So Much For Good Economic News; 85K Jobs Lost Last Month

The Obama administration has been talking "green shoots" and other such nonsense about the economy over the last few months with no real data to support the claim. We all want to get out of this economic swamp and Obama knows that in an election year the only thing that will save the House and Senate is some kind of economic turnaround so they caress even the most gloomy numbers to make them better. They talk of a 2nd stimulus when the first has driven us deeper into trouble and other such magic potions and elixirs that will be the magic that will bring us back to where we were four years ago.

None of it works and the employment numbers get bleaker and bleaker:

(Reuters) - U.S. employers cut 85,000 jobs in December, confounding expectations the labor market was finally stabilizing and piling pressure on President Barack Obama to spur job growth.

The jobless rate held steady at 10 percent, the Labor Department said on Friday, but it would have marched higher if a surprisingly large number of discouraged jobseekers had not left the labor force.

November payrolls were revised to show the economy actually added 4,000 jobs rather than losing 11,000, as initially reported, breaking a streak of 22 consecutive monthly losses. With revisions to October, however, the economy lost 1,000 more jobs than previously estimated over those two months.

Unemployment remains the Achilles heel of the economy's recovery from its worst recession in 70 years, with job creation critical to sustaining the recovery when government stimulus fades.

Note the word "unexpectedly" isn't used in this assessment but usually whenever the MSM writes about a new jobs report, those of us living in the real world where Barack Obama is not the Messiah generally expect it to be worse.

Anyway, the recession grow deeper and we haven't even seen the effects that will follow once states realize that the feds can't quite prop up their budgets anymore and the easiest way to cut obligations is to clear the payrolls. How bad will that be? Way worse than even I can dare to fear. Look at this chart taken from a Rockefeller report:

I ask you, where is the money going to come from? States are being starved for revenue, the federal government can't afford anymore debt and if they try to buy more, who will buy with the Chinese growing wary?

That leaves only a massive increase in taxes by the states such as bumping up sales taxes thus stunting purchasing and further hurting jobs and manufacturing. States have no options but to start shedding workers and it won't be blue collar jobs because of union pressure so it will be the middle class management-type positions flooding the job-seeking market with many people who haven't worked in the private sector previously and probably willing to take any job available subsequently driving down earning power. A truly vicious cycle.

But it gets worse. States will severely curtail funding for municipalities and that will drive up property taxes--generally included in ones mortgage--leading to a new round of foreclosures and more bank failures. Again, a vicious cycle.

It's not all bad news, however. If the public pressure keeps up with Tea Party gatherings and people contacting their congressman about every vote, we may be able to cut the administrations legs out on everything from health care to a second stimulus. Incumbents are scared to death right now as are liberal bastions and they know that if we don't stop spending, Democrats will be sent to exile so far out they will see Sarah Palin's house from their front porch.
So how do we make this better? We start by voting out every incumbent who voted yes on the stimulus and health care. We also demand that those we choose to support are those who will not vote for another entitlement, pledge to reduce deficits and will cut spending instead of increasing taxes. We must then pay attention and hold them accountable and not just while in the recession but when we come out of it and start prospering again. We must find men and women--from both parties--who support low taxes on business and individuals and make raising taxes a thing of the past.

This is the time for action and the repercussions can be like ripples expanding for a generation. We can make fiscal sanity the norm instead of a rarity.

The Folly of Big Government

In the last seven months, we've seen government expand at a rate greater than at any time in American history including WWII. We've added "czars" for capping spending limits on private business and czars for health care. Hell, we'll be seeing a "czar" to oversee all the other "czars" before too long.

We've seen a stimulus program tank when the proof is clear it wasn't ever needed and the country didn't even want. When a European nation leads the way on escaping recession by not spending money, one has to sit up and take note.

Anyway, we're now seeing a simple program designed by this administration to spur auto sales become so burdensome and expensive that those it was designed to assist may end up losing money and the government is forced to divert staffers from another, much more important agency, to help keep it running. Note, The One actually said that the Post Office was a great example of a government-run entity that was efficient and would be a model for how health care would be run:



So let's sum up, shall we? Obamacare is on the ropes because Americans like what we have and the costs would be incredible so they protest and are treated like vermin plus get dissed by their elected representatives. A nation known for a socialist bent spends no money and allows the markets to work themselves out is out of the recession while we are still deeply mired. And finally, we have a test program of small scale and little complexity that the government has turned into a quagmire due to incompetence and pure planning and they still expect us to support the largest, single program the nation has ever seen.

Matt Welch has the last word:

After 11 months of federal bailouts and freakouts, Americans have become bone tired of panicky power grabs from Washington. It's the big government, stupid.

The message of the various Tea Party protests, which predated this summer's ahistorical media panic over town hall "lynch mobs," has been pretty simple, says Matt Kibbe, president of FreedomWorks, the nonprofit that has helped organize the protests, told Reason magazine this spring. "It was: stop spending so much money, stop borrowing so much money, and stop bailing out people who were irresponsible."

Privacy Rights Trashed in Ohio

It's now clear that employees of three separate agencies (in four instances) looked into Joe the Plumbers records in violation of privacy laws:

The director of the Ohio Department of Job and Family Services, Helen Jones-Kelley, confirmed on Monday that she approved a records check on suddenly famous Joe the plumber, who was mentioned frequently by John McCain in his Oct. 15 presidential debate with Barack Obama.

Driver's-license and vehicle-registration data about Wurzelbacher were obtained from the Bureau of Motor Vehicles. Also, the State Highway Patrol is investigating unauthorized access to data about Wurzelbacher in the attorney general's office from a test account that the office shared with contractors who developed a computer network for the Ohio Association of Chiefs of Police.

Does anyone have a doubt that Ms. Jones-Kelley would have balked at looking into, say, the abortion records of someone if she had the means to allow it? There's absolutely no difference here because she was plainly looking into confidential records in an effort to smear a private citizen who Obama delivered an incendiary political comment to--after Obama approached him in the mans backyard.

Is this a peek into how Obama's appointees will use the weight of the government to silence critics?

Security and confidentiality of private information is the cornerstone of American civil rights. It seems that it is official Ohio policy to snoop on those one disagrees with and Governor Ted Strickland has evidently no qualms about it being so.

The perpetrators of these crimes--and yes they are crimes--should be prosecuted to the full extent of the law without delay. They broke a law and used government resources to do so.

A Reasoned Approach to Abandoning the Bailout

As written by a "Libertarian economist":

The obvious alternative to a bailout is letting troubled financial institutions declare bankruptcy. Bankruptcy means that shareholders typically get wiped out and the creditors own the company.

Bankruptcy does not mean the company disappears; it is just owned by someone new (as has occurred with several airlines). Bankruptcy punishes those who took excessive risks while preserving those aspects of a businesses that remain profitable.

In contrast, a bailout transfers enormous wealth from taxpayers to those who knowingly engaged in risky subprime lending. Thus, the bailout encourages companies to take large, imprudent risks and count on getting bailed out by government. This "moral hazard" generates enormous distortions in an economy's allocation of its financial resources.

In other words, rewarding those who made poor decisions with the ability to make more poor decisions. This is what got us into this mess; banks--with pressure from the government--gave mortgages to those who had no business getting them. Someone making minimum wage has no business buying a $300,000 house yet the Democrats, through Fannie and Freddie, changed the idea of owning a house from a privilege that is earned through hard work and education to a right. Owning a house is not a right.

I'm steadfastly against the bailout at this point after being on the bubble until yesterday. It goes against Conservative principles completely to essentially nationalize private businesses. If Republicans vote to allow a bailout, we will have lost any high ground we may have had on fixing social security, extending the Bush tax cuts and fighting against socialized medicine. You can not be for socialistic policies on one hand and against them on the other. Selective capitalism is a recipe for disaster.

Update: More along these lines in this essay by John Montgomery in The Australian.

Bush Perpetuates Democrat Scam

Fannie Mae and Freddie Mac were created to assist low and middle income people get mortgages so they could enjoy home ownership. A noble idea to be sure but along the way things got all screwed up. Why? It's run by the government and anyone with an iota of brain matter knows that the government can't run a damn thing where turning a profit is the goal.

To ensure that this government monstrosity was run like everything else in DC, they made it tax exempt and oversight was essentially nil until the early 2000's. As is so often the case with many federal entities, it also became an attractive job locale for former presidential advisers looking to cash in after serving in government. Being DC--a highly Democrat populated city--those who cashed in through shady accounting practices were Democrats including former Clinton Justice Dept official Jamie Gorelick whom John Ashcroft verbally obliterated in front of the 9/11 Commission. Typical DC, contribute to the cause of the death of 3,000 Americans and cash in for $700K, what a sewer that city is.

Anyway, President Bush in his infinite wisdom is going to bailout Fannie Mae and Freddie Mac:

Trying to calm financial markets at home and abroad, the Bush administration on Sunday evening asked Congress to give the Treasury Department new authority to extend credit and to purchase securities from the two mortgage giants Fannie Mae and Freddie Mac. Treasury Secretary Henry Paulson described the proposal as a “temporary” step and a “liquidity backstop.”

But portions of the request do break new ground, and the timing of the announcement at 6 p.m. appeared clearly aimed toward reassuring international markets before they opened in Asia and risked spreading further turmoil to Europe and Wall Street.

How effective the administration strategy will be was still unclear as most Asian markets fell Monday after opening with early gains. The Associated Press reported only major indices in China and the Philippines held up against the negative swing. European markets, meanwhile, rose in early trade.

Paulson acted after weekend consultations with leading members of Congress, and House Financial Services Committee Chairman Barney Frank (D-Mass.) told Politico that he is prepared to add the Treasury request to a pending housing bill that passed the Senate on Friday night.

The President could have made wholesale changes to the way these two organizations are run and should have played hardball with Rep. Frank. Privatization would be a great concept if the timing wasn't so whacked with Countrywide and other mortgage giants in tatters.

More link-filled info at the Heritage Foundation blog.

Americans Overwhelmingly Against Wealth Redistribution

Even though we are in an economic downturn and inflationary pressures are high, a huge majority of Americans believe that big government is not the answer:

PRINCETON, NJ -- When given a choice about how government should address the numerous economic difficulties facing today's consumer, Americans overwhelmingly -- by 84% to 13% -- prefer that the government focus on improving overall economic conditions and the jobs situation in the United States as opposed to taking steps to distribute wealth more evenly among Americans.

Here's the breakdown:

More surprisingly in light of the media barrage against corporations, especially "Big Oil" and the mortgage industry implosion, a majority still think government is doing too much:

Republicans and Independents both want less government whereby Dems want more but not nearly as much as the GOP supporters want less. Now it's up to McCain to hammer Obama as a big government lib and pound the wealth districution angle for all it's worth.

Perhaps there's hope after all.

Comcast Gets A Tutorial in Capitalism

Comcast is the largest cable company in the US. Their meteoric rise was something to watch as they gobbled up other companies in a frenzy. The were cutting edge in offering Internet, phone and TV all in one package then adding instant and recordable viewing. They had the government on their side as well as competitors were not allowed to edge in on the monopoly.

As so happens with companies who have a monopoly, Comcast got a little too full of themselves and their pricing structure went through the roof. It didn't matter to them, if you didn't like them, the only option you had was satellite, yet that left other issues such s Internet service, etc.

In an example that should give big government liberals pause (but will not), the government relented and allowed Verizon to start running fiber optics through the state and offer all the services that Comcast does. Comcast was cocky though, the people will pay us and stay with us because they were Comcast and the best.

A funny thing happened, Verizon dug up neighborhoods and started running those lines and offered better services including a higher quality picture and people started listening to their aggressive sales pitch. I, personally was a huge advocate of Comcast, they are a local company who keeps a lot of people employed and I've been with them since I returned to the East Coast. I paid their exhorbitant fees because I'd heard horror stories about satellite TV.

But then I switched to Verizon. They offered comparable Internet, better TV channel selection and my phone service was already with them. They changed the cable lines in my house at no or little cost and every single TV I have (enough to give Al Gore the cold sweats) has a picture that looks brand new. All this for less money than it cost for inferior service with Comcast.

The cable behemoth is feeling the pinch:

Comcast Corp.'s shares were slammed on the stock market yesterday after the company acknowledged that the housing slump and new competitors - mainly AT&T Inc. and Verizon Communications Inc. - were slowing its growth even as its costs climbed.

The shares of the nation's largest provider of cable TV and high-speed Internet plunged more than 12 percent yesterday.

"This is not a robust economy," Comcast chief financial officer Michael Angelakis said yesterday, speaking at the UBS Global Media conference in New York. The company, based in Philadelphia, had predicted this year that it would add 6.5 million subscribers in 2007, but Angelakis said yesterday that growth would amount to 6 million.

"We will fight in the streets and do everything we can for retention" of customers, Angelakis added. "But when you have a company like that throwing those kinds of resources - not just Verizon but other competitors - we will lose some basic subscribers."

As happens with so many companies on top, they let service slide, charged more and expected you to pay regardless. I saw a definite decrease in Comcast's quality of service and their near ambivalence towards customers. Evidently, I wasn't the only one. Think back through America's long history and the names that fell before the mighty will of capitalism are legion--Sears, K-Mart, the entire American automotive industry, etc.

Comcast is in first aid mode right now, trying to stop the bleeding. They told my wife, you should have called us before and we'd have made a deal--they of course disregard the fact that if they provided a better service at a better price I wouldn't have even contemplated switching. They're in a pitched battled and they are going to suffer pretty dramatically before it's over.

For those who are anti-capitalist, this lesson is probably falling on deaf ears, yet it's proven time and again that when the government tries to regulate business as they did by allowing Comcast to maintain a monopoly, the public suffers. If they allow competition to flourish, everyone wins. This is just the latest example but one that occurs repeatedly. The simple formula is to keep the grubby fingers of the government beast out of industry and the citizens win. Let's hope they heed this advice when it comes to the mortgage and petroleum industries.