American Elephants

Here’s Why There are No Jobs and No Recovery. by The Elephant's Child

Two stories:

Kennewick, Washington —  It took Bob Bertsch 25 years to build his construction business and just one day for it all to go away.  Mr. Bertsch’s Kennewick -based Ashley-Bertsch Group went on the auction block last Friday. By 4 p.m. they had sold off two dozen vehicles and trailers, tons of power tools and supplies, and even the gas-fired fireplace in the office.

Mr. Bertsch, 65, said he is down-sizing because the tax burden got too expensive to stay in business.  “I am tired of carrying all the tax load,” Bertsch said.  “I renew 13 licenses here every year just so I can spend money in this city.”  He makes no attempt to conceal his frustration with the costs government imposes on small businesses like his.  Government is killing small business.  We used to have 24 employees, now all those people are in the unemployment line. He told a friend at the auction that he is selling out because the government was taking more out of his business than he was.

Los Angeles, California — George Will tells this story:  In 1941, Carl Karcher was a 24-year-old truck driver for a bakery. He was delivering huge numbers of buns, so he scrounged up $326 to buy a hot dog cart across from a Goodyear plant, and then the war came. As did millions of defense industry workers. Southern California’s contribution to American cuisine was fast food, which eventually included hundreds of Carl’s Jr. restaurants.  Carl died in 2008, but CKE Restaurants survives. It would thrive, says CEO Andy Puzder, except for the government’s comprehensive campaign against job creation

CKE has more than 3,200 restaurants (Carl’s Jr. and Hardee’s) with some 70,000 jobs, 21,000 directly and 49,000 with franchises. CKE’s health care advisers said that ObamaCare would add between $7.3 million and $35.1 million to the company’s $12 million 2010 health care costs.  They guess $18 million — twice what CKE spent last year building new restaurants. ObamaCare means fewer restaurants, fewer jobs at about 25 jobs per restaurant., and about 3,5 times that much in the community.

That’s not all — government policies are raising fuel costs which affect everything from air conditioning to the cost of supplies, and the threat that the NLRB will impose something like “card check” in place of secret-ballot union elections.  CKE has stopped building restaurants in California because approvals and permits can take up to two years, compared to six weeks in Texas, and the cost to build is $100,000 more than in Texas — where CKE is planning to open 300 new restaurants.

CKE has 95 percent employee turnover in a year, not bad for this industry. Health-care benefits under their “mini-med” policies will be illegal  under ObamaCare. All sorts of employers will be looking for ways to reduce numbers of employees.  CKE is governed by 57 categories  of regulations.  The administration is quite certain that regulation has nothing to do with the dearth of jobs.  In their world, that’s just what government does — set the rules to control business and the people who engage in it. That’s why they were elected, isn’t it?  To tell employers how to operate their businesses so everything is fair and good.

These are not unusual stories. They are being repeated across America in multitudes of businesses, and have been for the last three years. When you have an administration where no one has ever worked in the private sector, let alone managed anything in the private sector, you have a lot of regulators who have no idea what the consequences of their regulations are.  A job is a cost to an employer.  When you make it cost more, there are fewer jobs.

A 63-Year-Old Cartoon Is Pertinent For Today! by The Elephant's Child

Here is a 63-year-old cartoon, made in 1948 by the Extension Department of Harding College.  It does a pretty good job of describing the situation today.
The president’s speech tomorrow at Osawatomie, Kansas is all too reminiscent in character to the snake-oil-salesman in this cartoon, and he is asking you to give up your liberty in the name of “a make-or-break moment for the middle class if they don’t get everyone ‘the rich” to pay their fair share, while everyone else is struggling to get along.  We’re all in it together.  Everyone gets a fair shot.  It’s an old, old story, captured in a 63-year-old cartoon.  The same old snake-oil.

(h/t: Godfather Politics)


The Coming Class Warfare Speech! by The Elephant's Child

President Barack Obama will journey to Osawatomie, Kansas on Tuesday to give a big class warfare speech.  He will emphasize the need for Americans (read “the rich”) to pay their “fair share.”  He will draw on the Osawatomie speech given by President Theodore Roosevelt  on August 31, 1910.  It was a very progressive speech, very long,  and though well received in Kansas, caused the Eastern states to denounce Roosevelt as a “communist agitator,” while the West thought he was supporting hostility towards Taft, his chosen successor.

The press release from the White House says:

On Tuesday, December 6, President Obama will travel to Osawatomie, Kansas where he will deliver remarks on the economy. The President will talk about how he sees this as a make-or-break moment for the middle class and all those working to join it.  He’ll lay out the choice we face between a country in which too few do well while too many struggle to get by, and one where we’re all in it together – where everyone engages in fair play, everyone does their fair share, and everyone gets a fair shot. Just over one hundred years ago, President Teddy Roosevelt came to Osawatomie, Kansas and called for a New Nationalism, where everyone gets a fair chance, a square deal, and an equal opportunity to succeed.

This is a pure attempt to blame “the rich” for the misfortunes of all the people Obama has put out of work.  Obama is impervious to information that the rich are already bearing far more than their fair share of taxes, that economists advise that it is unwise to raise any taxes in the middle of a recession, and any information that many of the so-called rich are actually small businessmen reporting the earnings of their companies n their individual return — small businesses that usually supply most of the new jobs. He doesn’t understand that the rich have options. They can move their businesses offshore, relocate, quit their businesses, or engage in vigorous lobbying.

Obama has tried to blame George W. Bush,  the Japanese tsunami, the Arab revolutions, the financial crisis in Europe, the wars in Afghanistan and Iraq, ATMs, airport kiosks,  oil companies, gridlock, speculators,  the media for the lack of a compromise, Congress for lack of progress, a lack of will in Washington, a string of bad luck,  and especially those who are not paying their fair share— for the lack of a recovery.  Anything but his own policies. He is quite sure that he has done everything right.  He has said so — specifically. It is all somebody else’s fault.  Now he wants to blame the rich for not paying enough taxes.

Obama does not change his mind.  He remains convinced that he just didn’t have a big enough stimulus, and if he can confiscate some more money, he can invest in “infrastructure” creating all sorts of union construction jobs.  Been there, tried that, and that’s why we’re in  such a mess now.

Can we review this? The financial crisis was caused by Congress.  Ever since the Carter administration it has been government policy to try to get more minorities into their own homes, in the belief that home ownership would help people to get ahead and become more involved in their communities.

Over the years, it didn’t seem to be improving fast enough and Congress pressured banks and Fannie and Freddie, the government mortgage giants, to reduce their standards for mortgages to get more people into their own homes. Banks were forced to make loans to people, who under normal prudent lending rules would not qualify for a loan.

The reduced qualifications and climbing housing prices encouraged speculators to buy homes to ‘flip’ them as prices escalated.  Fannie and Freddie bundled these bad loans into questionable securities and they passed muster with the rating agencies.  Investment banks, who should have known better, bought them up. The boom collapsed, banks were left with bad securities— that, since they were made up of many different mortgages from different places at different rates, nobody knew what they were really worth if anything.

Obama began whining almost immediately after he was inaugurated — Bush left him a mess, which is partly true. Business cycles happen, bubbles burst —unexpectedly, and most presidents start out with whatever is left from the previous administration.  Most new presidents suck it up and go to work to try to alleviate the pain.  Obama decided, instead, to ignore the problems and push through a gigantic transformation  of the economy with ObamaCare.

He pushed Americans into a green economy, investing billions in his vision of an economy powered with alternative energy. He set about vast regulation of every sector of the economy, and enlarged government and its control of the economy.  And to no conservative’s surprise, nothing worked.

Taxing the rich won’t improve the economy. The rich don’t have enough money, even if you took it all away, to make a real difference.  Quite a few states have tried escalating taxes to solve their budget problems, and succeeded only in sending their wealthy citizens and their businesses to Texas, where they know something about low taxes and light regulation.

Obama cannot run on his record, which is dismal. It’s going to be a vicious campaign.

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