Filed under: Capitalism, Democrat Corruption, Economy, Politics, Progressivism | Tags: 1.8% Growth, Keynesian Economics, President Barack Obama
President Barack Obama was in New York on Thursday, addressing Democrat donors. According to CNS News, Obama said:
Deficits are not the only thing that could mortgage America’s future, President Barack Obama told Democratic donors in New York on Thursday. He stressed that if government does not spend money in certain areas, it would be mortgaging the country’s future.
“I’m not going to sacrifice investments in education. I’m not going to make scholarships harder to get and more expensive for young people,” Obama said to a cheering crowd. “I’m not going to sacrifice the safety of our highways or our airports. I’m not going to sacrifice clean air and clean water. I’m not going to sacrifice clean energy at a time when we need to free ourselves from dependence on foreign oil, and folks are getting killed at the pump.”
In other words, damn the torpedoes, full speed ahead. Our Presidential spendaholic wants to keep right on spending on all the things that haven’t worked, aren’t working, and will not work.
— Austan Goolsbee, the chairman of the Council of Economic Advisers, said that a slowdown in government spending was mostly responsible for the only 1.8 percent growth in gross domestic product between January and March, down from 3.1 in the fourth quarter of 2010. Goolsbee said in an interview on Bloomberg television:
It was an expected slowdown. The biggest driver was a reduction in government spending at the federal level, a big negative from defense spending.
Nobody likes a growth slowdown. We’ve got to have faster growth, but 2011 and 2012 are still looking fairly positive.
— Financial Times reports that “Doubts have been cast over the strength of the U.S. economic recovery after output grew at an annualized rate of only 1.8 percent in the first quarter. A surge in oil prices held back consumption growth while public spending fell at every tier of the U.S. government.”
At this stage of a recovery, growth often rebounds by between 4 and 5 per cent. Expansion of less than 2 per cent will not create enough jobs to keep up with population growth and cut the US unemployment rate of 8.8 per cent.
The dollar fell further on release of the growth numbers as investors judged that weak growth would cause US interest rates to stay lower for longer.
Initial claims for unemployment insurance climbed to 429,000. Bad news all around.
— The Wall Street Journal was unenthusiastic:
For three long years, the U.S. has been undertaking an experiment in economic policy. Could record levels of government spending, waves of new regulation and political credit allocation, and unprecedented monetary stimulus re-ignite growth? The results have been rolling in, and they represent what increasingly looks like an historic mistake that deserves to be called the Keynesian growth discount.The latest evidence is yesterday’s disappointing report of 1.8% in first quarter GDP. At this stage of recovery after a deep recession, the economy is typically growing by 4% or more as consumer confidence returns and businesses accelerate investment as their profits revive. Yet in this recovery consumers are still cautious and business investment remains weak.
Our spendaholic president has engaged in the greatest spending binge since World War II. He did everything that the Keynesian rule book said politicians should dump into the economy: $168 billion in one-time tax rebates, then $814 billion in spending over 2009-2010, cash for clunkers, an $8,000 home buyer tax credit, the Detroit auto bailouts, billions for green jobs, a payroll tax cut for 2011, and near-zero interest rates for 28 months and Ben Bernanke’s ‘quantitative easing’. And growth is 1.8%.
Deficits this year are estimated to hit $1.65 trillion. How many more trillions does the Keynesian rule book call for?
A Washington Post/Pew poll conducted April 21-25 asked respondents whether they think the federal budget deficit is a major problem that must be addressed now, when the economy improves, or not much of a problem.
A major problem that must be addressed now — 81%
When the economy improves —14%
Not much of a problem — 1%
Filed under: Conservatism, Humor, Politics | Tags: Donald Trump, President Barack Obama, Senator Rand Paul
Senator Rand Paul (R-KY) went to New Hampshire this last week, and called for proof of Donald Trump’s Republican registration. Really funny in the context of Trump’s calls for Obama to release his birth certificate. Paul said:
I’ve come to New Hampshire today because I’m very concerned. I want to see the original long-form certificate of Donald Trump’s Republican registration.
Embarrassingly, there is less evidence that Trump is a long time Republican than there is that Barack Obama was born in Hawaii. Perhaps this will be the end of the silly ‘birther’ theme. Trump, on the other hand was a registered Democrat as recently as 2009.
Apparently now, Trump is in a desperate search for Obama’s grades. We have slaughter in Syria, both Trump and Obama are uninterested. Libya is a mess that Obama can’t manage to be concerned about. Obama has suggested that the unsettled Arab countries should pump more oil to reduce our cost of gas, and Trump is concerned about Obama’s grades many years ago when he was in college?
I guess some people admire Trump because he is “taking on” Obama. I don’t get it. I’d like to see the long form of his Republican registration too.
Filed under: Capitalism, Freedom | Tags: Income Inequality, The United States, The World's Rich and Poor
This graph, posted by economist Veronique de Rugy, takes a minute or two to understand, but there’s a lot of information here, and it’s worth your time. The graph shows inequality within a country— in the context of inequality around the world.
The horizontal line at the bottom shows the population of each country divided into 20 equal-sized income groups, ranked by their household per-capita income. This is divided into 5 clusters (or ventiles) each of 5 percentiles, similar to the way we customarily divide people in this country from ‘poor’ to ‘rich.’ So the entire population of a country is divided, by income, into 20 equal parts.
The household income numbers are all converted into international dollars adjusted for equal purchasing power, since the cost of goods varies from country to country. In other words the chart adjusts for the cost of living in different countries, so we are looking at consistent living standards worldwide.
The vertical axis shows where any given ventile from any country falls when compared to the entire population of the world.
Trace the line for Brazil, a country with extreme income inequality. The poorest 5 percent of Brazilians are as poor as anyone in the entire world,while at the other end of the Brazil line are some of the world’s richest people. This one country spans the entire range of world income.
See how the entire line for the United States falls in the top portion of the chart? The entire country is relatively rich. Americas poorest people are still richer than most of the world.
Compare with the line for India. India’s poorest correspond with the 4th poorest percentile worldwide, and India’s richest are in the 68th percentile, about where America’s poorest are, as a group. The bottom chunk of Americans, some of whom make as much as $6,700, amounts to a good standard of living in India where about a quarter of the population lives on $1 a day.
When it comes to income inequality, in America, there is relatively not all that much of it. For most people in the world, where you are born makes all the difference.
What do the poor most need? They need to stop being poor. And how can that be done on a mass scale excpt by an economy that creates more wealth? Yet the political left has long had a remarkable lack of interest in how wealth is created. As far as they are concerned, wealth exists “somehow” and the only interesting question is how to re-distribute it.
The very fact that economists sweat over statistics purporting to demonstrate economic inequality in America proves that there is, relatively speaking, not much of it.
The chart comes from Catherine Rampell of Economix.
Filed under: Capitalism, Economy, Energy, Junk Science | Tags: Gas Prices, Obama, oil, Supply and Demand
If President Barack Obama were to schedule a major speech tomorrow, and tell the assorted networks that America was returning to oil production— he was lifting the federal bans on drilling—the price of oil would start dropping the next day.
- In 2008, Senator Ken Salazar (D-CO) refused to vote for any new offshore drilling. In a conversation with minority leader Mitch McConnell (R-KY), Salazar objected to allowing any drilling on America’s outer continental shelf—even if gas prices reached $10 a gallon. Obama named him Secretary of the Interior.
- In 2008, Steven Chu, head of the Lawrence Livermore Laboratories at U. of California Berkeley, told the Wall Street Journal that “Somehow we have to figure out how to boost the price of gasoline to the levels in Europe.” he also said “We have lots of fossil fuel; that’s really both good and bad news. We won’t run out of energy, but there’s enough carbon in the ground to really cook us.” Obama named him Secretary of Energy.
- During the 2008 campaign, candidate Obama said “Under my plan of a cap-and-trade system, electricity rates would necessarily skyrocket.” And “So if somebody wants to build a coal-powered plant, they can. It’s just that it will bankrupt them.” He was elected president.
I don’t know if Obama ever took a class in economics, but he seems to be totally unfamiliar with the basic laws of supply and demand. When supply is restricted, the cost goes up. When the cost of gasoline goes up, so does the cost of everything else.
Goods are transported by truck, and when delivery costs more, the price of your groceries cost more. When the government is busily printing money, the value of the dollar goes down. Oddly enough, the price of gas and the cost of food are not included in the government’s statistics on inflation. You have to keep track of that yourself.
President Obama speaks enthusiastically about his clean, green economy of tomorrow; but he doesn’t seem to understand that windmills and solar arrays produce only small amounts of electricity, which has little to do with transportation, and does not replace gasoline. Our transportation sector is powered by petroleum, and will continue to be powered by petroleum far into the foreseeable future. There is no alternative.
Why do I say that an Obama speech turning the energy sector free would start to bring down oil prices right away? Ronald Reagan did it, and George W. Bush did it. There is evidence. And the evidence that Obama’s clean, green government subsidized energy will prove to be an effective alternative — ever? Nonexistent.
Filed under: Capitalism, Democrat Corruption, Economy, Energy | Tags: Attention to Appearances, President Barack Obama, Why Not Drill?
Sometime in the last year, the media adopted the term “optics” as a replacement for “what it looks like.” It’san annoying word. Andrew Malcolm, of the Los Angeles Times, wrote yesterday of “the increasingly odd political optics of Barack Obama.”
He referred to the appearance of President Obama’s activities. For example, today Obama and Michelle will fly to Chicago on Air Force One. They will be there for three hours. The purpose is to tape an Oprah show. Then they will fly to New York City. The purpose there is a fundraiser, three of them. It costs the government $181,000 an hour to operate Air Force One.
This is the same president who, a few days back, suggested that a commuter worried about gas prices should buy a new hybrid car instead.
With America in a recession and millions of people out of work, the president entertained with Wagyu beef and hundred dollar bottles of wine. With people on the Gulf of Mexico out of work and the region starved for tourists, the President urged tourists to return to the Gulf Coast, as Michelle and a planeload of her closest friends headed off to the beaches of Spain.
When Obama “leads from behind,” as his foreign policy was described in the current New Yorker, the appearance in not one of judicious consideration of alternate policy options, but of a weak, indecisive president unable to make decisions.
When Obama tries to blame speculators and price gouging for high oil prices and threatens criminal action, Americans remember that Steven Chu, who Obama made his Energy Secretary told the Wall Street Journal in a December 2008 interview the “Somehow we have to figure out how to boost the price of gasoline to the levels in Europe.” He appointed Socialist activist Carol Browner as his energy czar; and Van Jones, admitted Communist, as his green jobs czar. Obama keeps subsidizing wind and solar energy, when he talks about a clean green economy, yet wind and solar have nothing to do with the price of gasoline. They produce only tiny, inefficient amounts of electricity, and ethanol increases the cost of driving.
The rhetoric and the actions never match. Does he just say whatever he thinks will please his audience? Does he simply not understand how things look? We can read. Obama’s own Energy Information Agency projects that the delays in issuing permits are costing us 240,000 fewer barrels of oil a day.
Stopping drilling in Alaska for the sake of what a computer model projects might be the result of emissions from an icebreaker on the air quality in a village nearly a hundred miles away doesn’t look like a considered, careful decision. It looks like environmental activist blockage.
You have told us, Mr. President, that you are working too hard, that you are thinking of us every night when you go to sleep and every morning when you awake, but with your feet on the Oval Office desk, and golf games when wars are starting or when Japan is dying under earthquakes and a tsunami — it just doesn’t look like you are working hard or that you are thinking of American citizens and their concerns.
When Americans are worried about inflation and rising gas prices — those little items that are not included in the official inflation statistics — and you are quoted as “urging world oil producers to lift crude output,” it really doesn’t look good. And when your answer to the price of gas rising over $4.00 a gallon is that “They need to increase supplies. We are in conversations with major oil producers like Saudi Arabia,” what can you possibly be thinking?
If you understand that increased supplies will bring down the cost of oil, why are you not increasing our own supplies? The Saudis, if you remember, have been busy.
Filed under: Foreign Policy, History, United Kingdom | Tags: British Tradition, Prince William and Kate Middleton, The Royal Wedding
There is much talk on the talk shows about the wedding of Prince William and Kate Middleton. Some Americans are offended that other Americans pay attention. Many husbands find it obnoxious that their wives love the romance of a royal wedding. Their wives find their husbands’ callousness obnoxious. Lots of people just don’t get the fascination. The media wallows in fascination. So there you are.
I find it interesting. The British like their royalty, except for those who don’t. Many assume that the royals are empty, vapid characterless folk. It takes courage and fortitude though, to perform kindly at constant appearances, charity functions, to endure elaborate ceremonies, and to pretend to enjoy long state dinners with other heads of state. It cannot be an easy life, and they have no real choice. It is the role that they were born to. Despite the trappings, I can think of a lot of things I’d rather do.
When you are just a rich celebrity, you can be rude and do pretty much whatever strikes your fancy. If you go too far, you may have to pay the price. Royalty cannot do that.
I like the spectacle. The British have a long tradition of spectacular ceremonies, and they do it all very well. It’s fun to watch. I wish the young couple well and hope they can find happiness in the formal lives they must perform. But I’m not caught up in illusions of fairy tale romance, and I won’t stay up half the night to watch.
I like English history, which is partly my history, though many generations removed. I’m a mix of English, Scots, Welsh, German and Dutch with a stray Norwegian and a Frenchman thrown in, way back. And I had a good many ancestors who fought against the British, twice.
For an explanation of the difference between the United Kingdom, the British Isles, Great Britain and England, don’t miss this brief but enlightening tour. For an earlier British ceremony when King George III rode to address Parliament on the distressing issue of war in America in 1776, see here, with a picture of the royal coach as well.
Enjoy the spectacle or ignore it, but refrain from being rude about the whole thing. That gets a little tiresome.
Filed under: Foreign Policy, Islam, Middle East | Tags: Bashar Assad, Hillary Clinton, John Kerry, Nancy Pelosi, Obama, Syria
In Syria, the Assad regime made a fateful decision this week. They used their army —even including tanks —to kill civilians protesting peacefully. Bashar Assad made the decision that it was better to kill hundreds of unarmed Syrian citizens than to risk the fall of his regime. This is the man whom Nancy Pelosi, John Kerry and Hillary Clinton thought was a peaceful reformer. As Elliott Abrams says:
In Syria and Lebanon, there is confusion about the American position. Many believe we are Assad well-wishers, and certainly Obama’s policy for 2009 and 2010 lent credence to that view. Now, the administration is coy: It talks of new sanctions but does not impose them yet. It talks of U.N. action but it is the U.K. and France that introduce the resolution, not the United States. It will not recall the U.S. ambassador who was so foolishly dispatched to Damascus late last year.
Two weeks ago, al Jazeera turned against Assad and is doing what it did in Egypt — broadcasting whatever it can get its hands on about the brutality of the regime and the courage of the protesters. The Amir of Qatar owns the station.
Syria is closely allied with Shia Iran, and with Hamas and Hezbollah, but the Syrian population is 74 percent Sunni. If the Alawite regime were to fall, it would be widely interpreted as a step toward the fall of the ayatollahs, so what happens in Syria is hugely important for American interests in the region. The president is, um, testing the wind, thinking about sanctions. He could recall our ambassador. He could pressure Turkey very hard to distance itself from the regime. He did say that Mubarak and Quaddafi must step down, he hasn’t even suggested that Bashar should.
He did issue a travelers’ warning.