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Showing posts with label book. Show all posts
Longest time to getting back to pre-recovery peak since WWII

Longest time to getting back to pre-recovery peak since WWII

IBD's take on the "recovery":

The U.S. economy added 227,000 jobs in February vs. expectations for 206,000, continuing a recent trend of decent hiring activity. The unemployment rate held at 8.3%.

But America remains mired in the longest jobs recession since the Great Depression. It's been 49 months since the U.S. hit peak employment in January 2008. And with nonfarm payrolls still 5.33 million below their old high, the jobs slump will continue for several more years.

The previous jobs recession record — 47 months — came during and after the comparatively mild 2001 recession, which saw unemployment climb to only 6.3%. The average job recovery time since 1980 is 29 months, not including the current slump.

The labor market won't truly return to health until some 10 million positions are created to rehire all those who lost their jobs and to absorb new workers. . . .
Ann Coulter gives brief summary about what is in my new book Debacle

Ann Coulter gives brief summary about what is in my new book Debacle

Ann was debating MSNBC host Lawrence O’Donnell, and while she wasn't explicitly mentioning my book, she did write a blurb for the book and she pretty much summarized part of it here:

“That was a very good defense of a very bad economy. You can never run the same experiment twice and see what happened,” she said. “But there are comparisons to other recessions and this is the worst recovery — the unemployment rate has been higher and longer during the recovery than it was during the recession, which ended in mid-2009.”

“Also, the Obama administration economists, who have taken economics courses, they made their predictions for what the stimulus would do. And they certainly weren’t raising expectations. In fact, instead of getting the unemployment rate down, it had gone through the roof. It also something that can be looked at without having to run the experiment twice, that the stimulus money went to Democrats, friends of Democrats. It went to very high income states, not states that are suffering, not the states with the highest unemployment — but the states that voted for Obama.”

“And you have half-a-trillion dollars going to Solyndra and six members of the Obama administration going to work for Solyndra under a special loan taxpayers can never get back. I mean, we really do have crony capitalism that has hurt Americans while helping Democratic friends”

Coulter said to compare the U.S. economy and its Keynesian policies to Canada and its austerity policies to determine what course would have been the best. . . .

Valerie Jarrett: Unemployment checks are good for the economy


White House senior adviser Valerie Jarrett: "People who receive that unemployment check go out and spend it and help stimulate the economy, so that's healthy as well."
One general point: where is this money coming from? If it is having to come from someplace else, where is there a net increase in spending?
Some amazing predictions from the CBO

Some amazing predictions from the CBO

Who knows about predicting the economy a year from now, but the CBO has some depressing predictions.

Key facts from the CBO’s Budget and Economic Outlook:

Real economic growth is projected to be to 2.2 percent in 2012, falling to 1.0 percent in 2013;

The unemployment rate is expected to reach 8.8 percent in 2012, 9.1 percent in 2013, and 8.7 percent in 2014;

The FY2012 budget deficit is projected to equal $1.079 trillion, the fourth consecutive year with the budget deficit above $1 trillion;

Total debt is projected to reach $16 trillion in 2012, with debt held by the public to eclipse the $11 trillion mark in 2012 (72.5% of GDP);

Debt held by the public is projected to reach $15.3 trillion by 2022. . . .


How about this discussion of the report:

The unemployment rate would be even higher than it is now had participation in the labor force not declined as much as it has over the past few years. The rate of participation in the labor force fell from 66 percent in 2007 to an average of
64 percent in the second half of 2011, an unusually large decline over so short a time. About a third of that decline reflects factors other than the downturn, such as the aging of the baby-boom generation. But even with those factors removed, the estimated decline in that rate during the past four years is larger than has been typical of past downturns, even after accounting for the greater severity of this downturn. Had that portion of the decline in the labor force participation rate since 2007 that is attributable to neither the aging of the baby boomers nor the downturn in the business cycle (on the basis of the experience in previous downturns) not occurred, the unemployment rate in the fourth quarter of 2011 would have been about 11⁄4 percentage points higher than the actual rate of 8.7 percent. . . .


Meanwhile, it looks as if most Americans think that Obama is passing up some jobs with his dragging his feet over the Keystone pipeline. It is interesting to see when the Obama administration is willing to use multipliers in its predictions and when it claims that we need a short term stimulus versus a longer term one. They haven't exactly been consistent over time. From Politico:

Congressional Republicans and proponents of TransCanada's Keystone XL pipeline have successfully put the issue on the map, as 78 percent of Americans believe the pipeline would create a “significant amount of jobs,” according to a late December poll by GOP pollster David Winston.
TransCanada claims the pipeline would create 20,000 jobs - 13,000 in construction and 7,000 in manufacturing.
But the State Department — which was studying the proposal — said it would create " approximately 5,000 to 6,000 direct construction jobs" and downplayed any major long-term employment boost.
Further muddling the picture, TransCanada commissioned a Perryman Group study that predicted up to 119,000 spinoff jobs. . . .
Meanwhile, voters were divided over whether President Barack Obama was right in November when he attempted to punt a decision on the pipeline until 2013.
Forty-eight percent said they agreed more with the president and concerns about the environmental impact than with Republican claims the delay "is costing 20,000 jobs" and is due to political reasons. Forty-five percent sided with the GOP claim. Those figures are within the margin of error. . . .
For fourth year the deficit will exceed $1 trillion

For fourth year the deficit will exceed $1 trillion

So much for Obama's promise to cut government spending and the deficit. From the Washington Post:

The federal budget deficit will top $1 trillion for a fourth straight year, congressional budget analysts said Tuesday, the smallest since the Great Recession hit in 2009.

The nonpartisan Congressional Budget Office projected that the gap between government spending and tax collections would continue to fall, dropping sharply in 2013 and through the decade if policymakers follow through with major changes in both tax policy and government spending now on the books.

The $1.1 trillion deficit is the smallest deficit figure — both in nominal terms and as a percentage of the economy — since the Great Recession. . . . .
The economy is still a mess

The economy is still a mess

Home Prices drop again

. . . For November, the Case-Shiller index of 10 major metropolitan areas and the 20-city index both fell 1.3% from the previous month. David M. Blitzer, chairman of the index committee at S&P Indices, also noted that 19 of the 20 major U.S. metropolitan markets covered by the indices in November saw prices decline from October.

"The only positive for the month was Phoenix" . . . .

The 10-city and 20-city composites posted annual returns of negative 3.6% and negative 3.7%, respectively, versus November 2010. At negative 11.8%, hard-hit Atlanta continued to post the lowest annual return. . . .


People can't get financing for new home purchases.

Falling homeownership — and prices — reflect the worst housing downturn since the Great Depression. And while there are signs that the housing industry's downturn may at least be nearing a bottom, the impact of the collapse will be evident for years to come, economists say.
As of November, average U.S. home prices were back to mid-2003 levels, S&P says.
"Americans are less keen on homeownership knowing now that prices can fall," says Paul Dales, economist with Capital Economics.
Even if people want to own a home, they may not be able to, given the difficulty in getting financing for a mortgage, Dales says. The National Association of Realtors says many purchase contracts appear to be falling through for that reason.
Many economists expect home prices to continue to fall this year and maybe into next year before stabilizing and then showing little or no appreciation for some time.
"The trend is down, and there are few, if any, signs in the numbers that a turning point is close at hand," says David Blitzer, chairman of S&P's index committee. . . .


Consumer Confidence Plummets

U.S. consumer confidence in January gave back some of the huge gains posted in the previous two months, according to a report released Tuesday. Views on labor markets darkened.

The Conference Board, a private research group, said its index of consumer confidence retreated to 61.1 this month from a revised 64.8 in December, first reported as 64.5. The January index was far less than the 68.0 expected by economists surveyed by Dow Jones Newswires.

The fallback was concentrated in consumers’ view of the current economy. The present situation index, a gauge of consumers’ assessment of current economic conditions, dropped to 38.4 in January from a revised 46.5, originally reported as 46.7.

Consumer expectations for economic activity over the next six months slipped only slightly, to 76.2 in January from a revised 77.0, first reported as 76.4.

“Regarding the short-term outlook, consumers are more upbeat about employment, but less optimistic about business conditions and their income prospects." . . . .

Perceptions about the job markets worsened this month. The survey showed 43.5% think jobs are “hard to get” up from 41.6% saying that in December, while only 6.1% think jobs are “plentiful” down from 6.6% in December. . . .
Larry Summers' December 15, 2008 Economic Memo

Larry Summers' December 15, 2008 Economic Memo

Summers' memo that gives some insight into what the Obama administration was thinking on the economy is available here. Here is a list of important points in the memo.

The stimulus was about implementing the Obama agenda
Team Obama knows these deficits are dangerous
Obamanomics was pricier than advertised
Even Washington can only spend so much money so fast
Liberals can complain about the stimulus having too many tax cuts, but even Team Obama thought more spending was unrealistic
Team Obama wanted to use courts to force massive mortgage principal write downs
Team Obama thought a stimulus plan of more than $1 trillion would spook financial markets and send interest rates climbing


Pages 10 and 11 shows a list of what others have proposed for Stimulus amounts.
It provides another forecast about the unemployment rate would be over time with and without the Stimulus.
Another company getting Stimulus dollars goes bankrupt

Another company getting Stimulus dollars goes bankrupt



From CNS News:

Ener1--a company that manufactures batteries for electric cars, and that received $118.5 million in federal stimulus money, and that Vice President Joe Biden visited last year the day after President Obama’s State of the Union Address—announced today that it has filed for Chapter 11 bankruptcy protection.

In last year’s State of the Union Address, delivered Jan. 25, 2011, President Obama set a national goal of having a million electric vehicles on the road in the United States by 2015—a goal that would be achieved, Obama said, by taking money out of the oil industry and “investing” it in new technology.

“With more research and incentives, we can break our dependence on oil with biofuels and become the first country to have a million electric vehicles on the road by 2015,” said Obama.

“We need to get behind this innovation,” he said. “And to help pay for it, I'm asking Congress to eliminate the billions in taxpayer dollars we currently give to oil companies. I don't know if you've noticed, but they're doing just fine on their own. So instead of subsidizing yesterday's energy, let's invest in tomorrow's.”

The next day, Biden visited the Ener1 plant in Greenfield, Ind.—which the White House said at the time had received a $118.5 million grant from the Department of Energy and was the type of investment the president was talking about in his State of the Union. . . .
Obama's decision on Keystone pipeline means really big money for Obama backer

Obama's decision on Keystone pipeline means really big money for Obama backer

From Bloomberg:

Warren Buffett’s Burlington Northern Santa Fe LLC is among U.S. and Canadian railroads that stand to benefit from the Obama administration’s decision to reject TransCanada Corp. (TRP)’s Keystone XL oil pipeline permit.
With modest expansion, railroads can handle all new oil produced in western Canada through 2030, according to an analysis of the Keystone proposal by the U.S. State Department.
“Whatever people bring to us, we’re ready to haul,” Krista York-Wooley, a spokeswoman for Burlington Northern, a unit of Buffett’s Omaha, Nebraska-based Berkshire Hathaway Inc. (BRK/A), said in an interview. If Keystone XL “doesn’t happen, we’re here to haul.”
The State Department denied TransCanada a permit on Jan. 18, saying there was not enough time to study the proposal by Feb. 21, a deadline Congress imposed on President Barack Obama. Calgary-based TransCanada has said it intends to re-apply with a route that avoids an environmentally sensitive region of Nebraska, something the Obama administration encouraged.
The rail option, though costlier, would lessen the environmental impact, such as a loss of wetlands and agricultural productivity, compared to the pipeline, according to the State Department analysis. Greenhouse gas emmissions, however, would be worse. . . .

While private sector debt gets under control, public sector debt explodes

World Economic Forum calls for reforms of "outdated" capitalism

World Economic Forum calls for reforms of "outdated" capitalism

I guess that I could go along with reforming the troublesome regulatory system, but this is something to remember when we hear about all the well-known people who attend the World Economic Forum each year.

Economic and political elites meeting this week at the Swiss resort of Davos will be asked to urgently find ways to reform a capitalist system that has been described as "outdated and crumbling."
"We have a general morality gap, we are over-leveraged, we have neglected to invest in the future, we have undermined social coherence, and we are in danger of completely losing the confidence of future generations," said Klaus Schwab, host and founder of the annual World Economic Forum.

"Solving problems in the context of outdated and crumbling models will only dig us deeper into the hole.

"We are in an era of profound change that urgently requires new ways of thinking instead of more business-as-usual," the 73-year-old said, adding that "capitalism in its current form, has no place in the world around us." . . .
New York Times gives only one side of Obama - Steve Jobs discussion

New York Times gives only one side of Obama - Steve Jobs discussion

Here is the way the New York Times in an article entitled "How U.S. Lost Out on iPhone Work" describes the interaction between Obama and Steve Jobs:

But as Steven P. Jobs of Apple spoke, President Obama interrupted with an inquiry of his own: what would it take to make iPhones in the United States?
Not long ago, Apple boasted that its products were made in America. Today, few are. Almost all of the 70 million iPhones, 30 million iPads and 59 million other products Apple sold last year were manufactured overseas.
Why can’t that work come home? Mr. Obama asked.
Mr. Jobs’s reply was unambiguous. “Those jobs aren’t coming back,” he said, according to another dinner guest.
The president’s question touched upon a central conviction at Apple. It isn’t just that workers are cheaper abroad. Rather, Apple’s executives believe the vast scale of overseas factories as well as the flexibility, diligence and industrial skills of foreign workers have so outpaced their American counterparts that “Made in the U.S.A.” is no longer a viable option for most Apple products. . . .


The Times then goes on to quote Jared Bernstein to argue that this is a really difficult problem for the administration to fix.

“Apple’s an example of why it’s so hard to create middle-class jobs in the U.S. now,” said Jared Bernstein, who until last year was an economic adviser to the White House.

“If it’s the pinnacle of capitalism, we should be worried.” . . .


So it seems pretty clear from the Times that Jobs didn't really blame Obama for driving American jobs to China. But there is a significant problem with that story:

“You’re headed for a one-term presidency,” Jobs told Obama at the outset. To prevent that, he said, the administration needed to be a lot more business-friendly. He described how easy it was to build a factory in China, and said that it was almost impossible to do so these days in America, largely because of regulations and unnecessary costs.

Isaacson, Walter (2011-10-24). Steve Jobs (p. 544). Simon & Schuster, Inc.. Kindle Edition.
Republicans will revive Keystone Pipeline issue

Republicans will revive Keystone Pipeline issue

The Obama administration keep claiming that several years isn't sufficient to give regulatory approval for the pipeline to be built. Even former administration officials have a hard time accepting these arguments. From the Washington Examiner:

President Obama's decision last week to deny a permit for a Canadian pipeline that would run all the way to Texas helped solidify his support among environmental groups. But it pits the president against congressional Republicans who are all but certain to use the Keystone XL pipeline as a bargaining chip in this week's negotiations over extending a payroll tax cut and unemployment insurance.

"This is a wonderful talking point for Republicans," said Jerry Taylor, a federal energy and environmental policy scholar with the Cato Institute, a libertarian think tank. "They will argue that the high gasoline prices Americans have been paying are something one can blame on the president. And they will argue that high unemployment rates are due to this."

Neither argument is entirely true, Taylor said, but Republicans can still use them to back Obama into a corner over the pipeline project, which would carry oil from the tar sands of Alberta, Canada, through a 36-inch pipe to oil refineries along the Gulf Coast. . . .

Among the Democratic lawmakers backing the Keystone project is Rep. Nick Rahall of West Virginia.

"I want the project to go forward," Rahall told The Examiner. "I think we need it for our energy security and for jobs for America."

The president, Rahall said, "is obviously walking a tightrope here, with the environmental community. Part of it is an anti-fossil fuel attitude." . . .


At least one Democrat Senator who is up for re-election this year says that he is very critical.

Sen. Joe Manchin, D-W.Va., said the decision was a major setback for the economy, workers "and America's energy independence."

The United States should be buying oil from allies like Canada rather than from nations wanting to harm America, Manchin said.

"Until we are energy independent, it only makes common sense to get our resources from our friends and greatest allies, like Canada," Manchin said. "I respectfully urge the president to reconsider this decision." . . .


Not only is the administration taking forever to make a decision, it seems pretty clear that the risks from oil pipelines are minimal. From Fox News:

While the Obama administration says it needs more time to assess the potential risks surrounding the proposed Keystone XL pipeline, a vast underground network of more than 2 million miles of energy pipeline already traverses the United States.

Several energy experts who represent the oil and gas industry say the controversial Keystone XL, a 1,700-mile pipeline that would run from Canada to Texas, poses less of a risk to the environment than the estimated 50,000 miles of crude oil pipelines already crisscrossing the U.S., a network they say is safe and efficient.

The Obama administration on Wednesday blocked a permit for the $7 billion Keystone XL, at least temporarily, claiming a more thorough review is needed to examine problems it may pose to the nations air and water quality. The administration also blamed Republicans for including a provision in a recent tax cut bill that compelled a decision within a 60-day time frame.

The pipeline system, proposed by the Canadian firm TransCanada, would transport crude oil from the Athabasca Oil Sands in northeastern Alberta to multiple locations in the U.S., including as far as the Gulf Coast of Texas. The Keystone XL would go through Montana, South Dakota, Nebraska, Kansas and Oklahoma, and the so-called feeder pipelines would connect it to rich oil fields in North Dakota and Montana. . . .

But several energy experts say the Keystone XL would be no different from an extensive network of energy pipelines already in place and some say its state-of-the-art design would make it safer than many of the countrys aging pipelines.

Theres no shortage of energy pipelines, Dan Kish, senior vice president for policy at the Institute for Energy Research, told FoxNews.com. This pipeline would be better than 1.9 million miles of pipeline already in the United States. Its newer and has the best technology. . . .
So much for all those shovel ready jobs: the case of high-speed trains

So much for all those shovel ready jobs: the case of high-speed trains

From the Washington Post:

Critics began panning the first leg of California’s futuristic high-speed rail network as a “train to nowhere” soon after officials decided to build it not in the major population centers of Los Angeles or San Francisco, but through the state’s Central Valley farming belt. . . .

Obama set a goal of providing 80 percent of Americans access to high-speed rail within 25 years. But that lofty vision is yielding to the political gravity generated by high costs, determined opponents and a public that has grown dubious of government’s ability to do big things.

Virtually none of the projects has gotten off the ground, and the one that has is in trouble. . . . .
So are environmentalists admitting that their other green energy offerings aren't working?

So are environmentalists admitting that their other green energy offerings aren't working?

The beginning of this article sure seems to concede a lot. It is too bad that this wasn't understood before we put all the Stimulus dollars into all this. From ABC News:

Geothermal energy developers plan to pump 24 million gallons of water into the side of a dormant volcano in Central Oregon this summer to demonstrate new technology they hope will give a boost to a green energy sector that has yet to live up to its promise.

They hope the water comes back to the surface fast enough and hot enough to create cheap, clean electricity that isn't dependent on sunny skies or stiff breezes — without shaking the earth and rattling the nerves of nearby residents.

Renewable energy has been held back by cheap natural gas, weak demand for power and waning political concern over global warming. Efforts to use the earth's heat to generate power, known as geothermal energy, have been further hampered by technical problems and worries that tapping it can cause earthquakes. . . .
More Stimulus for Europe? Note which countries are doing best and which ones the worse

More Stimulus for Europe? Note which countries are doing best and which ones the worse

So which countries in Europe are having problems? The ones where government spending over the last few years have been completely out of control. Which are doing best? The ones where spending has been restricted: Germany and Poland being obvious examples. The New York Times has this headline: "European Leaders Use Debt Downgrades to Argue for Austerity, and for Stimulus." But the accompanying story has little arguing for an Obama type Stimulus.

European leaders sought to limit damage from a ratings agency’s downgrade of nine countries on Friday, or even turn the news to their advantage, saying that it showed the need to impose more austerity or else do more to stimulate growth.

Germany’s chancellor, Angela Merkel, said Saturday that the downgrade by Standard & Poor’s meant the euro area must speed up measures to create a more centralized currency union.

“We are now challenged to implement the fiscal pact quickly,” Mrs. Merkel said in a statement Saturday, a day after S.& P. downgraded France, Austria and seven other countries — but not Germany. She added that leaders should not water down the agreement and instead quickly pass other measures they have agreed to, like limits on debt.

In Italy, Prime Minister Mario Monti used the downgrades to bolster his argument that austerity alone would not solve the euro crisis. Europe needs to support “national efforts in favor of growth and employment,” Mr. Monti told the newspaper Il Sole 24 Ore, according to Bloomberg News. . . .
Real wages falling

Real wages falling

People leaving the work force, real wages falling. If people think that they are having a hard time getting by, it isn't their imagination. Things don't look very good here. Why aren't these numbers getting more attention? So much for economic growth.

Here are the real (constant 1982-1984 dollars) earnings for all employees on private nonfarm payrolls, seasonally adjusted

Real average hourly earnings Nov. 2010 $10.38 Nov. 2011 $10.22
Real average weekly earnings Nov. 2010 $355.04 Nov. 2011 $350.68

Here are the real (constant 1982-1984 dollars) earnings for production and nonsupervisory employees on private nonfarm payrolls, seasonally adjusted.

Real average hourly earnings Nov. 2010 $8.94 Nov. 2011 $8.75
Real average weekly earnings Nov. 2010 $299.46 Nov. 2011 $293.93
Obama's view on Free market economies

Obama's view on Free market economies

One has to read Obama's full speech to realize how really bad it is, but here is a taste of it.

“The market will take care of everything,” they tell us. If we just cut more regulations and cut more taxes -- especially for the wealthy -- our economy will grow stronger. Sure, they say, there will be winners and losers. But if the winners do really well, then jobs and prosperity will eventually trickle down to everybody else. And, they argue, even if prosperity doesn’t trickle down, well, that’s the price of liberty.

Now, it’s a simple theory. And we have to admit, it’s one that speaks to our rugged individualism and our healthy skepticism of too much government. That’s in America’s DNA. And that theory fits well on a bumper sticker. (Laughter.) But here’s the problem: It doesn’t work. It has never worked. (Applause.) It didn’t work when it was tried in the decade before the Great Depression. It’s not what led to the incredible postwar booms of the ‘50s and ‘60s. And it didn’t work when we tried it during the last decade. (Applause.) I mean, understand, it’s not as if we haven’t tried this theory. . . .
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