American Elephants

There’s Good Economic News by The Elephant's Child
May 6, 2018, 2:27 am
Filed under: Politics | Tags: , ,

The US unemployment rate has dropped to a near 17½ year low of 3.9 percent. It was the second straight monthly drop in the participation rate. Economists polled by Reuters had forecast the unemployment rate falling to 4.0 percent.

The dollar paid no attention to the employment data and rose to its highest level this year against a basket of currencies. Jobs are widely available, but there is shortage in some needed skills.

The media is not anxious to extol any good news about the economy. but bits do get through now and then. Things are going well. Valerie Jarrett popped up to claim that the good news was because of Obama’s efforts.

The Business of Businesses is to Create Value by The Elephant's Child

Back in 2011, a Rasmussen survey taken on August 20 and 21st found that 64 percent of Americans actually believe that the most basic goal of businesses is “to create jobs for the overall economy.”  Only 25 percent of respondents understood that “the primary objective of a business is to create value for the shareholders.” In other words, to make a profit. The socialists among us have so demonized the word “profit” without any understanding, that people get confused.

We have a lot of people in this country currently unable to find a job, and a lot who are working at jobs for which they are overqualified. So jobs are a big concern. Jobs, however, are not created out of thin air, or wishful thinking, and businesses are not charities.

Business begins with an idea. Someone thinks he can make money with his idea. Unless he is independently wealthy, he must raise money to start. He has to sell his idea to people who will believe that his idea will create value. Those people will become shareholders, giving our idea man enough money to get a start, and he in turn, gives them shares or rights to future value.

With that financial backing he can hire people to do the jobs necessary to create the value promised to shareholders and continue to create value so they will continue to support him.  Investors will stick around only so long buoyed by hope for future profits. They expect to get their money back, with some more value thrown in to reward them for risking their money.

“Profit” is not a dirty word.  People have long been confused by the political left— academics and media people who simply do not understand the profit motive. A successful idea, well-implemented, can create many jobs, not only in their own offices, but in all the companies that supply a business: raw materials, shipping containers, computers, equipment, janitorial services, transportation, and so on; and the same increase happens in each of the suppliers’ businesses.  Free enterprise at work.

But a free market economy is always changing, growing, and there is ‘creative destruction’ too. Here are a couple of examples that will clarify it all. Though each short video could prompt another few essays.

The MSRP for a Tesla Model S — $106,200. Tax and license extra. But the EPA: 101 city/102 hwy (MPGe)

The Record of the First Four Years: by The Elephant's Child
November 8, 2013, 6:08 pm
Filed under: Capitalism, Democrat Corruption, Economy, Progressivism | Tags: , ,


In the first four years of the Obama administration, the real median income of American households dropped by $2,627. The number of people in poverty increased by approximately 6,667,000 according to data the Census Bureau released today.

The number of people now officially in poverty is now a record 46,496,000, or twice the population of Syria — depending on how many have been killed recently.

The poverty threshold depends on the size of the family. A single person living by themselves was considered in poverty if they earned less than $14,937. A family of two was in poverty if they earned less than $14,937, and a family of three met the threshold at $18,284, a family of four at $23,492 and so on.

The real unemployment rate (the U-6 unemployment rate) is a broader measure of the unemployed plus all persons marginally attached to the labor force plus the total employed part-time for economic reasons. The U-6 rate is a fuller picture of people who are willing and able to work, but cannot find a job.

The U-6 rate was 14.5% in January 2009 and rose to a high of 17.1% in October November and December 2009 and through April 2010. The rate did not fall below 14% until March 2013 when it hit 13.8% where it is today.

To fix everything Obama recommends a pathway to citizenship for America’s illegal aliens. Not sure how that works. Just changing the subject?

ADDENDUM: The latest GDP report shows that Obama’s policies continue to weigh down the economy. The recovery from the Obama Recession is now 51 months old and the weakest since the Great Depression. Consumer and business spending have slowed and the recovery is $1.3 trillion below average. Had job growth been merely average there would be 7.3 million more people with jobs — or 64% of those looking for work would be employed. It was, of course —Bush’s fault, and when that didn’t work, insufficient stimulus, “head winds,” the Arab Spring, and problems in Spain, Italy and Greece. Now it’s the government shutdown. His own economic policies are never mentioned.

Milton Friedman Takes On the Minimum Wage by The Elephant's Child

The do-gooders believe that by passing a law saying that nobody shall get less than $9 per hour (adjusted for today) or whatever the minimum wage is, you are helping poor people who need the money. You are doing nothing of the kind. What you are doing is to assure, that people whose skills, are not sufficient to justify that kind of a wage will be unemployed.

The minimum wage law is most properly described as a law saying that employers must discriminate against people who have low skills. That’s what the law says. The law says that here’s a man who has a skill that would justify a wage of $5 or $6 per hour (adjusted for today), but you may not employ him, it’s illegal, because if you employ him you must pay him $9 per hour. So what’s the result? To employ him at $9 per hour is to engage in charity. There’s nothing wrong with charity. But most employers are not in the position to engage in that kind of charity. Thus, the consequences of minimum wage laws have been almost wholly bad. We have increased unemployment and increased poverty.

Moreover, the effects have been concentrated on the groups that the do-gooders would most like to help. The people who have been hurt most by the minimum wage laws are the blacks. I have often said that the most anti-black law on the books of this land is the minimum wage law.

There is absolutely no positive objective achieved by the minimum wage law. Its real purpose is to reduce competition for the trade unions and make it easier for them to maintain the higher wages of their privileged members.

The Facts Are Clear. by The Elephant's Child

Obama, Can You Spare a Dime? by The Elephant's Child

Vanderleun found an overlooked video from 2009, It packs a lot more punch today.

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

The Hope and The Change — The Official Movie Trailer by The Elephant's Child
September 3, 2012, 6:53 am
Filed under: Capitalism, Economy, Politics | Tags: , ,

What Is The Message of the Obama Campaign? by The Elephant's Child

On Sunday’s State of the Union, CNN’s Candy Crowley struggled valiantly to understand the message the Obama campaign is presenting to voters. She interviewed David Plouffe, White House Senior Adviser who was Obama’s campaign manager for the 2008 campaign. So, who should know better just what the message the Obama Campaign is proposing for his second term will be?

It is pretty obvious to everyone who is paying attention to politics, that Obama really hasn’t got much to run on. Unemployment remains extremely high although the recession officially ended in June of 2009. Spending is out of control and the debt threatens every American.

A free-market economy wants to recover after a recession. Left entirely alone, the economy gradually will recover. Politicians can’t leave it alone, they always hope to make it faster and less painful. Instead, it has only gotten worse, and three-and-a-half years later blaming Bush is wearing more than a little thin. The green energy and green jobs have been a flop, so why should we give him another four years? That’s what Candy Crowley wants to know. What is his message?

Here is the transcript. Do read it, it is beyond entertaining, and revealing as well. Candy is persistent, and just won’t give up.  And the video is at the end of the transcript. Enjoy. It’s great fun.

President Obama’s Really, Really Bad Math. by The Elephant's Child

President Obama held a press conference today, and managed to commit a terrible gaffe. He said “the private sector is doing fine.” Here’s the whole quote:

The truth of the matter is that, as I said, we created 4.3 million jobs over the last 27 months, over 800,000 just this year alone. The private sector is doing fine. Where we’re seeing weaknesses in our economy have to do with state and local government. Oftentimes cuts initiated by, you know, Governors or mayors who are not getting the kind of help that they have in the past from the federal government and who don’t have the same kind of flexibility as the federal government in dealing with fewer revenues coming in.

James Pethokoukis, who is very good at this kind of thing, says:

Private-sector jobs have increased by an average of just 105,000 over the past three months and by just 89,000 a month during the entire Obama Recovery.

In 1983 and 1984, during the supply-side Reagan Boom, private sector jobs increased by an average of 292,000 a month. Adjusted for population, that number is more like 375,000 private-sector jobs a month.

(Aside:) I wonder how many people are just turned off, at this point, by more numbers. The efforts to make American students love math have not been very successful, and it may be hereditary. When your kid brings home some math problems that he can’t figure out — how many parents just make the situation worse, and continue a distaste for math in another generation?

To keep it simple, I wrote down this number from a reliable source, I just don’t remember who it was. To keep up with population growth, we would need to add 125,000 new jobs each month. So we would need 1,500,000 new jobs in the last year, so Obama’s job creation came up 700,000 short. Or to take James Pethokoukis’ average number of 89,000 a month — Obama would have needed 1,068,000 jobs in the last year to keep up with his own average.  800,000 just won’t cut it.  Somebody’s math here is wrong.

Somebody apparently alerted Mr. Obama to what he has said in the press conference, so he rushed back for the nearest microphone to say no, he didn’t mean that “the private sector was doing fine.” What he meant was that Congress had to stop being lazy and not doing anything and pass his jobs bill. Congress has no interest in passing his jobs bill, and has rejected his budget unanimously.

The President has held 16 ‘campaign events’ over the last 7 days and flown in Air Force One to 6 states.  More campaign events that all previous presidents, but he likes campaigning, it is the actual job of being president that he doesn’t seem to care for.

After His Very Worst Week, The Weakest Jobs Report Since Last October. by The Elephant's Child

The Worst Economic Recovery in History” trumpets the headline in the Wall Street Journal over a column by Edward Lazear, chairman of the President’s Council of Economic Advisers from 2006-2009. “Weak March jobs report could spell trouble for Obama’s reelection bid” says the headline from the Hill.

U.S. employers added just 120,000 net jobs last month— the smallest increase since last October. The U.S. economy hasn’t been below 8% since Obama took office in January 2009. Back in May 2007, unemployment was just 4.4%. Average hourly wages are up just 2.1% over last year, but inflation is up 2.9%. American workers are losing ground.  March was expected to yield another positive report, but job gains were almost 100,000 below expectations.

The broader U6 measure of unemployment which includes the discouraged and the part timers is still a sky high 14.5%. Everyone juggles the numbers and attaches their own meaning. The president regards it as another step in the recovery, if one that is a bit of a disappointment. But the U.S. needs to generate 262,000 jobs each month to get back to the breakeven point.

Obama says, on the campaign trail, that he knows there’s still work to be done, but those dastardly Republicans want to make tough choices about the deficit, and cut taxes. He wants to invest in education, and science and research. He wants to make sure that our air is clean and our water is clean, that we’re not poisoning our kids. See how dastardly the Republicans are?

Try to Remember When It Gets to November: by The Elephant's Child

It was three years ago that Obama signed the much celebrated $787 billion Stimulus Bill into law.  Friday was the anniversary.  So after three years, how do the results stack up? (From Investors Business Daily)

Obama claimed it would “create or save” up to 3.5 million jobs, and unleash a “new wave of innovation, activity and construction across America.” The stimulus would, he promised “ignite spending by businesses and consumers” and bring “real and lasting change for generations to come.”

Unemployment rate February 2009: 8.3%. February 2012: 8.3% unchanged.

Long term unemployed: the number of workers unable to find a job in 27 months or more has shot up by 83%. They number now 5.5 million.

Size of the civilian labor force: Declined by 126,000.  In past recoveries, the labor force climbed by an average of 3 million over the same time period.

Household income is about 7% below where it was in February 2009.

National debt: Up by 41%  or $4.5 trillion since February 2009. The latest Treasury figures put the national debt at $15.4 trillion, larger than the entire U.S. economy.

The deficit for fiscal year 2009 was $1.4 trillion, the proposed deficit for 2012 is $1.3 trillion for the fourth year of trillion dollar deficits.

Over the past 3 years from Q1 2009 to Q4 2011, the Gross Domestic Product (GDP) has climbed only 6%, according to the Bureau of Economic analysis.

The original estimate for the Stimulus was $787 billion but the CBO says it has grown to $825 billion.  The official name was HR1: American Recovery and Reinvestment Act of 2009.

Best measure: Obama’s latest budget request calls for another round of stimulus.  He wants $350 billion over the next four years for “short-term measures for jobs growth”


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