American Elephants


Unemployment up, spending up, debt up, hope down. by The Elephant's Child

The American unemployment rate rocketed up to 8.1 percent at the end of February, the highest since late 1983.  Employers, struggling to cut costs, slashed 651,000 jobs as the economy continues to sour.

Both figures were worse than analysts expected.  In all, the number of unemployed climbed to 12.5 million.  In addition the number forced to work part time “for economic reasons” rose by 787,000 to 8.6 million.

These figures come, along with the usual gloom and doom and some questionable facts, from AP Economics Writer, Jeannine Aversa, on Friday, March 6.

The President on Friday went to Columbus, Ohio.   The White House said “The President will deliver remarks at the Columbus Police Graduation Exercises.  The 25 Columbus police recruits graduating Friday learned in January that instead of being sworn-in as officers, they would be let go.  However, Mayor Michael Coleman announced last week that he would use money from the American Recovery and Reinvestment Act to pay the recruits’ salaries so they could keep their jobs.” At least until December 31.

There you go, only $31 and a half trillion per job,  but the cost per job will come down if we manage to “save” a few more jobs.

The market doesn’t buy the administration claim that the Dow is just like a political tracking poll; and it is uncomfortable with a President who refers to a” profit/earnings ratio.”  Ken Fisher, the billionaire chairman of Fisher Investments, said “Obama should be listening to the stock market more than talking to it.  He hasn’t gotten out of the gate well.”

“The ‘day of reckoning’ has arrived”, Charles Krauthammer wrote. ” And because ‘it is only by understanding how we arrived at this moment that we’ll be able to lift ourselves out of this predicament,’ Obama has come to redeem us with his far-seeing program of universal, heavily nationalized health care; a cap-and-trade tax on energy; and a major federalization of education with universal access to college as the goal.”

As an explanation of our current financial difficulties, this is absurd.  Universal health care, energy taxes, federalization of education are simply more costly programs that will sink us deeper into generation-spanning debt.  Neither health care nor energy nor education had any part in this financial crisis. Attempting to reform them is just adding another massive cost to an already overburdened economy.

Recessions have histories. Those histories can be studied for clues as to what works and what does not. Raising taxes during a recession is universally declared to be a mistake.  Restraining trade hurts not only our economy, but that of our allies. But lessons from history are not of interest.

Attempting to reform health care, restrain emissions of carbon dioxide through a cap-and-trade program, build new alternative power sources, bail out banks, rescue those with mortgages underwater, bail out the car companies, reform Social Security and Medicare and who knows what else, is a pattern of vast overreach.

“You never want a serious crisis to go to waste,” said chief of staff Rahm Emanuel. “This crisis provides the opportunity for us to do things that you could not do before.”  “Things that you could  not do before” all seem to come with a price tag of billions and trillions, with the government printing press churning out more dollars.  There are consequences to that too.

“On the evidence of little more than a month,” remarked Ambassador John Bolton,” this is a very naïve, inexperienced and uninformed administration.”




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