March 31, 2011

Bill Whittle: Eat the Rich

Filed under: Business Moves,Economy,Taxes & Government — Tom @ 6:01 pm

Building on a great post by Iowahawk (direct YouTube link), Whittle delivers an objectively irrefutable body blow to arch-leftist and world-class hypocrite Michael Moore:

Reich Touts FDR’s Mid-1930s Depression-Era Growth, Ignores Reagan’s Record

Former Clinton Labor Secretary Robert Reich, in a column appearing at Business Insider, says that we’re heading in the direction of a “double-dip” — and though he doesn’t follow it with the word “recession,” it’s obvious he’s not talking about an ice-cream cone. It’s also obvious that he’s less than pleased with the media spin that things are really okay.

Along the way, Reich had to go back to the mid-1930s, the era of Frankline Delano Roosevelt’s ongoing economic depression (at least as far as employment was concerned), to exemplify what a supposedly good recovery from an economic trauma looks. He was clearly desperate to avoid saying anything nice about the more historically relevant and objectively more impressive recovery and subsequent prosperity that occurred under Ronald Reagan. This is also true of the establishment press.

The failure to compare the current recovery to the recovery from the last serious recession the U.S. encountered has become a nasty establishment press habit, for a drop-dead obvious reason: Despite the fact that his challenges were arguably greater — 13% inflation, 20%-plus prime interest rates, and high unemployment — Reagan’s tax-cut and regulatory relief-driven economy boomed. By contrast, Barack Obama’s stimulus-laden, gimmick-dominated, fossil fule-hostile, uncertainty-driven economy isn’t impressing anyone.

Here are several paragraphs from Reich’s Thursday morning column (“The Truth About The Economy: We’re Heading Back Toward A Double Dip”):

Why aren’t Americans being told the truth about the economy? We’re heading in the direction of a double dip – but you’d never know it if you listened to the upbeat messages coming out of Wall Street and Washington.

… The Reuters/University of Michigan survey shows a 10 point decline in March – the tenth largest drop on record. Part of that drop is attributable to rising fuel and food prices. A separate Conference Board’s index of consumer confidence, just released, shows consumer confidence at a five-month low — and a large part is due to expectations of fewer jobs and lower wages in the months ahead.

… But isn’t the economy growing again – by an estimated 2.5 to 2.9 percent this year? Yes, but that’s even less than peanuts. The deeper the economic hole, the faster the growth needed to get back on track. By this point we’d expect growth of 4 to 6 percent. In 1934, emerging from the deepest hole of the Great Depression, the economy grew 7.7 percent. The next year it grew over 8 percent. In 1936 it grew a whopping 14.1 percent.

Add to these data two other ominous signs: Real hourly wages continue to fall, and housing prices continue to drop. Hourly wages are falling because with unemployment so high, most people have no bargaining power and will take whatever they can get. Houses are the biggest asset most Americans own, so as home prices drop most Americans feel even poorer.

Reich inexplicably fails to cite accurate mid-1930s growth figures, but the actual numbers seen here for 1934-1936 (10.9%, 8.9%, and 13.0%, respectively) still look pretty good. But c’mon: If we’re to believe the government’s data from the 1930s, the economy at the end of 1940 was 63% bigger than the economy at the end of 1933. I question how could that be if unemployment never got below 12%. But even if it’s accurate, it’s obvious that whatever growth occurred failed to reach an awful lot of people who wanted to work.

By contrast, once his policy prescriptions were finally in place, the post-1980s recession Reagan economy recovered exceptionally well and quickly, both in terms of GDP growth and employment. Here’s how the Reagan post-recession record compares to Obama’s in both metrics (through six quarters for GDP growth and 20 months for employment; click on the second graphic to enlarge and open in a separate window):

ReaganomicsVsObamanomicsThru6Qtrs032511 ReaganVsObamaAllJobsThru20mos

The post-recession economy under Reagan grew 9.9% (with compounding) in its first six quarters. Obama’s post-recession economy has grown 4.5%. Reagan’s economy created over 4.9 million jobs during its first 20 post-recession months. Believe it or not Obama’s economy went positive at a whopping 22,000 jobs just last month.

No wonder Reich didn’t want to make a comparison. It would imply the need for policy prescriptions he doesn’t like, virtually regardless of whether they will work. The same generally goes for the establishment press in their supposedly “objective” news reports.

Cross-posted at NewsBusters.org.

AP Uses Economist’s Dubious ‘Undeniable’ Improvement Assertion to Frame Tepid Unemployment Claims Report (See Update)

UPDATE, April 1: Joshua Shapiro, who is “quoted” in the AP article covered in this post, has emailed me and informed me of the following —

  • Christopher Rugaber did not speak with him, but instead used text from “a written note that I (Shapiro) produced after the jobless claims report was released.”
  • Shapiro is unhappy at my making it appear that he is fooled by establishment press reports. Although I framed my assertions in “if” and “might” to make it clear that I really didn’t know, I regret implying that possibility, though of course I had no idea that Rugaber didn’t even speak to him.

By using the word “said” without contextualizing it, Rugaber gave readers every reason to believe he spoke with Shapiro. Per Shapiro, he didn’t. Rugaber used information that Shapiro framed in a much longer-term context to make current news appear better than it really is. Rugaber’s AP report is even more risible than indicated in the post which follows.

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This morning, the Associated Press’s Christopher Rugaber, in his 9:14 a.m. coverage (saved here at my web host in case it’s revised, as well as for fair use and discussion purposes) of today’s weekly unemployment claims release by the Department of Labor, found an economist whose reaction was to get all pumped up about the job market:

“The downtrend … is undeniable,” Joshua Shapiro, chief economist at MFR Financial Inc., said. “We believe that this improvement will continue in the weeks and months ahead.”

While one of course hopes for improvement in the coming weeks and months, the existence of an “undeniable” downward trend is questionable, as seen below:

WeeklyInitiClaimsTo032611

(Source data: March 24; March 17; March 10; figures going back more than three weeks can be found using the tool at this DOL web page.)

Perhaps other readers have better eyesight than yours truly, because if there’s an “undeniable” trend in the direction of “improvement,” I’m having a hard time seeing it.

That noted, it’s easy to see how Mr. Shapiro might be fooled, as the press has reported that unemployment claims have dropped during each of the past three weeks, while failing to notice that the revision of last week’s number from a seasonally adjusted 382,000 to 394,000 changed what had been a decline into an increase. So if Shapiro is only internalizing initial press reports without going through each week’s numbers in detail, he would of course believe that the situation has been consistently getting better. Trouble is, it hasn’t been. I should note that DOL incorporated changes in its seasonal adjustment factors going back four years into today’s report, and that those changes were responsible for about two-thirds of the 382K to 394K change; but regardless of the source, last week’s initial claims figure changed by a lot, and in the wrong direction.

Based on DOL’s record of upwardly revising initial week reports, it’s more than a little likely that today’s reported week-over week decrease will also turn into a week-over-week increase.

The AP’s Rugaber was among those failing to explicitly notice last week’s swing from positive to negative in his report today, saying only the following about today’s: “That’s the second decline in three weeks.” He did note an uptick in the moving four-week average, but not its degree (up 3,250 to 394,250, a number close enough to 400,000 that Rugaber might have wanted to avoid revealing it).

CNNMoney’s Ben Rooney noted the degree of the revision to last week (“Last week’s total, for example, was revised up by 12,000″), but failed to note that it turned what had been a decrease into an increase. So did this Reuters “Instant View.” Experts consulted by Reuters were far more muted in their enthusiasm (“a marginally weaker report for the labor market”; “we’re just not at the kind of pace we need in order to get employment back to normalized levels”).

Speaking of “normalized levels,” AP’s Rugaber seems to have lowered the bar for real improvement, especially when one compares it to the standard of an expert quoted at Reuters:

  • Rugaber — “Applications near 375,000 or below are consistent with a sustained increase in hiring.”
  • Michael Mullaney, quoted at Reuters — ” one thing we’ve been looking at is that we have to get claims in the 250,000 area to be considered normal again.”

That’s a very big difference. It seems that Rugaber, like other AP business and economics reporters, is trying to define a decidedly non-ambitious “new normal.”

Cross-posted at NewsBusters.org.

Social Security: Obama and Dems Dodge Their Debris

Filed under: Economy,Soc. Sec. & Retirement,Taxes & Government — Tom @ 9:59 am

SocSecBrokeCard0309They still claim “there is no crisis.”

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Note: This column, absent the reference to Victor Davis Hanson, went up at Pajamas Media and was teased here at BizzyBlog on Tuesday.

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“Debt is now the father of us all. In some sense, every cruise missile fired, every Social Security check cashed, ever NPR show aired is done so in part with borrowed money.”

– Victor Davis Hanson, March 20

Annually for well over a decade, the Social Security system’s trustees have been telling the public in polite words that a) its “Trust Funds” (Old Age and Disability) represent an accounting fiction, and b) that the time when yearly benefits paid would exceed tax collections is not all that far away.

In 2000, at Page 338 in a report (large PDF) originating from its Office of Management and Budget (OMB), the Clinton White House also acknowledged those verities. Specifically, as the Washington Post’s Charles Krauthammer noted a few weeks ago (bolds are mine), OMB analysts wrote:

These balances are available to finance future benefit payments and other trust fund expenditures—but only in a bookkeeping sense. These funds are not set up to be pension funds, like the funds of private pension plans. They do not consist of real economic assets that can be drawn down in the future to fund benefits. Instead, they are claims on the Treasury that, when redeemed, will have to be financed by raising taxes, borrowing from the public, or reducing benefits or other expenditures. The existence of large trust fund balances, therefore, does not, by itself, have any impact on the Government’s ability to pay benefits.

Jacob (“Jack”) Lew was Bill Clinton’s OMB Director at the time of that 2000 report. He has held the same job under President Obama since late last year.

For most of the decade which followed, the Trustees told us that the Social Security system would begin running cash deficits in the mid- to late-2010s. Then, in the late spring of 2008, along came what I have since been calling the POR (Pelosi-Obama-Reid) economy. The four-quarter recession as normal people define it which Nancy Pelosi, Barack Obama, Harry Reid, and their party caused, followed by the awful policy choices they made once they gained full control over the executive and legislative branches of government, have led to a “recovery” so anemic that, in the words of Mort Zuckerman, the economy “is neither certifiably dead nor robustly alive.”

That pathetic “recovery,” accompanied by heavy doses of administration-induced economic uncertainty, has caused unemployment to remain historically high. The 21-month string of seasonally adjusted unemployment rates of 9.0% or higher which finally ended in February is the longest such streak in the 62 years such records have been kept. The government’s Household Survey used to determine the unemployment rate tells us that only 875,000 more Americans were working in February 2011 compared to a year earlier. The Establishment Survey used to report jobs added or lost shows about 1.25 million jobs added; but its figures have been retroactively adjusted downward by hundreds of thousands of jobs in each of the past two years (378,000 in February 2011; 902,000 a year earlier).

The payroll tax receipts on which Social Security depends have plummeted, and remain depressed. Such collections, which amounted to $193.9 billion during the fourth quarter of 2008, came in 6.9% short of that mark at only $180.5 billion in the fourth quarter of 2010, six quarters after the recession ended.

The most recent Social Security Trustees’ report, issued last year based on the situation at the end of 2009, told us the following:

Social Security expenditures are expected to exceed tax receipts this year for the first time since 1983. … This deficit is expected to shrink substantially for 2011 and to return to small surpluses for years 2012-2014 due to the improving economy.

As already seen, the economy in 2010 did not improve in a way that would have helped the Social Security system retain its last shreds of solvency. As a result, the Congressional Budget Office now projects Social Security cash deficits as far as the eye can see, rising from over $40 billion in 2011 to over $100 billion by 2021. The estimable Victor Davis Hanson quoted at the beginning of this column is absolutely correct, even about Social Security. Until recently, today’s workers were funding the retirements of today’s retirees. Now generations yet unborn have also been conscripted for that same purpose.

Yet the Obama administration, including the aforementioned and now about-facing Jack Lew, insists that Social Security must be off-limits in any deficit discussions because, as Lew wrote in response to a USA Today editorial, “Social Security benefits are entirely self-financing.” Suddenly, the “Trust Fund” which Lew’s 2000 OMB wrote “do(es) not consist of economic assets” is what will in 2011 and beyond enable the system to “have adequate resources to pay full benefits for the next 26 years.”

The 2000 version of Jack Lew was right. Politicians raided Social Security for decades by “borrowing” its surpluses and squandering over $2 trillion. But that wasn’t enough. Except for a brief, primarily Republican-inspired period around the turn of the century, Democratic and Republican administrations have continually added to the nation’s debt load. The Obama administration has taken it to a horrifying new level. By September 2011, it will have rung up over $4 trillion in additional deficits in three fiscal years (it gets responsibility for fiscal 2009 because, as noted earlier, Democrats created the POR economy before that fiscal year began). It has also increased the national debt by roughly $5 trillion.

So, if we’re to believe Team Obama, the 2011 version of Jack Lew, and Harry Reid — who doesn’t see a need to deal with Social Security for 20 years — a government whose nonpublic debt is projected to be within a whisker of what many experts believe is the code-red level of 90% of GDP in 10 years is automatically going to be able to continue to fund Social Security’s cash deficits for the next 26 years. Horse manure.

These people know the truth, and they’re deliberately dodging it. They’re cynically hoping to ride a wave of ginned-up opposition to any and all entitlement reform in hopes of getting across the finish line in the 2012 elections. I don’t believe I’ve ever seen a more cynical strategy on a problem so important in my lifetime.

I hope they fail.

Ford to Surpass GM in March Sales?

Filed under: Business Moves,Taxes & Government — Tom @ 9:22 am

Note: This was originally posted shortly after midnight and has been carried to the top.

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The ultimate source is Edmunds, as carried at AutoObserver.com (HT Doug Ross):

… while it is no sure bet just yet, Ford Motor Co. has a shot at beating General Motors Co. for U.S. sales leadership in March, a month in which the Seasonally Adjusted Annual Rate (SAAR) of sales is expected to be 13.1 million vehicles. Ford will sell 210,400 vehicles in March to GM’s 208,400, according to Edmunds.com’s forecast released Thursday. However, as demonstrated dramatically of late, much can happen in the last week of the month and especially in this environment of rising gas prices, a catastrophe in Japan and turmoil in the Middle East.

The race between Ford and GM this month surely will be neck-and-neck. A number of factors — a last-minute sales drive, inventory issues, a fleet order – could decisively shift the advantage. If Ford does beat GM in sales, it would be the first time since February, 2010. Before that, Ford hadn’t surpassed GM since 1998, according to Edmunds.com’s records.

I’ll believe it when I see it — but I really didn’t think Ford was going to come close to getting even with GM for quite a while.

The guess here is that someone in the General Services Administration is going to be told on Thursday morning to place a really big order — and to somehow take delivery or otherwise do whatever it takes to make a sale.

You guys at Edmunds better not be playing with us on this.

Wow.

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UPDATE: The original news goes back to Sunday March 24. The gut says that there’s no way Obama Motors lets 2nd place happen — and if it still happens, it will be a spectacular failure, simply because they had so much warning.

Positivity: As beatification nears, memories of John Paul II surface

Filed under: Positivity — Tom @ 9:21 am

From Rome:

Mar 30, 2011 / 01:24 am

With the May 1 beatification of Pope John Paul II fast approaching, those who knew and loved the late pontiff are speaking out about the imprint he left on the Church and the world.

Archbishop Piero Marini remembered the “almost father-son relationship” he enjoyed with the Pope while serving as his master of liturgical ceremonies. In a Vatican Radio broadcast on March 28, he said that the beatification is a way for all people to once again “re-encounter this friend of humanity” by getting to know him, his love for evangelization and his strong witness.

Archbishop Marini remembered that the “greatest gift” the Pope ever gave him was in reminding him of the everyday quality of holiness. “Each of us … must build sanctity responding to the vocation that the Lord has given us in our life with humility and simplicity as John Paul II did. He spent his entire life announcing the Gospel to create unity.”

By going out to meet the people where they were, proclaiming God’s Word and celebrating the Eucharist and sacraments, the Pope was able “to create around himself, around the person of the Pope, truly the unity of the Church,” said the archbishop.

Cardinal Roberto Tucci, who planned the Pope’s lengthy and frequent trips to international destinations, remembered the Pope for his “spontaneity.”

He was present at a press conference last week to launch Italian journalist Angela Ambrogetti’s new book, “Travel Companions,” examining previously unedited comments and conversations the Pope had with reporters on his trips abroad.

Cardinal Tucci called the book a “rare and efficient testimony of the personality and the ideas of Pope Wojtyla which comes across with great freshness – as it was – with his extraordinary spontaneity and freedom of expression, with his kindness and bluntness before others, also to that special kind of humanity that are journalists.”

Vatican spokesman Fr. Federico Lombardi, and veteran Vatican analysts Gian Franco Svidercoschi and Paloma Gomez Borrero recounted anecdotes of their personal experiences with the pontiff on the numerous papal flights. …

Go here for the rest of the story.