American Elephants


Nevermind The Economy, The Real Issue Is Cow Flatulence. by The Elephant's Child

Grazingsmall

We grasp at any evidence of the slightest improvement in the economy. Everybody knows someone who is having a hard time. So when the Labor Department says that there was a 288,000 gain in payroll jobs in April, it seems like progress, but that just gets us back to where we were in the middle of the last recession—December 2007 – June 2009. The new payroll jobs number comes from surveying businesses, but the broader survey of households shows a decline of 73,000 jobs in April.

The broadest survey is the labor participation rate, the broadest gauge of demand for workers. That fell 0.4 percentage point to 62.8%, an all-time low. That’s because 806,000 people left the labor force last month.  When  you add this into the statistical mix, you get the U6 unemployment rate, which now stands at 12.3%, down from a high of 17.1% in 2010 and the lowest level since early in the last recession.

Even during the Bush recovery—the one Obama constantly claimed as the worst since the Great Depression—the U6 unemployment rate never got above 10.4%. For each person who is not in the labor force, just 1.3 people are working full time. This is Obama’s economy. And add in Harry Reid and Nancy Pelosi who famously claimed that unemployment insurance made the economy grow. That’s based on the Keynesian theory that any money you put into the economy has a multiplier effect, and a each dollar divides and increase. Pleasant idea, doesn’t work.

Why is this such a weak recovery? Economist John Makin at AEI points out investor uncertainty in the wake of the financial crisis and “substantial regulatory changes by the Obama administration.” The administration has been busily regulating anything that moves and anything that doesn’t. Convinced that the wise experts in Washington D.C. can fine-tune and improve the American economy, they’re going at it with a vengeance.

The perception is that the Obama administration may at any moment impose a new regulation that will cost a business millions, or they may descend on a business with a SWAT team for breaking some law that nobody ever heard of, or the IRS may audit and send in teams from other agencies to look into business practices. There is no confidence that this administration has any understanding of business and it’s needs. Very large corporations have lobbyists, but not every business can afford a full-time high-priced team to plead their problems. No confidence.

Then you have ObamaCare with all the uncertainty involved in that, and what is put off till after the election and what is not. The low cost of borrowing should normally boost investment, but everything about doing business is a risk, and there is no evidence that taking a risk will pay off. So there you are.

The public cares about jobs. The Obama administration does not know how to fix that, so they are going for a different distraction. Brilliant. Make yourself a laughingstock instead.

Obama adviser John Podesta told reporters today that “Congress could not derail the Obama administrations efforts to unilaterally enact policies to fight global warming.” The president wants to limit “carbon pollution” that he thinks causes global warming. Congress has urged the Obama administration to scale back the climate goals because of the adverse impact of new regulations on the coal industry. The administration’s “war on coal” has caused huge job losses in coal states like Kentucky and West Virginia— for no reason whatsoever. Any time there is the slightest uptick in economic statistics, Obama finds another way to put the brakes on the economy—his only real expertise.

The Obama administration’s most recent attempt to lower U.S. greenhouse gas emissions is to target methane emissions. A major part of his plan will be to limit emissions from the dairy industry, which sees large amounts of emissions from cow flatulence and burps.

If Obama sees banning cow flatulence as the way to restore the public’s declining trust in his administration, he’s getting some pretty poor advice.



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