March 5, 2010

Why the Alleged Recovery Is Soooooo Slow

Filed under: Economy,Taxes & Government — Tom @ 9:00 pm

Rush referred to this post at Heritage this afternoon. It ties in to assertions I’ve been making about the economy and who is to blame for its condition for a long time — a longer time period than Heritage cited.

Here is why monthly job creation, eight months into an alleged recovery, is still going negative on a seasonally adjusted basis, and is still on a not seasonally adjusted basis trailing what we saw in 2004 through early 2008, when the economy was reasonably good (links are in original):

The reason our unemployment rate is so much higher now is low job creation, not high job loss. So why aren’t businesses creating jobs?

  • At one of President Obama’s many jobs summits, Fred Lampropoulos told The New York Times that businesses were uncertain about investment because “there’s such an aggressive legislative agenda that businesspeople don’t really know what they ought to do.” That uncertainty, he added, “is really what’s holding back the jobs.”
  • Dan DiMicco, CEO of steelmaker Nucor Corp,  told the Wall Street Journal: “Companies large and small are saying, ‘I am not going to do anything until these things — health care, climate legislation — go away or are resolved.’”
  • Porta-King CEO Steve Schulte told USA Today his company is not investing because “proposals in Congress to tackle climate change and overhaul health care would raise costs.”
  • The New York Post’s Charles Gasparino reported on the 600 companies stock analyst Peter Sidoti covers: “‘There hasn’t been one bankruptcy,’ he tells me. How did they survive the recession? By cutting costs and hoarding cash, not expanding their business and hiring more people, even as the economy now is starting to recover. During other recoveries, Sidoti says, firms like these would be hiring workers in droves as demand picks up for goods and services. This time around, they’re not — because ‘they don’t know what their costs are going to be.’”
  • National Federation of Independent Business chief economist Bill Dunkelberg writes: “The horizon is filled with cost unknowns, from healthcare to cap and trade to yawning deficits and the need to come to grips with them, from paid family and medical leave to card check, from expiration of the Bush tax cuts to state decisions about their finances. Washington cannot expect small business owners, facing difficult economic circumstances anyway, to commit themselves to investing in new employees or equipment and vehicles without acknowledging and revealing the policy-inspired costs that will be imposed on them. It is all about uncertainty and confidence.”

Our economy’s job creators have been trying to send a message to the Obama administration for months: stop creating so much uncertainty in the tax and regulatory environment so that we can figure out how to invest our money and start creating jobs. Stop taking over car companies. Stop shedding financing contracts. Stop taking over 1/6th of our economy. Stop raising taxes on our energy sector. Just stop.

But what people don’t get is that the factors cited all became relevant in about June of 2008 (based on recently revised employment data, perhaps even a month earlier than that).

All of the factors cited — statist health care, draconian climate legislation, and brutally higher taxation on the productive — were core campaign platforms of Barack Obama when he emerged as the Democratic Party’s presumptive presidential nominee. THAT is when the uncertainty cycle began, THAT is when the economy began turning down, and THAT is when yours truly pegged what we have been living through for past 21 months or os as the POR (Pelosi-Obama-Reid) Economy — because THAT is exactly what it has been.

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ADDENDUM: At the time I first identified the POR Economy, I suggested that Pelosi, Obama, and Reid were engineering an economic downturn in the name of winning the White House and larger majorities in Congress.

Rush Limbaugh has been making the argument that follows in various forms — that it’s about much more than merely being in power — for quite a while (so have Beck and Levin, with Beck probably being the first to recognize and articulate the full potential scope of the dangers). The longer this administration stays on the path of designed uncertainty described above, in combination with using 1930s FDR-style and 1990s Japan-style stimulus that did not work then and hasn’t worked now, the more convincing the talkers’ argument becomes.

This time, Rush has anonymous testimonials (link will become inaccessible in about a week; I added a couple of paragraph breaks for readability):

I met with a guy today — this is fascinating. There’s a whole bunch of powerful people here in town in Palm Beach because the Club for Growth, the annual convention or whatever they call it is taking place here. And quite naturally, many of the attendees have sought a meeting with me. I have granted an audience to four of them. And one of them was this morning. I’m not going to name names. You would know them all. They come from many different spheres, if you will.

One of them said to me today, “I was driving around a little over a year ago, about a year ago, and I was listening to you, Rush, and I cringed –” the guy’s a Republican “– I cringed when you said that Obama purposefully intends to destroy the country’s economy, take it, pare it down to size. I said, ‘No, no, that can’t possibly be true.’ It may be that he just doesn’t get it and that he’s not a leader, but, Rush, I have to tell you, I can see no other reason to explain this. We keep heaping mistake after mistake after mistake after mistake. This is more than somebody just not getting it.”

And then this person said to me, “We know some people in this administration. You get a couple of drinks in them and they really open up because their egos are huge. These two guys are over at the Pentagon. And they said quite honestly and very proudly, ‘We are here as part of the administration to manage America’s decline. Whatever you think that means, you’re watching it, America’s decline. We are here to manage it.’” Not fix it, not correct it, but to manage it because they think this is what we deserve, that we’ve been too big shot for too long.

I knew all this by instincts because I know people like this and I said to the guy to whom I granted the audience when he said, “I cringed when I heard you say that.” I said, “I know it’s hard to hear.” I said, “It’s difficult for me to hear myself say it.” So this now makes four people who have said, “You know, a year ago, when I heard you talking about how radical this guy was, I said ‘no, Rush, it’s just the Democrats, it’s just some young, unqualified Democrat, that’s all it is.’” Nobody thinks that anymore. They may think he’s unqualified, they may think he’s not a leader, they may think that he doesn’t get it, but they all understand now that his agenda is his agenda, and it doesn’t matter the impact his agenda has on the country.

Many entrepreneurs, investors, and businesspeople and a few others, including yours truly, saw it as early in May-June 2008, and we were right.

It’s not a pretty conclusion to reach, but it is what it is, and there no benefit to underplaying it. The American people, who are overwhelmingly sensible, constitution-driven, and yes, conservative, must recognize the full scope of what they’re up against, and the true goals of those who are currently in control, before they will be able to completely defeat them. They must be routed.

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1 Comment

  1. When will people learn to start believing us?

    Comment by Joe C. — March 7, 2010 @ 2:21 pm

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