A good mind possesses a kingdom.
Seneca
RIP, Logan....
Two-year-old Logan Stevenson, best man at his parents' recent wedding, died last night from leukemia and related complications.
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| Courtesy of AP |
Obama's Most Glaring Economic Failure: Long-Term Unemployed
From ZeroHedge:
Obama is going to have to do something at least since the average person in the USA today is still unemployed and has been under his presidency for 36 weeks. Unemployment still remains at 7.6% according to the Bureau of Labor Statistics for June 2013 and we are waiting on the figures for July 2013. Long-term unemployed (people out of work for more than 27 weeks) has increased exponentially under the Obama presidency. Granted, the financial crisis came along and scuppered all of the attempts that might have been made. But, quite honestly, we are not here to be magnanimous in life, we want unemployment to disappear. Being understanding isn’t why we vote politicians into power. It’s to get the policies right, whatever the situation. Falling back on the hardship of the financial crisis and using that as a crutch to lean on isn’t going to wash with many people, is it? In January 2009, long-term unemployment stood at 22.6%. After one year in office it had risen to 41.6%. By 2011 it was up again to 43.8%. The following year the average monthly rate was 41.1%. Today there are 4.3 million long-term unemployed in the US. That means there are 36.7% of all the unemployed people in the US that have been on the dole for more than 27 weeks.July's number came in at 7.4%, but let's recall that the official unemployment is artificially low because it only includes an arbitrary subset of the unemployed in the labor force. Structurally unemployed people of greater than 6 months are virtually unemployable; I think I quoted a Fed paper a few weeks back, suggesting that employers were routinely trashing the resumes of candidates with longer work gaps. I would quarrel with the post's author; I'm not sure that these unemployed are on the dole--some government compensation like unemployment or welfare (for example, if I'm between assignments, I dig into rainy day savings); the August survey put the number at 4.2 million and the percentage as an unconditional 37%. (They do suggest the number of long-term unemployed has fallen by 921K over the past year.) However, the number of discouraged workers has increased over the past year by 136K.
Mark Perry of Carpe Diem presented the following takeaway:: "Temporary help employment increased in July to almost 2.7 million jobs, setting a new all-time record high for temporary and contract workers." I sometimes tease Professor Perry of engaging in "perky economics". Most people, including myself, see that number as problematic and reflective of economic policy uncertainty, e.g., the notorious issues with ObamaCare implementation. (In my discipline, temps/contractors typically do not get benefits, health or otherwise.) [I looked at a relevant Fed paper in a post over the weekend.] If you look at his other items, he's talking improved numbers; so he sees them as precursors to perm employment, but, for example, I did a contract to hire over the Great Recession, and the clients [a CMS contractor] called me in just before the end of the contract to say they had budget problems... Clearly a temp/contract job is better than no job, but a temp gig is typically at will of the client and probably the first target of austerity measures. (The temp position I held at ISU in 1990-91 was cut the next academic year.) In my area of the IT market, only a small fraction of opportunities are perm, and I've seen a lot of employers window-shopping: there's often not a real position there, but if they find someone whom knocks their socks off, they'll find the budget.
Obama shows no sign that he's willing to take the steps needed to reduce economic policy uncertainty. Obama's idea of "compromise" is a manipulated one which offers little more than lip service concessions; until he stops playing his political games with the GOP and gets serious about negotiation, if for no other reason than his own legacy, this economy is going to, at best, tread water. The shameful part is that Obama has put his political ideology ahead of the American people, and history will judge him harshly on missed opportunities.
Obama's "Grand Bargain": Thumbs DOWN to Economically Illiterate Wheeling and Dealing
Has anyone thought of putting Obama's face on baseballs? If they do, I want the name of batting cages, so I can smack some of those suckers into the bleachers. Of course, an Obama baseball pitch would probably look like a knuckeball; even the catcher wouldn't have a clue where it's going; the main difference: a knuckleball is delivered with no spin.
This Obama idea of a "compromise" is to allow the highest business tax bracket rates among developed economies go down only if he gets policy and budgetary goodies, like more business tax revenues, where he gets to decide how to spend the money (HINT: not to reduce the public debt), pile more money into crony infrastructure projects, raise the minimum wage..... In other words, think of the most counterproductive economic policies, and like Prego sauce's tagline, "it's in there".
High business tax rates are globally noncompetitive; they represent additional costs. We need as flat a business rate as possible (and I have suggested considering an alternative tax regimen like a value-added tax). I'm not going to repeat the history of evidence that lowering rates increases the tax base and typically results both in higher economic growth and more revenues. (The Waltons became billionaires by focusing like a laser on low prices.) Obama has a static view of economics; he sees the world as zero-sum. The US shoots itself in the foot with counterproductive policy, and Obama is like, I still have one more foot to shoot.
Obama's reckless pursuit of a minimum wage increase will actually result in even fewer job opportunities for black teens and others, already suffering from high unemployment rates. And don't get me started on Obama's hopelessly naive understanding of public infrastructure boondoggles; Larry Schweikart and Burton Folsom in their WSJ piece do a great job of showing how the private sector systematically does infrastructure better and more economically than the public sector.
Cato Event, “A Gun to the Head”: Secretary Sebelius’s Coercive Tactics to Expand Medicaid: Thumbs UP!
One of the overlooked parts of last year's ObamaCare SCOTUS decision was the fact that Democrats had installed a big stick to force states to expand Medicaid eligibility to adults was declared unconstitutional. Traditionally the Feds have matched state Medicaid spending. Part of the Dems' sweetener, based I think on the original Cornhusker Kickback, was a promotional gimmick to pick up most of the states' match for the expansion in Medicaid, at least for the first few years, no guarantees in the long term (i.e., expect the state to pick up regular matches after the trial period has expired). But the stick part was extortion: if you realized that in the long run, this meant the states might have to come up with millions or billions of revenues they won't have for an expansion they don't want, the Dems said, "Well, we're going to cut you off EXISTING PROGRAM FUNDING", which meant that states would see their program costs double almost immediately. So suppose for the sake of argument the expansion resulted in raising state program costs by 30%, the Democrats gave the states no real choice: either a 30% increase or a 100% increase. Chief Justice Roberts famously called this "a gun to the head".
I don't think Cato Institute made Cannon's presentation slides available or I would reference them; but I was thoroughly disgusted with how rogue Obama Administration officials attempted to misrepresent what Roberts wrote in striking down this unconstitutional stick provision. Cannon also rattles off a laundry list of how the Obama Administration has lawlessly and corruptly implemented ObamaCare with exemptions, waivers, delays, etc., all of which mock the rule of rule and are blatantly unconstitutional (not to mention sheer incompetence in setting up their government-dominated exchanges).
Political Cartoon
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| Courtesy of Eric Allie and Townhall |
The Beatles, "Hey Jude"
