Freedom Line Blog

CFIF Contributing Editor Ashton Ellis discusses how President Obama’s decision to block the construction of the Keystone XL Pipeline will cost Americans roughly 20,000 new jobs and 700,000 barrels of oil a day, and how the decision ultimately could benefit China at the expense of the U.S.

Listen to the interview here.

Today, the Department of Labor announced that the 2011 union membership rate fell to a new record low of 11.8%.   Disturbingly, the rate among public-sector workers now stands at 37%, whereas the membership rate for private-sector employees stands at a historic low of just 6.9%.

Now, National Labor Relations Board (NLRB) chairman Mark Pearce has announced that Obama’s NLRB will push for new rules forcing employers to turn over lists of employees’ private phone numbers and email addresses in a shameless attempt to assist Big Labor in its desperate organizing activities.  After all, unless labor leaders can wrench more dollars from employees’ paychecks, they won’t have as much to spend on Obama’s reelection campaign.  Meanwhile, the government also announced today that the U.S. economy only grew a lackluster 2.8% in the fourth quarter of 2011.  That illustrates once again that Obama’s policies aren’t helping the economy, they’re subduing what should by now be a much sharper recovery.

As we have observed, if the Obama Administration behaves this thuggishly during an election year, just imagine how heedlessly it would behave during a second term when it needn’t worry about reelection.

Reading the text of Indiana Governor Mitch Daniels’ Republican response to President Barack Obama’s State of the Union Address gives us a bittersweet reminder of what might have been had he run for President this year.  Here are some phrases I hope the eventual nominee incorporates into his campaign – and governing – rhetoric:

“In three short years, an unprecedented explosion of spending, with borrowed money, has added trillions to an already unaffordable national debt. And yet, the President has put us on a course to make it radically worse in the years ahead. The federal government now spends one of every four dollars in the entire economy; it borrows one of every three dollars it spends. No nation, no entity, large or small, public or private, can thrive, or survive intact, with debts as huge as ours.

“The extremism that stifles the development of homegrown energy, or cancels a perfectly safe pipeline that would employ tens of thousands, or jacks up consumer utility bills for no improvement in either human health or world temperature, is a pro-poverty policy. It must be replaced by a passionate pro-growth approach that breaks all ties and calls all close ones in favor of private sector jobs that restore opportunity for all and generate the public revenues to pay our bills.

“The mortal enemies of Social Security and Medicare are those who, in contempt of the plain arithmetic, continue to mislead Americans that we should change nothing. Listening to them much longer will mean that these proud programs implode, and take the American economy with them. It will mean that coming generations are denied the jobs they need in their youth and the protection they deserve in their later years.

“We will advance our positive suggestions with confidence, because we know that Americans are still a people born to liberty. There is nothing wrong with the state of our Union that the American people, addressed as free-born, mature citizens, cannot set right. Republicans in 2012 welcome all our countrymen to a program of renewal that rebuilds the dream for all, and makes our ‘city on a hill’ shine once again.”

If Republicans win the White House this year I hope there’s an important place in the Administration for Mitch Daniels.

I’m glad to see the Wall Street Journal’s editorial page echoing Troy’s advice to Mitt Romney to get out in front of the Bain-bashing and make a full-throated defense of free market capitalism.  But as both Troy and the Journal seem to allude to, Romney doesn’t appear capable or willing to make the case for democratic capitalism; the kind of market economy that emphasizes equal access and opportunities instead of guaranteed outcomes.

The way I’m using the term, democratic capitalism disdains the unfairness many perceive in the crony capitalism of Obama’s Solyndra deal, and in the bailouts of companies deemed too big to fail.  Americans don’t like it when public employee unions get tenure protections and better benefits than the private sector.  People feel cheated when General Electric pays no federal income taxes thanks to loopholes only the wealthy like Warren Buffet can exploit.  For the free market to work, people have to trust it, and right now Wall Street, the White House, and many other entrenched special interests from unions to rent-seeking businesses are making everyday Americans think the capitalistic system they’ve been sold is far from democratic.

In a sense, democratic capitalism is at the heart of Sarah Palin’s appeal.  Her entire career in Alaska was built around taking down entrenched interests enriching themselves at the expense of a fair system.  She exposed a corrupt state oil and gas commission; disrupted the state GOP’s patrician good old boys club by defeating an incumbent governor; and won a fight with a major oil company over its ability to exploit Alaska’s natural wealth without sharing some of it with residents.  These were the accomplishments that made her a maverick and put her on John McCain’s vice presidential radar.  When Palin was toying with a presidential run this time around, she gave a major speech blasting distortions of the economy that make the market less fair, and ultimately, less free.  Better than anyone to date, Palin communicates the Tea Party’s angst over Big Government into a larger narrative about the dangers posed by any segments of society that threaten the democratic element in America’s form of capitalism.

Now, I’m not saying that Mitt Romney is a foe of democratic capitalism.  What I’m saying is that he doesn’t appear comfortable articulating his understanding of the free market in a message that applies equally to executives and frontline workers.  That’s probably because he’s never been a frontline worker.  Of course, he’s worked hard – graduating with honors from Harvard law and business schools demands it – but as the son of an auto executive and governor whose first job out of graduate school was telling CEO’s how to fix their companies, Mitt Romney has never experienced capitalism from the factory floor.  That means he will have a hard time explaining the virtues of capitalism to people near the destructive end of capitalism’s creativity.

Fairly or not, if Romney is the nominee liberals will savage him as a member of the 1% who made millions replacing people with technology and exporting many of the remaining jobs overseas.  Conservatives who favor the free market should hope that Romney discovers how to articulate the democratic element of capitalism soon and well.  He could start by reading Troy’s excellent remarks as soon as possible.

Today’s jobs report from the Labor Department shows that unemployment has now exceeded 8% for 35 consecutive months, the most since the federal government began keeping records.

The reason that 8% number is important is that the Obama Administration promised in January 2009 that unemployment would not exceed it under his $1 trillion spending “stimulus.”  They also projected that unemployment would peak in October of that year, and be down to approximately 6% today.  Instead, the jobless rate ascended past 10%, and has never come in below 8% since.  Moreover, the incremental decrease from November’s 8.7% rate was due to a decline in the size of the nation’s workforce.  Further, the 200,000 jobs added is barely sufficient to tread water with population growth.

By this point in our cyclical recovery, employment growth should be much stronger, and unemployment much lower.  To compare alternative economic strategies, Ronald Regan dealt with even higher unemployment than has Obama (not to mention far higher inflation and interest rates back then).  But Reagan’s tax-cutting and smaller-government policies slashed unemployment from 10.4% on the effective date of his tax cuts to 7.0% in the same 35-month span Obama has had.  The answer to the Obama jobs freeze is clear.  It’s simply up to the American electorate to demand it.

Kimberly Strassel of the Wall Street Journal draws attention to the central  failure of Republicans losing ground against a Barack Obama quietly gaining in popularity:

One mistake the party is making is fighting this race like the 2010 midterms. A certain laziness has settled in, based on the notion that the GOP can make 2012 another referendum on the president’s mismanagement. But while Obama-bashing may again fire up the conservative base, it delivers nothing to those crucial independent and middle-of-the-road voters who are anxious, confused and looking for someone to convince them they have a better plan.

Strassel goes on to explain how focus groups in battleground states are showing a consistent pattern in swing voters.  They want Republicans to make a moral case against the President and his policies.  They assume both parties will overspend.  What they want is a coherent explanation of why Obama’s policies are wrong for the country and wrong for them.  In short, what Americans want are concrete arguments explaining why Obama’s liberalism is so bad for the country, followed by an alternative vision that flows in the mainstream of American political thought and experience.

More Strassel:

Consider that ObamaCare was a concern of the focus group, though it had notably receded. This is in part because, while the GOP often complains about the law and its individual mandate, it has largely stopped explaining to voters what else is in it, or how other upcoming provisions will hurt consumers, or exactly how they grow government.

Presidential aspirants and congressional Republicans, take note: To make a moral argument against the president, you also have to make one for yourselves. To the extent the GOP is lobbing the usual Obama complaints or going to the mat over who cares more about a piddling payroll tax holiday, it is wasting time.

In a nutshell, the GOP’s messaging failure explains Paul Ryan’s success.  Almost alone among major Republican leaders, Ryan is defining the problems we face with confidence-building detail, offering thoughtful, consensus-based solutions, and justifying them in light of our history and tradition.  This is the work of a statesman.  The sooner Republicans take the hint and follow suit, the sooner America will remember the moral case for prosperity.

Below is one of the latest cartoons from two-time Pulitzer Prize-winner Michael Ramirez.

View more of Michael Ramirez’s cartoons on CFIF’s website here.

Below is one of the latest cartoons from two-time Pulitzer Prize-winner Michael Ramirez.

View more of Michael Ramirez’s cartoons on CFIF’s website here.

When Barack Obama entered office and proposed his nearly $1 trillion spending “stimulus” bill, his administration promised that unemployment would peak at 8% in the fall of 2009 if we passed his plan.  They also predicted that unemployment would be down to approximately 6% by now.

Instead, following today’s latest report from the Department of Labor, unemployment has now exceeded Obama’s promised 8% ceiling for a record 34th consecutive month.  Although some will focus on the decline from 9.0% to 8.6%, most of that statistical decline is due to people giving up and dropping out of the labor force, rather than from sudden job creation.  That is illustrated by the fact that only 120,000 net jobs were added, less than the anticipated number.  That’s also fell far below the 200,000 new jobs needed each month to reduce the unemployment rate by just 1% over the span of a year. Additionally, the broader labor participation rate again declined and now stands at 64%.

In contrast to the destructive effects of Obama’s borrow-and-tax-and-spend agenda, Ronald Reagan’s tax-cutting agenda saw unemployment plummet from 10.4% to 7.1% over the same period of time.  As the old Latin saying goes, “res ipsa loquitur” – the fact speaks for itself.

It’s an old trope that Democrats are the Santa party while Republicans play Scrooge.  But if the experience of this group of veteran Santa Claus impersonators is any guide, it looks like Old Saint Nick is learning the value of managing (economic) expectations.

Fred Honerkamp, a Santa graduate who also lectures at the school, said that he had come up with his own story of an errant elf to in the North Pole explain why children can’t have everything.

He said: ‘It’s hard to watch sometimes because the children are like little barometers, mirrors on what the country has been through.

‘In the end, Santas have to be sure to never promise anything.’

The school has also been advising its pupils on how to deal with such questions as: ‘Can you bring my daddy a job?’

Santa student Tom Ruperd told the New York Times that he tends to guide children towards more realistic gifts and tells them that ‘Santa’s been cutting back too’.

Faced with an impossible question, such as finding a job for a parent, his reply is: ‘Santa specializes in toys, but we can always pray on the other’.

Pray, and work hard to elect government officials who know that the truth told with respect for another’s dignity is a much better gift than empty promises.

H/T: Daily Mail

Glenn Beck’s The Blaze reports on a highly visible casualty of the economic downturn that is costing Americans’ jobs and now memories: decades-old restaurant chains.

Here’s a list of the Top Ten restaurants that are contracting in today’s tight  economy:

(1)   Bennigan’s Grill and Tavern

(2)   Ground Round Grill & Bar

(3)   Baker’s Square

(4)   Damon’s Grill & Sports Bar

(5)   Don Pablo’s

(6)   Gloria Jean’s Coffees

(7)   Big Boy

(8)   Tony Roma’s

(9)   Country Kitchen

(10) Black Angus Steakhouse

These corporate losses are just another source of lost jobs and opportunities.  Mr. President and the “super” committee, are you listening?

In an interview with CFIF, Richard Trzupek, a chemist, consultant and writer who has worked in the environmental industry for decades, discusses his recently released Encounter Broadside titled, “How the EPA’s Green Tyranny is Stifling America.”

Listen to the interview here.

The nation’s unemployment remained at or above 9% again last month, and has now exceeded 8% for 33 consecutive months since February 2009.  That’s the longest stretch since the federal government began issuing monthly reports in 1948.

Here’s why that 8% benchmark and February 2009 are important.  When Obama passed his nearly $1 trillion “stimulus” bill that same month, his administration projected that unemployment would never exceed 8%, and be all the way down to approximately 6% today.  Instead, unemployment quickly climbed to 10.1%, and has remained above 9% for all but four months during that record 33-month span.  Moreover, the economy only added a disappointing 80,000 jobs for September, less than the expected 100,000 and far below the estimated 200,000 necessary each month to reduce the rate by just 1% over the course of a year.

It’s instructive to compare the real-world results of Obama’s economic agenda with Ronald Reagan’s.  In the same 33-month stretch following the effective date of Reagan’s tax cuts, unemployment plummeted from 10.4% to 7.1%.  The comparison speaks for itself, yet now Obama tells the nation that what we need is more of the same – more “mini-stimulus” government spending.  Obama’s agenda has demonstrably failed, and it’s time to return to what demonstrably works.

So the government reported tepid 2.5% gross domestic product (GDP) third quarter growth yesterday, and the market celebration it triggered says a lot about the bleak nature of the Obama economy.

First of all, that reading fell below consensus expectations of 2.7% growth.  Second, 2.5% falls almost a full percentage point below the post-war historical average of 3.3% quarterly growth.  Third, GDP should be growing even faster than that 3.3% long-term average during a period of so-called “recovery” – recall that the most recent recession officially ended nine quarters ago in June 2009.  At a similar point during the Reagan recovery in 1984, GDP grew at a 7.1% rate following consecutive quarters of 9.3%, 8.1%, 8.5% and 8.0% growth.  And at the same point during the Bush recovery from the Clinton/Gore tech bubble downturn and 9/11, GDP grew 3.7% following a previous quarter of 6.7% growth.  Fourth, 2.5% growth is insufficient to significantly improve the nation’s festering unemployment problem.

A 2.5% rate certainly beats the 0.4% and 1.3% readings for the preceding two quarters of 2011, but America’s desperate need for new economic leadership becomes clear when such a lackluster result is seen as “good” news.

Quin’s point is well taken.  Obama-era regulations and rhetoric are scaring away the kind of investment growth the country needs to get Americans back to work.  On the regulatory side, increased capital holding requirements stack dollar bills in bank vaults while small business loans dry up.  Cost-of-employment drivers like Obamacare and the EPA’s threatened regulation of carbon make any rational employer look for ways to enhance productivity and efficiency instead of staffing up.  Simply put, under President Obama it’s cheaper to do more with less to keep what you have rather than risk the money and regulatory gauntlet trying to increase market share.

On the rhetoric side, my recent column on the five most recent dumb statements by the president contains just a sample of his daily assaults on the ambition and energy of America’s job creators.  What the president fails to see is that a sustainable government depends on a vastly more prosperous private economy.  Until he learns the importance of that relationship, we’re likely doomed to being (and producing) much less than we otherwise would.

Btw, Quin: I’m sure you’ve got business contacts in the Mobile-D.C. corridor.  Are any of them looking at the current and future regulatory scene and thinking, “Gee, what a great time to expand”?

In an ominous sign, the nation’s consumer confidence plummeted in October to lows not seen since March 2009, three months before the last recession officially ended.  After improving to 46.4 in September, the measure fell 7 points to 39.8, well below what economists expected.  That reading is also far below the 90 level that economists generally agree indicates a healthy economy.

So along with the cyclical recovery following the last recession, consumer confidence rose but has now returned to lows not seen since that time.  It will therefore be interesting to watch Barack Obama and liberals attempt to once again scapegoat the Bush Administration for this, almost three years since Bush departed office, and five years since his party last controlled Congress.

Below is one of the latest cartoons from two-time Pulitzer Prize-winner Michael Ramirez.

View more of Michael Ramirez’s cartoons on CFIF’s website here.

Below is one of the latest cartoons from two-time Pulitzer Prize-winner Michael Ramirez.

View more of Michael Ramirez’s cartoons on CFIF’s website here.

On yesterday’s Meet the Press, Rep. Paul Ryan (R-WI) demonstrated how to reframe quickly just about any debate on taxes or the economy into one that favors free markets and opportunities for everyone:

“I don’t worry about people who are already rich. I worry about getting people to become successful,” Ryan said Sunday on NBC’s “Meet the Press.” “Removing those barriers so that people who have never seen success before can actually become successful. … This redistribution idea of pinning people against each other does not work. It’s divisive, and it hardly gives us the kind of attitude we want for businesses to take risks so we can succeed in the future.”

Conservatives need more of this kind of rhetoric from leading politicians.  Let’s hope the eventual GOP nominee lifts Ryan’s lines to give an inspirational lift to what will surely be a withering attack on the failed Obama economy.

Bloomberg News reports the latest ultimatum from House Speaker John Boehner (R-OH) to President Barack Obama:

“We await the president’s submission of the three trade agreements sitting on his desk so the House can consider them in tandem” with the aid and preference programs, Boehner, an Ohio Republican, said in a statement yesterday. “If the president submits these agreements promptly, I’m confident that all four bills can be signed into law by mid-October.”

Apart from Rep. Paul Ryan’s budget resolution and the president’s deficit reduction proposal, there may be no better example of how different is each party’s idea of sound economic policy.

Boehner wants Obama to release three trade treaties negotiated by the Bush Administration so that Americans and their counterparts in Columbia, South Korea and Panama can start enjoying the benefits of free trade.

For his part, Obama wants to force Republicans into funding another round of unemployment benefits, this time for workers displaced by the yet-to-be-ratified agreements.  That’s right: the president wants to spend money on people who may never be fired.

First of all, it’s fallacious to assume that businesses operating at historically low worker levels will fire employees; especially since increased trade opportunities are more likely to lead to hiring increases.  Moreover, Obama fails to recognize the cost of not enacting the three free trade agreements.  For instance, the U.S. Chamber of Commerce estimates that failure to ratify the agreements will cost 380,000 jobs due to missed business opportunities.

At the heart of this dispute is the focus of each party.  Boehner and the Republicans want to spur economic growth.  Obama and the Democrats want to lock-in the growth of the entitlement state.

Boehner is right to demand action on both free trade and worker aid at the same time.  If Obama cries foul, it’s only because his childish attempt to spend more and get less was called out.