The growth for the fourth quarter of 2010 was also reduced to 2.3%, meaning that for the last nine months the economy has grown a minimal 1.5%, barely treading water as the weekend Wall Street Journal described it. For comparison purposes, economic growth during the first seven quarters of the Reagan recovery in the 1980s boomed at an average of 7.1%. Economic growth during the first seven quarters of the Obama non-recovery has now been reduced to an average of 2.6%, barely a third as much.

Historically, as the Journal also reiterated, “the deeper the recession, the more robust the recovery.” So the idea that the recovery is so bad because the recession was so bad doesn’t wash. Based on the historical pattern, we should be in the second year of a booming recovery by now. President Obama? instead is mired in three and a half years of stagnation with worse to come.

Keynesian Economics, RIP
This catastrophic failure for America’s working people has resulted from President Obama doggedly following exactly the opposite of Reaganomics in every detail. In particular, Obama came into office with his Rip Van Winkle attitude pretending not to notice that anything has happened since 1981, and returning to the failed Keynesian economics of the 1970s with a vengeance.

As the Journal explained it this weekend, President Obama “deployed the entire arsenal of neo-Keynesian policies to lift domestic demand,” including “nearly a $1 trillion in stimulus, plus a battalion of temporary and targeted programs: cash for clunkers, cash for caulkers, tax credits for homebuyers, 99 weeks of jobless benefits, ‘clean energy’ grants, subsidies to states, and so much more.”

Keynesian economics is the doctrine that economic growth and revival is caused by increased government spending and deficits. The increased spending and deficits are supposed to increase aggregate demand for goods and services, which supposedly causes producers to produce more. If you listen to President Obama carefully, he is always saying that economic growth and prosperity comes from increased government spending.

If the idea that increased government spending and deficits create prosperity doesn’t seem to make sense, that’s because it doesn’t. Keynesian economics has never worked, not when it was born in the 1930s and not when it finally crashed and burned in the 1970s with double-digit inflation, roaring unemployment, and deep recession all at the same time. That is supposed to be impossible under Keynesian economics, because you can’t have both too little aggregate demand (the supposed cause of recession and unemployment) and too much aggregate demand (the supposed cause of inflation) at the same time.

The central fallacy behind Keynesian economics is that the money for the increased government spending and deficits has to come from somewhere. If the government borrows a trillion dollars out of the private sector to spend a trillion back into the private sector, it hasn’t done anything to increase the economy on net. If it seizes a trillion dollars in taxes out of the private sector to finance the trillion of increased spending, the result is worse. The economy has not been expanded on net, and the increased taxes reduce the incentives for production, resulting in a net loss to the economy.

Keynesian economics survives not as a matter of logic, but because it provides cover for what the politicians want to do: increase spending and deficits to buy votes for their political machines. For a Chicago machine politician like Barack Obama, that is catnip.

The Failure of President Obama
What drives economic growth and prosperity, however, is not government spending and deficits, but incentives for production. That was the insight behind Reaganomics, and the reason why it was so successful.

Lower tax rates increase the incentives for production by allowing producers to keep more of what they produce. Deregulation increases incentives for production by reducing the costs of production, increasing the resulting reward. Restrained, anti-inflation monetary policy expands the incentives for investment to increase production because investors know the value of their investment will not be depreciated by inflation and a declining dollar. Reduced government spending and deficits reduce the government drain on private-sector investment funds.

Moreover, these are not policies suited for a particular time and its policy challenges. These are timeless free-market economic policies enduring for all time. As I argue in my new book, America’s Ticking Bankruptcy Bomb, if we would only restore these planks of Reaganomics, within a year the economy would take off on a new, generation-long economic boom. As the Journal again said this weekend, “The only way out of this mess is to return to the growth policies that nurtured the boom of the 1980s.”

The disgrace of Obamanomics is that its rigid, unreconstructed Keynesian economics was discredited in both theory and practice over 30 years ago. The historic success of Reaganomics was a demonstrated fact for all the world to see (and subsequently imitate) over 20 years ago. But President Rip Van Winkle, playacting dumb, takes us back to the future of the 1970s, reflecting the devout prep-school Marxism of his youth.

He is not the only one. Witness the spectacle of the equally self-absorbed Ezra Klein , who in his uninformed blog for the Washington Post just last month ridiculed the Republican Cut, Cap and Balance Plan for failing the test of Keynesian economics. He writes:

The only way to prevent massive layoffs, the only way to give the unemployed some help and the underpaid some relief, is for the federal government to spend. And yet we want to write into the Constitution a requirement that spending remain at 18 percent of the previous year’s GDP? That is to say, a requirement that the federal government needs to make recessions worse rather than drawing on its unique capacity to make them better? Are we mad?

Klein is blissfully unaware that there is even any dispute over Keynesian economics, let alone that it was thoroughly discredited 30 years ago, and replaced by an historical success proven over 20 years ago. Indeed, he is so behind the curve in recognizing the economic policy debate that he indicates that anyone who doesn’t genuflect to the 1930s wisdom of Keynesian economics must be “mad.” That only raises, and answers, the question of whether Klein can helpfully comment on today’s politics and public policy in America when he is not even following, let alone understanding, a central, decades-old, fundamental economic policy debate.

That is apparently not a problem for the Washington Post, which institutionally presents an open question of whether it is so behind the curve of what is happening in America today that it can even cover and report on current politics adequately for its readers. Certainly no one relying on that paper for political coverage in 2010 would have had any idea of the New Deal-sized political earthquake coming in November. That little item was first predicted in this space, by contrast, in 2009.

But arguably even worse: the New York Times, whose resident economics scholar, Paul Krugman, argues that the only thing wrong with the Keynesianism of Obamanomics is that the spending stimulus wasn’t several times bigger. He offers as his model the spending of World War II. Federal spending in 1943 was 43.6% of GDP, with the federal deficit at 30.3% of GDP. In today’s equivalent terms, that would mean a federal budget of $6.54 trillion, or over 70% higher than today, and a federal deficit of $4.55 trillion, almost 3 times higher than today.

Talk about mad. The runaway Keynesian spending spree we have already suffered has driven the nation to the edge of bankruptcy. Do we have to drive America over the bankruptcy cliff before Krugman acknowledges the proven failure of Keynesian economics? The answer is no, because his devotion to the doctrine is religious, not intellectual, and so it can’t be falsified.

Professor Richard Rumelt of the UCLA Anderson School of Management timely reviews the economics of World War II spending and other policies in the weekend Journal. He explains that it wasn’t Keynesian-increased consumption from all that World War II spending that ended the Depression, writing:

Government policy didn’t stimulate personal consumption, as Keynesian policy makers aim to do today. During World War II, there was no investment in civilian infrastructure and the government placed severe restrictions on consumption.… Thrift restored personal balance sheets, ultimately setting the stage for the postwar boom.

Rumelt adds that contrary to Keynesian economics:

During the 1941-1945 war years, over 22% of disposable income was saved. This high savings rate was driven by fiat. Thanks to wartime rationing, Americans were only allowed to purchase small amounts of sugar, butter, meat, gasoline, tires, shoes, bicycles, processed foods and other goods. Plus, there was virtually no production of new cars, radios, home appliances, or housing. In fact, when inflation and increased working hours are taken into account, consumption per hour worked actually declined for the bulk of civilians during the war. Civilian living standards stayed at Depression-era levels.

Rumelt explains that it was actually after World War II, when government spending was reduced by nearly two-thirds as a percent of GDP, and the deficit was nearly wiped out, that the economy boomed. The foundation for that boom was not the Keynesian consumption spending of the World War II years, but the increased personal savings and debt repayment of those years. So Krugman completely misinterprets the government spending effects of the war years.

The more sophisticated (I would argue sophistic) defense of the tragic failure of Obamanomics states that recoveries that follow financial panics are supposedly slower. But that has not been the experience of the American economy. Over the last 70 years, recessions in America have previously lasted only 10 months on average, with the longest previously being 16 months. Moreover, again, the deeper the downturn, the stronger the recovery. Yet, we are three and a half years beyond the last recession’s starting date, and there has been no effective recovery.

It was only the Great Depression itself, prolonged with Keynesian economics, where the human suffering dragged on for over a decade. Historically, recessions or downturns have often been accompanied by financial panics, a classic feature of the business cycle. The sophistry of this argument is just an attempt to devise a political excuse for the failure of President Obama and his outdated, benighted economic policies.

HT: American Spectator

Meanwhile, for the Chinese and other fast-growing economies, it’s full speed ahead on new energy projects. Chinese oil companies are pursuing new oil and gas exploration on a global scale, even in the mainland U.S. They are buying up oil and gas leases in Asia, Africa, Latin America, Europe, and North America, including just offshore Louisiana in the Gulf of Mexico.

But China is not limiting its options to petroleum. It is acquiring vast reserve of coal, importing U.S. coal that environmentalists have put off-limits to electric utilities in the United States and securing ownership of coal mines in Australia, Asia, and Latin America. The purchase of Felix Resources by China’s Yanzhou Coal in December 2009 was the largest coal acquisition in Australian history, but it was by no means the last. Asian buyers are now competing for another big prize: Whitehaven Coal. Soon, even if American policymakers were to wake up to the threat we face, there will be no more major coal properties available for purchase.

The situation with uranium supplies is equally dire. At present the U.S. is the largest nuclear energy producer in the world, but China is out to change that. As reported in the Wall Street Journal, China plans to build 60 large nuclear reactors by the end of this decade, and it is acquiring the uranium necessary to fuel these facilities along with its existing plants. Chinese state-owned companies are bidding on uranium-rich companies around the world, including Kalahari Minerals, owner of large uranium deposits in Namibia.

In response, the Obama administration has not approved a single one among the pending 21 applications for new nuclear facilities in the U.S. With no action on the part of regulators, American companies are loath to acquire rights to new supplies of uranium. They have been largely absent from bidding for the world’s remaining supplies.

This review is not intended as a criticism of China, which is simply pursuing the kind of coherent, long-range energy policy that is lacking at present in the U.S. China is acting in the rational self-interest of its people, and its people will reap the reward of this effort in the decades ahead.

Obama’s policy, on the other hand, is simply “none of the above.” America will also reap the rewards of its energy policy under Obama and Energy Secretary Chu. With no additional nuclear facilities under development, with the withering away of domestic coal-power production, and with no access to major new Alaskan and offshore oil supplies, America faces a future energy shock of unprecedented proportions. Once the effects of Obama’s restrictions on drilling begin to be felt, today’s gas prices are going to seem like a blue-light special.

The question is, why does Obama want to forestall access to so many of our energy resources just at the moment when gas prices are hitting $4 a gallon and experts are predicting they will go higher? Either the President is out of his mind, or he is intent on wrecking our future. Since spiraling gas prices are also going to hinder Obama’s re-election, it is a difficult question to answer. The truth may be that he just hasn’t thought about it. He’s too busy shooting hoops and hosting rappers like Jay-Z in the White House Situation Room.

Unless reversed by a conservative president and Congress following 2012, Obama’s failed energy policy will have devastating consequences. Americans will pay much higher prices for energy in the future, as high as $12 a gallon for gas and four times the current price of about 15 cents per kilowatt hour for electricity. More important yet, high energy prices will sap economic growth, and slower growth will result in structurally high unemployment, declining living standards, and a weakening of our national defense. Maybe this is what Obama wants — I believe that it is — but it is not what most Americans hope to see.

Slow growth and a weakened military may not seem like such an awful fate to the fashionable idiots on the left. It is, in fact, exactly what they are seeking: an America brought to its knees, one weak little nation among many, no more powerful or influential than Bolivia or Peru. A nation that sits happily on the sidelines of history, content to consume its “fair share” of the earth’s resources and live at the average level of the world’s economy, somewhere between Nigeria and Moldova.

That is the happy future that Obama has in mind for your grandchildren and great-grandchildren. A pair of plastic sandals and a government-issued bike for transport, a bowl of rice for supper, a three-month wait for a visit to the physician’s assistant, and a hundred-square-foot apartment with a wall screen permanently tuned to MSNBC.

There are some Americans who are born communists — those who fancy the Mao suit, the masochistic fall-into-line mentality, the fondness for self-abasement and diminishment. These natural-born comrades, eager to hand over their liberties to some vicious and inscrutable dictator, must like what they see in Obama. The rest of us will continue fighting to preserve our liberties.

HT: American Thinker

After months of refusing to cut any spending, Senate Majority Leader Harry Reid (D.-Nev.) finally came out with a Democratic offer to cut spending for this current fiscal year by a mere $4.7 billion. The budget deficit for the current fiscal year is projected to be $1.6 trillion. So, the Senate Democrats’ spending cuts would lower the federal deficit by a mere .004%.

“At a time when Washington is borrowing about $4 billion a day, Democratic leaders want to cut about four and a half billion in government spending for the rest of the fiscal year and then call it a day,” said Senate Republican Leader Mitch McConnell (R.-Ky.).

When the Democrats’ spending proposal came to the floor for a vote last week, Reid could not even keep his own Democrats on board because the spending cuts were so insignificant. When the Democratic alternative spending bill came to a vote in the Senate, 11 Democrats voted against it. The final vote was 42-58.

In contrast, the Republican House-passed Continuing Resolution (CR) which cuts government spending this year by $61 billion got more votes (44-56), but did not meet the 60-vote threshold needed to pass. McConnell held together all his Republicans for the CR (H.R. 1), except three who wanted even deeper cuts, Jim DeMint (S.C.) and freshmen Mike Lee (Utah) and Rand Paul (Ky.). So all of the Republicans in the Senate and 11 of the Democrats want to cut government spending this year, while Reid and other Democratic leaders fight to keep almost all the taxpayers’ money in Washington.

The Democratic House and Senate last year did not pass a budget or any of the appropriations bills. To keep the government from shutting down, McConnell and Obama negotiated a three-month CR in December. On February 19, the House Republicans passed a CR (H.R. 1) that cut $61 billion in government spending for the current fiscal year, which goes through September 30.

Reid at first refused to take up the House CR, calling the cuts “draconian,” and Obama said that he would veto the bill if it passed the Senate. So to keep the government funded after March 4, Congress had to pass a short-term CR. However, Boehner said that any short-term CR to keep the government funded while budget negotiations continued would have to include cuts in spending. Thus, the House passed a two-week CR last week that cuts spending by $4 billion and expires March 18.

While the Senate Democrats blocked the House CR, the House Democrats were claiming that they had already compromised on spending cuts. Pelosi said last week that the House Democrats “have, I repeat, have cut $41 billion from President Obama’s budget already.”

“We’ve come up more than halfway to meet the Republican proposals, Minority Whip Steny Hoyer (D.-Md.) told reporters this week.

But, the Democratic leaders’ saying that they had already cut spending is merely a reference to the December CR which was $41 billion less than Obama’s proposed budget, which was never enacted. So the House Democrats are not willing to cut a single penny from current spending, but claiming that they have already come “halfway”.

To be fair, the Democrats learned how to claim bigger spending-cut numbers from the example set by the House Republicans. When Budget Committee Chairman Paul Ryan (R.-Wis.) first announced the CR in early February, he said that it met the Republicans’ “Pledge To America” by cutting spending back to 2008 levels and saving $100 billion from the President’s budget. But when the actual numbers were released, it was clear that Ryan’s CR did not bring spending back to 2008 levels and cut only $32 billion from current 2010 levels.

The House Republican leadership spent days trying to spin reporters by saying that the Pledge to cut $100 billion was always in reference to Obama’s proposed budget and was for a calendar year. But it was the backlash from the freshmen and the conservative wing that forced Speaker of the House John Boehner (R.-Ohio) to ask the Appropriations Committee to cut more discretionary spending. By the time the CR came to the floor for a vote, the Republicans had cut another $29 billion from this year’s spending.

So, the Democrats’ claim that their $41 billion is halfway to $100 billion means that both sides are citing non-existent cuts to hypothetical spending levels. Bottom line: Both sides are cooking the books to make their political points and improve their image with the public.

While the Senate debated the House spending bill last week, President Obama put out his second veto threat. The White House said that Obama would veto H.R. 1 if it passed the Senate because “the unbalanced bill would undermine the nation’s economic recovery and its ability to succeed in a complex global environment.”

Obama has now put out two veto threats, but has not participated at all in the negotiations with Congress on the budget.
“Where is the President?” asked an outraged Majority Leader Eric Cantor (R.-Va.). “We continue to hear from him and the White House that, ‘We are going to meet you halfway.’ Well, where is the President?”

Instead, Obama named Vice President Joe Biden as his “chief negotiator” with congressional leaders on the CR. But, Biden left the country before the Senate vote to travel to went to Finland, Russia and Moldova.

“The Vice President is the main negotiator; the Vice President is not even in the country today. We have less than a week and a half to go. You ask the press secretary at the White House, ‘Well who’s the lead negotiator with the Vice President gone?’ ‘Can’t tell you that.”” said Majority Whip Kevin McCarthy (R.-Calif.) last Wednesday.

Biden’s only involvement with the CR was to make phone calls to Boehner and McConnell. He tried calling Reid but they did not connect (There is more than one phone line on Air Force 2. I know; I’ve flown on it many times.)

So what are the next steps?

The House will vote on Tuesday on a three-week CR that will cut an additional $6 billion in spending. The House Republicans are putting the CR out a week earlier than the deadline in order to disarm the Democrats from making accusations of shutting down the government. The Senate and President are expected to go along with the new CR.

For the negotiations on the long-term CR to occur, Republicans insist that the Democrats have to come up with real spending cuts in order for them to negotiate down from the $61 billion level. But so far, the only offer on the table is the $61 billion from the House CR, which failed to pass the Senate last week.

“Where is the Senate Democrat plan? I’m not going to sit up here and negotiate with myself!” an indignant Boehner said last Thursday.

The negotiations between the House Republicans and Senate Democrats will have to resume, but the resolution and the final level of spending cuts is still unpredictable.

HT: Human Events

Faced with stifling debt, bloated pensions and intractable government unions, liberal Midwestern legislators have fled those states — paralyzing Republican fiscal reform efforts. Like Monty Python’s Brave Sir Robin and his band of quivering knights, these elected officials have only one plan when confronted with political hardship or economic peril: Run away, run away, run away.

Scores of Fleebagger Democrats are now in hiding in neighboring Illinois, the nation’s sanctuary for political crooks and corruptocrats. Soon, area hotels will be announcing a special discount rate for card-carrying FleePAC winter convention registrants. Question: Will the White House count the economic stimulus from the mass Democratic exodus to Illinois as jobs “saved” or “created”? More important question: How much are taxpayers being charged for these obstructionist vacations?

Voters have spoken: In Wisconsin, Indiana, Ohio and across the heartland, they put Republican adults in charge of cleaning up profligate Democrat-engineered messes. Instead of defending their same old tax-hiking, union-protecting, spending-addicted ways, Democrats are crossing their state borders into big government sanctuary zones — screaming “la, la, la, we can’t hear you” all the way.

Wisconsin Democrats warned that their delinquent members — evading state troopers and literally phoning it in — could be gone “for weeks” to prevent a quorum on GOP Gov. Scott Walker’s modest plan to increase public union workers’ health insurance and pension contributions, end the compulsory union dues racket and rein in collective bargaining powers run amok.

Big Labor insists its intransigence isn’t about money, but about “rights.” But the dispute is about nothing but money and power — the union’s power to dictate and limit its members’ health insurance choices to a lucrative union-run plan, for example, which adds nearly $70 million in unnecessary taxpayer costs.

On Tuesday, only three of 40 House Democrats in Indiana showed up for legislative debate on a similar bill to end forced unionism and join 22 other “right to work” states. Hoosier media reported that some of the fugitive pols may be headed to Kentucky in addition to President Obama’s old political stomping grounds.

The White House and Beltway Democrats have paved the way for subverting deliberative democracy, of course. If only Republicans in Wisconsin and Indiana had followed the Obama/Pelosi/Reid model and rammed their behind-closed-doors-crafted legislative agenda through in the middle of the night on a holiday weekend, the Fleebaggers wouldn’t be on the lam today. But GOP legislators just don’t roll that way. It’s Democrats who cut and run — abroad in wartime and at home in crisis.

Almost eight years ago, more than 50 Texas Democratic state lawmakers holed up in Oklahoma and New Mexico for weeks to stymie a vote on Republican-sponsored redistricting plans they opposed. Over the past week, it was thousands of public school teachers in Wisconsin who faked illness and boycotted their classrooms. And it’s union henchmen calling out loud for statewide strikes to bring Republican reformers to their knees.

The Party of Truancy has become a laughingstock — and Americans aren’t waiting for left-wing late-night comedians to bring down the hammer of well-earned mockery. The Internet has lit up over the past week with “Wanted” posters and all-points-bulletin alerts for missing Democrats.

Blogger John Hayward of the conservative Human Events newspaper joked that “the next issue of National Geographic will track the migratory patterns of fugitive Democrats across the great plains.” Seton Motley of the Washington, D.C.-based Media Research Center weighed in: “First, Wisconsin. Now, Indiana. When we said ‘runaway government,’ it was a complaint — not a suggestion.” Comedian Stephen Kruiser snickered that OFA — the Democrats’ political organizing arm, Organizing for America — now stands for “Organizing Fleeing Americans.”

Note: Many of the loudest Washington and Hollywood critics of former Alaska Gov. Sarah Palin’s decision to resign from office in 2009 are themselves now AWOL on the Wisconsin and Indiana AWOL-ians. Who’s all for mocking “quitters” now? Anyone?

One mortified Wisconsin taxpayer speaks for many. “As the daughter of former Wisconsin Senate Minority Floor Leader William R. Moser (D-Milwaukee, Dist. 6),” Mary Magdalen Moser told me, she’s humiliated by the “flee-bagging” politicians. “I am ashamed of the actions taken by the minority party to subvert our system of government by boycotting its legitimate processes. Anarchy is undemocratic, and I know that my Dad is spinning in his grave right now. … I do not support refusing to participate, because that will not solve any of the issues facing our state.”

Remember the 2008 Democratic Party chant: “Fired up! Ready to go!” Well, there’s a new Democratic Party motto in town: “Ready to go? OK, then, let’s blow this pop stand!” It’s difficult to see how Obama and his absconder allies can “win the future” when they’re stampeding over each other to escape the present.

HT: Townhall.com

President Obama has been speaking lately of what he views as an upswing in the economy. “The economy is growing again,” he declared in the State of the Union address. Not surprisingly, he failed to mention that for 104 consecutive weeks, larger and larger numbers of Americans have become dependent on welfare. Or that within those families receiving welfare, fathers have become more and more irrelevant, and youth crime has increased.

But, then, those are not facts that one expects to hear from the President in a State of the Union address, or anywhere else. What we hear, again and again, is the fantasy that government creates jobs, government drives the economy, government feeds kids and sends them to bed happy. The facts are just the opposite.

In fact, the Department of Agriculture has just reported that 43.6 million Americans are now receiving food stamps.

Significantly, in 2006, near the height of the historic Bush economic expansion, the number of Americans receiving food stamps was just over 20 million. Since then, the number of recipients has more than doubled, with nearly all of the increase coming under the presidency of Barack Obama. In fact, one of the under-reported stories of the past two years is that the number of Americans receiving food stamps has increased every single month under the Obama administration. Even with the recent decline of the unemployment rate from 10% to 9.4%, the number receiving food stamps has continued to increase.

That increase is not good for the taxpayer or for the welfare recipient. The increase in federal welfare spending is one of the main reasons for annual budget deficits now totaling $1.5 trillion. In the 2011 budget that Obama has submitted to Congress, over $1.43 trillion is to be spent on Medicare and Medicaid, with Medicaid the fasting growing component. Next to defense, health and human services is the largest component of discretionary spending in the Obama budget, coming in at $83.5 billion. But housing is not that far behind, with $41.6 billion. And other major redistribution programs, such as the Earned Income Credit, do not even appear in the budget.

The annual cost to the taxpayer of the Earned Income Credit program, which provides a maximum of $5,666 per family, is $59 billion. This is a high cost to pay, especially since as many as 30% of those claiming the credit are not entitled to it.

Clearly, Obama’s redistributionist politics are not good for the taxpayer. But welfare is not good for welfare recipients, either.

The impact of food stamps, Section 8 housing subsidies, Medicaid, and other support programs has been to create a permanent welfare class which, in terms of skills and attitudes, is poorly equipped to return to work. Not only that, the children of welfare moms are nurtured in a mentality that perpetuates dependency from generation to generation. And liberal politicians are in no hurry to end this dependency since the system of welfare patronage serves their interests.

The destructiveness of welfare goes beyond political dependency. As Daniel Patrick Moynihan documented long ago in The Negro Family: The Case for National Action, the welfare system contributes greatly to the breakdown of the family. What Moynihan wrote in the 1960s holds true today. The more welfare that families receive from government, the less necessary fathers are for their support. Lacking the role model of a responsible father, children grow up to believe that dependency is a natural condition of life.

Furthermore, a great deal of evidence points to a close relationship between crime and welfare. It is by no means an urban myth to suggest that housing projects are dangerous locales. Statistical mapping reveals that murder sites in urban areas are clustered around public housing locations.

In testimony before the Senate Judiciary Committee in 1994, Michael Tanner documented the relationship between welfare and crime. Pointing to the ill effects of high rates of out-of-wedlock birth and fatherless families among welfare recipients, Tanner concluded that “the welfare system is a significant cause of juvenile crime and violence.” Clearly, welfare entails a cost to society that goes beyond its effect on the federal and state budgets.

As to why so many Americans are receiving food stamps and other welfare benefits, one reason is that so many have dropped out of the workforce altogether. The January 2011 jobs report confirmed that Obama’s economic policies are not creating jobs. In fact, there were only 36,000 jobs created at a point in the economic cycle when one would expect a quarter million or more. The “good news” is that the unemployment rate fell to 9%, but only because so many more decided that welfare beats work. Expect the big increases in food stamp numbers to continue.

Maybe Obama is pleased with the jobless recovery we are in. America now has the lowest labor force participation rate in a quarter century. As of November 2010, the rate had sunk to 64.5%. That number includes not only those persons of working age who are employed but also those who are unemployed but looking for work — currently 16% of the workforce. In other words, 35.5% of working age adults have simply given up on finding a job.

US Labor Force Participation, Lowest in 25 Years

One would think these numbers would be alarming to a President who has already kicked off his re-election campaign with a partisan State of the Union address and numerous appearances in swing states. But Obama was schooled in the Chicago patronage system which equates dependency with votes. For a politician like Obama, a vigorous private sector expansion just means fewer votes. Maybe that’s why he has done so much to prevent it from happening.

Democrats have a vested interest in expanding the numbers of Americans who have simply given up looking for work. Why should Obama wish to create more jobs when it is welfare recipients who are his greatest fans?

HT: American Thinker

Everyone is aware that our public system of education, especially at the secondary level, is failing. To function well, our system of government requires an educated and intelligent populace. When 40 percent of our children are unable to successfully complete a high school education, the failure becomes a national crisis marked by high unemployment and growth of a welfare state. Here is a proposal for an entirely different method of delivering an education.

As a once-hopeful high school science teacher, I discovered that the primary cause of school failure (at least where I practiced) was the high percentage of students in school who had no interest in learning, no respect for teachers, and no intention to graduate. For various reasons, traditional education did not relate to their lives in any useful way. Many of them were simply putting in seat time until they could legally drop out at the age of 16.

Clearly, the issue was lack of motivation (which is another long subject) from many of my students. Meanwhile, professional educators tell us the problem is a lack of sufficient funding for good school facilities and good teachers. Attempts to revive failing schools invariably result in creation of a commission to study the problem followed by a recommendation to upgrade the building and facilities and to hire more teachers. It may also include new schemes to promote successful teachers and eliminate unsuccessful ones. These expensive efforts have had limited success. What are we missing? Is it that no one has bothered to ask the students themselves what they want from an education?

Our school system was designed many decades — well over century — ago, much of it before high school was invented and when college was for only a very few. While adequate for the elementary grades (for which it was designed), it does not work well for the upper grades. It did not expand effectively as the nation grew and our goals changed. It is time to redesign it with no preconceived notions except to meet the needs of the students and the society they must live in.

These are the issues as I imagine them: education must be relevant for every student (algebra doesn’t interest a boy who doesn’t know if there will be a sober parent at home to fix dinner at the end of the day); it must provide security where none is present (that is, a means for a sixteen-year-old to survive, often without a parent); and it must provide a clear path for success (that is, a useful job skill after schooling ends). From a teacher’s perspective, it must remove uninterested and disruptive students from the classroom, and it must give them the setting to teach at the student’s level and at the student’s learning pace.

Trying to think outside the box, I came up with the following system modeled after the Boy Scouts of America programs. Scouts earn advancement by satisfying their Scout Master in that they understand and can demonstrate a set of skills or achievements. For example, a boy may need to demonstrate how to lay a fire three different ways and explain under what circumstances each is most useful. To earn a merit badge or advance to the next rank, he would have a prescribed list of such knowledge elements, each of which must be demonstrated to the leader’s satisfaction. Scouts may complete the skill or knowledge elements in any order at any time, and if they fail the examination, they may repeat it as often as necessary to pass.

A similar modular education system would operate as follows: first, it is necessary to remove the disaffected children from the classroom — in today’s schools, they simply disrupt all attempts to teach. Upon completion of the eighth grade they will choose either a college preparatory or vocational school. Those seeking an early out will be enrolled in work-study programs of their choice at the vocational school. They would attend concentrated classes for half the school year in such areas as construction, auto mechanics, business operations, personal finance, etc. The other half of the year, they would work as paid apprentices in their chosen field. Upon completion of the two-year program, they would be skilled workers and already have money in the bank.

The college preparatory schools would be restructured to teach by modules (the vocational schools could be similarly designed). For each grade level, a curriculum would be established identifying the subjects to be mastered to complete that grade. These might include fifteen to twenty topics each for math, science, history, language arts, fine arts, etc. Students would choose a topic module (e.g., beginning algebra: how to solve an equation), attend the classes, take a test (which might be written or oral), and have that module signed off by the teacher. Modules may be taken in any order, and students need not attend class to have a skill signed off; that is, they may study on their own or test on prior experience. Once all requirements for a grade were completed, the student would be awarded a diploma for that grade. Students would no longer achieve “high school graduation,” but would be a graduate of the grade completed with a diploma for each level of achievement. Dropouts would no longer exist because every student would be a diploma-holding graduate of the last grade he/she completed successfully.

These are the advantages of such a system. There would be no association between a student’s age and his level of advancement. First, the system would allow students to advance as rapidly or as slowly as they wish. Thus, a teacher might have students of all ages and mental abilities in class. After the age of 16, students would be free to drop out if they wish. They would also be free to drop back in at any age when they are ready to continue their education. This would apply to both the college preparatory schools and the vocational schools, and students would be free to switch between the two so long as progress is being made. Progress is modular and recorded and does not expire, and diplomas are awarded at each level of achievement.

Second, every student in class is there because he or she has chosen the class, wants to be there, and wants to learn. Mainstreaming, or the mixing of slow learners with fast learners, is not an issue. Fast learners are no longer held back to sit in boredom in slow-moving classes. There is no pressure for slower learners to finish at a preset time. Disruptive students are gone. Each student’s style and pace of learning is controlled by himself. Success is defined by each student for himself, and appropriate diplomas are earned for each level of achievement.

This system will work because it is student-centered rather than teacher-centered. It meets the needs of each student individually, because each one designs his own curriculum and pace of learning. Just as every Boy Scout feels successful — whether he is a Tenderfoot Scout or an Eagle Scout, or whether he has earned one merit badge or sixty — so every student will be successful.

HT: American Thinker

It is Europe’s autumn of discontent. All across the continent, people are taking to the streets to protest the austerity measures of their governments. The governments have to cut for a simple reason: They are broke. They no longer have the money to sponsor the kind of padded lifestyles to which their citizens have grown accustomed. This in turn makes the citizens angry — so much so that they are willing to turn their countries upside-down in order to obtain benefits their governments simply cannot provide.

In France, where the deeply unpopular President Sarkozy is trying to raise the retirement age of 60, things have turned decidedly unpretty. Across the country, cars are getting burned, shop windows are getting smashed, garbage is left uncollected, roads are being blocked, and people are getting beaten up. Nearly one fourth of France’s twelve thousand-plus gasoline stations are suffering shortages. Even secondary schools are being blocked and disrupted.

Across the border in Belgium, a rail workers’ strike halted rail transport across the country. Only in the northern region of Flanders — which is the less socialistic part of Belgium — were some trains running intermittently last week. According to Agence France-Presse, “the strike triggered massive traffic jams on Belgian roads and also disrupted the services of the Eurostar train line which links London, Paris and Brussels.”

Late last month, a strike in Spain shut down much of the country’s industry and paralyzed transportation services. As many as 70 percent of Spain’s workforce walked off their jobs. “The strike has been an undoubted success,” gloated a union leader.

Greece now seems to be in a perpetual state of unrest and protest. Two weeks ago, protesters — mostly government workers — besieged and then occupied parts of the ancient Acropolis. Meanwhile, on the other side of town, rail workers and students marched on the Greek parliament. Even though it is bankrupt and dysfunctional, the Greek government still managed to rally the riot police to beat up on the state’s hapless wards.

The Frenchmen’s sense entitlement to Big Brother’s dough is truly staggering. It apparently makes itself felt early in life, as evidenced by Laura Tanniou, a 22-year-old student, who probably spoke for many in her generation when she said, “We may be only students now, but we still want to make the most of our retirement.” What she actually meant by the word “retirement” was state-provided retirement.

In the past, students used to dream about how they would become rich and make it big through their talents and efforts. But now, under the welfare state, they are fantasizing about how they will retire on generous government pensions. In light of the young lady’s statement, the expression “forward-looking young people” gains an entirely new meaning.

While the youth of France is dreaming about easy retirement, some of their mature compatriots think that work may pose a danger to health. Véro Du Cheyron, 51-year-old social worker, said this to a reporter: “They say that people are living longer so they have to work longer, but they don’t say anything about the health problems that come by doing that.”

This is a strange claim, especially when coming from France, where people are not known to overextend themselves during their working years. By law, they enjoy a 35-hour working week, which they tackle, for the most part, at a less-than-breakneck pace. Their blasé attitude toward work is not surprising, given that more than half of Frenchmen work either directly for government or in government-related jobs. Yet there are people in France who think that adding two more years of this to a person’s work-life could endanger their health.

What we see happening in France and across Europe are the devastating effects of the welfare state. We see a citizenry whose work ethic, morals, power of reason, and grasp on reality have been grievously damaged. They balk at hard work, yet they want to enjoy lives of plenty and ease. Their governments are bankrupt, but they still keep demanding benefits that are impossible to deliver. And while they refuse to engage in hard labor themselves, they see nothing wrong with living at someone else’s expense.

The welfare state — once the pride and glory of European democracies — has become a curse. This sad situation should have not come as a surprise. The outcome was predictable, given what we know about human nature and the workings of government. More than two hundred years ago, John Adams warned of welfarism’s pernicious effects:

Like a cancer; it eats faster and faster every hour. The revenue creates pensioners, and the pensioners urge for more revenue. The people grow less steady, spirited and virtuous, the seekers more numerous and more corrupt, and every day increases the circles of their dependents and expectants, until virtue, integrity, public spirit, simplicity and frugality become the objects of ridicule and scorn, and vanity, luxury, foppery, selfishness, meanness, and downright venality swallow up the whole of society.

Adams’ words describe the disposition of the contemporary western welfare state almost to a T. One could only perhaps add “widespread amentia” to Adam’s list of afflictions.

If they were clear-thinking, the Europeans would protest against the criminal waste and recklessness of their governments and demand that they shape up. They would call for the resignation and prosecution of those politicians responsible for their bankruptcy. They would insist that the fiscal house be put in order. But they never do that. On the contrary, they march and demand even more spending. Instead of demonstrating against those who brought on their fiscal ruin, they protest those who try to do something about it.

In one respect, America is still very different from Europe. It is the only Western country where people march against the bankrupting policies of their government. We have seen this in numerous Tea Party rallies across the land. It is encouraging to see this reaction, especially since such thinking is completely alien to most people in the rest of the developed world.

But even in America, welfarism has exerted its devastating effects. Even though many in this country are angry about our fiscal plight, they are unwilling to support the kind of measures necessary to bring about remedy. Anyone who looks at the budget and long-term spending trends will quickly realize that it is entitlements that account for the bulk of the federal fiscal burden. The much-talked-about national debt — large though it is — represents only a small portion of the government’s overall obligations. To avoid the fiscal train wreck that lies ahead, drastic cuts will have to be made in entitlement programs. But this is precisely what the vast majority of the American people — including those who are upset about our national bankruptcy — refuse to accept.

We saw a striking demonstration of this last week when Carly Fiorina, a California Senate candidate, appeared on “Fox News Sunday.” One of the themes of Fiorina’s campaign has been reinstating financial sanity in Washington, D.C. — so much so that she recently even issued a budget plan intended to bolster her fiscal hawk credentials. But when asked by the host to name a single entitlement benefit she would cut or reduce, she refused to answer. When pressed on the point, she accused her interlocutor of “asking a typical political question.”

Some would say that Fiorina’s evasiveness is indicative of a lack of political will to make the hard choices. But this is not the case. Fiorina’s attitude is, in fact, reflective of a lack of popular will. Had she said that she would cut entitlements, her chances of getting elected would have effectively dropped to zero.

Nor is Fiorina’s quandary peculiar to left-leaning California. As far as this writer is aware, no Tea Party candidate for federal office has publicly advocated deep cuts in entitlement programs. In fact, according to research by James Ostrowski, not one Tea Party-favored senatorial candidate is calling for significant reductions in even the over-bloated federal agencies. To say, as Fiorina did, that she plans to cut waste will simply not do. For one thing, the savings from what is officially termed waste would be too small to make any real difference. But the larger point is that most federal spending is a waste in the first place, not to mention the fact that it is also unconstitutional.

What the concerned Americans need to realize is that we cannot have it both ways: We cannot gripe about the size of the federal cake while munching on it all the while. Until we resolve this contradiction in our hearts and minds, we cannot be fiscally cured.

HT: American Thinker

There are among the population of the country Barack Obama has been chosen to lead those who have experienced firsthand the iron fist of a dictatorial government and who have survived the bloodshed that resulted. Tens of millions died during the past century under dictators. Deep within their psyche, these survivors are extraordinarily attuned to those factors that gave rise to the devastation when dictators have their way.

They know that the first step along this path is the emergence of a leader willing to do or say anything to promote a destructive and failed political philosophy and to achieve power by manipulating the emotions, fears, and prejudices of the people. But above all, they are mindful that only by exposing those who are determined to undermine their society, without hesitation or fear, can their nation be saved.

Therefore, on behalf of those of us who have live through the worst of times, and based upon the president’s words and deeds, it must be stated that Mr. Obama is a liar and a demagogue.

This deception began during the presidential campaign. Falling sway to soothing rhetoric and a deliberately fraudulent campaign to promote moderate positions on the economy and government, many citizens in 2008 voted for Senator Obama. Further, they hoped that by electing a man of African descent, the long national nightmare of slavery and the long civil rights struggle would at last be relegated to the pages of history. Capitalizing on that hope, Mr. Obama campaigned on the theme that as a political moderate, he would bring all Americans together and end the divisive politics of the past, as well as control the scope and size of government.

In the intervening two years since the election, the president, his underlings in the administration, and the sycophantic members of Congress have repeatedly invoked the checkered past of this country in regard to civil rights and never missed an opportunity to remind the people of Mr. Obama skin color. This has been done in a willful effort to capitalize on so-called white guilt, thus keeping alive the tensions in the black community and muzzling dissent, while enacting radical policies anathema to the overwhelming majority of the American people.

There has been no compunction in exploiting race or racial incidents, such as Professor Gates in Cambridge, Massachusetts, the Department of Justice and the Black Panthers, or the references to slavery in recent speeches by the president, to sow dissent among the populace. Given numerous opportunities to denounce racial demagoguery by his supporters or the media, the president has chosen to remain silent, thus giving his tacit approval to the onslaught of racial divisiveness and manipulation.

Employing the crassest of political ploys, Mr. Obama has, with forethought, sought to exploit the issue of illegal immigration by making it a matter of race and not law. His opposition to the Arizona immigration law and the false and overheated rhetoric used by both him and his associates constituted a deliberate attempt to disseminate fear and loathing toward fellow citizens by the Hispanic population in order to capture Hispanic votes and ensure Obama’s and his party’s radical wing’s continued and expanded hold on power.

In a time of recession and apprehension about the future economic well-being of the country, President Obama has exploited one of the oldest of man’s failings: envy towards those perceived to have more. Whether it is allusions to “the fat cats” in corporate America or snide references to millionaires or the implication that all of the average citizen’s problems can be solved by taking away money from the rich (who supposedly achieved their wealth on the backs of the poor), it is an age-old tactic geared to distract the populace by inciting anger against their fellow citizens and to present the government as the final arbiter of “fairness,” which results in the massive expansion of governmental dominance.

In furtherance of these aims, the lies and misrepresentations by Barack Obama and his administration are legion. But none are as egregious as those made in order to pass the Health Care Reform Act. Among the lies were assurances that premiums would not rise, Medicare would not be cut, everyone would be able to keep his or her current doctor and insurance, abortion would not be funded, and national medical costs would be reduced. All were total fabrications used to pass the most insidious attack on personal freedom in the history of the country.

It is of no difference who may have written the bill or what it may have contained within its 2,400 pages or whether Barack Obama or the members of Congress had read it. These false claims by the president would still have been made, as his only concern was to take away liberty from the people and vest it in himself and the government.

No president of the United States, or leader of any other country, would have made his primary foreign policy to go about the world apologizing and denigrating his nation, thus mocking the enormous sacrifices generations of Americans have made to save countless millions of people over the past century. Barack Obama, in a grandiose display of narcissism, did so only as a means of ingratiating himself to others and elevating his stature as a world figure.

By his rhetoric and strategy, Mr. Obama has sunk to the same level as numerous demagogues over the past 150 years who employed these same tactics as a means of achieving personal and centralized power.

The United States is on the precipice of failure. It may follow the well-worn path taken by so many great powers over the centuries and become an entry in the list of the rise and fall of great nations. This country cannot sit idly by and allow a president (or any other national leader) whose guiding personal philosophy is “the end justifies the means” and is thus devoid of honor and integrity, to go unchallenged by being reluctant to confront his words and deeds.

The media, politicians, and general citizenry must not be intimidated by Mr. Obama’s skin color or the pall of “political correctness.” They must face the reality of who the president is and his radical objectives. Too much hangs in the balance not to speak out forcefully and without apprehension, even after the midterm election, regardless of the outcome, and not to trust or believe whatever the president may do or say in the future. After all, he has squandered all credibility by his actions to date.

HT: American Thinker

Obamacare: A Nightmare for America

9/20/2010 – N.C. Aizenman -

Some of the country’s most prominent health insurance companies have decided to stop offering new child-only plans, rather than comply with rules in the new health-care law that will require such plans to start accepting children with preexisting medical conditions after Sept. 23.

The companies will continue to cover children who already have child-only policies. They will also accept children with preexisting conditions in new family policies. …

Three insurers – WellPoint, Cigna and CoventryOne – all cited uncertainty in the health insurance market for their decisions. That incertitude and the resulting decision of other insurers to drop their child-only plans, according to WellPoint spokeswoman Kristin Binns, “has created an unlevel competitive environment.”

CoventryOne spokesman Matthew D. Eyles said that the insurer was facing “unique challenges that could undermine our ability to offer value and meet our continued obligations to existing policyholders.”

But officials of the Obama administration said the move contradicted a letter from the leader of one of the insurance industry’s most important trade groups after the law’s adoption in March. Karen Ignagni, president of America’s Health Insurance Plans, expressed support for the law’s provisions concerning children with preexisting conditions and promised to “fully comply” with them.

“We expect [insurance companies] to honor that commitment. Insurers shouldn’t break their promise and turn their backs on some of our most vulnerable Americans,” said Jessica Santillo, a spokeswoman for the Department of Health and Human Services.

Robert Zirkelbach, a spokesman for AHIP, noted that insurers will be accepting children with preexisting conditions in other types of plans.

But, he said, extending such coverage in child-only policies “provides a very powerful incentive for a parent to wait until their child becomes very sick before purchasing coverage.”

Zirkelbach added that in 2014, when similar protections kick in for all individuals with preexisting conditions, virtually all Americans will be required to get health insurance.

With no such mandate currently in place, however, the result over the next several years could be that the pool of children insured by child-only plans would rapidly skew toward those with expensive medical bills, either bankrupting the plans or forcing insurers to make up their losses by substantially increasing premiums for all customers. And Zirkelbach said the effect could be compounded if only a few plans remain in the market.

It is unclear how many children will be affected. Child-only plans represent only a small share of the non-group plans available on the individual market – with somewhere between 100,000 and 700,000 children currently receiving such coverage, according to administration officials.

In some states that have separate requirements concerning child-only plans, insurers will continue to offer new policies – New York, Maine, Ohio and Virginia, in the case of WellPoint’s Anthem Blue Cross and Blue Shield plans, for instance.

Most poor children with preexisting conditions already qualify for insurance through programs such as Medicaid and the Children’s Health Insurance Program. And those who are not poor will be able to apply to new high-risk pools established by the law.

HT: Washington Post

Meanwhile, Treasury Secretary Geithner, erstwhile cheerleader for the Obama economic team, announces that unemployment rates could rise “for a couple of months.” “Of course we want to do what we can,” says Geithner, but what we’re doing is just not working.

Still, “large parts of the private sector continue to strengthen,” Geithner wrote in the New York Times on August 3. Maybe Geithner wasn’t looking at the same data as the Federal Reserve, which one week later reported that the economy was weakening. Not only that, but the Fed backed up its opinion with a commitment to new monetary stimulus. Come to think of it, Geithner’s boss was not hesitant to sign a $26-billion stimulus bill designed to bail out teachers’ unions and state Medicaid programs. If Geithner is so sure the economy is expanding, why is he supporting another stimulus bill?

The truth is that Geithner knows, as does every reputable economist out there, that the U.S. economy is not recovering as it should following the severe recession of 2008-2009. The Obama economic policies are just not working, and no one in the administration seems to have a clue about what to do.

As for Geithner, he thinks that Americans haven’t been taxed enough. In an August 4 speech, Geithner suggested that the tax cuts that began during the Reagan administration and continued through the presidency of George W. Bush actually slowed the growth of the economy. Geithner is perhaps the only economist in the universe to believe that employment rates did not increase during the period from 1983 to 2008, following reductions in marginal rates, capital gains, and other taxes during the Reagan, Clinton, and Bush II administrations. The Secretary is apparently incapable of reading a line chart, or of comprehending that the percentage of Americans employed rose from 57% in 1983 to 63% in 2008.

Geithner, of course, is saying these things only to defend the president. It is the president who plans to raise taxes on the rich, as he likes to call everyone earning more than $200,000 — even those who reinvest that money in small businesses and create new jobs. Somehow the president believes that robbing small businesses of every dime of profit is going to kick-start the economy. Once again, just about every economist except Paul Krugman disagrees with him. As Sen. Mitch McConnell pointed out on Aug. 4, the tax increases scheduled for Jan. 1, 2011 “will have a devastating impact” on the economy.

If the President really thinks that raising taxes will promote growth, why not raise taxes on everyone? More taxes, more growth. Why not let government take everything, as it already has, almost, in California and New York? If higher taxes produce jobs, where are the jobs in California and New York? Why were more new jobs created in low-tax Texas in 2009 than in the other 49 states combined?

Maybe it’s just that the Democrats have a different definition of “jobs” from most people’s. For Democrats, a job is not a job unless it’s “green.” A job need not be real — it can be “created or saved” or bought with stimulus spending. For Nancy Pelosi, collecting unemployment benefits is a job in itself. And for Tim Geithner, raising taxes on some is the precondition for putting others back to work.

The fact is that Obama’s economic policies have always been laughable. The $862-billion stimulus spending of 2009 distributed massive funding to welfare recipients, alternative energy boondoggles, environmental regulation enforcement, unionized education, and public service workers. But the spending bonanza was never intended to create jobs. It was designed to buy votes, as was the latest stimulus bill signed by the president on August 10.

Meanwhile, the economy overall has lost six million jobs since the recession began, most of them since the inauguration of Barack Obama; 14.6 million Americans are now out of work. Millions of ordinary Americans have been sacrificed so that the Democratic Party can retain the votes of welfare recipients, teachers, public service unions, and environmentalists — and what’s more important, the campaign contributions of unions, environmental groups, and trial lawyers.

If the president really wished to create jobs, he could do so in several ways. He could reduce marginal tax rates across the board, thereby returning billions of dollars to their rightful owners. He could cut capital gain, dividend, and interest taxes, thus increasing business investment and spurring expansion. He could promote tort reform and eliminate unnecessary environmental regulation. Most importantly, he could lower taxes on businesses and corporations.

Obama has done none of these things. The only “solution” he has proposed is raising taxes and distributing more stimulus funds to his key constituencies.

There are 14.6 million unemployed, and the president’s solution is to raise taxes so as to distribute more taxpayer money to his political supporters. Apparently Obama is so callous or so blind that he cannot comprehend what it means for 14.6 million families to lose a breadwinner. Everything that he has done, and that he continues to do, serves only his own interest. He appears to be ruthlessly intent on a single objective: securing his political base in advance of the 2012 election. No matter if fourteen or twenty or fifty million Americans go hungry.

HT: American Thinker

– The Congressional Budget Office says the 2010 federal deficit will be in excess of $1.3 trillion, as in $1,000,000,000,000+. (BTW, the next level we’ll be talking about out of Washington is quadrillion, which has fifteen 0′s.)

– Despite Vice President Joe Biden’s April boast that administration stimulus spending would spur the economy to add a half-million jobs a month by now, initial unemployment claims jumped a half-million last week, the worst since last November, as national unemployment remains at 9.5% and the economy sheds 131,000 more jobs.

– But the economy’s going great at the Democratic National Committee, which reports collecting $11.5 million from donors in July on top of the $53.8 million already taken in from various sources this year. The president just devoted three workdays across five states to rake in several more millions for his party.

– But before leaving for his ninth presidential vacation, 10 days at a secluded estate on Martha’s Vineyard, Obama devoted four minutes in the White House driveway to a special statement on the latest disappointing jobs numbers. (Full text, as usual, can be read on the jump, along with a brief reaction from the Republican National Committee chairman.)

No questions allowed because the president didn’t want to explain why despite the administration’s announced Recovery Summer Program, the jobs numbers have started going backward again after 19 months of promises and $787 billion in alleged stimulation spending. Because, faced with the uncertainty of the economy and the certainty of new taxes after Nov. 2, employers are holding back on hiring.

According to the president, he’s been “adamant” with Congress for months now about a new jobs bill to help small businesses. Obama says this really good bill is stalled in the Senate, where so much administration legislation has been crammed through so effectively by Majority Leader Harry Reid.

Reid’s been so good at it, in fact, that he’s now running for his political life in a reelection campaign back in Nevada where unemployment is 14.3% and Obama’s legislation is not so popular.

Reid’s up against a conservative Republican. So, that means Harry Reid must be a Democrat, just like Obama, and just like 59% of the Senate’s votes.

The very same party that has controlled both houses of Congress since the 2006 election and really controlled them both since the 2008 hopey-changey balloting.

So, facing the growing grim possibility of a GOP surge on Nov. 2, is this maybe the start of buddy-bickering within the Democratic huddle? Vulnerable people pointing the proverbial political finger of blame at someone else? That’s ridiculous, of course.

HT: Los Angeles Times

America’s economic situation needs an emergency heart transplant, but Obama and the Democrats keep offering band-aids instead. We need a major change in government economic, tax, and fiscal policies not more government bailouts. Yet the president is doing nothing to reverse the enormous uncertainty fostered by his own administration’s aggressive anti-business and pro high-tax initiatives and rhetoric.

In the latest indication that our president has no clue why businesses are struggling and unwilling to hire, Obama is trying to force through another $30 billion government bailout program to “help banks boost lending to small businesses.” Unfortunately, it’s not the lack of available funds that are stopping businesses from expanding and generating new jobs. It’s the massive economic uncertainty and instability created by misguided government mandates (especially the oppressive regulations of ObamaCare), coupled with the massive tax increases coming in January 2011, that have spooked companies and forced them into defensive economic positions.

A few months ago, Steve Wynn, the American entrepreneur and casino resort/real-estate developer, warned that our government’s own unpredictable and irresponsible policies had created a “frightening” business climate in America and brought about an atmosphere of uncertainty for everyone.

“So when you ask me today about predictability and uncertainty in China compared to Washington, I take China. Washington is unpredictable these days. Washington is… No one in the business community from one coast to the other has any idea what’s next. And what’s even worse, the people that do business with us that buy our bonds in other countries don’t even know what’s next. The uncertainty of the business climate in America is frightening, frightening to everybody. And it’s delaying the recovery.”

Since 2006, under the “leadership” of the Democrat controlled Congress we have witnessed the unthinkable, communist China now has lower corporate rates (25%), more stable regulatory policies, and a more business-friendly economic environment than the “free-market” United States. Even the communists understand how capitalism works and what governments must do to help stimulate economic activity and encourage private sector job creation.

Meanwhile our own ivory-tower president, who has never started a company or created one private sector job in his life, continues to deny reality and blame the Republicans for refusing to go along with more socialist “solutions” and endless government bailouts; “A partisan minority in the Senate has been standing in the way of giving our small business people a simple up or down vote on this bill,” said the president. “Small business owners… don’t have time for political games.”

Ironically, it is the very “political games” and hundreds of billions of dollars in government “stimulus” programs, forced through by Obama and the Democrats, that have scared small businesses and negatively influenced economic activity, while simultaneously increasing economic risks and fiscal instability.

Small businesses, responsible for approximately two-thirds of all new jobs in the United States, are not expanding and hiring because they are frightened by what the government has done and promises to continue doing. Offering them more bank loans will do little to persuade them to ignore reality and endanger their positions. Unless and until President Obama and Congress address the threats of higher taxes, militant and oppressive government regulations, and increasing levels of deficit spending, no amount of easy money and government bailouts will ever motivate businesses to expand in the increasingly unstable and turbulent economic waters of America. They are seeing the mounting risks all around us and are correctly refusing to budge.

Originally posted at American Thinker Blog and Chris Banescu.com

Nor is the problem confined to Milwaukee. As the sewage migrates southward toward Chicago, it impacts the shores of three Wisconsin counties and two in northern Illinois. The threat of E. coli results in the closure of beaches and other recreational activities, and the sights and smells do little for the tourist trade.

So, given the scope of this environmental and health hazard, occurring on a fairly regular basis, how do the Obama administration and the city and state Democratic machine choose to utilize Wisconsin’s allotment of borrowed federal funds?

On a “high-speed” rail link between Milwaukee and Madison, of course.

Madison is located roughly 80 miles due west of Milwaukee and is easily accessed via Interstate 94. Outside the city, the speed limit is 65 mph, and barring construction or an accident, the drive is easy. Bus service is also available between the two cities and the major communities in between. A rail link was abandoned decades ago for want of ridership.

Despite the fact that a majority of the public is against the project, Governor Jim Doyle (D) and the Obama administration insist on proceeding. Stating that the project would create “more than 5,500 construction and engineering jobs,” Doyle immediately went abroad and arranged for the purchase of the locomotives and cars in Spain. The Spanish company has committed to renovating an old plant in Milwaukee for some of the work, but the bulk of the work, and the profits, will go to Spain. Obviously, the jobs created would evaporate once the work is done, and the taxpayers would be left with ongoing operating and maintenance costs for a railroad that few will use. Like Amtrak, which runs regular service between Milwaukee and Chicago as well as to Minneapolis/St. Paul, every ride would have to be heavily subsidized.

The taxpayers of Wisconsin, among the most taxed in the country, have been vocal in their opposition. The response to this from Federal Transportation Secretary Ray LaHood is to say, “High-speed rail is coming to Wisconsin — there’s no stopping it.” Governor Doyle, whose administration and policies have been responsible for the loss of tens of thousands of Wisconsin jobs and the departure of many of the largest companies (as this is written, Milwaukee’s Harley-Davidson is considering moving its manufacturing facilities out-of-state), has decided not to run for reelection — for obvious reasons. Whether this project goes through or not, his legacy will be an expensive one.

What is happening in Wisconsin is demonstrative of a mentality that has infected government at both the national and state levels: a failure to set correct priorities and an inability to readjust those priorities in view of more serious and immediate needs. Refusing to secure the southern border, even in the face of increased drug trafficking and violence in Mexico; the inability of the administration to associate the Islamofascist movement with the threat of foreign and domestic terror, even as more incidents occur; and the insistence on passing health care and other legislation that is clearly opposed to the wishes of the majority are disastrous choices from the start. Refusal to modify or abandon them, even as their effects become obvious, is irrational at best and malevolent at worst.

In the private sector, there is a keen awareness of correct priorities and the need for the flexibility to alter them as circumstances change. It cannot be otherwise. Businesses exist to provide goods and services, and the final arbiter of their success or failure is the marketplace. No matter the product, they must be alert to changes in tastes, style, technology, society, or competition that would render their present offering vulnerable, and they must be prepared to modify, augment, or supplant it as needed. To refuse to do so begets failure, and in this day and age, the increased “speed of life” can bring that about quickly and with finality.

Within the past half-century, a number of factors have contributed to the growing isolation of government at every level from the pragmatic realities of business and the life of the average citizen. As campaign costs have risen, political office has increasingly become the province of individuals of great wealth, and money, whether inherited or acquired, tends to insulate its possessors from many of life’s realities — especially the economic ones. Once elected, an incumbent can forge links with lobbyists, PACs, wealthy ideologues, unions, and other sources of funds to greatly boost reelection chances. This has resulted in a larger population of multi-term politicians more beholden to their bankrollers than their constituents. Government has also become attractive to academics, who are frequently more used to the world of ideas and theories than practical realities. David Halberstam’s 1972 book, The Best and the Brightest, is an instructive discourse on how some of the leading academic minds of a generation helped enmesh the Kennedy and Johnson administrations in the mire of Vietnam and, once in, evolved a strategy of failure. Its lessons have not been learned by the current administration, and it is significant that fewer than 10% of the present advisory and administrative staff derive from the business community.

Many of the candidates who will be running in the fall in opposition to current policies at both the state and federal level have come from the private sector. In both substance and style, they resonate with an electorate disillusioned by and disgusted with ideologies, social engineering, impractical solutions, and, in one case at least, expensive and unnecessary railroad trains.

As for Milwaukee, there has been no plan to fix or change the sewer system, and the homeowners whose basements were inundated or have collapsed have been told by FEMA that, as of now, aid is possible only when the flood reaches the first floor. One thing is for sure: The next time the city experiences heavy rains, it will happen again, and billions of gallons of sewage will spew into Lake Michigan. There is an ironic footnote: This may be the first time that the eco-fixated Democrats should have put money down the sewer and failed to do so.

HT: American Thinker

Tito Guirao-Aguilar

8/5/2010 – Dave Gibson -

Police in Williamsburg, Va., have arrested a juvenile, whose name is being withheld due to his age for repeatedly raping a 6-year-old girl. His arrest comes after two others, Tito Guirao-Aguilar, 39, and Samuel Eli Jacobo-Guirao, 20, were apprehended for victimizing the girl.

Guirao-Aguilar has been charged with three counts of aggravated sexual battery of a person under the age of 13, and Jacobo-Guirao is charged with one count of rape of a person under the age of 13 and two counts of aggravated sexual battery of a person under 13.

Both men are being held in the Virginia Peninsula Regional Jail without bond. Immigration and Customs Enforcement has also placed a hold on them.

The most popular tourist destination in the state, Williamsburg has a growing crime problem attributable to its illegal alien population, who are largely employed by the hotel and restaurant industry.

On June 10, Williamsburg police arrested illegal alien Raul Vasquez-Garcia, 33, in front of the same apartment complex where he allegedly shot a man, a week earlier.

On the night of June 4, police arrived at the Village of Woodshire apartments on Merrimac Trail, they found a man suffering from two gunshot wounds. According to police, the man and Vasquez-Garcia had been arguing over a woman.

The victim was taken to a local hospital, where he recovered from his wounds and has since been released.

Vasquez-Garcia is charged with attempted murder, use of a firearm in the commission of a felony and assault.

HT: Examiner.com

A rising number of supports champion inflation as a salvation strategy. Richard Russell in a recent newsletter provides the rationale (emboldening by Mr. Russell):

In my opinion, the US MUST default on its debt. There are two ways to default. One is simply to renege on the debt … The other way to default on the debt is to inflate it away. I’m absolutely convinced that this is the path that the US will take. If the US inflates enough, then over time (many years) the devalued dollar will tend of reduce the power of the debts.

Mr. Russell lived during the Great Depression and has been involved in the financial world ever since. His experience and observations are valuable. The desperation of our current economic situation should be apparent when default is presumed the only option. The idea is hardly unique to Mr. Russell. Anyone who has studied the numbers knows the mathematical impossibility of paying off the debt.

I differ with Mr. Russell — not on the government’s intent, but on their ability to execute such a strategy. They do not possess the knowledge to manage it. Nor is the government likely to have the luxury of time to succeed, given the rate at which we are adding new debt.

I expect inflation because it is based on a universal political characteristic: cowardice. Politicians are not going to stop welfare, social security, unemployment, and Medicare, at least not willingly. Furthermore, the Federal Reserve is not going to force the government into insolvency. The Fed, while de jure independent, is de facto not. It was created by legislation and can be disposed via legislation. The Fed must be a willing slave of the government.

Bernanke will “print” so long as the federal government is unable to support itself via tax revenues and market-based bond sales. Government as presently constituted will never regain this stasis of self-sufficiency. The Fed has been forced into an accelerating Quantitative Easing spiral which will not stop until market or political forces intervene. The timing of the end and its ultimate form are not yet knowable.

Former Fed Chair Paul Volcker understood the dangers of inflation in the early 1980s and took forceful action at a critical time. It is likely his actions prevented hyperinflation from destroying the economy. His was a personal act of courage, aided by at least two factors not present today. First, the economy was much more resilient and not overburdened with debt. Second, Mr. Volcker had President Reagan backing him. Reagan took the political heat because he considered inflation an evil: “Inflation is as violent as a mugger, as frightening as an armed robber and as deadly as a hit man.”

Today, we have no Volcker, Reagan, or functioning economy. To argue that our economic salvation depends on default is to admit the intractability of our problems. To believe that we can manage an inflationary default strategy is the height of folly. It represents more of the Keynesian arrogance that an economy can be run from the top. Friedrich Hayek aptly phrased an inflationary strategy as akin to having “a tiger by the tail.” His analogy captured a situation that is neither enviable nor manageable.

Not all economists agree on the definition of inflation, how to measure it, or its causes. Yet many believe inflation is a cure that can be applied in proper doses to resolve insolvency. The economy, akin to a cooking recipe, can be improved by adding the right dosages of this or that at just the right temperature and at the proper time. What ignorance and hubris!

At this point, Bernanke’s rather simple goal of avoiding deflation appears to be failing. If he is unable to create inflation under the insane spending and QE of the last couple of years, why would anyone believe he can manage inflation to save the economy?

Inflation, once begun, is difficult to stop from a political standpoint. Reducing inflation always produces a slowdown in economic activity: the higher the inflation, the greater the slowdown. The recession Volcker triggered was severe and produced the usual painful effects.

An economy with extreme levels of debt would be especially vulnerable to massive bankruptcies and defaults. Such a debacle would bring debt back to sustainable levels, but at enormous social and economic costs. The term “Great Depression II” is something no politician wants associated with his legacy.

At some point, the political costs of accelerating inflation must be dealt with. Public unrest then becomes a bigger fear for politicians than making difficult spending cuts. Political action will then occur, but not because of “courage.” Fear of peasants with pitchforks marching toward the Capitol has immeasurable motivational value.

When inflation is finally addressed, action will likely come too late. The problem with higher levels of inflation is that a new dynamic is encountered. Inflation is a function of both the supply and demand for money. While the Fed has substantial, but not total, control over supply, it has virtually no control over demand. As inflation accelerates, individual and business demand for money decreases. It does so because the cost of holding money goes up as its purchasing power declines.

Under these conditions, money is spent faster to get in front of expected price increases. This behavior appeared during the latter stages of the Carter administration, before the Volcker-Reagan clamps were applied. Under extreme conditions, people refuse to hold money (think Weimar Germany or Zimbabwe). They spend it as soon as they receive it.

Monetarists use the term “velocity” to describe the behavior of the demand for money. Velocity is a measure of the rate at which money turns over. In all hyperinflations, demand for money turns down and velocity turns up. This is a sign that the Fed has lost control of monetary policy and inflationary expectations. As an aside, the rather unexpected turndown in velocity in this recession has offset much of the Fed’s easy money efforts.

The economy collapses in a hyperinflation when money ceases to be an acceptable medium of exchange. Barter replaces money. Trade is drastically curtailed, plunging the economy into a hyperinflationary depression.

While it is true that a hyperinflation will wipe out debts, it will also wipe out the value of savings, loans, and fixed income. The wealth of the middle class of a country is generally wiped out. Society is reduced to two classes — the haves and the have-nots.

Inflation is not an economic strategy. It is the worst thing that can happen to a country. It is not manageable! Economists have less chance of managing inflation than they do of controlling a tiger by the tail. Great harm will come to both the tail-holder and the economy.

Inflation is a political strategy, and a damn poor and dangerous one to boot. It represents a desperate attempt to kick the can down the road one more time. It is the last hope for scoundrels. It will destroy the economy and society. As a political strategy, inflation has only two purposes:

The first panacea for a mismanaged nation is inflation of the currency; the second is war. Both bring a temporary prosperity; both bring a permanent ruin. But both are the refuge of political and economic opportunists.
- Ernest Hemingway

The way to crush the bourgeoisie is to grind them between the millstones of taxation and inflation.
- Vladimir Lenin

The reader should make his own judgment as to whether either or both intentions might be applicable.

HT: American Thinker