated how stronger immunity protection can lead to higher corruption. The model suggested that unaccountable politicians under immunity protection can enhance their chance of re-election by using illegal means, namely supporting interest groups through lax law enforcement, non-collection of taxes, and other forms of favoritism that will go unpunished.
Where’s Charley Rangel? Chris Dodd? Barney Frank? Oh, enjoying retirement. Turbo Tax Tim Geithner? Well, not in jail.
And how about Lois Lerner? From what does she want immunity? Well in reality, she wants immunity from accountability. There’s no other reason to seek immunity otherwise.
Unfortunately, she’ll probably get it and we’ll watch the level of corruption within government continue to grow, and grow and grow.
You want to know why people don’t trust government?
Among all the distractions, scandals and foreign policy failures, we’ve sort of lost track on how the economy is going. And that’s one small favor I assume the administration is happy about.
Behind Wal-Mart, the second-largest employer in America is Kelly Services, a temporary work provider.
Friday’s disappointing jobs report showed that part-time jobs are at anall-time high, with 28 million Americans now working part-time. The report also showed another disturbing fact: There are now a record number of Americans with temporary jobs.
Approximately 2.7 million, in fact. And the trend has been growing.
The number of Americans receiving subsidized food assistance from the federal government has risen to 101 million, representing roughly a third of the U.S. population.
The U.S. Department of Agriculture estimates that a total of 101,000,000 people currently participate in at least one of the 15 food programs offered by the agency, at a cost of $114 billion in fiscal year 2012.
That means the number of Americans receiving food assistance has surpassed the number of private sector workers in the U.S.
Oh happy day. We now have more people receiving food assistance than are working (other than regulations, what do government workers contribute to the economy?). That’s obviously something that can’t continue, can it? Reminds one of Social Security, which is approaching the same problem. Not enough workers to support those drawing SS.
So who is going to pay for all this? Those temp workers?
But not to worry, we have ObamaCare on the horizon which will mean “less costly” health care, right? And there are stringent checks to ensure that only those eligible for “government funded subsidies”, aka taxpayer funded, will get them:
The Washington Post reported on Saturday that the Obama Administration will get rid of verification requirements in ObamaCare to determine whether or not applicants are eligible for taxpayer-funded subsidies to purchase health insurance coverage from the state exchanges.
“The Obama administration announced Friday that it would significantly scale back the health law’s requirements that new insurance marketplaces verify consumers’ income and health insurance status,” wrote Sarah Kliff and Sandhya Somashekhar at the Washington Post. “Instead, the federal government will rely more heavily on consumers’ self-reported information until 2015, when it plans to have stronger verification systems in place.”
Wait, what? 2015 … maybe? In the meantime, free-for-all, just apply and you’ll get it, because, you know, there’s no such thing as fraud (*cough* 60 billion in Medicare each year *cough*). And besides, all those young folks who don’t want or need health insurance will be picking up the tab anyway.
This week, Bruce, Michael, and Dale discuss Egypt, The Supreme Court, and an interesting and unusual 3rd Amendment case.
The direct link to the podcast can be found here.
As a reminder, if you are an iTunes user, don’t forget to subscribe to the QandO podcast, Observations, through iTunes. For those of you who don’t have iTunes, you can subscribe at Podcast Alley. And, of course, for you newsreader subscriber types, our podcast RSS Feed is here.
Obama’s shills have settled in on a long-term talking point concerning the IRS scandal. They say something along the lines of “Obama didn’t tell the IRS to target anyone for political reasons. That’s just crazy. And, since you can’t pin anything on Obama, there’s no scandal here.”
There are two clear logical fallacies in this position.
First, it’s a strawman argument. I don’t know anyone anywhere on the political spectrum who is saying that Obama actually issued any directives to anyone to start the targeting. In one of my previous posts about it, I explicitly said
Even if Obama isn’t directly involved (and he would have to be sand-poundingly stupid to have issued actual directives that resulted in this) his rhetoric towards these groups was a contributing factor, so he bears some responsibility.
Along the same lines, one of our commenters (jpm100) wrote this morning:
…these orders didn’t necessarily have to come from the Whitehouse. The organization is corrupted by years democratic nepotism and recent leadership influenced by Team Obama and the tone of non-accountability set by the Whitehouse. Team Obama knew the kind of people they were appointing. These people knew what Team Obama wants. And they knew the worst consequence for them would be a job change to some Democrat Party position or some job with a Democrat benefactor. So they just did it.
The Whitehouse could be involved, but other than ensuring no serious consequences after the fact, it doesn’t have to be.
These comments also point up the second logical fallacy. Big-government fanciers really don’t want to face up to the possibility that the federal government is just as out of control as those on the right have been saying for years (or decades). They would very much like to pretend that there’s no scandal here.
So they use a complete non sequitur. “Obama didn’t give the directive” –> “There’s no scandal.”
This is stupid even by standards of leftist argument. Political targeting by the IRS is a serious and scandalous problem no matter how it started.
We know the political targeting is there. The attempted leftist misdirection that it wasn’t politically motivated and that “progressive groups were targeted too” failed just as badly as the “doctored emails” Benghazi talking point.
Two senior IRS bureaucrats have now taken the 5th. The FBI is stonewalling an investigation that Congress ordered. It’s possible, or even likely, that the targeting affected the outcome of the 2012 elections.
So we have a serious, serious scandal. I said in the earlier post that
The IRS scandal is bigger than Watergate, bigger than Benghazi, bigger than Fast and Furious, bigger than Iran-Contra, bigger than Monicagate – bigger than any other scandal for the federal government in my lifetime.
The reason I believe that is what the scandal says about the federal bureaucracy. The one agency that is supposed to be scrupulously non-partisan is revealed as having chosen sides in the partisan debate.
It doesn’t matter if Obama ordered it.* All he had to to was put forth enough “wink, wink, nudge, nudge” rhetoric for the IRS bureaucracy to know they likely would not be punished by him for doing it.**
It would only take one other essential ingredient – an IRS bureaucracy sympathetic to the Obama administration and hostile to his political opponents. That’s what the scandal shows us – that the supposedly non-partisan bureaucracy, the one we all have to deal with whether we like it or not, is now a de facto arm of political leftism.
We have additional evidence for this. We know that the IRS favors Obama in political contributions:
While IRS employees generally donated to Obama by a 4-to-1 ratio, the lawyers for that particular federal agency donated to Obama by an astounding 20-to-1 ratio, according to Robert Anderson, associate professor of law at Pepperdine University School of Law.
Lawyers are relevant because they are the ones taking the lead in writing regulations, litigating cases, and making delicate legal judgment calls in borderline cases.
The result is a solvent that is eating away at our civil society. Once half the country no longer trusts the government bureaucracy to even carry out it’s most basic functions in a non-partisan way, the seeds are sown for a terrible reckoning.
That’s what makes it even worse that the targeting probably was not ordered by Obama. Assuming he didn’t overtly order it, and the IRS bureaucrats came up with it on their own, means we are getting much closer to that reckoning that we thought.
* I’m not completely dismissing the possibility that someone in the White House did start the ball rolling. Probably not Obama, though – at most his role might have been some casual musing about how those Tea Party groups were getting pretty uppity, and someone should check into them. I’d be flabbergasted if any hard evidence turned up that he directly ordered the targeting.
** There is ample evidence that the Obama administration will cover for its allies reflexively. See the Black Panther voter intimidation case for an example.
Today’s only economic statistic is the Employment Situation. The headline numbers: 195,000 Net new jobs were created in June; the unemployment rate remained steady at 7.6%; average weekly hours were unchanged at 34.5; average hourly earnings rose by 0.4% to $24.01. Looking a bit deeper, the labor force participation rate actually rose a tick to 63.5% as an additional 160,000 people were employed. The real unemployment rate is closer to 11.65%.
"I have no reason to believe there is an investigation. It appears to me the Obama administration is only talking to itself," Mitchell stated in an e-mail.
The FBI announced the supposed investigation over six weeks ago. Three weeks later, FBI Director Robert Mueller said he didn’t know who the lead investigator is or how many agents are assigned.
Unlike most of the misdirection and obfuscation in the IRS scandal, I think he was telling the truth, and I think the reason is simple: at that point, and maybe even up to now, there may not be a lead investigator.
The FBI clearly doesn’t want to do this investigation. If the IRS targeting scandal is as bad as it appears so far, the investigation is going to be long and messy, and possibly end up sending some federal bureaucrats to jail. I doubt this outcome has much appeal to other federal bureaucrats.
I don’t know much about how the FBI operates. I don’t know how much influence investigators have over the work that is assigned to them. But if they have any influence at all, even informal influence, then it’s quite possible that assignments to the investigative team are being passed around inside the FBI like a hot potato.
Put yourself inside the head of someone at the FBI being assigned to investigate the IRS. Here are some of the thoughts I imagine you could have:
- “If I find something really bad, the Obama administration isn’t going to like it. Or me, for bringing it out. Will they torpedo me? Will I find myself being smeared?”
- “What if I find some real wrongdoing, and someone at the IRS decides to retaliate?”
- “Taking down the IRS could mean the FBI is next. We’ve had our own share of messes over the years.”
- “No matter how this thing turns out, my career is probably going to take a hit.”
Given the realities of the situation, if you worked at the FBI, would you want to be on the investigative team? And if you get stuck on it, are you more interested in getting to the bottom of the mess or mollifying the political class to minimize the impact on you personally?
The FBI has been cruising on a reputation of professionalism that I think vanished in fact long ago. From their incompetent labs to suppressing information to protect Obama, they are far more political and far less professional than they would like to pretend.
Given that problem, will the FBI be motivated and capable enough to get to the bottom of the scandal? I doubt it. Oh, we’ll have a pro-forma investigation at some point. But I’m betting we’ll find out a lot more through the lawsuits launched by Tea Party groups. We might find even more with a special prosecutor if the Democrats would allow one to be appointed, but in their own craven political interests, they probably won’t.
Somewhere on the federal side, a scapegoat will eventually be found, possibly two or three. They will be fired, and the propaganda arm of the Democratic Party will work overtime selling the “Nothing more to see, time to move along” narrative.
They have to. The left-leaning political class recognizes the possible damage if they can’t contain this scandal. It was bad enough when the media chose sides in the left-vs-right political battle. If those on the right also become convinced that the entire federal bureaucracy has similarly chosen sides, then they will likely conclude that our current political differences can’t possibly be decided through normal political means. They will feel, rightly, that the system is rigged against them.
Which would mean that they come to the same conclusion many of us came to a while back.
Here are today’s statistics on the state of the economy:
The MBA reports that mortgage applications plunged -11.7% last week, with purchases down -3.0% and re-fis down -16.0%.
Challenger reports job layoff announcements totaled 39,372 in June, up from 36,398 in May.
The ADP Employment Report estimates that 188,000 private payroll jobs were created in June.
The U.S. trade deficit in May jumped to $45.0 billion from $40.1 billion in April.
Initial jobless claims fell 5,000 to 343,000. The 4-week average fell 250 to 345,500, while continuing claims fell 54,000 to 2.933 million.
The Gallup U.S. Job Creation Index was unchanged at 22 for June.
The Bloomberg Consumer Comfort Index rose 0.8 points to -27.5 in the latest week, a fresh five and a half year high.
The ISM Non-Manufacturing Index fell 1.5 points to 52.2 in June.
The old means of changing government is back. The Egyptian military is reportedly staging a coup.
Egyptian President Mohammed Morsi is reportedly under house arrest after the military ultimatum expired Wednesday, reports Al Hayat TV.
Morsi’s spokesman denied the report, according to ABC News, but word of the house arrest provoked cheers in Tahrir Square.
This comes as Egypt’s military moved to tighten its control on key institutions before their afternoon ultimatum expired.
The military stationed officers in the newsroom of state television on the banks of the Nile River in central Cairo. Troops were deployed in news-production areas.
Officers from the army’s media department moved inside the newsroom and were monitoring output, though not yet interfering, staffers said, speaking on condition of anonymity because they were not authorized to talk about the arrangements.
Apparently, this is the plan:
Under a plan leaked to state media, the military would install a new interim leadership, the Islamist-backed constitution suspended and the Islamist-dominated parliament dissolved.
And our position, as reported by ABC?
Meanwhile, President Barack Obama is urging Morsi to address the people’s grievances and the White House is also warning Egypt’s military that a coup could jeopardize relations with the United States.
Oh, and where in the world is John Kerry?
Here are today’s statistics on the state of the economy:
June auto sales are coming in as the strongest in 6 years, up 4.6% to a 16M annual rate. Sales increases from various automakers: Ford, 13%; GM, 6%; Chrysler 8%; Nissan, 13%; Toyota, 9.8%; VW, 3%.
ICSC-Goldman reports a mixed retail sales picture, with weekly sales up 0.6%, but a weak 1.9% from last year. Redbook reports a moderate 2.9% year-over-year retail sales increase.
Gallup reports the July economic confidence index (ECI) averaged -8, little changed from May’s -7.
Factory orders rose 2.1% in May, largely on commercial aircraft orders, as ex-transportation orders were up 0.6%.