August 13, 2015

AP’s Ohlemacher Claims Social Security System Has ‘Money,’ Then Admits It Doesn’t

Carrying water for the left as their pet programs implode while pretending to be an objective reporter is a daunting task. The Associated Press’s Stephen Ohlemacher was not up to that task Thursday afternoon.

Twice, in relatively early paragraphs of his 31-paragraph writeup, the AP reporter claimed that the Social Security system has “money.” He then separately quoted a Democratic congressperson who insisted that it has money, and that the mere act of correctly asserting that it doesn’t “manufactures a crisis.” But in a discussion of how big Social Security’s problems really are, Ohlemacher acknowledged that Congress has already spent the balances in the so-called Social Security “Trust Funds.” The dictionary definition of money does not include promises to repay money borrowed, Stephen — and that’s what the Social Security “Trust Funds” contain.

(more…)

January 22, 2015

A Badly Needed Economics Lesson

Henry Hazlitt’s vital lessons explained on PJTV.

________________________________________

This column went up at PJ Media and was teased here at BizzyBlog on Tuesday.

________________________________________

How serendipitous it is that PJTV has begun 2015 with a series of videos covering Henry Hazlitt’s marvelous book, “Economics in One Lesson.”

Its arrival comes just as Obama administration apologists celebrate the alleged wonders of our current economy. Later, I will provide one example showing how suspect those claims likely are.

PJTV’s effort includes an installment on each of Hazlitt’s original 24 chapters. Short of reading and absorbing the content of the book itself, its series may be the best 90 or so minutes one will ever spend learning how societies genuinely advance their living standards, and how governments almost invariably work to slow or stop that onward march. It’s perfectly suited for otherwise very busy people who only can carve out a few minutes a day from their daily pursuits, including the millions who are working multiple part-time and temporary jobs in this allegedly marvelous economy just to makes end meet.

Keynesian naysayers will immediately try to pounce on PJTV’s supposedly misplaced priorities. After all, a skeptic’s book originally published almost 70 years ago can’t possibly have any current relevance. We’re all so much smarter now, right? Wrong.

Since the advent of Franklin Delano Roosevelt’s New Deal, Keynesian thought has held sway with rare exceptions in economics courses throughout the land. As has been the case in so many other areas dominated by leftist dogma, real-world failures to achieve predicted outcomes have only caused its adherents to double down on their nonsense, mount ever more absurd arguments, and turn up the shrillness of their attacks on opponents.

Keynesians desperately in search of good news after the awful recovery from the nation’s most recent recession — a recovery publicly and explicitly directed by their disciples — want the public to believe that the U.S. economy’s recent performance, at long last, vindicates their precepts.

We’re supposed to forget that their recipe gave us a four-year post-downturn performance that was arguably worse — that’s right, worse — than the four years following the Great Depression’s 1993 crater. We’re not allowed to notice that the 20 percent ramp-up in federal spending supposedly required to enact their precious stimulus plan in 2009, originally sold as a “temporary” two-year maneuver, has instead morphed into what they hope is a permanent floor in the size and scope of the federal government upon which they build an even bigger leviathan.

We’re supposed to discount as unimportant the $6 trillion in deficits and the $7.5 trillion increase in the national debt seen during Barack Obama’s presidency. We’re supposed to believe that the $4.5 trillion in Federal Reserve electronic money creation known as “quantitative easing,” without which an otherwise broke government could never have financed its profligacy, won’t badly hurt us down the road.

Through the first quarter of 2014, during the first 4-3/4 years after the recession’s official end, this unprecedented spending and borrowing binge got us real average annualized economic growth of … wait for it … 2.1 percent. By contrast, during the 1980s recovery, the government under President Ronald Reagan faced far more challenging conditions, including sky-high inflation and interest rates, than Team Obama did in early 2009. Despite that, and while mostly making economic policy choices directly opposed to what Keynesians would have recommended, annualized growth averaged a stunning 4.8 percent.

But now, all is supposedly well. The government estimates that the economy grew by an annualized 4.8 percent during last year’s second and third quarters, finally accomplishing for two quarters what Reagan’s economy did for almost five years. The U.S. economy added a seasonally adjusted 2.95 million payroll jobs in 2014, the largest pickup since 1999. The unemployment rate is “only” 5.6 percent, which, thanks to convenient bar-lowering and likely statistical manipulation, is what the economic elites now believe is “full employment.”

It would be nice to think that what has finally happened is that the private sector has finally figured out how to maneuver its way around the latest round of government encroachment. Sadly, business birth and death statistics shatter that illusion.

Last week, Jim Clifton, Chairman and CEO of Gallup, noted that the number of new business startups has trailed the number of failures for the past four reported years. That has never happened since such measurements began in the 1970s. The margin is not narrow: “Four hundred thousand new businesses are being born annually nationwide, while 470,000 per year are dying.”

Such conditions would lead one to question how the economy can be growing so robustly. Hazlitt has at least part of the tragic answer in his book’s Chapter 8: “Spread-the-Work Schemes.”

Though the chapter focuses on labor union make-work and featherbedding practices, which “always raises production costs,” and end up resulting “in less work done and in fewer goods produced,” the principles involved have direct application to how the Obama administration has imposed its will on the nation’s economy. It has done so by creating make-work schemes, at the very least within Obamacare and the government’s regulatory apparatus.

Obamacare’s onerous electronic recordkeeping and reporting requirements on doctors and medical providers have quietly created an entire new industry of “medical scribes.” According to Politico, “About 100,000 of these glorified typists are expected to be working for doctors by 2020.” Though there’s no reason to question the work ethic of the individuals involved, the fact is that these people clearly add little or no value to the healthcare delivery system.

In early December, Labor Secretary Tom Perez bragged: ”At the beginning of this administration, there were 730 investigators in the Labor Department’s Wage and Hour Division. Today, we’re over a thousand.” The idea that the there are thousands and thousands of employers out there brazenly violating minimum-wage laws is patently absurd. These new workers will at best add no value to anything. At worst, over time, as a friend of mine who has fought the government has long pointed out, they will dream up new ways to harass law-abiding businesses.

In each instance and likely dozens of others, the new make-work hires are of course counted as employed, and are naturally getting paid and spending most of their take-home pay. Their consumption is treated as part of gross domestic product. So the real question isn’t whether GDP is being artificially inflated by make-work hiring; it’s only how much artificial GDP inflation is occurring with no accompanying genuine increase in standards of living.

This is just one real-life application of Hazlitt’s clearly explained economic principles. Surely dozens of others await those who subscribe to PJTV’s important series.

November 18, 2014

Immigration Study: Obama’s Executive Action Will Make Many Illegals De Facto Full Participants in the Welfare State

Link (organization’s home page):

Through a maze of statutes and regulations, aliens granted deferred action or parole in place will be eligible for many public benefits. This is true even though they are still illegal aliens. To summarize:

Aliens with parole for less than a year are eligible for Obamacare, Social Security, EITC, Unemployment, and Medicare (with sufficient authorized work history). Paroled aliens, whether for less than a year or greater, who are children and pregnant women are also eligible for health care benefits through Medicaid and SCHIP in states that have opted to cover them.

Aliens with parole for more than a year retain their eligibility for Obamacare, Social Security, EITC, Unemployment, and Medicare. If they are children or pregnant women, they are also eligible for health care benefits through Medicaid and SCHIP in states that have opted to cover them. Finally, because paroled aliens become qualified aliens after a year, paroled aliens become eligible for all federal public benefits after 6 years, including SCHIP and TANF.

Finally, aliens with deferred action are eligible for Obamacare, Social Security, EITC, Unemployment, Medicare (with sufficient authorized work history). If they are children and pregnant women, they are also eligible for health care benefits through Medicaid and SCHIP in states that have opted to cover them.

Even if this was a good idea — and it most emphatically isn’t, for reasons which would take up a book — a government running serious deficits as far as the eye can see and long-term unfunded liabilities approaching and perhaps by now exceeding $100 trillion can’t even begin to afford this.

June 24, 2014

Latest PJ Media Column (‘Cloward-Piven Everywhere’) Is Up

It’s here.

It will go up here at BizzyBlog Thursday morning (link won’t work until then) after the blackout expires.

January 4, 2014

Jesse Myerson, Occupy ‘Leader’ Turned Far-Left Rolling Stone ‘Journalist,’ Explains It All

It’s hard to know what’s more ridiculously entertaining when choosing between Jesse A. Myerson’s “Five Economic Reforms Millennials Should Be Fighting For,” the illogical screed in Rolling Stone which would lead to the enslavement of those about whom he claims to be concerned, or Myerson’s tweets as the opprobrium has poured in.

Since Noel Sheppard at NewsBusters has handled Myerson’s original work, I’ll have fun with the tweets. And it will be a pleasure to turn around Saul Alinsky’s Fifth Rule for Radicals (“Ridicule is man’s most potent weapon”).

(more…)

October 13, 2013

AP Headline Claims Social Security Inflation Increase Will Be ‘Among Lowest in Years,’ When 2010 and 2011 Had No Increase at All

There was no annual adjustment to Social Security benefits for inflation during 2010 or 2011. That’s because the 2009 increase of 5.8 percent (announced in November 2008, and considered the “2009″ increase at this table) was artifically lifted by the $4 per gallon gas prices seen in the summer of 2008, the period used in the annual inflation adjustment calculation. After gas prices came down, overall prices levels were slightly lower during the next two years.

With that background, it’s hard to imagine how a headline writer at the Associated Press, aka the Adminstration’s Press, could transform what writer Stephen Ohlemacher accurately described as an “historically small increase” to “among the lowest in years” — unless it’s to create a false impression among those who only read headlines that the government is being unduly stingy in disbursing benefits. Excerpts from Ohlemacher’s report follow the jump (bolds are mine):

(more…)

September 26, 2013

Buckeye Institute: Cincincinnati’s Pension Liability is $2.5 Billion, or $8,400 Per Resident

Filed under: Economy,Soc. Sec. & Retirement,Taxes & Government — Tom @ 4:43 pm

“Somebody” was saying that this was unsustainble as recently as June and way back in 2005.

So now it’s a crisis.

The Buckeye Institute (HT to an email from Chris Littleton) has the details:

Cincinnati’s current public employee retirement plan, the Cincinnati Retirement System (CRS), is a traditional “defined benefit” (DB) pension plan that is far less fiscally sound than commonly understood. By some accounting standards, CRS is optimistically underfunded by $862 million. But a more accurate measure, the “fair market valuation” preferred by most economists, reveals unfunded liabilities of over $2.5 billion and a funding ratio of only 35%. As a result of this shortfall, pension costs for the City are extremely high. Total pension costs for 2014 are projected to equal 58% of total employee payroll, with the City bearing a cost equal to almost 49% of payroll. By comparison, the median total state or local government pension contribution is equal to 13% of employee payroll.

That $2.5 billion is roughly $8,400 for each of Cincinnati’s 296,000 residents.

Chris’s email points out to a related November ballot issue:

A Yes vote on Issue 4 this November, the charter amendment to fix Cincinnati’s pension problem, is extremely popular with voters and absolutely vital to Cincinnati’s future. Win-win from every direction!

This is going to require more research, because attempts at finding information about the issue on the web were futile.

Stay tuned.

July 30, 2013

Evil Employers Forcing Employees Into ObamaCare Exchanges

Except that the evil employers are municipal governments, as an Investor’s Business Daily editorial noted yesterday:

Detroit Shows How ObamaCare Will Bankrupt the Country

Cost-Shifting: Looks like Detroit might get a federal bailout after all, by offloading its retiree health costs onto federal taxpayers via ObamaCare. It’s a window into why Obama-Care costs will quickly spiral out of control.

On Sunday, the New York Times noted that Detroit hopes to push its younger retirees who aren’t yet eligible for Medicare into the ObamaCare exchanges, where many will be eligible for subsidized insurance. Federal tax payers will pick up the tab, rather than those in Detroit. (IBD’s Jed Graham first wrote about this last month.)

One of the first to suggest this clever cost-shifting idea was Chicago Mayor Rahm Emanuel, who was in the Obama administration while it was putting ObamaCare together. In May, he revealed plans to save about $108 million a year by tossing 30,000 retirees into the ObamaCare exchanges.

If Detroit and Chicago get away with this, you can bet other cities will try, too. The U.S.’ 61 largest cities have more than $118 billion in unfunded retiree health care liabilities, the Pew Charitable Trusts estimates.

And the National League of Cities is practically drooling over the opportunity to shift as much as possible onto ObamaCare.

Imagine that. The public-sector unions will probably roll over on this. Union bosses tend to be all about representing current workers. When push comes to shove, they’ll throw retirees, who often do not have a vote on union contracts, under the bus and let the nation’s taxpayers pick up the tab (e.g., [although they're private sector -- well, sort of in GM's case]: GM and Chrysler bailouts).

June 11, 2013

Cincinnati’s pension costs threaten to eat it alive

Filed under: Soc. Sec. & Retirement,Taxes & Government — Tom @ 5:15 pm

Its defined-benefit plans are unsustainable.

_________________________________________

This column went up with minor edits at Watchdog.org earlier this afternoon.

_________________________________________

In a story which should have stayed on its home page for several days but instead was gone within hours, the Cincinnati Enquirer reported on Saturday that the City of Cincinnati must pay at least $85 million into its $2 billion pension and retiree health care system next year.

Cincinnati is alone among Ohio’s major cities in that its employees do not participate in any of the state’s five statewide retirement systems.

In the past year alone, the Enquirer’s Cliff Peale notes, the Cincinnati Retirement System’s unfunded liability has ballooned by 22 percent to a whopping $870 million, or just under $3,000 for each man, woman and child living within the city’s limits.

Not that it’s much consolation, but the city is far from alone.
(more…)

April 30, 2013

Ohio Lawmakers About to Zero Out All Pension Fund Conference Travel

Has no one heard of web conferencing?

_________________________________

This post went up a short time ago at Watchdog.org.

_________________________________

Two of the most tone-deaf organizations in America have to be the National Conference on Public Employee Retirement Systems, followed closely by Ohio’s School Employees Retirement System.

NCPERS markets itself as “the largest trade association for public sector pension funds, representing more than 550 funds throughout the United States and Canada.” SERS is a “public pension fund that provides pensions and access to health care coverage” for non-teaching personnel at public schools throughout the Buckeye State.

NCPERS thinks that holding an expensive members’ conference at a posh Hawaiian resort is a great idea. SERS believes, defiantly so, that sending two of its board members to the conference is an appropriate use of participants’ funds.
(more…)

April 7, 2013

Politico’s Tau Pretends Big Labor ‘Targets’ Obama, When It Just Doesn’t Like One White House Proposal

I guess Byron Tau thought he had to make it look like Big Labor is really, really mad at President Barack Obama and the White House so he could make Obama look like he’s a moderate on economic and fiscal issues. Thus his Sunday morning post’s headline: “Labor targets Obama over proposed benefit cuts.”

Of course, they aren’t “cuts” at all, though they are being portrayed as such. All Obama has done, according to information which appears to have been conveniently leaked (perhaps in hopes of killing the idea) to the New York Times ahead of his very late President’s Budget, is “propose a new inflation formula that would have the effect of reducing cost-of-living payments for Social Security benefits, though with financial protections for low-income and very old beneficiaries, administration officials said.” Despite the weakly descriptive language at the Times, monthly Social Security and other checks would continue to increase under the proposal each year inflation occurs — just not by as much.
(more…)

January 29, 2013

Politico’s ‘Quiet Liberal Plans for Entitlements’ Are Predominantly Tax Increases, Redistributions of Wealth

The front-page title at the Politico for David Nather’s lengthy write-up on Democrats’ alleged ideas for doing something about runaway entitlement programs is “The quiet liberal plan for entitlements; There are some ideas for reining in spending that have been blessed by the left.” That gives readers the impression that the left might actually have something specific and potentially palatable in mind.

No such luck. The actual title at Nather’s write-up, however, pluralizes “plan” — “The quiet liberal plans for entitlements.” Its itemization of the supposedly brilliant ideas for reform liberals have in mind are dominated by tax increases and income redistribution measures which fail to structurally reform anything.

(more…)

January 22, 2013

Politico’s Carrie Budoff Brown: Obama Has ‘Conflicted Relationship With Entitlement Reform’

For four years (and really going back further when you consider former President George W. Bush’s halting attempt to reform Social Security in the middle of last decade), Barack Obama and his party have paid lip service at best to the idea of entitlement reform while refusing to provide any specifics about what they would do to fix Social Security and Medicare, both of which are unsustainable in their current forms. Obama rejected his own Simpson Bowles commission’s recommendations. Democrats have treated serious proposals coming from Republicans as grannycide.

Yet the Politico’s Carrie Budoff Brown, who must be gaining strength in her arms and shoulders from all of her water-carrying for Obama and his party, wants us to believe that Obama has a “deeply conflicted relationship with entitlement reform.” And in case you missed it (I certainly did), Obama has tried “harder than any other Democratic president to tackle the issue” (no Democratic Party president has “tried hard” to tackle the issue). Several paragraphs from her Tuesday dispatch follow the jump (bolds are mine):
(more…)

January 10, 2013

Jack Lew: Architect of Obama’s Trillion-Dollar-Deficit Budgets

This column went up at FrontpageMag.com in slightly revised form early this morning.

_____________________________

On Wednesday, Julie Pace and Martin Crutsinger, two of the usual suspects at the Associated Press, began paving the way for what they clearly hope will be a worry-free Senate confirmation of current Obama administration Chief of Staff Jack Lew to become the nation’s next Treasury Secretary.

Towards that end, the AP pair larded on the compliments and historical revisionism with reckless abandon:

  • “one of Washington’s most knowledgeable budget experts to manage prickly fiscal negotiations with Congress and steer the still-shaky national economy.”
  • “Lew, 57, would bring to Treasury a mastery of federal budget mechanics …”
  • “Lew helped negotiate a balanced budget agreement with Congress, something that has eluded Washington ever since.”
  • “Lew, a pragmatic liberal … is well-liked in Washington by both Democrats and Republicans …”

Along the way, Pace and Crutsinger couldn’t make up their minds about the current condition of the economy. After the “still-shaky” characterization just noted in their first paragraph, they later evaluated it as “now stabilized, if still sluggish.”  Those two conditions can’t exist at the same time, given that “shaky” is an antonym of “stable.” Although it would have required more verbiage, the AP pair should have characterized the current economy, as a result of the derelict stewardship of Obama, the soon-departing Tim Geithner, and Fed Chairman Ben Bernanke as “the worst since Franklin Delano Roosevelt needlessly extended the Great Depression by over eight years during the 1930s.” Because it is.

The AP also decided to have a little fun with Lew’s signature, which will appear on the nation’s currency if he is confirmed, commenting in a separate item that his sign-off, a ”J” followed by “seven loopy scribbles,” is “illegible.”

What’s really loopy is AP’s collection of contentions about Lew.
(more…)

January 9, 2013

Social Security: Even More Insolvent Than You Thought

Its actuaries have been blowing the calculations, and there is no “buffer.”

___________________________________

This column went up at FrontPageMag.com with minor revisions early Tuesday morning.

___________________________________

At first, one doesn’t know whether to laugh or cry at research findings reported by two Ivy League profs in a co-authored column in the Sunday New York Times titled “Social Security: It’s Worse Than You Think.”

Actually, white-hot anger is more appropriate, given that what Gary King, a professor of government and director of the Institute for Quantitative Social Science at Harvard, and Samir S. Soneji, a demographer and assistant professor at the Dartmouth Institute for Health Policy and Clinical Practice, really told us, namely that the New Deal-era retirement system, thanks to its use of ossified actuarial calculations, is more insolvent than almost all of us knew.

The pair’s core finding, as presented in the Times: “[T]he Social Security Administration underestimates how long Americans will live and how much the trust funds will need to pay out — to the tune of $800 billion by 2031.”
(more…)