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June 30th, 2015 at 2:10 pm
Two-Face T-Mobile 2.0
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We recently described how T-Mobile was playing crony capitalist DC games and talking out of both sides of its mouth.  On one side, it told Wall Street that it’s in a great position.  On the other side, it pleaded with federal regulators in DC that it needs their help in order to remain competitive in the wireless marketplace.

The company CEO, whom The Wall Street Journal’s Holman Jenkins labeled “Potty-Mouth” Legere, is now doubling down on the company’s “Little Sisters of the Poor” message to DC and calling for a larger set-aside in the upcoming spectrum incentive auction.  The Obama Federal Communications Commission (FCC) already promised to set aside 30 MHz, but that just wasn’t enough for T-Mobile.  Now Mr. Legere and the Save Wireless Choice coalition – which conspicuously counts T-Mobile, Sprint, and DISH as members – are pushing for at least 40 MHz.

That set-aside proposal is a bad idea for several reasons.  First, T-Mobile wants the FCC to make it easier for it to get spectrum at below-market value without competing against AT&T and Verizon.  There’s no reason, however, to believe that T-Mobile can’t compete in a fair and open auction without federal bureaucrats tipping the scales in their favor.  Moreover, even if money were an issue, couldn’t T-Mobile’s multi-billion dollar parent company, Deutsche Telekom, come to its aid?

Consider the straightforward numbers:  Deutsche Telekom, a German company with a market cap over €70 billion, is a 66% stakeholder in T-Mobile.  Additionally, the German government maintains approximately a 1/3 stake in Deutsche Telekom.  Accordingly, offering T-Mobile an unjustified advantage translates into a giveaway to a foreign company and a foreign government.

But what about American consumers?  The set-aside could drive down auction revenue, which in turn means less money for the U.S. Treasury and less spectrum that’s sold and brought to market for the benefit of U.S. consumers.

FCC Chairman Tom Wheeler recently said that he thinks the set-aside should remain at 30 MHz and NOT get increased.  That’s a rare bit of moderately positive news, but if the FCC is really reviewing the set-aside in advance of its July 16th open meeting, it should eliminate this cronyist monstrosity entirely, and send Mr. Legere and his tin can packing.

October 13th, 2014 at 4:18 pm
Re Progressives, What Would the Founders Do?

As we gear up for another week of politics-as-usual, it’s helpful to keep our eyes on what we’re arguing for and how we do it. In a splendid little essay about civil discourse rightly understood, political scientists Matt Parks and David Corbin explain how to keep one’s dignity when defending our republic.

What’s a critic of Progressivism to do? Follow the example of Publius: argue vigorously about the common good while judging with charity the aims of one’s opponents. Respect friends of the rights and liberties of the people wherever you find them and seek to correct them when their means don’t match their ends.

Lies should be called lies and there’s no need to assume that well-intentioned plans and proposals will end well, but a healthy measure of forbearance joined with an openness to self-criticism will do more for the cause of republican government than a conservative equivalent of the Big Smathers Lie. The result will either be to reopen the public square to civil discourse by enlivening a debate over the common good or by showing Progressives, in their intransigence, to be both cynical and unserious about the most important political questions.

In other words, we honor the public square when we assume the best of our opponents’ intentions, even if we are compelled by logic and evidence to criticize their ideas.

It’s a high bar to clear, but worth the struggle.

October 4th, 2013 at 11:59 am
This Week’s Liberty Update
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Center For Individual Freedom - Liberty Update

This week’s edition of the Liberty Update, CFIF’s weekly e-newsletter, is out. Below is a summary of its contents:

Lee:  In Televised Interview, Increasingly Desperate Obama Encourages Markets to Panic
Senik:  Government Shutdown Reveals Extent of Federal Waste
Ellis:  ObamaCare: “A Good First Step Toward Single Payer”?

Video:  Green Hysteria
Podcast:  ObamaCare Is Unworkable
Jester’s Courtroom:  When Is a Fruit Really a Fruit?

Editorial Cartoons:  Latest Cartoons of Michael Ramirez
Quiz:  Question of the Week
Notable Quotes:  Quotes of the Week

If you are not already signed up to receive CFIF’s Liberty Update by e-mail, sign up here.

April 12th, 2013 at 2:14 pm
In Federal Filing, CFIF Petitions GSA to Reform or Replace LEED Rating Standard
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This week, in an official comment filed with the U.S. General Services Administration (GSA), CFIF called for reform or replacement of the Leadership in Energy and Environmental Design (LEED) standard endorsed by the GSA.  Americans deserve a building certification system that is more fair, open, evidence-based and that uses consensus-based standards.

Although the issue of forest certification remains rather obscure to most Americans, its regulation significantly impacts the price consumers pay for wood products, not to mention America’s struggling domestic timber industry.  Unfortunately, a vocal group of environmental activists only endorses Forest Stewardship Council (FSC) certification, and prefers it as a monopoly, while irrationally demonizing competing forest certification systems.  Among other things, those activists successfully pressure Fortune 500 companies into accepting the exclusive use of FSC-certified products, and many government and rating agencies to only award green “credits” to forest products recognized by FSC.

That policy causes the market to become increasingly distorted, with real costs for producers of wood and the environment, and fewer choices for consumers.  A recent study by the American Consumer Institute estimated the costs of carrying that policy to its endpoint.  Namely, FSC certification as a binding requirement for American forests means consumer welfare losses in a number of markets, totaling $10 billion for wood products and $24 billion for paper products markets each year.  Another destructive consequence of the FSC monopoly is that wood from almost 75% of America’s certified forests is placed off-limits.  While that single-source arrangement benefits the FSC and activists, it imposes significant costs on the domestic forestry industry and discourages competition.  That’s because FSC holds foreign landowners to lower standards than U.S. foresters.  For example, harvesting 600-year-old Russian trees occurred on FSC-certified property.  Such an arrangement discriminates against domestic foresters and increases the likelihood of builders seeking foreign suppliers of wood.  In fact, 90% of FSC’s certified land is found abroad, making it fairly easy for businesses to access foreign timber.  Typically, the government interferes with the market to ostensibly protect American industries.  Here, sadly, it is relying on an unaccountable third-party to do the opposite.

The current LEED policy also jeopardizes American jobs;  penalizes smaller landowners who use other certification systems;  discourages the use of many common building materials and other products that are regularly found in construction projects, such as PVC piping, foam insulation, heat reflective roofing and LED lighting face.

Meanwhile, there exists little to no clear environmental benefit to using FSC over alternatives like SFI or ATFS.  A recent study published in the Journal of Forestry examined the impact of FSC and SFI forest certification in North America, and found few differences in land management outcomes of those two alternative systems.  Additionally, the League of Conservation Voters, National Alliance of State Foresters and National Association of Conservation Districts also favor a more level playing field for certification.   Those groups possess much better on-the-ground expertise than the activists who come from marketing backgrounds and lack credentials pertaining to land management or environmental science.

We conclude:

We already witness too many government policies picking winners and losers in the marketplace.  For the federal bureaucracy to allow a third-party environmental group to do so is appalling.  Given USGBC’s agenda and arbitrary actions, it is reckless to empower that organization to dictate a government-sanctioned standard, especially when that standard stifles growth and kills off American jobs during this time of economic uncertainty…  LEED in its current incarnation as the government-approved standard is simply unacceptable.  American consumers, small businesses and our domestic timber industry deserve much better, and the era of the USGBC’s taxpayer-subsidized monopoly must end.”

Meanwhile, in an excellent Forbes commentary this week, George Mason University fellow Jon Entine echoes our view.  Entitled “Forestry Labeling War Turns Ugly as Greenpeace Bungles Logging Industry Attack,” Entine neatly examines the contradictions and tensions contaminating the current forest certification regime:

Policies regarding the procurement of timber, use of building codes and what businesses can sell to their customers should be informed by facts and science, not scare tactics. Greenpeace’s deception is only the latest propaganda effort that has muddied rather than clarified the issues surrounding forestry practices. With a majority of forests lacking certification, we need common-sense incentives and more certification options to achieve sustainable forestry management goals. Consumers and the general public deserve much better than the disinformation campaigns that have shadowed this debate.”

Fortunately, the GSA review period offers the opportunity to return credibility to the building certification system.

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August 3rd, 2012 at 9:33 am
Unemployment Rises to 8.3% – “I Didn’t Cause That! Somebody Else Made That Happen!”
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With a new Gallup poll showing Obama’s unpopularity higher among business owners than any other occupational group, this week we dismantle his desperate “You didn’t build that – somebody else made that happen!” alibis.  Peggy Noonan, in this weekend’s column, believes they’re now his most famous words:

President Obama’s comment – ‘You didn’t build that’ – is the political gift that keeps on giving.  They are now the most famous words he has said in his presidency. And oh, how he wishes they weren’t.”

Now, with this morning’s sour unemployment report, prepare to hear, “I didn’t cause that – somebody else made that happen!” from the White House.  The nation’s unemployment rate rose yet again, to 8.3% from last month’s 8.2%.  That means we’ve now suffered a record 42 consecutive months of unemployment in excess of 8%, a level Obama promised we’d never reach in the first place under his economic plan.  The White House will also attempt to emphasize the 163,000 new jobs created, but keep three things in mind.  First, our economy must add 200,000 jobs each month just to keep up with population growth and substantively reduce the unemployment rate.  Second, nearly as many Americans – 155,000 – dropped out of the labor market altogether, according to this morning’s report.  Third, according to the Labor Department, employment growth has averaged just 151,000 per month in 2012, which is below 2011’s average of 153,000 per month.  Some “recovery.”

Fortunately, there is an alternative.  The early-1980s recession witnessed even worse numbers – higher unemployment, higher inflation and higher interest rates.  But President Reagan’s policy of lower taxes and less regulation slashed unemployment from 10.4% to 6.7% in the three years following the effective date of his tax cuts in January 1983.  In contrast, Obama’s policies of higher spending, higher deficits, higher taxes and more regulation have caused the worst recovery since the Great Depression.

Obama just hopes that enough people fail to notice that he really is making that happen.

June 1st, 2012 at 9:05 am
Another Atrocious Unemployment Report
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Economists projected that the U.S. economy would add 160,000 new jobs last month.  Instead, the Labor Department announced today that we only added 69,000.

Additionally, the unemployment rate increased to 8.2% in May from 8.1% in April.  That makes 40 consecutive months above 8%, a new record.  Keep in mind that the Obama Administration claimed we wouldn’t reach 8% in the first place if his failed “stimulus” spending bill passed back in early 2009.

This announcement also arrives one day after the Commerce Department announced that the American economy grew only 1.9% in the first quarter of 2012, short of its initial 2.2% estimate.

More broadly, the economy must add 200,000 jobs each month just to keep pace with population growth and materially reduce the unemployment rate, and today’s report follows a disappointing 115,000 number in April.  The Obama Administration claims that the last recession was “the worst since the Great Depression,” but that’s false.  The early-1980s recession was substantially worse – higher unemployment, higher inflation and higher interest rates.  President Reagan’s policy of lower taxes and less regulation, however, rapidly reduced unemployment from 10.4% to 6.7% in the three years following the effective date of his tax cuts in January 1983.  In contrast, Obama’s policies of higher spending, higher deficits, higher taxes and more regulation have caused the worst cyclical recovery since the Great Depression.

May 4th, 2012 at 8:51 am
Jobs: Unemployment Exceeds 8% For Record 39th Consecutive Month Under Obama, Fewer Jobs Created in April Than Expected
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For a record 39th consecutive month, unemployment has exceeded the 8% level that the Obama Administration said we’d never reach in the first place under his government spending “stimulus.”

Compounding that misery, the nation added only 115,000 jobs last month according to this morning’s monthly Labor Department report.  That’s far fewer than the consensus prediction of 163,000 new jobs, which itself is far below the 200,000 needed each month to keep pace with population growth and substantively reduce the unemployment rate.  The Obama Administration claims that the last recession was “the worst since the Great Depression,” but that’s false.  The early-1980s recession conquered by Ronald Reagan’s economic policies was substantially worse – higher unemployment, higher inflation and higher interest rates.  Under Reagan, however, unemployment plummeted from 10.4% to 6.7% in the three years following the effective date of his tax cuts in January 1983.  Obama, in contrast, didn’t face “the worst recession since the Great Depression,” but his agenda of massive spending, regulation and deficits has given us the worst recovery since the Great Depression.

September 20th, 2011 at 5:42 pm
FBI’s Latest Figures Refute Myth That Poverty Is the Root Cause of Crime
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Two federal government reports released within the past week again refute the toxic, persistent myth that poverty is the root cause of crime.

Last week, the Census Bureau announced that the nation’s poverty level jumped from 14.3% in 2009 to 15.1% for 2010, the highest rate since we emerged from the Jimmy Carter hangover in 1983.  The overall number of poor Americans rose to 46.2 million, the highest total since poverty estimates began 52 years ago.  Those numbers justify Newt Gingrich’s observation that Barack Obama is the “Food Stamp President.”

Now this week, the Federal Bureau of Investigation (FBI) announced that crime rates continued to plummet last year.  Violent crime rates declined for the fourth consecutive year, while property crimes declined for the eighth consecutive year, even as the nation’s economic malaise deepened.  Moreover, the lower crime rates occurred amid local budget reductions that have affected police departments.

These statistics confirm the timeless reality that criminality is not some sort of involuntary act to which helpless souls are driven by economic adversity.  Rather, criminality is a voluntary choice on the part of the culpable criminal.  The latest data won’t stop the political left from repeating their discredited dogma, but the facts as usual refute them.

September 2nd, 2011 at 9:32 am
Happy Labor Day? Zero Jobs Added to Economy Last Month
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Zero.  That’s the number of net jobs created in America last month according to the Labor Department’s monthly update, and the unemployment rate remained at 9.1%.

We are now more than two years since the recession officially ended in June 2009, and at the stage where the Obama Administration predicted that his trillion-dollar deficit spending “stimulus” would reduce unemployment to approximately 6% after topping out at 8% all the way back in the fall of 2009.  Instead, we suffered a post-war record number of months over 9%, and it continues to fester there.  By way of background, keep in mind that economists generally agree that a minimum of 150,000 to 200,000 jobs must be added to the American economy each month just to keep pace with natural population growth.  Also consider that economists had forecast a rise of somewhere near 100,000 jobs for July.

In contrast, in the same 30-month period following the effective date of President Ronald Reagan’s tax cuts in January 1983, unemployment plummeted from 10.4% to 7.4%.  We know what economic policies actually work.   What hath the opposite approach wrought?

August 15th, 2011 at 5:05 pm
Wall Street Journal Urges More Republicans into the Presidential Race
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After months in which the shape of the Republican presidential campaign has been amorphous, the events of the past weekend have, at long last, given the GOP contest some definition. Rick Perry is in, Tim Pawlenty is out, and Michele Bachmann is walking away victorious from the Ames Straw Poll. And now, conventional wisdom is beginning to congeal around the notion that the final showdown will be a three-way race between Perry, Bachmann, and Mitt Romney.

That conventional wisdom, however, isn’t good enough for the editorial board of the Wall Street Journal, as authoritative a voice as there is in the print wing of the conservative movement. In a staff editorial today analyzing the prospects of the candidates in the race, the Journal’s ed board weighs the candidates in the balance and finds them wanting. It wraps up on this brusque note:

Republicans and independents are desperate to find a candidate who can appeal across the party’s disparate factions and offer a vision of how to constrain a runaway government and revive America’s once-great private economy. If the current field isn’t up to that, perhaps someone still off the field will step in and run. Now would be the time.

There are still some major Republicans flirting with– or being courted for — a race for the White House. Sarah Palin and Rudy Giuliani fall into the former category, while Paul Ryan and Chris Christie are the two names most frequently cited for the latter. Will any of them get in? Those prospects probably defend on the performance of Perry, who has the chance to close down the field by filling the conservative vacuum or blow it open by becoming the second coming of Fred Thompson. To paraphrase a dictum familiar in Perry’s home state, the eyes of the party are upon him.

August 15th, 2011 at 1:54 pm
Gallup: Obama Falls to New Low, Which No President Has Overcome for Reelection
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President Obama has fallen to a new low in public approval as measured by Gallup, with only 39% approval and 54% disapproval.  Even more troubling for Obama and his supporters, no President has won reelection with ratings this low at this point in their tenure.

According to Gallup, President Truman’s approval/disapproval stood at 55%/29% at approximately this stage, President Eisenhower possessed a positive 71%/16% ratio, President Nixon’s approval outweighed his disapproval by a 49%/38% margin, President Reagan remained barely underwater with a 43%/46% ratio, President Clinton possessed a 46%/43% positive edge and President George W. Bush held a positive margin of 59%/37%.  All of these Presidents won reelection, and it should be added that President Reagan, unlike President Obama, was on a steadily upward approval trajectory that had him enjoying a 53%/37% approval surplus just three months later in November 1983.  The nation’s economy was accelerating throughout 1983 following the arrival of his tax cuts that January, whereas our current economy continues to stagnate.  Additionally, although President Kennedy was assassinated before he could face reelection, he enjoyed a 56%/29% approval edge at this point, and his Vice President Lyndon Johnson won in 1964.

In terms of Presidents who did not win reelection, President Ford actually enjoyed a 45%/37% approval balance, whereas President Carter found himself in a negative 30%/55% hole, while President George H. W. Bush still maintained his post-Gulf War approval rating of 74%/19%.

So while Obama can state that he isn’t as bad as Carter, he cannot point to a single instance in which a President with his current Gallup approval/disapproval margin won reelection.

June 3rd, 2011 at 9:22 am
Obamanomics: Unemployment Rises to 9.1%
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This morning, the Labor Department announced that the U.S. unemployment rate climbed again to 9.1% this month, up from 9.0% in April.  Just as alarmingly, the net number of jobs created was only 54,000, down from 232,000 in April.  In addition to deteriorating from the previous month, both numbers fell well below the expectations of economists, who had anticipated a decline in the unemployment rate to 8.9%, and 160,000 net new jobs.  This also means that in the 27 months since Obama signed his unprecedented government spending “stimulus,” unemployment has only climbed from 8.2% to 9.1%, even though the Administration projected that he would have it down to 6.5% by now.  By way of comparison, in the same 27 months following the effective date of President Reagan’s tax cuts in January 1983, unemployment plummeted from 10.4% to 7.3%.  The facts speak volumes.

February 4th, 2011 at 10:25 am
Unemployment: On Eve of Reagan’s 100th Birthday, Let’s Compare Presidents
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In its monthly report this morning, the Labor Department announced that unemployment has now remained at or above 9% for a post-World War II record 21st consecutive month.  Additionally, it reported just 36,000 new jobs, well short of the expected 140,000 number.

On the eve of the 100th anniversary of Ronald Reagan’s birth, these numbers contrast the results of a big government agenda versus a free market agenda.  In the 23 months since Obama’s massive $1 trillion “stimulus” passage, unemployment has increased from 8.2% to 9%.  One would expect better results in exchange for deficits of $1.4 trillion in 2009, $1.3 trillion in 2010 and an expected record $1.5 trillion this year.  Keep in mind that Obama projected that if we followed his big government agenda, unemployment would be down between 6% – 7% by now.  In contrast, the 23 months following the effective date of Reagan’s tax cuts in January 1983 saw unemployment plummet from 10.4% to 7.2%.

The facts speak for themselves.  Inexplicably, Obama nevertheless called for even more federal “stimulus” in his State of the Union address.  As we celebrate the Gipper’s 100th birthday, we should remember the timeless lesson taught by his freedom agenda’s success.

November 24th, 2010 at 4:55 pm
Giving Thanks for Clarity

So maybe the era of big government really wasn’t over when former President Bill Clinton declared it so.  Jim MacDougald of the Free Enterprise Nation explains that the balanced budget Clinton delivered was the product of a shell game with the Social Security Trust Fund, not a profile in political courage.  From a blog entry discussing the history of Social Security and Medicare:

The federal government recognized that beginning in about 2011 the transfer payment system wouldn’t work. There would be too many recipients of benefits and not enough workers to take money from to pay for it. To avoid the financial catastrophe that loomed ahead, in 1983 the government substantially increased employer and employee contribution requirements to (at least partially) pre-fund for 2011 and thereafter.

Planning ahead for an event that would occur 28 years in the future was a commendable and far-sighted act by our elected officials. “Baby-boomers,” who made up the majority of our workforce, were subsequently “taxed twice,” with matching contributions from employers. One portion of their tax was to pay for those on Social Security who had already retired, the second portion was to pre-fund a part of their own retirement benefits.

Congress took this excess tax revenue and put it in a “trust fund” to pay future benefits. But the trust fund they established was an enormous shell game because the money was treated as general revenues…a huge windfall to the federal government. It enabled President Clinton to announce at a State of the Union address, that the deficit was “exactly zero.” Even today, people are still congratulating Presidents Clinton and H.W. Bush for having balanced budgets and reducing national debt. But Congress had accomplished that feat by taking and spending all of the “excess revenue” that was coming in from payroll taxes for Social Security, and there was a lot of it to spend! From 1983 to 2008, the federal government took $2.5 trillion more than required to pay current Medicare and Social Security recipients, and they “bought Treasuries” with it. In other words, they spent it all.

Now, it makes a lot more sense how the federal government could “balance” the budget so quickly with nary a squeal heard from entrenched interests.  As MacDougald makes clear in the rest of his article, starting next year there are no more games to play.  The 2011 budget for Social Security and Medicare is $1.22 TRILLION – more than all of the federal income taxes paid by all of the workers in America last year.  In order to pay for the payments owed to Baby Boomers (who, as a cohort, begin reaching 65 in 2011), every American worker will have to pay at least $10,000 in new federal taxes every year.

Add this to the cost of ObamaCare and….pass the tryptophan and bring on the food coma.

November 5th, 2010 at 9:30 am
Latest “Stimulus” Report Card: Unemployment Remains 9.6%
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Today, the Labor Department announced that the unemployment rate remained at 9.6% for the third consecutive month.  When President Obama signed his nearly $1 trillion “stimulus” in February 2009, the unemployment rate stood at 8.2%.  In the 20 months since that date, the rate has increased to 9.6% despite White House projections that it would top out at 8% fully one year ago.

Once again, a comparison to the Reagan recovery is profoundly instructive.  In the same 20 month span following the effective date of the Reagan tax cuts in January 1983, unemployment plummeted from 10.4% to 7.3%.  Also instructive is the following headline from today’s Wall Street Journal“European Central Bank Parts Ways With U.S. on More Stimulus.” It is a sad state of affairs when even the spendthrift Europeans are providing economic guidance to Obama.

Liberal Keynesians have had almost two years to prove the validity of their economic agenda.  It has failed, their rationalizations have grown stale, and their desperate efforts to resist corrective action will only prolong the nation’s misery.

October 29th, 2010 at 12:50 pm
Today’s GDP Report: Latest Proof of “Stimulus” Failure
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Today, the U.S. Commerce Department reported disappointing 2.0% gross domestic product (GDP) growth for the third quarter of 2010.  Not only is that number below the expected 2.2% rate, it’s also below the rate needed to substantively reduce our 9.6% unemployment rate.  This now means that GDP growth rates for the five quarters of our current “recovery” have been 1.6%, 5.0%, 3.7%, 1.7% and now 2.0%.

Here’s how that compares to the Reagan recovery, which focused instead on cutting taxes and reducing government regulation.  In the five quarters following implementation of the Reagan tax cuts in January 1983, we posted remarkable growth rates of 5.1%, 9.3%, 8.1%, 8.5% and 8.0%.

So remind us again:  Who is the one blinded to “facts and science,” Mr. President?

October 8th, 2010 at 11:01 am
Obama’s “Stimulus” 19 Months Later: September Unemployment 9.6%, 95,000 Jobs Lost
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Nobody should cheer bad economic news, but neither should anyone deny reality or ignore the clear consequences of toxic public policy.

Some 19 months after Barack Obama signed a nearly $1 trillion “stimulus” bill into law, the Labor Department this morning announced that unemployment remains elevated at 9.6%, and the nation lost 95,000 jobs in September.  This following Obama’s and Joe Biden’s promises of a “recovery summer.” Obama and his apologists may trot out the teleprompters and once again claim that the private sector gain of 64,000 jobs (offset by losses in other sectors to arrive at the negative 95,000 total) shows that “we’re moving in the right direction.”

No, we’re not.  Even that paltry 64,000 is down almost 30,000 from the August private sector gain of 93,000, all at a time when his “stimulus” would supposedly have the economy accelerating, not decelerating.  Further, the Labor Department announcement stated that 15,000 more jobs were lost in July and August than previously estimated, along with a 366,000 downward revision in jobs during the 12 months through March.  The bottom line:  since Obama signed the “stimulus,” unemployment has steadily risen from 8.2% to 9.6%.

By way of comparison, in the 19 months following the arrival of Ronald Reagan’s tax cuts in January 1983, unemployment plummeted from 10.4% to 7.3%.  The facts speak for themselves.

August 13th, 2010 at 11:21 am
August 13, 1981: President Reagan Signs Tax Reduction Act
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On this date in 1981, President Ronald Reagan signed the Economic Recovery Tax Act of 1981 at his Rancho del Cielo property in Santa Barbara, California.  Sponsored by Congressman Jack Kemp (R – New York) and Senator William Roth (R – Delaware), the bill amended the Internal Revenue Code in order “to encourage economic growth through reductions in individual income tax rates, the expensing of depreciable property, incentives for small businesses, and incentives for savings.”

Did it ever.

By reducing tax rates and unleashing American dynamism, the U.S. witnessed two consecutive years of remarkable growth.  For the eight quarters spanning 1982 and 1983, we saw gross domestic product (GDP) growth of 5.1%, 9.3%, 8.1%, 8.5%, 8.0%, 7.1%, 3.9% and 3.3%.  Compare that to our current cyclical recovery, in which the Obama-Pelosi-Reid agenda of higher spending, regulation and taxation has subdued our rebound to 1.6%, 5.0%, 3.7% and 2.4% (soon to be revised downward to an estimated 1%).  Obama, Pelosi and Reid like to claim credit for our inevitable cyclical recovery from the last downturn, but the truth is that they’ve only managed to stifle it while adding trillions to our debt.

They should instead take a trip down memory lane and correct course according to the crystal clear Regan example.

July 20th, 2010 at 10:19 am
Five Reasons Why Sen. Harry Reid’s Joblessness Ploy Is a Bad Idea
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Senate Majority Leader (for the time being, at least)  Harry Reid (D – Nevada) mistakenly believes that he’s got a winning card with his scheduled vote today on yet another unemployment benefit extension.  Reid, along with co-conspirators Nancy Pelosi and President Obama, predictably mischaracterize Republican opposition to the vote that will immediately follow the introduction of replacement West Virginia Senator Carte Goodwin.

But here are some facts.  First, Senate Republicans only request that unemployment benefit extensions be offset with cuts in other forms of runaway federal spending.  Second, Harry Reid’s proposed extension will add $30 billion to this year’s projected $1.4 trillion deficit.  Third, unemployment benefits already stretch for 99 weeks – almost two full years.  Fourth, there have already been seven extensions in unemployment benefits during the period in which Obama’s $1 trillion “stimulus” spending has instead managed to stifle what should be a robust cyclical rebound by this point.  Fifth, even Obama’s own economic advisers have proclaimed that jobless benefits actually perpetuate and exacerbate unemployment itself.

Here’s the better policy prescription:  prevent upcoming tax increases, slow the federal government’s breakneck spending expansion and reduce the threat of anti-growth regulatory uncertainty.  When we implemented those prescriptions during the Reagan Administration, we witnessed astounding two-year gross domestic product growth of approximately 7% over eight consecutive quarters in 1983-1984.  How much longer will it take Harry Reid, Nancy Pelosi and Barack Obama to finally learn that simple lesson?

June 14th, 2010 at 9:53 am
Data: Obamanomics Causing Consumers and Businesses to Batten Down the Hatches?
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Are Barack Obama’s economic policies sucking oxygen from our precarious economic recovery?  Economic numbers released at the end of last week provide the latest evidence of that troublesome possibility.

On Thursday, the Federal Reserve reported that American businesses were hoarding an all-time record $1.84 trillion in cash and other liquid assets at the end of March.  This inclination to sock away their accumulated dollars rather than spend on expansion or new hiring suggests trepidation regarding the prospects of near-term economic recovery.

Then, on Friday, the Commerce Department reported that consumer spending – which constitutes over 2/3 of our economy – unexpectedly plummeted 1.2% from April to May.  This was the first month-on-month decline in seven months, and prompted The Wall Street Journal to report that, “the surprisingly poor sales cast fresh doubt on the durability of a rebound in consumer spending that had allowed economists to raise their forecasts for U.S. growth this year despite a moribund housing market, a dismal job market and tepid business investment.”

Obama and his allies continue to claim credit for the cyclical end of the 2008-2009 recession, but it appears more likely that their policies are stifling it.  Coming out of our most recent severe recession, the U.S. achieved rapid gross domestic product (GDP) growth of 8%.  Now, in contrast, we’re witnessing lukewarm 3% growth and depressing employment numbers.

With Obama promising even more tax hikes, deficit spending and unpredictable new regulations, it’s becoming increasingly apparent that both businesses and consumers are bracing for an Obamanomics storm, not a spring bloom.