American Elephants


Inequality, Hypocrisy, Pretense, Lies, and Politics of Course. by The Elephant's Child

The Democratic Party has made it clear that they are planning to run on “Income Inequality” in the 2014 midterm election. Liberal Washington Post writer Greg Sargent has suggested that this strategy is part of the reason for Harry Reid’s embarrassing war on the Koch brothers.

When all else fails, you rely on “class warfare.” Otherwise defined as “envy,” one of the Seven Deadly Sins. Liberals’ ideas about income inequality always involve higher taxes on the rich, and more government benefits for the poor. Most of the people who are currently suffering from income inequality would prefer to have a decent job. After six years Obama’s policies still aren’t  creating jobs.

The number of long-term unemployed increased by 203,000 — at the same time that Obama brags about total non-farm payroll employment increasing by 175,000 —  you see the problem. The labor force participation rate remains at only 63 percent, a level not seen since the stagflation of the 1970s, and well below the rate when President Obama took office.

Where is Income Inequality the greatest? The gap between the wealthy and the poor is most extreme in several of the United States’ most prosperous and largest cities. The economic divides in Atlanta, San Francisco, Washington D.C., New York, Chicago and Los Angeles are significantly greater than the national average.

The one city that has hardly noticed a recession is Washington D.C.  There is plenty of income inequality, but more than half the members of Congress are millionaires. Members have long been  far wealthier than the typical American, but now a majority of members are, for the first time — millionaires.

So, if almost everybody is a millionaire, and Harry Reid certainly is, why is he at war with the Koch brothers? Liberal politics is seldom about what it claims to be about. The war on the Koch brothers is about discouraging any wealthy American from donating to the Republican party. That is what the IRS scandal is largely about — if you donate to the hated Republicans, we will attack you and make your name a poison among right-thinking people.

Democrats, on the other hand, are bountifully financed — contrary to all claims of thousands of small donations from regular folks — by the Democracy Alliance, a shadowy non-profit, self-described “liberal organization” which serves as a funding clearinghouse for progressive groups. DA members, called “partners,” include individuals and organizations alike. Partnership is by invitation only. There originally was an initial $25,000 fee, and $30,000 yearly dues thereafter. They must give at least $200,000 to groups which the Alliance endorses. There are at least 100 donor-partners. Members and staff have been working to establish subchapters in all 50 states.

There’s George Soros; Taco Bell heir Robert McKay; Tides Foundation founder Drummond Pike; Golden West Financial Corp. founders Herb and Marion Sandler; the AFL-CIO; Television producer Normal Lear; Progressive Insurance Co Chairman, Peter Lewis — for a sampling of partners. So you can see why attacking the philanthropic Koch brothers is so important. And why President Obama’s  IRS has gone to such lengths to illegally discourage donors to the Republicans with audits, searches and questionable investigations.

The man who professes solidarity with the poor has seen poverty increase every year of his presidency. His supporters and bundlers grow richer on government contracts, subsidies or grants to “green” start-ups that promptly go bankrupt. He claims to care deeply about the future of poor black children, yet teacher’s union opposition to charter schools trumps the most successful route to success for poor black kids. Charter schools have produced markedly better test scores than traditional public schools.

Inequality is no barrier to growth. There are no negative macroeconomic effects of inequality. We need to grow the ranks of working adults and shrink the rolls of those dependent on government.

The President’s latest big idea is “manufacturing hubs”— the first has been in operation in a once-abandoned furniture warehouse in Youngstown, Ohio. This  first in a series of ‘America Makes‘ operations is supposed to ensure “a steady stream of good jobs” into the 21st century. The focus is Three-D printers. The problem is that once they are programmed and loaded with raw materials, they work their magic with not a single human hand. If they are ever widely adopted, the main reason will be that they use less labor than traditional manufacturing.

Typical, typical, typical. The “ruling class” who are supposed to be ever so much smarter than any of us, have not, as usual, done their homework. Oh, they have some statistics, and some studies — but they are missing plain old common sense. So busy congratulating themselves on their brilliance, they have no understanding of how the world works; and the people they disdain as dumb, and needing job training, and food stamps, and welfare, and handouts, need government to get out of the way and give them a chance. Here’s the sleek new workplace of the future with an ever-declining need for workers. Go figure.

3D printers of all shapes and sizes fill the studios at America Makes, the National Additive Manufacturing Innovation Institute in Youngstown, Ohio



A Bleak and Foreboding Economy And How to Fix It. by The Elephant's Child

The Obama campaign continues the mantra of “26 months of job growth.” That sounds like the economy is improving, doesn’t it? What they are not mentioning is that more people are dropping out of the job market. Their statement is true, but wrong in that it gives a false picture of what is happening.

The Wall Street Journal reported:

The economy turned in another lackluster month for job creation in April, with 115,000 net new jobs, 130,000 in private business (less 15,000 fewer in government). The unemployment rate fell a tick to 8.1%, albeit mainly because the labor force shrank by 342,000. This relates to what is arguably the most troubling trend in the April jobs report, which is the continuing decline in the share of working-age Americans who are in the labor force.

The civilian labor participation rate, as it’s known, fell again in April to 53.6%. That’s the second decline in a row and the lowest rate since December 1981.  That’s right— more than 30 years ago, longer than Mark Zuckerberg has been alive.  The nearby chart shows the disturbing round trip the workforce participation rate has taken since 1980 and the precipitous drop in the last three years.

Normally as we come out of a recession, hiring picks up, and as Americans see job opportunities they jump back into the labor force. That’s what happened after the sharp recession of 1981-1982 when the participation in the labor force last hit 64.6%.

Average weekly earnings are up 2.1% but inflation has climbed by 3%. With real wages climbing so slowly, work is less attractive.

Government has rapidly expanded government transfer payments during this recession.  It creates a disincentive for low skilled workers because in some high-benefit states they would need to earn more than $30,000 to make up for the benefits they would lose.

The tragedy is that the Obama administration has put their policy of social welfare ahead of the policies that would create a strong, durable economic expansion. President Obama has been on a tour of college campuses to sell his proposal to lower student loan interest rates. But what students most need are jobs when they graduate, and this administration has no idea how to encourage job growth.

I think that the administration holds conservatives in such contempt that they reject any and all Republican ideas for creating jobs or encouraging growth. The president has sneered at suggestions celebrating individualism and suggesting that people do not need an all-powerful government to direct their lives. The president rejects any idea that there is too much regulation and claims that Republicans don’t care about clean air, clean water or sick children.  Callous, that’s us.  The complaints of businesses about over-regulation fall on deaf ears.

Victor Davis Hanson captured it:

Much of the answer is found in the collective psyche of those Americans who traditionally hire, purchase, or invest capital. An economy is simply the aggregate of millions of private agendas, of people sensing and reacting to a commonly perceived landscape. Yet since January 2009, that landscape has been bleak and foreboding.

Take the debt. The problem is not just that Obama has borrowed $5 trillion in less than four years, but also that he has offered few plans to reduce the ongoing borrowing and none at all to pay down the debt. Instead, he has demonized as heartless anyone who opposes his serial $1 trillion annual deficits. That demoralizes the public, who privately know that they cannot buy everything they might wish, and who expect that government will not, either. In the business community, there is the unspoken assumption that, at some point very soon, either taxes will have to rise, the currency will have to inflate radically, or debts will have to be renounced — all equally foreboding for those with capital. Some even believe that Obama is not a haphazardly profligate spender but a deliberate one who welcomes the radical measures on the horizon to stave off bankruptcy as laudable in themselves.

Obama’s obsession with “clean energy” and attempt to end our reliance on fossil fuels are a direct attack on the economy. The mandates of the EPA are strangling business. ObamaCare is a mess of mandates, escalating costs and misguided interference in the free market. Liberals always think that big or bigger government will perform better than the free market — which is just the aggregate, as Mr. Hanson says, of  “millions of private agendas. people reacting to a commonly perceived landscape.” Liberals are sure that their “experts” can do better. but there are no experts there — only ordinary people with bad ideas. They must be voted out of office.

Victor Davis Hanson added:

The net result is that those with capital, even if they are small businesses, do not believe that the Obama administration likes them. They feel that regulations will increase, that taxes will increase, that energy costs will increase, and that as they pay more to government and keep less, government will nevertheless become even more arrogant and inefficient — and they will become even more demonized. When people pay over 50 percent in payroll, federal, state, and local taxes and are still caricatured as “not paying their fair share,” a sort of collective shrug follows and bodes ill for the economy at large. One need not be liked to make money, but the constant presidential harangues finally take their toll in insidious ways.

Do read the whole essay. It is well worth your time.




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