Wake Up Call of the Day

Via (Ed Morrissey; Hotair)

Ezra Klein calls this “the scariest jobs graph you’ve seen yet,” and for good reason. The center-left Brookings Institute calculated what kind of job growth it would take to reach pre-recession employment levels, and how long it would take. Brookings takes into account population growth and therefore calculates that in this month, the total employment gap has expanded to 11.2 million jobs. According to their analysis, adding jobs at a rate equal to the best average monthly rate for any one year in the past decade will mean we won’t catch up to pre-recession employment until 2022 (via Newsalert):

Looking ahead, there are several challenges to sustained job growth. The boost to economic activity from the American Recovery and Reinvestment Act is winding down and job losses related to temporary Census workers will continue in July. Further, the four-week moving average of initial claims for unemployment insurance have hit their highest level since March and have remained above 450,000 all year.
The “job gap” underlying these numbers is daunting. In recent months, on this blog, we described the job gap — the number of jobs it would take to return to employment levels from before the Great Recession, while also accounting for the 125,000 people who enter the labor force in a typical month. After today’s employment numbers, the job gap stands at almost 11.3 million jobs.
How long will it take to erase this gap? If future job growth continues at a rate of roughly 208,000 jobs per month, the average monthly job creation for the best year for job creation in the 2000s, it would take 136 months (more than 11 years). In a more optimistic scenario, with 321,000 jobs created per month, the average monthly job creation for the best year in the 1990s, it would take over 57 months (almost 5 years).

If we start in 2009Q4, when Obama argued that Porkulus and his other economic policies started taking effect, the rate of job creation under his policies has been … +39,000. Bear in mind that this includes the massive Census Bureau hires made by the Obama administration in 2010.
 
How about just the private sector? The Brookings calculation isn’t limited to the private sector, so it’s a bit like comparing apples and oranges, but few people doubt that private sector jobs have to return in force to close the jobs gap. The average monthly growth in the private sector during the entire Obama term has been -192,000, and the average growth since the beginning of 2009Q4 has been +14,000. In other words, two-thirds of the growth numbers from Porkulus come from government hiring, not private-sector growth.
 
How long will it take to close the employment gap with a growth rate of +14K in the private sector? It’s flat-out impossible, because we’re digging the hole deeper each month at that rate. Under the failed Keynesian policies of the Democrats in Congress and the Obama administration, 2022 looks like a pipe dream instead of a nightmare.

Guess who pays in the new Financial Regulation Bill

Barack Obama celebrated the passage of the new financial regulation bill yesterday. So did Chris Dodd and Barney Frank. And why not? It’s not as though they’ll have to pay for the new bureaucracies and regulation imposed on the American financial system. For that matter, it won’t be the bankers, either. Who pays? Three guesses, and the first two don’t count:

Big banks facing big drops in revenue are looking to Main Street to make up the difference.
Checking accounts, bank statements, even popping into your local bank branch could carry a hefty cost as the nation’s mega-banks scramble to offset expected damage from the sweeping financial overhaul. The uncertain future has overshadowed otherwise strong second-quarter earnings at JPMorgan Chase & Co., Citigroup Inc. and Bank of America Corp.
All three companies beat expectations this week with profitable results. Yet their stocks tumbled, helping send the wider market sharply lower Friday.

This is so basic that people inside the Beltway never learn it. Costs imposed on businesses get passed to consumers. It doesn’t matter where those costs originate, whether they come from materials, labor, rent, taxes, or regulation. All of those figure into the price paid by consumers for the product or service provided.
 
How will consumers get hit with these new regulations? Expect more fees on more transactions, including paying premium prices for doing business face to face with bank tellers and other employees. Banks will start demanding higher minimum balances and start charging higher fees on accounts that don’t make the cut. Bank of America will lose between $7 and $10 billion just on charges for debit and credit cards alone, money that will get made up by its customers somewhere.
 
That's the big secret that most of the public fails to realize when Democrats continually issue the battle cry calling for raising taxes and fees on big business. Consumers may not pay the entire price, however, at least not directly. If you like your local branch, better get used to the idea that it may disappear. With billions of dollars in new costs landing with a thud on their balance sheets, we can expect to see branches close up entirely — and the jobs that exist disappear along with them.
 
In short, the bill will erode consumer buying power, harm retirement accounts that rely on the performance of financial institutions, and create more unemployment. What exactly did we get in return for all of this?
 
If you want a refresher course on business, I've done the legwork.  Pay attention!

More from "Recovery Summer".....13 year low in Mortage applications

Thursday, the Associated Press reports that mortgage applications hit a 13-year low last week despite low mortgage rates. Even refinancing applications dropped significantly:

Demand for loans to purchase U.S. homes sank to a 13-year low last week, and refinancing demand also slid despite near record-low mortgage rates, the Mortgage Bankers Association said on Wednesday.

Requests for loans to buy homes dropped 3.1 percent in the week ended July 9, after adjusting for the Independence Day holiday, to the lowest level since December 1996, the industry group said.
Refinancing applications fell 2.9 percent, and the mortgage market index that reflects total loan demand also fell 2.9 percent.
Average 30-year mortgage rates edged up 0.01 percentage point to 4.69 percent, but were near the record low of 4.61 percent set in March 2009, based on MBA records dating back to 1990.

Now that the artificial stimuli have ended, most of those who intended to buy have already done so in order to take advantage of a useless taxpayer subsidy of the sales. There remains only a historically small demand among those who either didn’t qualify for the tax break or didn’t need it, or perhaps a cadre of buyers who think that Congress will create yet another subsidy for sales and are waiting them out.

Remember when the Obama administration announced its plan to spend billions of dollars to prevent foreclosures? Again, it’s the Associated Press informing people today that there will be more foreclosures in 2010 than there were in 2009, breaking records again:

More than 1 million American households are likely to lose their homes to foreclosure this year, as lenders work their way through a huge backlog of borrowers who have fallen behind on their loans.

Nearly 528,000 homes were taken over by lenders in the first six months of the year, a rate that is on track to eclipse the more than 900,000 homes repossessed in 2009, according to data released Thursday by RealtyTrac Inc., a foreclosure listing service.
“That would be unprecedented,” said Rick Sharga, a senior vice president at RealtyTrac.
By comparison, lenders have historically taken over about 100,000 homes a year, Sharga said.

None of the stimuli and the rescue plans worked, because none of them addressed the core problem: joblessness. Without jobs, people lose their homes no matter how much the government intervenes to stop it. Until we get people back to work, these programs are simply futile. A homebuyer tax break doesn’t help someone without a job qualify as a buyer, and restructuring plans for existing mortgages can’t help an unemployed person make a mortgage payment. We need to shift gears quickly to reduce the massive uncertainties created by the radical Democratic agenda, reduce taxes and the regulatory burden, and get capital working in the US again so that we have employment at a level where foreclosures return to their normal level. Only then will housing markets stabilize.

The Feds are Pushing Risky Lending.....again?!

Wednesday, the Wall Street Journal journal posted this article.  Just two years after the implosion of easy credit nearly cratered the entire Western financial structure, the same people who caused it are returning to their old habits. Fannie Mae has embarked on a new program to offer easy credit to people who may not be able to pay it back in a desperate attempt to ignite the economy:

Fannie Mae, seized by the U.S. government in 2008 to avert the mortgage company’s failure, launched an initiative in January that allows some first-time home buyers to get a loan with a down payment of as little as $1,000. Securities firm Morgan Stanley Smith Barney, a brokerage operation jointly owned by Morgan Stanley and Citigroup Inc., is offering some clients home-equity credit lines of as much as $2.5 million.

Credit-card issuers mailed 84.8 million offers of plastic to U.S. subprime borrowers in the first six months of this year, up from 43.7 million a year earlier, estimates research firm Synovate. Nearly 8% of loans for new cars in the latest quarter went to borrowers with the lowest range of credit scores, up from 6.2% in 2009’s fourth quarter, according to J.D. Power & Associates and Fair Isaac Corp. …
Shirley Davis, a 66-year-old retired phone-company administrator who lives in Brooklyn, N.Y., is more than $33,000 in debt, earns just $2,414 a month and filed for bankruptcy in June. Shortly before that, she ripped open an envelope from Capital One Financial Corp., which pitched her a credit card even though it sued her in 2006 to recover $4,470 she owed on a different card from the bank.
“At some point we lost you as a customer and we’d like to have you back,” the letter said. Ms. Davis said she was stunned. “Even I wouldn’t give me a credit card at this point,” she said.

Did we not learn anything the first time?  Take into account that the Financial Regulation Bill passed yesterday has no restrictions.....NO REGULATION (I mean not to the extent that private lenders will get)....on the entities that played essential roles in the financial collapse in 2007.  Of course, I mean Federally run, Fannie Mae and Freddie Mac under the FHA.
Making high risk loans to unqualified borrowers is part of the reason why we got us into this mess.  Lenders aren't lending because we want them to be more responsible (and they have no idea what's going to happen next year when taxes jump), so the fix is to promote high risk lending? Why make the same mistakes again?
Surely that doesn't sound responsible

We're In Good Hands....

Debt Commissioner Bowles, of our official Deficit Commission, comes to the great conclusion of cutting spending and increasing revenues to save the economy. We needed a commisson for that?!
Seriously, any economist could tell you that!  Every Republican was saying that!  How about you cut spending by disbanding this group of idiots and save us taxpayers from paying your salaries!

Obama falls back to the same conclusion as Bush when it comes to Iran

Wow, the Administration's realized that Iran wants nukes more than it wants peace, after wasting three years of watching then build a nuclear arsenal. Nice!

In late 2006, George W. Bush met with the Joint Chiefs of Staff at the Pentagon and asked if military action against Iran’s nuclear program was feasible. The unanimous answer was no. Air strikes could take out some of Iran’s nuclear facilities, but there was no way to eliminate all of them. Some of the nuclear labs were located in heavily populated areas; others were deep underground. And Iran’s ability to strike back by unconventional means, especially through its Hizballah terrorist network, was formidable. The military option was never officially taken off the table. At least, that’s what U.S. officials always said. But the emphasis was on the implausibility of a military strike. “Another war in the Middle East is the last thing we need,” Secretary of Defense Robert Gates wrote in 2008. It would be “disastrous on a number of levels.”

Gates is sounding more belligerent these days. “I don’t think we’re prepared to even talk about containing a nuclear Iran,” he told Fox News on June 20. “We do not accept the idea of Iran having nuclear weapons.” In fact, Gates was reflecting a new reality in the military and intelligence communities. Diplomacy and economic pressure remain the preferred means to force Iran to negotiate a nuclear deal, but there isn’t much hope that’s going to happen. “Will [sanctions] deter them from their ambitions with regards to nuclear capability?” CIA Director Leon Panetta told ABC News on June 27. “Probably not.” So the military option is very much back on the table.
What has changed? “I started to rethink this last November,” a recently retired U.S. official with extensive knowledge of the issue told me. “We offered the Iranians a really generous deal, which their negotiators accepted,” he went on, referring to the offer to exchange Iran’s 1.2 tons of low-enriched uranium (3.5% pure) for higher-enriched (20%) uranium for medical research and use. “When the leadership shot that down, I began to think, Well, we made the good-faith effort to engage. What do we do now?”

Now that the Obama administration has wasted more than a year on the same kind of fruitless diplomacy that had already been tried over and over, they have suddenly reached the conclusion that Iran doesn’t want peace; it wants nukes. And if it wants nukes more than it wants peace, they’re likely to want the nukes for a specific target. All of this was blindingly apparent in 2007, but Obama somehow figured that starting over from scratch would work, since he was the change that the world wanted and needed.
A military strike will be an act of desperation, which the Bush Administration surmised, but the only option worse is an Iran armed with nuclear weapons. We’ve wasted three years getting back to that same realization, but you can bet that the Iranians haven’t wasted a day of it.

Examining Black Loyalty to Democrats

I've got to hand it to Zo, he hits most of the points.  I would go even further and say that the socio-economic policies of the Democratic Party, in it's current form, results in economic slavery by creating a class of dependent citizens.  These citizens will support the hands that feed them, while never noticing that their other freedoms were given away in exchange for relief from the burden of personal responsibility and comfort.  Quite similar to the physical slavery by the Democrats of the past.  Only this time, blacks aren't the only ones enlaved.  It's the middle and lower classes of all races and genders.
Watch...

"Al Qaeda is a racist organization" says......President Obama?!

No worries about being politically correct any longer. It's on.

Speaking about the Uganda bombings, the president said, “What you’ve seen in some of the statements that have been made by these terrorist organizations is that they do not regard African life as valuable in and of itself. They see it as a potential place where you can carry out ideological battles that kill innocents without regard to long-term consequences for their short-term tactical gains.”…
Explaining the president’s comment, an administration official said Mr. Obama “references the fact that both U.S. intelligence and past al Qaeda actions make clear that al Qaeda — and the groups like al Shabaab that they inspire — do not value African life. The actions of al Qaeda and the groups that it has inspired show a willingness to sacrifice innocent African life to reach their targets.”…
“Additionally, U.S. intelligence has indicated that al Qaeda leadership specifically targets and recruits black Africans to become suicide bombers because they believe that poor economic and social conditions make them more susceptible to recruitment than Arabs,” the official said. “Al Qaeda recruits have said that al Qaeda is racist against black members from West Africa because they are only used in lower level operations.”
“In short,” the official said, “al Qaeda is a racist organization that treats black Africans like cannon fodder and does not value human life.”

I question the timing, given today's low support numbers from CBS and WaPo on the President.  It seems like a ploy to cater to the center-right who were tired of the refusals to label terrorist organizations from the Middle East as "radical muslim" factions.  Easiest way to demonize them (as it has been for any opposition)?  Play the race card.  It stirs emotion and support pretty quickly. 
At the same time, it seems uneccessary, given that Al Qaeda has been seen as a terrorist group (bad guys) by the American public as a whole.....so why go there?

NAACP makes themselves even more irrelevant

After the embarassment over the Hallmark cards, Today, the NAACP has passed a resolution condemning racism within the Tea Parties. At least they didn't generalize the entire movement!
Other important resolutions by the relevant group:

1. a resolution “supporting Native Americans” (which one member objected to because Native Americans were “slaveholders”)
2. a resolution enshrining “DIVERSITY” as the NAACP’s top educational goal (not education?!)
3. a resolution banning the use of Tasers by police (which one member, a black female police officer, objected to because it would result in a blanket ban that takes away law enforcement alternatives…but whose objection was met with dead silence)

My take on this, if you call fire when there isn't one, you end up in trouble. The same applies to calling racism. The overall message of the Tea Party has always been a smaller and more responsible government, responsible spending, and safeguarding the pillars of our Constitution. If opponents can only restort to namecalling instead of rebutting my philosophical ideology, then I'm more than likely winning the argument.
So look out for these signs to know you're winning a debate.  If your opponent:

• resorts to  making it personal or namecalling (racism, physical appearance, etc)
• changes the subject
• curses
• will no longer listen after you've presented legitimate data (facts)

Then, there's no reason to continue debate.  The NAACP has just shut themselves out.

Recap

For a few years (since November or 2007) I've grown to be interested in politics; So for the next few postings, I'll re-post some of the topics I've covered since then. Kind of leads you on a journey through my thought process and showing how I came to my present way of thinking about everything. Bear with me, and leave comments!

My Version of Social Security Reform (January 2009)

Social Security is a legalized pyramid/ponzi scheme, similar to what Madoff pulled off for so many years in that new investors are promised a return at a later date as long as they pay into the promised return for the earlier investors. The only difference is that it’s transparent (meaning we know where our money is going), but that doesn’t change the fact that it is what it is. You are unwillingly MADE to invest into the system as soon as you get your first paycheck. (Got to love freedom of choice, huh?) The reason why it shouldn’t fail is because the supply of new investors should always exceed the number of investors before them (following the birth rate models, more born every generation). The problem is that the Government can take from this fund when they see fit, which depletes the amount that is supposed to be supplied to future retirees. Like Madoff, some of the investors are being paid back, but the Government is using that same money ($5 trillion) to fund its own endeavors. Notice the hypocrisy?

I’m putting a suggestion out there, further explaining/expanding how to wean us off of the current system in place.

For right now, we’ll call this program the Personal Retirement Account (PRA). Similar to the Social Security system, the PRA will take a percentage of your paycheck and hold it into a holding account of your choice (IRA, IRA Roth, savings account, etc). The idea is that the money would be “locked” until one’s retirement. One could also designate beneficiaries to this account in case of incident through a personal will or by power of attorney. 100% of your account would be able to be distributed at your discretion instead of being absorbed back into Government.

Key points:

1. The percentage transferred into your PRA is adjustable. As long as you do not go below the pre-determined minimum contribution (more research and discussion needed), you can deposit as much as you’d like into the account
2. Beneficiaries would be designated at your initial introduction into the PRA. This can be changed at anytime (as wills can be adjusted)
3. Government intervention is taken out of the equation. That’s less tax dollars used on enforcing the current system, thus putting the needed tax dollars on more important affairs
4. Distribution among multiple PRA accounts is open for discussion

Those from ages 16 to 25 would take part in a new system where the minimum amount that would normally be taken and placed into the Social Security system, would go into the PRA. Additionally, this age group will no longer contribute into the Social Security system as it’s now fixed.

Age 26 - 39 would get a portion of both the old and new programs (based upon age of course): a portion of the Social Security fund and the PRA program. The Social Security fund would be distributed based upon age in that, the closer you are to retirement, the more of the fund is set aside for your retirement. In addition, you will have your PRA just as the younger age group. Conversely, the further you are from retirement, the more you will have saved in your PRA. There would no longer be any contribution into the Social Security system.

Over time, the current Social Security system would dry up and everyone (after a generation or two) PRAs would have replaced it. It’s Social Security within your personal control.

This takes care of a few things:

1. The government can no longer dip into the Social Security funds that should be set aside for us because there would no longer be a fund to steal from
2. Politics would no longer use this as a means to use fear to obtain the elderly vote
3. The individual citizen can actually see that they have a retirement secured for their future. In addition, there is more of an incentive to work when a citizen can actually see how much one can set aside for the future. (The more you work, the more is set aside for retirement). This may aid in decreasing unemployment and increasing self-drive/motivation
   
4. This may inadvertently replace the burden of life insurance for those that can’t afford it. For those that can afford life insurance, it may become an additional security blanket to go towards beneficiaries

I probably missed something here. Any suggestions, needed additions, questions? I’ll open the floor to you.

My Rant about the Healtcare Debate (August 2009)

I'm all for reform but based on the crap they've tried to pass thus far, they may end up making things worse rather than better. By no means am I advocating that healthcare is a human right. I believe that everyone, who is able, should be responsible for the choices they’ve made especially regarding their well-being. That being said I’m going to attempt to explain how health insurance works before tackling the Public and Private solutions (Took me all day to write this up. Missing quite a bit so far, but its worth a look/discussion. It is a bit long, so bear with me….):


We know the basics of what insurance is. Whether it is for your car/home/health/etc. it is coverage “in case” something bad happens. Obtaining coverage, you must go through a screening in order for the insurance investor (lets be real, they are investing that nothing will happen to you while you are paying them, that’s how businesses make money). Your rate is determined by “pre-existing” factors. For cars: your driving history, tickets, accidents, etc. For homes: environmental factors (flood, earthquakes, etc), condition of home, etc. For health: lifestyle habits (smoking, eating, drinking), family history, etc. Let’s be clear, you can be denied access to coverage for any type of insurance if you present that you will cost the investor. You can be denied auto insurance. You can be denied home insurance. You can be denied life insurance. You can be denied health insurance. That being said if you ARE covered, you are essentially in a pool with other individuals being covered. The cost you pay for covered is based on the information you’ve given plus the cost of the goods and services required for keeping you healthy. When someone in your pool becomes sick, the cost for covering that person is spread amongst the other members of the pool. There are ways to drive costs down, and all it takes is volunteering to adjust your lifestyle by living healthier. That means: exercise, eating habits, smoking, drinking, sexual habits, etc would have to lean towards improving your personal health. If we each take a little more care in how we take care of OURSELVES and instill those habits into our children, prices are more than likely to drop. There are other factors (prescription costs, inflation, etc), but I’ll try to cover them ahead.

We do have a public (Government) plan in place. Medicare and Medicaid. Medicaid and Medicare have its shortcomings. There are cases of the government rationing benefits in order to save money but at the cost of your health. It should not be that way. Imagine cases like this on a national scale and you can see why the opponents to the Healthcare Bill are worried. (Hint: it isn’t about color of the skin of our President) For this government system to work, EVERYONE who works and collects a paycheck has to pay into the system (which you already do for Medicaid, Medicare & Social Security by the way and are set to increase for everyone for the program to work. No taxes on the middle class my ass…). Similar to how the insurance system works, everyone is a part of the pool. This program should work as a “safety net” for the public. It should cover those people who could not be covered by the private system, which it does, but it LIMITS COVERAGE to keep costs down. The more people in the pool needing coverage, the more costly it is to cover them, which means the more money will be needed to cover the people needing help. A board looks at your case and determines if you should have that operation. They don’t care if you pay them back, but they care if this operation will affect the national deficit. Another credible reason why opposition to the Government plan fears it: increasing the deficit. Ways to keep the costs down are similar to the private option. Changing your personal lifestyle is the first step. The difference is, the Government can “force” you to change your habits by influencing you. The cigarette and sugar taxes aren’t just for revenue people. It is just the beginning of controlling lifestyle habits through taxation. Also, it is one of the ways that the middle and poor classes will be affected. The second, of which we covered earlier, is by limiting coverage. (You should wonder why some hospitals don’t accept Medicaid as a form of coverage: it doesn’t cover costly procedures)

The private plans are your “evil” insurance companies. Let’s get this straight; businesses are in it for making profit. Similar to the Government plan, the private companies are trying to save money anyway they can by rationing coverage (yes, we already have a system where coverage is rationed…lets be real Republicans). A board looks at your case and determines if you should have that operation. They look at the type of career you have and determine if you have the ability to pay them back if the procedure has been approved. (I’m going to get chewed out for this next one) The business has a right to deny coverage because they are investing in you NOT to get sick. The empathic part of me understands the anger towards the private market because a lot of the problems stem from greed, plain and simple. The bad kind. (There is such thing as good greed) This is where decisions are made to make the company profit, but at the cost the service it supplies to its customers. Companies should follow suit as we should as individuals, stated in our Bill of Rights and our Constitution: you have the freedom to do whatever you like, with the exception that it does not infringe upon the welfare of others.

Another negative aspect of the private system falls upon private practices run by doctors whose duty it is to help their patients, have been clouded by "bad greed". There are cases in which certain doctors will authorize unnecessary procedures/test because of the finacial gain it brings to the practice. The motives could range from personal debts, cost of supplies, malpractice insurance rates, etc. So how do we control this? The options are being floated around: lowering the inflated cost of the supplies, doing away with the no-limit malpractice suits, subsidizing/lowering the costs for medical school, etc. (Quick way: FairTax baby...) Of course there will be some that will seek to take advantage, even if these problems didn't exist, but we shouldn't need the Government to step in to find a solution on how to deal with criminals, or do we?

Washington has recently pulled the public option from their draft of the Healthcare Bill. The Democrats control all three branches of government and have removed the public option the day before our President said he’d sign what ever they bring him a week ago. The Republicans were not responsible for the defeat of the Healthcare Bill back in 1994, despite what the President said last night. The people in this country read the bill the Democrats (they ran ALL three branches of Government in 1994) attempted to pass during that time and called their representatives to demand that it doesn’t pass. the people then knew the danger and so should you here in 2009. Democratic Senators have said in the last few weeks that they don’t even know what’s in this bill because it’s too confusing. Do you feel safe that they AREN'T READING/COMPREHENDING THE BILLS THEY PASS?! You think this is about helping you? You aren’t worried of the future implications?

We need real discussion before passage of ANY bill of this magnitude. Plowing forward and making “bold” moves can shackle future generations to a possible mistake that we know NOTHING about because our leaders know less about it than we do.