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The Obama Watch
The Madness of Obamanomics
An administration doing all it can to delay economic recovery indefinitely.
For two years I have been arguing here and elsewhere that Obamanomics will not work. But for Obama and the Democrats to persist in transparent error after the election tsunami and now last Friday’s catastrophic unemployment report has now veered into madness.
Obama’s unreconstructed, throwback Keynesian economics from the 1970s and even the 1930s was a proven failure 30 years ago. Bringing it back as if nothing has happened since the Keynesian intellectual high water mark in the 1960s is public policy malpractice so extreme that it deserves sanctions. But Obamanomics has now gone beyond this silliness to outright assault on critical areas of our economy.
Dude, Where’s My Recovery?
The American economy doesn’t just fall flat on its back and then stay there for years and years. That has happened in countries like India in the past (currently booming), or Bangladesh or Argentina today, or elsewhere in the Third World. But not America.
For over 200 years, the American economy has fallen into periodic recessions and then recovered in a normal business cycle. A great success of Reaganomics was that it stimulated a 25-year economic boom virtually uninterrupted by recession. (People on the Left, like “Progressive” talk radio savant Thom Hartmann, don’t know that, because mentally they have not been living in America during that time).
But on average since World War II, now 65 years ago, recovery from recession has arrived just 10 months after the recession began. The longest previous postwar recession was 16 months.
But as of last Friday, nearly 3 years after this latest recession began, the unemployment rate was still rising, flirting with double digits at 9.8%. African Americans suffered with an unemployment rate at 16%, Hispanics with unemployment at 13.2%. Instead of a recovery after a previous recession record of 16 months, the unemployment rate has now remained stuck at 9.5% or above for a postwar record 16 months. This is why the record of Obamanomics is starting to look more like a depression than a recession.
The Bureau of Labor Statistics (BLS) household survey in Friday’s report actually showed a loss of 173,000 jobs last month, after a loss of 330,000 jobs the previous month, in a self-reinforcing downward spiral.
The number of unemployed rose to 15.1 million last month, with another 9 million “working part time because their hours had been cut back or because they were unable to find a full-time job,” according to the BLS. The number of discouraged workers who were not counted as unemployed because they had given up looking for work was up 421,000 from a year earlier.
As economist John Lott explained at FoxNews.com last Friday, “Economists thought that the unemployment rate would rise as some of the Americans who had completely left the labor force began to look again for jobs.” That would actually be a sign of coming recovery.
But as Lott further explained, that hopeful reason was not the cause of rising unemployment last month. Lott wrote, “Unfortunately, the bad news today is that not only is the number of unemployed rising, the number of people who have given up and left the labor force is also still going up. More than 500,000 Americans have left the labor force since September — a shocking rise in such a short period of time for a so-called ‘recovery.’” Moreover, “2 million Americans have either become unemployed or left the labor force since April.” Those are signs of continuing economic deterioration rather than recovery, again 3 years after the recession began.
Finally, as Lott perceptively reveals, “The untold story that isn’t being covered is how many Americans have stopped actively looking for work. At this writing, the number of unemployed plus those not in the labor force is at 99.83 million, just below 100 million and 10 million above what it was just two years ago. President Obama seems poised to claim the dubious distinction of breaking through that 100 million barrier.”
The Failure of Keynesian Economics
The economy has continued to deteriorate rather than recover because from the beginning the recession was countered with the proven failed nostrums of Keynesian economics. That, again, is the doctrine that what promotes economic recovery and restores growth is increased government spending, deficits and debt. Hence President Obama’s failed, wasted, nearly $1 trillion stimulus spending of February 2009.
The increased government spending and deficits are supposed to increase aggregate demand, which is supposed to stimulate increased production to meet that demand. It doesn’t work in part because if the government has to borrow, or worse tax, $1 trillion out of the economy, spending that additional trillion back into the economy leaves the economy no better off on net. In addition, all that government spending doesn’t do anything to change the fundamental incentives that really drive the economy.
About the Author
Peter Ferrara is Director of Entitlement and Budget Policy at the Heartland Institute, General Counsel of the American Civil Rights Union, Senior Fellow at the National Center for Policy Analysis, and Senior Policy Advisor on Entitlements and Budget Policy at the National Tax Limitation Foundation. He served in the White House Office of Policy Development under President Reagan, and as Associate Deputy Attorney General of the United States under President George H.W. Bush.
Letter to the Editor View all comments (104) | Leave a comment
More Articles by Peter Ferrara
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http://spectator.org/archives/2010/12/08/the-madness-of-obamanomics
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TennesseeVolunteer| 12.8.10 @ 7:07AM
Huzzah, Peter, Huzzah!
Your calls for impeachment of these leftist beuracrats is the call for the end of strangling our country and it's people.
Many small businesses are absolutely drying up. Hanging on by a thread, many are very close to closing up because of the lack of customers who are spending.
The election in November was a shot over the bow but any conservative who thinks that the Democratic Socialists of the liberal elite will bow to reason is common sense is sadly mistaken. They mean to fundamentally transform our country and we must take it back!
Alan Brooks| 12.8.10 @ 1:22PM
Yet the reason you lost in 2008 is you lack the cohesion you enjoyed in the '80s.
Billy| 12.8.10 @ 2:54PM
So what? What in blazes does your remark have to do with TennVol's comment? You might try explaining why YOU lost in 2010. And give us a shout in 2013 with your analysis ...
KJ| 12.8.10 @ 3:52PM
All this talk of left or right, Liberal or Conservative. What happened to class struggle and discourse between the have's and have's-not? Keynesian economics also states government has the responsibility and the duty to ensure the spending is regulated. IE: it goes where it most needed and most beneficial with transparency and accountability (not the bankers pockets). There is no distinction between Liberal or Conservative in this regard. What we have is a distinction between right and wrong (morally, politically, and economically). If people want things to change, get out and vote (current voter turnout is abysmal)- or better yet, run for political office. This is especially true at the municipal levels. Reparation will be from the bottom up, not the top down.
Alan Brooks| 12.8.10 @ 4:31PM
"Reparation will be from the bottom up, not the top down."
Yours' is new age marxism: Toffler meets Trotsky. I am increasinglty surprised how gullible so many are; it's the timeframe, to change things takes enormous "amounts" of time (almost as if time is a commodity such as pork bellies!)
KJ, if you want to be gullible, that is your business, however I choose not to share that aspect of you. You will say "we have to start somewhere", but you don't know what the "start" is heading to; that is to say the trajectory is all too open-ended. However if you feel reparation must be from the bottom up ('fads are top down, trends are bottom up'), you are saying we must struggle like marxists being the vanguard in a self-sacrificing class war. But go right ahead, storm the barricades; you can be in front of me taking bullets; because the vanguard is to be sacrificed-- so there is no reason for you to reply to this comment.
What is there to say?: "Power to de peeples"?
Alan Brooks| 12.8.10 @ 4:35PM
...PS
"If people want things to change"
That's the point, perhaps the 'people' don't really want change.
Alan Brooks| 12.8.10 @ 6:11PM
ours' is new age maamounts" of time (almost as if time is arxism: T change things takes enormous " commodity such as pork belliesoffler meets Trotsky. I am increasinglty surprised how gullible so many are; it's the timeframe, to!)
KJ, if you want to bhave to start somewhere", but you don't know what the "start" is heading to; that is to say the trajectory is all if you feel reparation must e gullible, that is your business, however I choose not to share that aspect of you. You will say "we be from the bottom up ('fads are top down, trends too open-ended. However are bottom up'), you are saying we must struggle like marxists being the vanguard in athe vayou can be in front nguard is to be self-sacrificing class war. But go right ahead, stormto de peeples"?
the barricades; of me taking bullets; because sacrificed-- so there is no reason for you to reply tWhat is there to
o thissay?: "Power comment.
Alan Brooks| 12.10.10 @ 2:39AM
I have 39 cents in change in my pocket.
KJ| 12.8.10 @ 11:07PM
I'm not here to get into a dogmatic argument. I'm part of the so called middle class. (This presumes there is an upper, and lower class). I'm not big business (I have 22 employees and feel responsible for 22 employees, 16 wives, 4 girlfriends, and 28 children...(at last count) not including cats, dogs, etc.) I take an avid participation in local politics, thereby (hopefully) helping to ensure the viability of my business and thus the livelihood of my employees and their families. I'm convinced this translates into bottom up political pressure with regards to regional and federal levels of government. I would love to get away from the Us and them, left and right dogmatism and get on with the real issues...jobs, sustainable monetary system (whatever that is), government transparency and accountability. This can be broken down to many levels: ie: Jobs on the continent, specific states, localities...checks on speculation in monetary terms (pay taxes on what you make...esp those making above 6 figures), I could and can go on. Changes to electoral system, not only making it easier to vote, but also encouraging independents to run. More independents. Independents give rise to increased exposure to local issues, and (in my experience) greater voter involvement. Maybe I am already in the vanguard (if you want to quote Trotsky). I don't see it that way. I'm trying to do what is right for my family, the families I support, and the environment we live in. The environment they will inherit. If I am taking bullets, it is from people like yourself that need to stop the dogma and engage in civil conversation so that we can take that conversation to higher levels.
KJ| 12.8.10 @ 11:33PM
PS: Who is gullible or accepted...who is good or evil...who is right or wrong. If I am biased, it is on behalf of the middle class and those striving to be a part of it. I would like to see politicians with the same bias.
Alan Brooks| 12.8.10 @ 6:08PM
You're right Billy. That was a really dumb statement. I had to write something. I'm a lozel, you know?
Alan Brooks| 12.10.10 @ 2:37AM
Born loser.
Jonathan| 12.9.10 @ 1:03PM
John Lott? Are you kidding me?
Unfortunate, really. Your educational background clearly has not given you the empirical rigor you should have developed by now. Broad sweeing claims of "failure", and "doesn't work" is not a sufficient argument, nor are your cherrypicked examples. You do your alma matter a great diservice sir, but the proletariate seem to enjoy your simple analysis.
Ryan| 12.9.10 @ 1:05PM
Small businesses by their nature suffer from lack lack of customers, most go under in boom or bust. From your logic, you should support extending middle class tax cuts and extending unemployment benefits. Go back to the circus, clown.
Melvin| 12.8.10 @ 7:14AM
Of course Nancy Pelosi, Joe Biden, and John Kerry are going to tout these type of economics, is because they already have theirs. They're multi millionaires and the rational is. "Hey we can afford to experiment, but just not with our money, we'll use the taxpayers."
The very economic system they rail against is the exact system that allowed them to be millionaires and the one sided tax code in this Country.
Obama, will have come to Washington without a pot to piss in or a window to throw it out of, and will also leave a multi millionaire.
I'm not against people becoming millionaires, it just the fact that Obama and the gang don't want anyone else to either.
I guess they're attitude is that if there was too many Americans being millionaires then there wouldn't be a demand for Fascist elitist snobs would there?
Alan brooks| 12.8.10 @ 1:25PM
Well then see if you can replace the effete GOP with a vibrant Tea Party-- if you have what it takes to pull it off.
Billy| 12.8.10 @ 2:56PM
Yes, we will see, won't we? but maybe you should be worried that no matter what the Tea Party does in the future, what they HAVE done to date is eviscerate you. Be afraid, be very afraid :))
mikeD| 12.8.10 @ 7:50PM
Mr. brooks: We tire of your antics. I'd say you love to hear yourself talk, but I guess, in this forum, you must love to see how frequently and blatantly you can make a complete fool of yourself. Don't dispair though; you're getting better at it every day. In the immortal words of Forrest Gump: "Stupid is as stupid does." You're living proof. I think it's time you got a job and did something useful with your time.
coal carrier| 12.8.10 @ 7:15AM
Obama’s intention is to collapse the entire economic and financial system and start over again. His hope is that this collapse will be such a calamity that he will be able to dictate directly from the Oval Office. There will be no need for the Constitution or the Congress any longer.
What the hell do you think he meant when he said, “we are going to fundamentally change this country”? Read his books; look at the people that he has surrounded himself with and look at his family. Who they were, what they believed in and how he was trained.
saleboter| 12.8.10 @ 7:20AM
"former House Speaker Nancy Pelosi" That has a nice ring to it, kinda like former president obami.
Melvin| 12.8.10 @ 7:34AM
Salboter, this woman is a Franciscan fascist snob, and they don't go quietly into the night with dignity. This woman will continue to wreak havoc on our economic system and system of governance.
She'll be twice as deadly as she was as Speaker, now she can wreak havoc behind the scenes for the stuff we don't see.
This woman and those like her need to be removed from Washington D.C. one way or another.
dave| 12.10.10 @ 12:47PM
This is the best argument for term limits that I have seen. Power corrupts and absolute power corrupts absolutely. Limit the amount of time they have the power to screw things up and perhaps things will not get so screwed up. Another thought is to amend the Constitution so that all laws and programs are automatically terminated at the end of 20 years, no ifs, ands or buts. Then, future generations can decide if the terrible programs like Social Security and Medicare are really worth keeping and paying for.
MikeD| 12.8.10 @ 8:26AM
Yes, it does have a 'nice ring', but not nearly as nice as: "Disgraced, impeached, indicted, and convicted former president obama." Works for me.
The three "Fools", obama, reid, and pelosi, can't be that stupid, they are evil and their actions are intentional. As you said, "They have theirs", probably safely off shore in gold, and they are gleefully punishing the country they hate. Impeachment is too good for these people, and not even an option for pelosi and reid. I like conviction and prison.
Conrad Spiracy| 12.8.10 @ 7:31AM
Yeah, I kinda' like it.
Con Spiracy
EXCELSIOR!
martin j smith| 12.8.10 @ 8:08AM
It is time to throw the class warfare back into Obama's face and and give the American people a choice: Our regrowth or our destruction ? Obama's policies will mean our destruction. And expalin in very simple words how the SPENDING will hurt us very soon !!!!!!!!!!!
Mimi| 12.8.10 @ 8:13AM
Thanks again , Peter for keeping us informed and for doing it these past 2 years.
What the present leadership is doing to this country and to us a free people is downright tragic....all of it against our will!
We need to look into IMPEACHMENT of "THE MINIONS'"....also ASK the Number UNO important question...WHY are you destroying the economy of this NATION on purpose? Those in POWER need to answer...hopfully under oath, and in a public hearing. There is no way they should be allowed to RULE by decree. My God , it.s going to take years to unravel this destruction. I for one , am praying for these NEW and OLD members of CONGRESS!!!
Ken (Old Texican)| 12.8.10 @ 8:21AM
Peter,
Again, thank you for laying it on the line.
Please, Sir, grab a copy of "The Last Centurion" by John Ringo.
It is nothing short of a nightmare of prophecy.
I also want your help. I have written an E-book, and the sequel could really use your expertise....and help our country as more and more people download it.
Contact me at sales@texassaidno.com and I will send you a review copy.
Thank you again for raising awareness of the issues so clearly.
Best regards
daboss| 12.8.10 @ 5:14PM
ken -
i picked up the book on your recommendation and read it twice. it's a great read.
Deborah D | 12.8.10 @ 8:24AM
Whoa!! I was thinking starving their budgets. I didn't realize we could impeach these unelected "officials." I say whatever it takes. This is a war to save the Republic from fascists and totalitarians who don't give a fig what the American people want. The only thing worse than having to fight a war against an enemy outside the country is having to fight a war against the enemy within. Will Republicans have the strength to do it? Perhaps with the new Tea Partiers in their midst they'll find some integrity and class to finally figure out that this is no longer business as usual in Washington, D.C. -- this is a revolution brought on by the Left.
Louis Jenkins| 12.8.10 @ 8:25AM
Another moratorium on drilling, and the closure of coal fired plants buts the dressing on cake. Forget nuclear power plants-Obama hasn't even sneezed in their direction. Without energy this nation will not run. Oil priced out at or above $90 per barrel, and with the closure of coal fired energy plants get ready for brownouts. Doesn't matter what the Kenysian politicians think of next, this nation will continue to down spiral. It runs off of energy, and when you take it away, well, use your imagination. We need to be rid of this Obamanation; two more years.
knock it off| 12.8.10 @ 8:38AM
Oh, it's so easy to blame the government in general, and Obama in particular, for what is wrong with the economy.
The fundamental reason that the American economy is floundering is that the distribution of wealth has become excessively skewed.
Indiana Alex| 12.8.10 @ 9:36AM
Really,
And just whose private property should be distributed to whom?
knock it off| 12.8.10 @ 9:49AM
Yours.
beebop| 12.8.10 @ 3:10PM
See? Its really this kind of knee jerk that is so offensive.
Do you agree that inciting class warfare is a good thing or a bad thing? We used to ASPIRE to wealth in this nation (building it for ourselves that is) and now we DECRY and BULLY those who have achieved it? Is that why my dad served in WWII? If he were alive, I think he'd have a thing or two to say!
idalily| 12.8.10 @ 11:44PM
Well said! What the heck is wrong with being rich? When did that become evil?
Mike| 12.8.10 @ 9:57AM
Knock it off Knock It Off. Do you truly believe that? Really? So if we redistribute wealth all will be better? In your mind who gets to make the decisions on who gets what?
In my mind I am all for wealth redistribution. You see I provide a product or service that someone wants or needs. They voluntarily give me some of their wealth in exchange for that product or service. Their wealth has been redistributed to me and that makes me happy. They have received something they want or need and that makes them happy. Miraculously no government intervention was needed. If I work hard enough and have a good enough product I can redistribute some of my wealth to others to help me make and sell my product, therefore producing even more wealth for me! I will call those people employees. Not only has wealth been redistributed it has been created! Something the government simply cannot do.
The fundamental problem with the economy is that there is an administration that believes in the concept of a command and control economy, a concept that has failed every time it has been tried.
Mike Johnston
SFC USA (RET)
knock it off| 12.8.10 @ 10:07AM
Mike, I suggest you wait for your erection to subside before you post again.
What you don't get is that the billionaires who own 25% of the wealth and receive 25% of the income, have no interest in buying whatever product you are selling. And the rest of the population no longer has the means to buy it. So you are screwed.
Indiana Alex| 12.8.10 @ 11:15AM
Instead of fantasy land, let's take a real world case study. Warren Buffet is a billionaire. He receives very little income. His assets are all in a single company which doesn't pay a dividend, and he pays himself a meager salary.
How do we fillet him?
Mike| 12.8.10 @ 11:16AM
Knock it off
There are about 1000 billionaires in the world today controlling about 4 trillion dollars in wealth. This amounts to about 25% of the 15 trillion dollar GDP of the United States. Of course most of these billionaires are not citizens of the US so it is a bit skewed to compare all of the billionaires’ assets to the United States GDP. Your assertion that the evil billionaires control 25% of the wealth and income is just not true.
But for arguments sake lets go with that. Your hatred of the evil rich has colored your understanding of basic economics. My simplistic explanation was perhaps not clear to you. No billionaires are knocking on my door to buy what I sell. But if you think the billionaires aren't buying things you are misinformed. And they are certainly buying things that, somewhere in the supply chain, make me money.
The rest of the US population controls 75% of the 15 Trillion dollar economy, or about 11 Trillion Dollars. I am willing to compete for that even if the entire world population of billionaires never spends another dime. So you see I am not screwed. You must get out into the arena and compete. If you are unwilling or unable to do that it is not the fault of the mean old billionaires it is your fault.
You have not, of course, answered my question. If it is not the market that decides how to distribute the wealth then who do you feel should be making those decisions? Notice I managed to write this without an ad hominem attack. For an erection lasting more than four hours…
Mike Johnston
SFC USA (RET)
Ken (Old Texican)| 12.8.10 @ 12:08PM
Sergeant,
Thank you for your service.
THAT WAS FUNNY! GREAT LAST LINE THAT STAINED MY KEYBOARD.
Mike| 12.8.10 @ 12:53PM
Ken
You are welcome sir. I am glad I could bring a smile to your face.
Mike Johnston
SFC USA (RET)
beebop| 12.8.10 @ 3:14PM
I suggest that we redistribute George Soros' money first ... He already manipulated currency in one nation and I would not like to see that happen here.
Rich from Rockaway| 12.10.10 @ 9:22AM
Mike is correct. George Santayana said, "those who do not learn from history are doomed to repeat it." If a command and control economy worked, then: the Soviet Union would still exist, Cuba and North Korea would be shining examples of economic progress and wealth, China's Great leap Forward would have actually been a great leap forward. The difference between the two main socio-ecnomic systems is that one CREATES wealth and grows the "pie" for more to eat from, while the other sees an economy as a Zero Sum, fixed amount and seeks only to divide up that fixed amount "fairly". But no one asks the question, fair according to whom? Would you rather live in a fixed society with little to no growth (Sweden/Finland/Russia/and NOW the US) or a dynamic one where wealth is created, along with all the benefits that go along with it. Many choose the latter. For those who don't, you have nearly the rest of the entire world to move to were you can live out your socialist fantasy. But don't make the same historical mistake here in the U.S. by making US another socialist failure.
George| 12.8.10 @ 11:29AM
What you don't get is that it's the "billionaires" who make the products and hire the people that make them. And yes, "billionaires" do buy products... yachts, expensive cars, big houses etc. Do you think it's other "billionaires" that make these products or poor shmucks like you & me who need a paycheck!?!
John Navratil| 12.8.10 @ 6:20PM
George,
Exactly so. Remember what happened to the domestic yacht building industry the last time a luxury tax was imposed on those evil billionaires? All those American boat builders lost their jobs.
Charles Cassidy| 12.8.10 @ 3:10PM
Hey, knock it off, if we find out where you reside will we be able to take whatever measures we deem necessary to take care of you? Do you already have your millions too?
LeoInTheWoods| 12.9.10 @ 3:20AM
The distribution of wealth becoming "skewed" is a symptom, not a cause. This is what happens when the politicians make the country non-competitive and intentionally move the industrial sector oversease.
Look at LBJ's decision to allow subsidized foreign steel to be dumped on our market at less than production costs, and Clinton's decision to decouple human rights from China's trading status before they got the rights to organize labor and to strike as causes. Before those, the poor in America had the means to lift themselves out of poverty, buy a home and educate their children into better lives by simply getting a job in the industrial sector. Today, the industrial sector is in China, India and the Pacific rim, and our poor have lost their means for economic mobility.
That's the cause for the effect you're noticing.
knock it off| 12.10.10 @ 2:40AM
I'm a lozel, you know?I'm a lozel, you know?I'm a lozel, you know?I'm a lozel, you know?I'm a lozel, you know?I'm a lozel, you know?I'm a lozel, you know?
Petronius| 12.8.10 @ 8:38AM
I have 2 words for these f***ing beltway control freaks: black market.
Redstateboy| 12.8.10 @ 8:43AM
it is discouraging many times to see the wreckage of Hussien, Nazi Pelosi and Harry-the-war-is-lost-Reid have done.. but.... there is Hope! In One Word: "Defund"! We need to hold this new Republican Congress accountable.. This isn't the end of the Tea Party - it's the beginning.
Redstateboy| 12.8.10 @ 8:48AM
All it'll take is just 1 brave and fearless Conservative Republican candidate to speak the Truth and the American people will respond with a Landslide. Drill here, drill now!, 50 Nuke Plants in 50 years, lowering Corp Cap gains to 15%, Freeze current tax rates, a Flat 15% tax for all - scraping IRS, Defunding EPA, HUD, HEW, PBS..
This economy would take off like a Rocket.
ncatty| 12.8.10 @ 9:58AM
You are correct.
knock it off| 12.8.10 @ 10:07AM
No, he's not.
George True| 12.8.10 @ 10:45AM
You do not have a clue what you are talking about, troll. If you think he's incorrect, then state exactly HOW and WHY. You won't, because you can't.
If you are just here to disrupt the exchange of ideas rather than contribute to it in a meaningful way, then go back to PuffHo or wherever you came from.
Redstateboy| 12.8.10 @ 10:48AM
then enlighten me.. how am I incorrect?
knock it off| 12.8.10 @ 10:57AM
The answer to both of you, George and Red-boy, is as plain as the pimples on the noses of your faces. The prescription which Red-boy outlined is just what has been happening for the last 30 years. If you can't see that this has led to economic disaster for 90% if the people in this country, then there is really nothing I can say to open your eyes.
Ken (Old Texican)| 12.8.10 @ 11:16AM
Hey "Knock It Off".
How ya' doin?
I am very very sorry.
We don't have the tools to fix stupid here.
Guy, (Gal?) you are in so far over your head here you won't believe it.
Most of us will not spend time with you at all. It would be like arguing with a three year-old.
I am gently taking a moment to explain why you will be mostly ignored once we get your screen name in our memories.
See, every week or so, some stupid wanders in here, (or is hired to wander in here), saying the same stupid stuff you are trying to sell.
I, for perhaps three hundred thousand folks here,
will wish you good luck...then ignore you.
Bye.
knock it off| 12.8.10 @ 11:20AM
And how exactly are your remarks useful?
Oh, now I get it. You are explaining that you choose to ignore anything that you have not already thought of.
Too bad real people don't get to live in such a comfortable land of illusion.
Steve A| 12.8.10 @ 12:23PM
Hey Knock, If we were both in line at the grocery checkout, & you knew I make 300K / Yr & my wallet was laying open on the belt, would you feel entitled to take some of my $$ out of it??
YeloStalyn| 12.8.10 @ 11:48AM
knock it off:
Russia was, at one time, the bread basket of the world. Then they had a revolution because the rich were to rich and the poor too poor. What happened? The government became quite large and powerful, those connected became wealthy, and the farmers chose liberty over life. Russia entered a famine and millions of people died needlessly.
You are correct about something. There has been somethign going on over the last 30 years that has lead to an econmic disaster for so many. What was that event? People getting rich and powerful you say? Why yes! You are right. But hold on for a second there... don't get carried away.
WHO is getting rich and powerful? Is it busines men and women? Some... sure. And sure, some are crooks who are doing what? They are exploiting government ineffeciency and skriting around capitalism. They are stealing... NOT competing. So that marks them off the list of evil capitalists who ruined the system. Then there's politicians. Most of the top 10 richest members over the last however many years have been Democrats... odd, huh? Anyhow... a vast number of politicians go to DC and get wealthy and powerful. They begin to stick their nose into business and regulate and reform and control it. They begin to favor those businesses who didn't want to follow capitalism (the guys we mentioned above). So these guys are the large government regulatory guys who you are trying to claim (you haven't said as much, but your implied defense of them is obvious) are actually attempting to HELP us... but are stopped by the evil capitalist. Thus... it is again NOT capitalists who are ruining the economy but politicians and their crooked friends in SOME businesses (actual singular company entities, not business class as a whole).
The things Red has suggested have not, in fact, been happening over the last 30 years. We have not had a 15% flat tax, we have not had cheap and abundant energy via nuke, we have not gutted the unConstitutional sections of government like Dept. of Ed, SS (isn't it funny how Social Security's intials are SS... like the Nazi soldiers!?), Medicare/Cade, etc. We haven't reduced the penalties of being a business. We haven't allowed people to have true freedom in their lives. We haven't done one damned thing he listed so how the holy flying crap can you say those are the things that caused this mess ? You must either lie or be stupid.
Redstateboy| 12.8.10 @ 12:26PM
I reread what I wrote.. read your comment of it and concluded - you are a sad product of our Liberal infested educational system. You have no idea what you're saying, you should be castrated so as to prevent you from breeding more congentially stupid people such as yourself and you most definitely should be excluded from getting a-n-y-w-h-e-r-e near a voting booth.
knock it off| 12.8.10 @ 3:15PM
Redstateboy, I have determined your real-world identity and you will shortly be hearing from law enforcement regarding those threats you have made against me.
Loshooligan| 12.8.10 @ 4:41PM
Careful Redstateboy....."knock it off" is actually writing from a penal system computer. He is hopeful that you will be arrested and incarcerated with him so that he can show you manly love and affection. But don't worry....he is only prison gay.
idalily| 12.8.10 @ 11:48PM
You're right, Knock. There is nothing you can say. You have made that fact painfully obvious by your insults and attacks and your lack of cogent analysis and intelligent commentary. You could leave and spare both you and us the pain of your inane posts.
knock it off| 12.10.10 @ 2:41AM
I am very very sorry.I am very very sorry.I am very very sorry.I am very very sorry.I am very very sorry.I am very very sorry.I am very very sorry.
George True| 12.9.10 @ 12:14AM
Red: My comment was directed to Knock-off.
Maxwell| 12.8.10 @ 10:43AM
AMEN! And I would just add the budget and size of the federal government set back to what it was before 2000.
Charles| 12.8.10 @ 3:21PM
This is absolutely correct, but is uses "common sense", something this administration has 100% none of.
skedaddle| 12.8.10 @ 8:49AM
"What does it say about their economic policies that we are now seeking to extend unemployment benefits past two years to how long, three years?" I keep reading about this 3 years but the reality is there is a total of 99 weeks max. of benefits and less in some states. Still alot but 3 years is not factual.
Ned| 12.8.10 @ 11:42AM
99 weeks is what we have NOW. "Negotiations" going on now surrounding the tax rate extension for the next two years include more/longer unemployment benefits... while not yet cast in cement, chances are very good that extension to three years (or close to that) will be a reality very soon... assuming the lame duck Demon-crats permit the extension...
Ned| 12.8.10 @ 12:06PM
Highlights of the deal include:
• Bush tax cuts extended for all tax brackets for two years.
• Unemployment benefits extended for 13 months.
• Estate "death" tax maximum rate lowered to 35% (down from 55% for 2011) with an exemption on the first $5 million (up from $1 million for 2011).
• Capital gains tax maximum rate remains 15%. (This is perhaps the most important aspect of the deal for financial markets.)
• AMT "patched" to avoid its hitting over 20 million additional households.
• 1 year reduction of Social Security "payroll tax" of 2%.
• Continuation of certain Obama "stimulus" bill taxes, including for college tuition and equipment purchase write-offs; also expanding the earned income tax credit.
http://spectator.org/archives/2010/12/08/a-hollow-victory
wodiej| 12.8.10 @ 2:41PM
My understanding is that the emergency unemployment benefit extension is for another 13 months for those who have not maxed out the 99 weeks. Once a person hits that, I don't think they get any more. So those who have already been on it 99 weeks I don't think are eligible for any more.
davelnaf| 12.8.10 @ 9:23AM
For obvious reasons Obama is trying to look like a moderate now. But, as far as his czars are concerned, it’s business as usual. When the Bamster came into office he created these positions in order skirt Congress’ authority—a typical power grab instinct of the hard left. At the time this seemed fine with Congressional Democrats, but what about now?
On occasion Obama will preen as a centrist even as his czars do his really dirty work. He apparently believes this game will work for him. It actually proves what a hard core, unrepentant leftist he is. Are dem politicians with a strong survival instinct paying attention? Are they so beholden to the myths about their party that they are afraid to confront Obama? Or, maybe they are complicit in all that he is doing, as in being unindicted co-conspirators?
It’s probably the case that Obama is no longer trusted enough to get re-elected. This distrust will persist over the next two years and it will be fun to watch his media minions trying to spin it or assign blame for it. If dems bet against the distrust Obama has already built up they will lose worse the next time.
Youfamissim| 12.8.10 @ 9:33AM
Pelosi was re-elected as the Minority Leader for a purpose - Pelosi is standing up for Progressives. It will be She, who derails Egobama's attempts to compromise. Egobama can then claim "He Tried." If it weren't for that darned Nancy Pelosi. Pelosi will be blamed while Ego plays the thwarted Unifier in Chief... Placing Nancy in that position is exactly what Egobama wanted. It's all by design. Accept no substitutes...
PzKfw| 12.8.10 @ 9:38AM
Good article, but something seems missing. What about the finance community (federal or commecial) that started this mess? I don't recall anyone. beyond the Countrywide mortgage CEO, being brought to task for the meltdown.
This country has a fundamental problem. Over the last 30 years we have 10 good years of growth and them we celebrate by having the financial system shoot us in the head. Just think of the last 30 years:
1. Black friday when the idiots on wall street let the computers do the trading
2. Dot-com bust, when the idiots on wall street valued every company with "com" in its name to insane levels bound to crash
3. Mortgage meltdown...need I say more?
The government might be the facilitator, but the real threat is our financial industry that in our "modern" age hasn't found a risk it didn't like.
We can vote out the politicians, but they aren't the only enemy. Consider this, if the banks have 3 trillion in reserve, why aren't they lending? They are not here to help the economy rebound, they are all about maximizing shareholder (not customer) value.
YeloStalyn| 12.8.10 @ 12:05PM
That is akin to something I have been considering for some time. Should we even allow public trading? What is it? What good is being sold? What does it mean or do? It speeds the growth of a company that it otherwise may not be able to do. It allows the invenstment class to cause their invenstments to begin growing at insane paces while the working class doesn't have enough invenstment capital to recieve the sort of exponential gains at higher levels. I'm not arguing against capitalistic business and competition. But the stock exchange seems not to help but hinder this process by eliminating competition. Large companies can get larger while small, local companies, can only succeed with actual business success... so long as they are not undercut by the larger. That's not capitalism. A company should not be publicly owned. As conservatives we should believe in private ownership. One company, one person (or at the most, one family as many business are family affairs). What good does it do for everyone when a company is able to squash competition. The shareholders value goes up as the revenue goes up... but it goes up because no one is around to keep the prices competitive. So, unless you are a shareholder of any magnitude, you're SOL. The price rise will most likely overtake the increase in stock value.
Then there's dividends. You now have companies not seeking to satisfy customers, but owners. At this point, they run the risk of exploiting the workforce and/or short-changing the customer base. Neither one of which should happen in a capitalist environment.
Now, don't go getting any ideas. I'm not a socialist or a leftest. I'm a die hard conservative. But these are just things I'm considering and seeing how they truely fit with conservative ideals.
I just think that what you said is probably goign to be overlooked, sadly, because many on the right have a knee-jerk reaction to defend businesses in teh name of capitalism despite the fact that many businesses try to undermine that system for their own personal benifit.
Billy| 12.8.10 @ 3:05PM
But just remember, Countrywide et all could have done absolutely no damage without the Fed and a crooked Congress, without which none of this mess would have been possible. The "evil bankers" simply responded to an open invitation from the government.
YeloStalyn| 12.8.10 @ 3:34PM
Too true. But is the system in which they work truely legit? Can it truely be defended with a defense of capitalism? Dirivitives, short selling, day trading, hedge funds, et al. Are those truely the things of a competitive capitalist market or are they ways to create out of thin air more fiat money (which they wouldn't be able to do if we didn't have fiat money to begin with. Back to the gold standard!!)
Anthony| 12.8.10 @ 9:54AM
This is the very essense of the dangerous insanity that defines liberalism. On some level, even these hardcore Marxists know they are following a flawed economic theory. However, their political ideology trumps reality, common sense, and what is good for America, because it conflicts with their intended world hegemony.
Same with anthropogenic global warming; no amount of evidence to the contrary, plain common sense, and the exposure of this as a monstrous fraud to punish western nations, deters these people. They are full speed ahead. Their arrogance is breathtaking, but for them, it's another ends justify the means.
This is why there is no common ground with these people. This is why there can be no compromise; you cannot compromise with insanity motivated by political fanaticism.
I'm afraid an inevitable showdown is where all this is headed.
jack| 12.8.10 @ 10:02AM
perfect. revolution is the only solution. the Republican deal with Dems on taxes will be a disaster. We now have a lower SS tax and unemployment extended for eternity. There is no way to get rid of these things once passed. There should be no appeasement of the media,socialists,or anit american party
Howard| 12.8.10 @ 9:57AM
A well thought article. I could be persuaded that only an infrastructure type of stimulus, like Ike's highway program is possible. While government projects are inherently costly, I believe that there would be increased public goods stock that could be of value. Upgrading airports, bridges, etc. However, all of the other crap, i.e. cash for clunkers, the stupid work credit, all junk. In fact lefty Paul Krugman would have a $5 Trillion stimulus, sucking up total world wide savings in order to pay teachers $300,000 per year salaries. Total insanity.
Redstateboy| 12.8.10 @ 9:57AM
I can't wait - and I better not have to wait indeffinitely - for the new Congress to pull heads of EPA and HEW for starters before their respective Committees demanding they explain their policies.
martin j smith| 12.8.10 @ 10:34AM
During my lifetime we have had two parties but over time it appeared their differences seem to be unclear to me until the advent of GWB and the big fight over the 2000 election --and then 9/11. Once these events occurred especially 9/11 I would say I decided there was something fundamentally wrong in the Democrat Party espcially with regard our national security. After experiencing GWB for two terms and particularly financial meltdown of 2008 and also the response to the War on Terror, I felt at there was something fundamentally wrong with the leaders of the Republican Party. The came Obama and then came the Tea Party Movement. The advent of these two things simultaneously ( no accident )
clarified for me two things: The extreme danger of the Democrat Left Party and the extreme Danger of the mainstream republican Establishment's failure to respond in a understandable way. So I have concluded that the Tea Party Movement is ( I hope ) to allow the voters who care to have their voice and especially for those who oppose The Left Communist Agenda--imposing it against our will. Te People ( voters ) and that is a MAJORITY OF AMERICAN voters must take matters in their own hands thru their representatvis
voted against carter| 12.8.10 @ 10:42AM
HELLO!!????
Barry is doing this ON PURPOSE!
Can we say Cloward & Piven?
He WANTS the U.S.A. to fail. He is doing EVERYTHING he can to make it happen ASAP.
Oh, and ACTIONS speak louder than words.
Just say'n.
A. C. Santore| 12.8.10 @ 10:58AM
I posted the following on this site back in October. Time has only proven me right:
First, Obama and his community organizing social engineers have no idea about how a real economy works. They see only the pies in the sky of socialism and expanded government control over everything. They are killing jobs because, for them, it's government that creates wealth, not jobs in manufacturing, mining, and agriculture.
Second, Obama and his social engineers have no desire to learn how a real economy works. They already believe that they know it all.
In order to bring about the ideal society they envision (with no understanding of that system, either), they must first wreck, or at least fatally weaken, all of the things that can get in their way -- a strong capitalist economy, democratic institutions, and the moral foundation of the country (or religious, if you prefer).
Then, when there is no hope left for us -- or chaos in the streets - they would replace it with a totalitarian economy, a totalitarian government, and a totalitarian society...
...ruled by them because they know best, you see.
Redstateboy| 12.8.10 @ 10:53AM
things won't change in this country for the better until people can admit that the Democrat Party's political philosophy is flawed. These people are those who live in the failing People's Republics of NY, MI, CA, WA - etc. and the failing cities like: Buffalo, Detriot, LA...
Ken (Old Texican)| 12.8.10 @ 11:34AM
RedStater,
their philophy is not flawed at all. They have moved the ball to our three yard line.
Nothing less than a goal-line stand by us, and a successful two minute offense can save the country I grew up in.
Gird up your loins, fellow Americans. (Uh, that means "pull up your jock", for you Biblical illiterates.)
YeloStalyn| 12.8.10 @ 12:08PM
You're right Ken.
One way or another it IS time to reach down and grab.
The question is will we be grabbing our pair or our ankles?
idalily| 12.8.10 @ 11:52PM
How about we grab their pair instead? Then twist really, really hard. I like that better.
Paevo| 12.8.10 @ 12:10PM
I am so sick of people referring to the strategies of Obama et al as "madness." The whole point is to dramatically increase the number of unemployed in order to inculcate an ever-increasing sense of dependency on government largesse. Once 10-12% unemployment becomes the new normal, the gusto behind the effort to repeal Obamacare and reduce federal spending will sadly become a thing of the past.
Essentially, the rugged individualist spirit characteristic of the America we once knew is being actively and utterly eviscerated.
George S| 12.8.10 @ 12:40PM
Impeach Obama? That may be a possibility. Remember that Clinton was impeached because the Whitewater investigation turned up Monica which, in turn, forced out information that Clinton lied to a federal judge (the basis of the charge). I am sure that Obama's business dealings with Rezko are fair game because federal money was involved with those Chicago housing grants. After all, prosecutor Fitzgerald went out of his way to keep Obama out of the Blogo corruption investigation (why?). Maybe Congress should take another peek and force the president to disclose what he knew and when he knew it.
David| 12.8.10 @ 1:16PM
Whats really likely to happen, will be triggered at the state level and not the Federal.
The EPA will come in and attempt to regulate a state, probably Texas. That state, will tell the EPA to screw off, I think that’s already happening. The EPA will try to shut down a coal fired plant, and the Texas police will then arrest them on the orders of the Governor. This will set off a firestorm of protest from the left, and hearings from the Congress on the right. You will also likely get the state national guard mobilized and a bunch of other Federal officials kicked out of the state.
The results will be a nice constitutional crisis, and will be interesting to watch.
Turnditch| 12.8.10 @ 1:56PM
Very informative article. However, it did increase my angst reading certain parts, but I did get a chuckle on this one:
"Instead what we continue to hear from soon to be former House Speaker Nancy Pelosi, and the equally brain-dead Joe Biden (both of whom make Sarah Palin sound like a Nobel Prize winner)..."
Priceless Mr. Ferrara, priceless...
mixplix| 12.8.10 @ 5:54PM
Here's a plan, export 20 million illegals and right away there will be a lot of job openings plus less students getting free this and that. Get rid of welfare and the 20 million job vacancy will be filled with x-welfare and we can tax them instead of paying the freight.
John Navratil| 12.8.10 @ 6:35PM
mixplix,
Let's assume you could push a button and the estimated 12 million illegals would all go home (at no cost to the taxpayer). That's 4 percent of the population (6% is we use your number). Do you really think the loss of this many consumers would be without cost? Even if it resulted in full employment, a dubious proposition because if those jobs were previously filled the illegals wouldn't be here, would the expanding economy then experience wage inflation because of the limited available work force in the future? Remember, just a few years ago we had low unemployment AND lots of illegals.
I say this, not to argue against the proposition of getting Americans back to work, and your suggestion to limit disincentives to work (welfare) are fine as far as they go, but rather to suggest that protectionism is not a good solution.
Much better to continue with getting workers out of government jobs and into productive ones. This requires limiting regulation, unequal treatment under the tax code and generally shrinking the government and getting it out of the way of the entrepreneur.
idalily| 12.8.10 @ 11:58PM
This brings up a point that I have long debated with my fellow conservatives. I hate illegal immigration as much as anybody, but for all those who keep saying no to amnesty, what other choice is there? We do not have the money or the resources as a nation to find, process and kick out all the illegals we have here. It just isn't possible. I do not want to reward illegal behavior, which is what amnesty does. But on the other hand, we can't afford to find and send them all back. What other option is there? The way I see it, the only solution is...gulp...amnesty, but after we've put in place true border security. If anyone has a better and WORKABLE idea, please toss it out there. I want something else, but amnesty is the only thing that seems viable, sad to say.
old farmboy| 12.9.10 @ 7:32AM
Take away all incentives to be here illegally. Change the anchor baby law, treat medical problems only to stabilize then sent back to home country and no benefits that rightfully belong only to U.S. citizens.
Fine heavily any employer that intentionally hires illegals.
No work no benefits most will self deport.
John Navratil| 12.9.10 @ 9:00AM
old farmboy,
The self deportation occurs because there is no job. Face it, given a choice of feeding your family in Mexico or in Texas, which would you choose. The benefits are gravy. Heavily fining any employer (protectionism) may get Tyson and Hormel, but it won't touch Susie Homemaker and her house cleaner.
Not to picked on Mexican nationals - if our border were with China, the problem would remain - but the reason we have Mexican laborers is that we haven't figured out how to outsource our house cleaning, lawn care and roofing.
IzeHavitt| 12.9.10 @ 10:43PM
Another tactic to de-incentivize the illegals: Forbid them to send any monies earned here back to Mexico. Did you know that that money is the second largest source of foreign exchange for Mexico, next to it's oil revenue? Perhaps this would force the Mexican government to finally wake up and reform themselves from their socialist idiocy. I have maintained for a long time that the root of the illegal immigrant problem here in the U.S. is the failure of the socialist Mexican government to offer it's people any hope. So they foist their labor problems on us.
Bill Hussein O'Stalin| 12.8.10 @ 6:43PM
Mr. Ferrara's statement that the deeper the recession the stronger the recovery won't apply in this instance.
There are way too many greedy opportunists in both parties who have no desire to overhaul the federal bureaucracy. That's all that is really needed.
Rick| 12.9.10 @ 5:09PM
I knew the author was living on fantasy land as soon as he spoke of the "25 year boon attributed to reaganomics" ... what a joke.