American Elephants

Sixteen Trillion Reasons by The Elephant's Child

Okay, he seemed inspiring in 2008, but for sixteen trillion reasons, it’s all right to let him go.

Obama Wants Another Term; He Doesn’t Deserve One. by The Elephant's Child

President Barack Obama wants another term. I’ve always had the feeling that he didn’t really like the job, but I guess he doesn’t want to be a one-term president. That is not enough reason to reelect him. His record is dismal, but Democrats apparently don’t know it.

The Democratic Convention was strange, at least to my eyes. The conventioneers applauded any attack or smear on Republicans with enormous enthusiasm. I’ve had the feeling for some time that the Democratic Party is more like a team you cheer for and belong to, rather than a group who fight and agree over principles, approving some and rejecting others.  If you read some of the speeches, including the president’s, they say some enormously false and truly absurd things, and they seem to believe every word.

Let me start with the really big whoppers. The president keeps saying that he has created 4.5 million jobs and the economy is recovering, he just needs more time. The auto companies are back on top of the world, while reports in the press worry if GM will fall back into bankruptcy. Our dependence on foreign oil has dropped because of all Obama’s successful investments in alternative energy, when it’s clear that the solar companies have been going bankrupt right and left, and the use of oil is down because poverty is up and people aren’t buying much or driving much. Manufacturing is roaring back he claims, but the official gauge of factory output has dropped to the lowest point since July 2009 and is officially back in recession. These things can be verified, often by figures from his own administration.

I understand perfectly well that the president wants to put his administration in a positive light and celebrate his accomplishments, and cast a dark light on his opposition suggesting that they are incapable of improving anything — but there should be some limits to credulity. Do the Democrats believe this litany? Or do they just pretend to because Republicans, of course, are evil? And racist, mustn’t forget racist. I know that liberals read liberal newspapers and liberal books, and listen to liberal broadcasts and watch liberal TV, and associate with other liberals but do they just have no contact with the real world? Well, of course they don’t. Consider your college faculty.

Republicans that get things wrong get called on it — usually by other Republicans. I am not attempting to say here that Republicans are all things wise and wonderful. Republicans are normal human beings, make lots of mistakes, don’t necessarily do the right thing at the right time, say stupid things, but when they do, they try to fix the mistakes. And cases of bad behavior are asked to resign. Liberals always think that the next law or the next regulation will fix things, but it won’t. We are flawed human beings full of quirks and emotions and we just have to muddle along and try to get better.

Perhaps the most astounding idea of the convention was that “we all belong to the government.” They have always dreamed of a utopian “community” where we all share and get along famously. Puget Sound has long been a hotbed of utopian communities, which may be why we’re such a blue state.  Not everyone believes in that kind of community, and many think more of a community of those who care. And many use caring to disguise their quest for power — you can easily come up with examples. And then there are those who just want to belong to, and cheer for, their team. This is not your father’s Democratic party. The old Democratic party wanted to sit down and negotiate and get things done. We didn’t always agree, but we could find areas where we could easily cooperate. That’s mostly gone. Is it Obama? Current leadership? I don’t know.

Contrary to what many conventioneers seem to think, if businesses do not make a profit, there will be no taxes to support government. Government has no money of its own. There is a natural business cycle. When times are good, human nature is inclined to build a little more, hire a few more, and project more profits than will actually appear. The economy contracts, probably a little more than necessary, since human nature is inclined to get scared. The economy wants to recover, and left absolutely alone without government doing anything stupid, will usually recover on its own.  If the administration’s idea that more unemployment benefits and more food stamps will add needed demand to the economy — would work, then we just have to fire everybody.  Obama doesn’t even believe in the free-market.

Obama is now counting on more stimulus, more food stamps, more unemployment benefits and more time. We don’t have time, and contrary to Obama’s sneers about tax cuts, and same old prescriptions, rolling back regulations, he is sneering at what has worked every time it has been tried. There are records, there is history, there are statistics.  And here is one of the scariest statements of all:

And the truth is it will take more than a few years for us to solve challenges that have built up over decades. It will require common effort and shared responsibility, and the kind of bold, persistent experimentation that Franklin Roosevelt pursued during the only crisis worse than this one.

Franklin Roosevelt’s “bold, persistent experimentation” gave us a double-dip depression that lasted long past his death. Many areas of the county didn’t recover until the late 1940s. Roosevelt’s bold experimentation made the Great Depression far worse and far longer than it needed to be. “Common effort and shared responsibility” — empty words lacking any meaning whatsoever.

The recession that Ronald Reagan faced was far worse than this one. Reagan forced down interest rates that were as high as 20%, set the economy on the path to recovery, and an economic boom that lasted over twenty five years. Obama chose to address this recession with discredited Keynesian economics, and then turned his attention to expanding government, increasing regulation, rewarding cronies, scaring business,  killing jobs and forcing through a compliant Congress a socialist health care plan that Americans have explicitly resisted for fifty years.

Barack Obama is not a man who is apt to consider the possibility that he might be mistaken. He may even hear you out, but it is his way or the highway.  And that is a problem.

The Absolutely Awful August Jobs Report by The Elephant's Child
(click to enlarge)

The monthly jobs reports from the Bureau of  Labor Statistics are always confusing  for those of us who are not statisticians. If you listen carefully to the president, he says that things are not yet good, but they are improving. There are several measures of employment and unemployment, and while they are all reasonably accurate they are measuring different things. The U-3 rate, which is the one always quoted, when they say the unemployment rate is 8,3%, is a straightforward measurement of people hired and people fired (excluding farmworkers). But the actual situation is more complicated.

The size of the labor force —is not a fixed number. New college graduates, high school graduates, immigrants are entering the potential labor force. Some people retire, and some people die, some people leave the country or enlist in the military. The potential labor force is constantly growing. But what about the people who are unemployed and trying to find a job and receiving unemployment benefits?What about the people whose unemployment benefits have run out, and what about the people who have just given up looking? These are all different measurements, and all are just big-picture estimates, as accurate as they can get in a country of 315,000 citizens, and unknown numbers of non-citizens. Complicated.

So this month the U-3 unemployment rate dropped to 8.1% from 8,3% — so someone can say truthfully that the unemployment rate is better, but it’s not really an accurate portrayal of what is real. So the drop in the labor rate must be modified by the decline in the labor force (– 368,000) and the household-survey measure of employment (–119,000). Labor force participation has fallen back to a new cycle low of 63.5%.

The manufacturing sector, much heralded by the president last night, lost 15,000 jobs.  Nonfarm payrolls increased by only 96,000 in August against expectations of 125,000 or more. But in actuality you have to subtract something like 130,000 jobs to keep up with the increase in the size of the labor force. Revisions showed that June employment was revised from 64,000 to 45,000, and the change for July was revised from 163,000 to 141,000. The workweek declined to 34.4 hours, and hourly earnings edged down slightly.

The chart above is based on the original Obama administration prediction of unemployment with the stimulus.  The light blue line represents what was predicted if there was no stimulus. The red dots represent the actual U-3 unemployment rate, and the red dot up under the P in Plan represents the unemployment rate if the labor force was the same size as it was when Obama took office.  Here are the facts you need to take away:

If the number of people in the labor force was the same as when Obama took office in January 2009, the unemployment rate would be 11.2%.

If the number of people in the labor force had just stayed the same as last month, the unemployment rate would be 8.4%

Obamanomics 101: Understanding How the Obama Economy Works by The Elephant's Child

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