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.
In this week’s Liberty Updatecommentary “2012 May Be Even Brighter for Conservatives Than 2010,” we note that there are reasons why 2012 might bring even more conservative change than this week’s results regardless of the political climate two years from now. In the Senate, Democrats must defend 23 seats, many of those in red states like Montana, whereas Republicans need only defend 10 (most of which are in red states like Wyoming, Utah and Texas). And in the House, post-census redistricting in states that elected Republican governors and legislatures this week may add even more seats to the 60+ they won two days ago.
Here’s another encouraging (and related) factor for conservatives. The same post-census realignment that will facilitate more conservative wins in the House will also alter the Electoral College, thereby affecting the 2012 presidential race. How significant that effect will be one cannot yet say, but every point will count if that White House contest is as close as two of the previous three have been.
By all accounts, American voters have regained sobriety and will deliver resounding victories for conservatives today. This date in history, however, provides a cautionary tale for anyone even thinking of not voting because they assume that victory is in the bag.
Today in 1948, political pundits were so certain of a Thomas Dewey victory over Harry Truman that the Chicago Tribune prematurely published its infamous “Dewey Defeats Truman” headline. Need another cautionary tale? How about the 2008 Minnesota Senate race between Norm Coleman and Al Franken? There, Franken and his election attorneys somehow contorted an election night deficit into a narrow recount victory, possibly with the help of felon voters. Nobody’s laughing now that the chronically unfunny Franken routinely makes a mockery of his Senate seat.
So don’t take anything for granted. Too many people have fought and died to protect your right to affect this nation’s course, and too many people have worked too hard to provide alternatives to the bland “same ol’, same ol'” choice. You don’t want to be kicking yourself tomorrow.
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%.
Consistent with his vision of himself as point guard directing the entire universe, Barack Obama has repeatedly scolded his German counterpart Angela Merkel to pursue more of the Keynesian “stimulus” he prefers.
Today, however, employment data provided the latest vindication of Germany’s rejection of Obamanomics. Despite the worldwide economic malaise, German unemployment has now fallen to its lowest level in almost 20 years. Its unemployment rate is now 7.5%, and its total number of jobless fell below the 3 million threshold for the first time since 1992. Here in the U.S., meanwhile, we’ve now seen the unemployment rate rise from 8.2% when Obama signed his $814 billion “stimulus” in February 2009 to 9.6% today.
Obama loves to lecture campaign crowds that those opposing his agenda are blind to “facts and science,” but this latest data once again proves that he’s the one refusing to acknowledge hard reality.
Dwight M. Jaffee, professor of finance and real estate at the University of California, Berkeley, points out in The Wall Street Journal that “Today 90% of the $14 trillion in outstanding residential mortgages is controlled by the Federal Housing Administration (FHA), the Department of Veterans Affairs, or Fannie Mae and Freddie Mac – with the latter two under government conservatorship.”
Ninety percent? Wait a minute… Doesn’t every dizzy big-government leftist from Barack Obama to Paul Krugman tell us that “deregulation” of the housing sector caused our economic difficulties? The fact is that the housing finance market is one of the most regulated, not least regulated, sectors of the entire economy. Thanks to Professor Jaffee, we are reminded of the sheer scale of that regulation, as well as the left’s efforts that fed the housing bubble.
Barack Obama has consistently failed to gain political traction with unseemly attacks against everyone from former President Bush to Fox News to John Boehner’s tan. So Obama redirected his aim using illogical and baseless attacks against business groups whom he accuses of attempting to “sway elections” through sinister election spending.” David Axelrod, Obama’s top political guru, has labeled election spending a “threat to our democracy,” and when pressed to identify a shred of evidence supporting Obama’s allegation of illegal foreign campaign spending benefiting Republican candidates could only reply, “do you have any evidence that it’s not?”
So which group has actually spent the most to influence this year’s Congressional elections? The American Federation of State, County and Municipal Employees (AFSCME), a 1.6 million member union of public employees. According to The Wall Street Journal, AFSCME has now spent $87.5 million, which outdistances the demonized Chamber of Commerce by a cool $12.5 million. Of the top five spenders, in fact, three of them are big labor unions (the other two being the Service Employees International Union (SEIU) and National Education Association (NEA)).
One would hope for more ethical behavior from a President who based his entire 2008 campaign on bringing “change” to our toxic political discourse. What will be his campaign theme in 2012? Instead of “hope and change,” he’s building a legacy of “hypocrisy and impropriety.”
We’re now exactly two weeks from the long-awaited 2010 Congressional midterm election and report card for President Obama. By now, the question is simply how high the expletive decibel level will ascend on election night inside the White House.
On that front, a Gallup poll brings news every bit as chilly and cloudy for Democrats as today’s Washington, D.C. weather. In fact, the poll shows a high for Republicans that even 1994 didn’t bring. According to polling completed this past weekend, Republicans now possess a 5-point lead in voter preference, 48% to 43%. And here’s the really bad news for Democrats: that’s not among likely voters, but among registered voters. (Among likely voters, the GOP lead expands to 11% or 17%, depending on whether the “high turnout” or “low turnout” polling model is applied.)
Let’s put that historic lead in perspective. In 2002, the party holding the White House hadn’t added both House and Senate seats in its first mid-term since 1934, but the supposedly failed President Bush broke almost 70 years of precedent by adding 8 House and 2 Senate seats. Even that year, however, Democrats held a 9-point polling lead in mid-October among registered voters. And during the famous 1994 election season that rejected two years of Clintonian rule alongside a Democratic House and Senate, Republicans only held a 3-point lead on October 18-19, which switched back to a 3-point Democrat lead by October 22-25. If this is any indication, Democrats aren’t going to need seat belts this year, they’re going to need airbags.
“We have to pass the bill so that you can find out what is in it.” That was Nancy Pelosi last March, promoting that Pandora’s Box known as ObamaCare. Well, it turns out that Pelosi and the bill’s proponents may be upset to find out what is not in it. Namely, they failed to include a severability clause in their haste.
So what is a “severability clause,” and why might it matter? A severability clause is a simple provision stating that if a court later declares one or more subsections of a bill void, the remainder of the bill remains valid and enforceable. Without a severability clause, an entire bill can be jeopardized even if a very small part of it is stricken by the judicial branch. Now, with separate lawsuits challenging ObamaCare quickly proceeding toward judicial reckoning, it is possible that the entire package may crumble if its individual mandate (forcing free citizens to engage in involuntary commerce by purchasing approved health insurance) or some other clause falls.
There is no guarantee in this regard, as the Supreme Court just this year curiously allowed the tangled Sarbanes-Oxley web to survive despite its own absence of a severability clause. Nevertheless, the complete demise of ObamaCare due to the failure to add a simple severability provision could be one positive byproduct of ObamaCare’s sloppy birth.
In this week’s Freedom Minute, CFIF’s Renee Giachino comments on the desperation tactics and outright lies of President Obama and his liberal allies against their political and ideological opponents.
One year ago, the Obama Administration rammed through an auto bailout benefiting Big Labor that utterly obliterated the contractual rights of secured creditors. Obama has also famously charged like a bull through a china gallery on ObamaCare, Arizona’s immigration enforcement law and myriad other issues.
Despite those abuses of authority, Obama shamelessly pivots to plead that his hands are tied whenever it suits his momentary needs. Appearing on MTV today, Obama was confronted with an inconvenient question about his failure to make good on his sanctimonious promise to end the military’s “Don’t Ask, Don’t Tell” policy. His answer? “It has to be done in a way that is orderly… I do have an obligation to make sure that I’m following some of the rules. I can’t simply ignore the laws that are out there, I’ve got to work to make sure that they are changed.”
Obama may soon be hoping to achieve a Clintonian recovery following a disastrous mid-term Congressional election, but his clumsiness to date doesn’t suggest that he’s in the same league as Slick Willie.
In a refreshing victory today for individual freedom, the concept of federalism and Constitutional principles, a federal judge in Florida rejected the Obama Justice Department’s request to dismiss the challenge by 20 states against ObamaCare’s unconstitutional provisions.
Among other things, Judge Roger Vinson ruled that the states can proceed in their argument that ObamaCare’s individual mandate, which forces citizens to engage in involuntary commercial transactions by purchasing insurance, violates the Constitution. The Obama Administration, which couldn’t seem to decide whether ObamaCare passed Constitutional muster as a “tax” or under some other convenient authority, contended that the challenge should be thrown out in its entirety. With this preliminary legal victory, the case can now proceed toward trial.
In this week’s Freedom Minute, CFIF’s Renee Giachino calls the recent departure of several senior White House staff “a good start,” then recommends further cuts in the president’s cabinet.
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.
Arthur Laffer brought us the famed Laffer Curve, which plotted how higher tax rates can paradoxically reduce incoming revenues by inhibiting economic growth.
In today’s Wall Street Journal, Laffer adds to his legacy by showing how state income taxes lead to lower economic growth, personal income and population growth. The impetus for Laffer’s analysis is ballot Initiative 1098 in the state of Washington, which would impose a new 5% income tax on individuals earning over $200,000 or couples over $400,000 per year. An additional 4% would be heaped upon individuals earning over $500,000 or couples earning over $1 million. Laffer crunches the real-world economic numbers, which clearly demonstrate that this is a destructive idea. He shows that the nine states without a personal income tax enjoy 26.5% higher economic growth, 13.1% higher personal income growth and 9.4% higher population growth than the nine staes with the highest personal income tax rates. The highest-tax states also suffer 22% lower tax revenue growth and underperform in standard of living.
As Laffer neatly summarizes, “Each and every state that introduced an income tax saw its share of total U.S. output decline.” He can’t stop states from descending into economic self-destruction, but he provides a great service by providing this warning beacon.
Throughout the ObamaCare debate, President Obama promised that, “If you like your healthcare plan, you can keep your healthcare plan.” Nearly every single day, however, it seems that yet another healthcare plan becomes a casualty of ObamaCare.
Last week, McDonald’s made headlines when it revealed that a low-cost “mini-med” healthcare plan for 30,000 employees may now be “economically prohibitive” due to ObamaCare. Now, we receive news that 3M will discontinue a group healthcare plan for retirees not old enough to receive Medicare by 2015. The reason? “Health care reform has made it more difficult for employers like 3M to provide a plan that will remain competitive.”
The White House continues to wage a Soviet-style campaign against private enterprises that dare deliver the inconvenient news that ObamaCare is already destroying the healthcare marketplace, but killing messenger after messenger won’t change simple reality.
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