If the economy is getting better, then why did new home sales in the United States hit a brand new all-time record low during 2011?
If the economy is getting better, then why are there 6 million less jobs in America today than there were before the recession started?
If the economy is getting better, then why is the average duration of unemployment in this country close to an all-time record high?
If the economy is getting better, then why has the number of homeless female veterans more than doubled?
If the economy is getting better, then why has the number of Americans on food stamps increased by 3 million since this time last year and by more than 14 million since Barack Obama entered the White House?
If the economy is getting better, then why has the number of children living in poverty in America risen for four years in a row?
If the economy is getting better, then why is the percentage of Americans living in "extreme poverty" at an all-time high?
If the economy is getting better, then why is the Federal Housing Administration on the verge of a financial collapse?
If the economy is getting better, then why do only 23 percent of American companies plan to hire more employees in 2012?
If the economy is getting better, then why has the number of self-employed Americans fallen by more than 2 million since 2006?
If the economy is getting better, then why did an all-time record low percentage of U.S. teens have a job last summer?
If the economy is getting better, then why does median household income keep declining? Overall, median household income in the United States has declined by a total of 6.8% since December 2007 once you account for inflation.
If the economy is getting better, then why has the number of Americans living below the poverty line increased by 10 million since 2006?
If the economy is getting better, then why is the average age of a vehicle in America now sitting at an all-time high?
If the economy is getting better, then why are 18 percent of all homes in the state of Florida currently sitting vacant?
If the economy is getting better, then why are 19 percent of all American men between the ages of 25 and 34 living with their parents?
If the economy is getting better, then why does the number of "long-term unemployed workers" stay so high? When Barack Obama first took office, the number of "long-term unemployed workers" in the United States was approximately 2.6 million. Today, that number is sitting at 5.6 million.
The biggest lie told over the past century is that the Democratic left are better stewards of the economy than Conservatives. It worked to in 2008. And Obama is trying to sell to America that the right "can't be trusted" to control our economy as "Bush got us into this mess." As proof thereof, he cites to deregulation and "Wall St. greed."
We are now stuck with a President who believes that the profit motive is immoral, that businesses should be soaked of their wealth for redistribution, and that the economy can be successfully micromanaged from Washington. And we are stuck with a far left Congress that is the most profligate of all time.
The truth is that our economy fell apart because of social engineering by Democrats. Over a roughly 15 year period, they ruined our credit rating scheme as part and parcel of a massive push for "affordable housing." Instead of pursuing this laudable goal by market-based programs, they did so by means of punitive, race based social engineering. At every turn, they used the race card to protect the scheme. And in the end, they created a bubble with Fannie and Freddie that got so big that when it burst, it took our economy into the tank.
So either Obama is lying about all of this, or the right is. How can you possibly know which is which? It's easy.
If the Democrats were actually right, then their solutions to our ailing economy would have worked. Instead, the opposite has occurred. They have used our economic crisis to engage in even more social engineering between healthcare, labor regulations, massive favortism to unions, and new financial regulations. And our economy is on life support. It in serious trouble. Real unemployment is well into double digits and shows no sign of easing. Yesterday's housing report on sales of new and existing homes was the worst in well over a decade. Every day, we are accruing debt at record levels. CNBC reported today that, according to at least one respected economist, we are now in a depression. Indeed, the word incompetent doesn't begin to describe this President and Congress.
Why isn't the economy recovering? After previous recessions, unemployment didn't get stuck at close to 10 percent. If left alone, the economy can and does heal itself, as the mistakes of the previous inflationary boom are corrected.
The problem today is that the economy is not being left alone. Instead, it is haunted by uncertainty on a hundred fronts. When rules are unintelligible and unpredictable, when new workers are potential threats because of Labor Department regulations, businesses have little confidence to hire. President Obama's vaunted legislative record not only left entrepreneurs with the burden of bigger government, it also makes it impossible for them to accurately estimate the new burden.
In at least three big areas -- health insurance, financial regulation and taxes -- no one can know what will happen.
New intrusive rules for health insurance are yet to be written, and those rules will affect hiring, since most health insurance is provided by employers.
Thanks to the new 2,300 page Dodd-Frank finance regulatory act, The Wall Street Journal reports, there will be "no fewer than 243 new formal rule-makings by 11 different federal agencies." These as-yet unknown rules will govern lending to business and other key financial activity.
The George W. Bush tax cuts might be allowed to expire. But maybe not. Social Security and Medicare are dangerously shaky. Will Congress raise the payroll tax? A "distinguished" deficit commission is meeting. What will it do? Recommend a value-added tax?
Who knows? But few employers will commit to a big investment with those clouds hanging over our heads.
"As much as I might want to hire new salespeople, engineers and marketing staff in an effort to grow, I would be increasing my company's vulnerability to government," Michael Fleischer, president of Bogen Communications Inc., wrote in The Wall Street Journal.
Nothing more effectively freezes business in place than what economist and historian Robert Higgs calls "regime uncertainty."
"(A)ll of these unsettling possibilities and others of substantial significance must give pause to anyone considering a long-term investment, because any one of them has the potential to turn what seems to be a profitable investment into a big loser. In short, investors now face regime uncertainty to an extent that few have experienced in this country -- to find anything comparable, one must go back to the 1930s and 1940s, when the menacing clouds of the New Deal and World War II darkened the economic horizon."
Uncertainty created by Obama's legislative "successes" are comparable to the Depression and World War II? This does not bode well for job growth.
Higgs says: "Unless the government acts soon to resolve the looming uncertainties about the half-dozen greatest threats of policy harm to business, investors will remain for the most part on the sideline ... consuming wealth that might otherwise have been invested."
I am not the only person worried about the economically illiterate, anti-capitalist and anti-free trade statements of she who would be President - a topic on which I posted here. It seems that Hillary Clinton's sophmoric musings have also disturbed Peter Mandelson, the EU trade commissioner, who sees in her words a serious danger to the world economy. This today from the Telegraph:
Peter Mandelson, the EU trade commissioner, has warned Democratic candidate Hillary Clinton, that she risks stirring up a hornets nest by inflaming protectionist sentiment in the United States.
"The things she's been saying reverberate around the world," he said. "This is the last year the Doha trade round can survive. There is little chance of a breakthrough after this president leaves office. People in the current administration tell me the US is turning into a protectionsist country. It is a serious concern."
Mr Mandelson, the ex-architect of New Labour, once had close ties to the Democratic Party. But his duties as defender of the EU trade system now put him starkly at odds with his former allies and soulmates.
"The Democratic Party is not where it was in the free trade heyday of Bill Clinton, but I don't think it is irretrievable," he said.
Hillary Clinton has vowed to "review" America's main trade treaties, including the North American NAFTA pact signed by her husband. She has called for measures to "shelter" US companies from foreign investors.
Her arguments appear to go beyond campaign rhetoric. She now argues that "free trade" doctrines have been overtaken by the rise of cheap labour rivals in Asia, forcing the US to adopt a radically different strategy. "We just can't keep doing what we did in the twentieth century. We have to drive a tougher bargain," she said. . .
Read the article here. If Hillary Clinton believes half of what she has said about economics in America, she is tuly an economic illiterate and poses a danger to our economy and the world's economy if elected.
Several months ago, columnist Charles Krauthammer opined that he could live with a Hillary Clinton presidency. As he said of Hillary, "She has no principles. Her liberalism is redeemed by her ambition; her ideology subordinate to her political needs." While I agree with his assessment generally, I do not agree with his conclusion.
Hillary's economic ideology is different in both substance and degree from her husband’s. She clearly does not share her husband’s affinity for business and trade. Hillary's economic views appear socialist if not marxist, and they, in many ways. seem superficial and sophmoric. That notwithstanding, Hillary gives every indication that she intends to push the government into the center of America’s economy if elected as President.
Ms. Clinton has clearly stated her economic philosophy over the years. For example, in a 1996 interview with C-SPAN’s Brian Lamb, Hillary was asked about a quote she had included in her book, "It Takes a Village," that expressed severe criticism of free market economics. The exchange and response were:
LAMB: There's a quote here. I want to ask you if you agree with this. This is from Alan Arenhault, author of "The Lost City" -- you put it in your book. "The unfettered free market has been the most radically disruptive force in American life in the last generation."
CLINTON: I believe that. That's why I put it in the book. . . .
That is an incredibly strong statement. And to the best of my knowledge, it is not one she has ever retracted, either in deed or substance. Further, during the same interview, Hillary discussed her appreciation for the socialist policies of Europe – and I assume here that they are many of the same one’s Sarkozy is today trying to strip from France so that his country can compete economically. As she states:
CLINTON: Well, I am a fan of a lot of the social policies that you find in Europe, . . .
"Other developed countries, including some of our fiercest competitors, are more committed to social stability than we have been, and they tailor their economic policies to maintain it."
The NRO reports a 1995 conversation with Dennis Hastert on Social Security in which Hillary argued against personal accounts saying, "We can’t afford to have that money go to the private sector. The money has to go to the federal government because the federal government will spend that money better than the private sector will spend it."
In 2004, Clinton, speaking to an assembly in San Francisco, stated "We're going to take things away from you on behalf of the common good."
All of the above constitute merely antecdotal evidence. But Hillary's specific economic proposals are fully in keeping with this antecdotal evidence. For example, it was not long ago that Hillary proposed to strip American oil companies of their profits so that she can fund R&D for new sources of energy.
She really needs to take a course in basic economics. The oil industry has been the subject of recent investigations – several of them actually – to look into price gouging, price fixing and profits. In no case was anything found to be wrong. And furthermore, the reality is that the majority of their profits were being reinvested into finding and exploiting new sources of energy. I hate to begin to contemplate what damage an unchained Hillary could do to the energy sector, energy supplies and energy prices in the U.S. were she to attempt something so utterly ludicrous as what she has suggested here. (And as an aside, if we wish to achieve energy independance, the first things that we need to do are remove the impediments to exploiting our domestic resources - and Hillary is a major part of that impediment.)
"I have a plan - a moratorium on foreclosures for 90 days [and] freezing interest rates for five years, which I think we should do immediately," Clinton announced at what was the last Democratic debate before the Nevada Caucus on Jan. 19.
A government enforced control such as this would severly distort the market. As the writers at Fortune magazine see it:
. . . such a freeze would be disastrous. Interest rates on new mortgages would skyrocket - perhaps past 8 percent, as the mutual funds, pension funds and other investors who typically provide capital to the mortgage market shift their money into other investments where the government isn't impairing returns. With higher mortgage rates eroding buying power, the downward pressure on home prices would only increase. Lower home prices would lead to even more defaults, as more folks who'd lost the equity in their homes choose to walk away from their mortgages.
"It certainly would not speed the recovery of the housing market," says Doug Duncan, chief economist of the Mortgage Bankers Association. "The problem now is that investors are already worried about what the risks are, and (a rate freeze) would only widen risk premiums more."
Do you see a pattern here? Hillary, for all her intelligence, has woeful economic ideas and an anti-business animus that could truly injure our nation’s economy. And, if elected, she fully intends to use the power of government to manipulate the economy.
As she said in the NYT just yesterday, she does not trust "market forces." Rather she believes that the government should "play an active role" to correct "the excesses of the market and of the Bush administration." Compared to her husband, "she has long been more skeptical about the benefits of freer trade and other aspects of a free-market economy." Read the entire article.
I think the only way to characterize Ms. Clinton is as a strongly committed socialist, bordering on being a marxist. Yes, it is possible that she is simply blowing populist smoke at the nation with her incredibly sophmoric suggestions for massive taxation of oil company profits and imposing a five year mortgage interest rate freeze. But I will never vote for someone on the hope that they are lying to me about their intentions. And even if Hillary is more economically sophisticated than her pronouncements suggest, I think that she is sincere when she says that she wants to use the power of government to manipulate the economy. And I beleive she is sincere in her expressions of dislike for free trade or free markets. And lastly, she has convinced me that her knee-jerk reaction will be to intervene with the heavy hand of government in response to any perceived inequities or downturns in the market.
To put this in perspective, we are now facing some rather dismal economic news for which the President and Congress must take responsibility. President Bush’s economic policies have been, I would say, poor. Although we have had good growth and a relatively strong economy under Bush, in the long term, it was not sustainable under his policies. His "weak dollar" policy threatens havoc to the world economy so long as it stays dollar based and he has done nothing to rein in out-of-control spending by Congress. Arguably, the fed held interest rates too low for too long which has had a significant hand in causing the current sub-prime crisis. But indications are that the market is already correcting for these discrepancies, and that we should be able to weather this downturn without too much pain so long as our government does not act irrationally. Some ineffectual intervention – such as the one now being considered by President Bush - is necessary politically because the nation demands the appearance of action. To the extent that intervention is minimized, so much the better.
The next President will inherit the world’s strongest economy – and one that has already weathered or is about to come out of a recession and market correction. We have the world’s largest economy by far because of free market capitalism and free trade - though arguably with far too much existing regulation. That notwithstanding, there has not been a socialist nation yet that can even begin to compete with the U.S. economically. What the next President needs to do to keep our economy strong is, first and foremost, do no harm. Beyond that, the economy would benefit were the next President to pursue more free trade agreements and act to improve the business environment in America by repealing Sarbanes Oxley and by reducing the corporate tax rates that are so high as to be approaching non-competitive. Further, the next President would do well indeed to strengthen the dollar and get spending under control.
Hillary Clinton would seem to be the last person to undertake any of these tasks. Indeed, taking her at her word, she would clearly lead the nation in the opposite direction. The few economic ideas she has posited would be laughable if not for being so utterly dangerous to the economy. And her desire to manage the economy and adopt a socialist economic structure portend only ill. Thus, I am nowhere near as sanguine about a Hillary Clinton presidency as Charles Krauthammer seems to be.
Update: I am not the only person concerned with Hillary's apparent economic illiteracy. She has the EU Trade Commissioner concerned also.
Posts
