Wednesday, October 31, 2012

The Harder They Fall

"Some Chinese argue that permitting the families of Communist Party leaders to profit from the country’s long economic boom has been important to ensuring elite support for market-oriented reforms."
--David Barboza, New York Times

November 7 (November 8 in China), the day after, maybe the very day the U.S. learns who its leader for the next four years will be, China convenes its 18th Communist Party Congress. A week later, we will know China’s leadership line-up for the next several years.

The Economist reports, “The party is particularly nervous this year as the country’s economic growth slows and members of the new middle class become more anxious about their prospects in the years ahead.” Here’s some of the evidence the Economist gathered:

  • in Ningbo, a Zhejiang province port, thousands waging three days of sometimes-violent demonstrations successfully halted construction of a planned chemical factory. 

  • a government-sponsored think-tank survey surprisingly found that only 1% of respondents said their quality of life had greatly improved in recent years, one-fifth said it had improved slightly, more than one-third said they felt no change, and more than 40% said their lives were worse. 

Elsewhere, the Economist reported:

  • social media give China the next best thing to a free press, with China’s biggest microblog service, “Sina Weibo,” said to have 30 million “active daily.” 

  • microbloggers expose injustices, attack official wrongdoing and high-handedness, and help scattered, disaffected individuals feel a common bond, with local grievances now discussed and dissected nationwide with a fervor that has startled officials. 

  • widely circulated comments on microblogs share a profound mistrust of the party and its officials, while classified digests of online opinion gain Chinese leaders’ close attention. 

The Economist suggests this “rising tide of cynicism” is dangerous for the country’s stability, coinciding as it does with “growing anxiety among intellectuals and the middle-class generally about where the country is heading.”

At the top, leaders including Li Keqiang, who is expected to take over as premier, worry about a sudden economic slowdown that could “precipitate a fiscal and financial crisis” unsettling to social stability. They are looking at economic reforms, including loosening the state’s grip on vital industries such as the financial sector.   These “rightists” face opposition from old-line party leftists who fear the party will implode as did Communist parties in the former Soviet Union and eastern Europe, because it has embraced capitalism and forgotten to serve the people.

Below the top, the middle class--besides fretting about the environment and food contaminated with chemicals--is concerned about protecting its gains from the whims of law-flouting officialdom. They and the rest of the country have followed the downfall of the corrupt Bo Xilai, the ex-Chongqing party boss formerly in line for a place on the party’s standing committee. They have a feel for the existing assets of China’s next party chairman Xi Jinping and his family, reported in Bloomberg at over $760 million, including homes in Hong Kong.

But if Chinese learn of the New York Times’ David Barboza’s disturbing, in-depth report on the family wealth of Premier Wen Jiabao (picture)--estimated in the article at $2.7 billion--how much more will they be unsettled? Wen is a reformer, according to Barbosa, “best known for his simple ways and common touch.” In 2007, he called for measures to fight corruption among high-ranking officials, saying,
Leaders at all levels of government should take the lead in the antigraft drive. They should strictly ensure that their family members, friends and close subordinates do not abuse government influence.
Elizabeth C. Economy, China expert at the Council on Foreign Relations, says flatly that China’s reformers “have taken a serious hit,” and that Wen’s fall could harm the political prospects of other up-and-coming reformers. Yet she is hopeful that the evidence of “political rot within the system” will necessitate “fundamental political reform.”

Yeah, well maybe not. But to keep their current kleptocracy going, China’s leaders will have to insure continued economic prosperity that reaches hundreds of millions. They are “riding a tiger,” and they know it.

Sunday, October 28, 2012

More on Obama’s 9.11

Quotation without Comment

From conservative blogger Paul Mirengoff, writing in “Powerline”:
keep[ing] in mind that our inability to assess [Benghazi] is due mainly to the administration’s unwillingness to speak about the decision and the surrounding events[, v]oters. . . must assess the administration’s handling of Benghazi with limited information.
But we do know this: (1) the administration erred grievously by leaving open our mission in Benghazi while turning down requests for more security, (2) the administration made the wrong decision on the day of the attack by not bringing our military to bear, a decision consistent with Obama’s instincts, and (3) the administration has not been forthcoming or honest in its discussion of Benghazi after the fact.
These facts, without more, present a serious indictment of Obama.

Friday, October 26, 2012

Benghazi: Truth and Coverup

Jonathan S. Tobin writes in Commentary about Charles Woods, the father of Ty Woods, the ex-Navy SEAL who died while trying to defend Ambassador Chris Stevens in the terrorist attack on the U.S. consulate in Benghazi. Turns out the son was safe at a safe house a mile away, yet responded to calls for help coming from the consulate. According to the father:
within minutes of the first bullet being fired the White House knew these heroes would be slaughtered if immediate air support was denied. Apparently, C-130s were ready to respond immediately. In less than an hour, the perimeters could have been secured and American lives could have been saved. After seven hours fighting numerically superior forces, my son’s life was sacrificed because of the White House’s decision.
Charles Woods was particularly upset with, following his son’s death, the exchange of words he had with Secretary of State Clinton. She “not only attempted to promote the story of the video being the cause of the attack, but went so far as to promise to have the man who produced it jailed.”

Comments Tobin:

While the White House has been furiously trying to persuade the country that it always knew that what happened was a terrorist attack, Clinton’s comments are another reminder of the administration’s effort to falsely blame it all on the video. That Clinton would go so far as to push for the man’s arrest for exercising his free speech rights is chilling, especially given the State Department’s prior and subsequent efforts to appease radical Islamists.
The administration. . . seized upon a lie about the video and promoted it relentlessly for as long as they could get away with it. They were determined to do anything to suppress the facts about the revival of al-Qaeda-related groups in Libya. Rather than Woods and Republican critics speaking out of turn, it was [the] administration that was [playing politics--] campaigning on the idea that the death of Osama bin Laden ended the war on terror.
Comment: The White House was covering multiple disasters in real time. By 10:00 pm Washington time on 9.11, it was known the American Embassy in Cairo had been breached and that Americans were dead in Benghazi (Ambassador Stevens’ death confirmed publicly 4-1/2 hours later). AmEmbassy Cairo had blamed the Cairo breach and flag destruction on an American anti-Muslim video, but events were still unfolding in Benghazi when Mitt Romney (10:10 pm Washington time) issued a statement attacking the AmEmbassy Cairo press release as a craven Obama administration attempt to mollify Muslim extremists.

The White House at that point had to deal with these facts: 1) anti-American actions in Cairo and Benghazi, including the death of the American Ambassador, offered dramatic evidence Muslim terrorism, possibly al Qaeda terrorism, was alive and well, 2) timing the attacks to 9.11 particularly drove home the al Qaeda connection, 3) Obama could not afford an al Qaeda success so shortly after the Democratic convention had wedded Obama’s winning foreign policy to a single accomplishment: the killing of Osama bin Laden and subsequent collapse of al Qaeda, and 4) Benghazi was a complete mess--a potential “Desert One” disaster similar to the failed hostage rescue attempt that brought down the Carter administration in 1980, in Benghazi involving (ex-)SEALS but the mirror opposite of the highly-touted SEALS raid on bin Laden’s compound.

Faced with these facts, the White House worked to make the anti-Muslim video and the Romney statement mistakenly blaming Obama for the AmEmbassy Cairo press release (the State Department didn’t clear the release) into a fog machine designed to obscure actual details surrounding the Benghazi attacks. The fog machine generated its greatest output with Ambassador Susan Rice’s September 16 definitive statement on five TV networks that what happened in Benghazi was a spontaneous reaction to the U.S.-made video that had led to the earlier Cairo demonstration, and was not a pre-planned 9.11 al Qaeda terrorist attack. The cover up worked for a crucial two weeks, as media focused on Romney's statement and the video, not on what actually happened in Benghazi.

Now that Charles Woods is talking, does anybody still care?

Tuesday, October 23, 2012

Stock market falls; will it rise with Romney victory prospects?

U.S. stocks fell sharply Tuesday, with the Dow taking its worst single-day hit in four months. The Dow has dropped to 13,103, the S&P500 to 1,413, and the NASDAQ is below 3,000 at 2,990.

Our FOX Index, which tracks the distance from 15,800, the “healthy” market minimum total of a Dow of 12,000, an S&P 500 of 1,300, and a NASDAQ of 2,500, has now slipped below its previous +2,000 threshold to +1,706 (chart). On September 14, the FOX Index stood at +2,443, its all-time high (the Index is 5 years old). The drop since represents a 30% decline.

What’s happening? Quoting from the MarketWatch report referenced above:
“We have a weak earnings picture with a slower macro background catching up to the market,” said Sean Lynch, global investment strategist at Wells Fargo Private Bank. “We’ve had this week confirmation of weak earnings from large, industrial-type companies. And, there is talk that Spain may not hit its deficit target this year. It puts Europe back on stage.”
In China as well, the news is not good. HSBC's China manufacturing Purchasing Managers' Index this month remains below 50, coming in at 49.1. While that’s up from September's final reading of 47.9, anything below 50 represents a contraction of manufacturing activity, and the HSBC manufacturing index has been below 50 for 12 months as of the October report--a full year of manufacturing contraction, each month below the previous month.

This bank of bad economic news includes worries about the approaching U.S. “fiscal cliff”--the triple whammy on January 1, 2013 of 1) expiration of all the Bush tax cuts; 2) across-the-board spending cuts ("sequestration") to most discretionary programs totaling $1.2 trillion over the next ten years, and 3) other fiscal hits including reversion of the Alternative Minimum Tax thresholds to 2000 tax year levels, expiration of the so-called "doc fix", expiration of the 2% Social Security payroll tax cut, expiration of federal unemployment benefits, and new taxes imposed under Obamacare.

Will Romney’s rising election prospects lessen Wall Street’s worries about the “fiscal cliff,” and will they more generally spur a stock market rise? We shall see.

Saturday, October 20, 2012

Benghazi: Closer to the Truth

We asked on 9.16 if Benghazi was Obama’s 9.11. Today, we offer the following  

Quotation without Comment

 From FOX News’ James Rosen, carried in the Wall Street Journal:
William Safire, the late New York Times columnist. . .once defined coverup broadly to include "any plan to avoid detection of wrongdoing . . . an act to conceal a mistake." . .
"Everyone had the same intelligence," Secretary of State Hillary Clinton told Fox News last week. But that . . . appears untrue. How information immediately made known to an assistant secretary of state could somehow be withheld for eight days from the secretary of state herself—and from our U.N. ambassador, from the director of national intelligence, from the analytic corps at the Central Intelligence Agency, from the president's chief spokesman, and from the president himself—now forms the central question in the Benghazi affair.
In Tuesday night's debate with Mitt Romney, President Obama claimed to have "told" the American people that Benghazi was a terror attack the very next day, Sept. 12, when speaking from the Rose Garden. The assertion was untrue, despite moderator Candy Crowley's ruling to the contrary. The president had only spoken generally of terror attacks, and Benghazi would have been understood to fall under that umbrella only if it had been acknowledged as a terror attack.
On Sept. 12, that was not the administration's line. Not until his afternoon appearance on "The View" on Sept. 25—the "two weeks" of delay that Mr. Romney alluded to in the debate—did the president offer Americans an explanation of Benghazi that made no reference to a protest over a video. The YouTube connection had figured prominently in his Benghazi pronouncements as late as Mr. Obama's Sept. 20 appearance on Univision, and even in his address to the United Nations General Assembly on the morning of Sept. 25.
"The business of intelligence has become politicized," says an intelligence source with knowledge of the Benghazi episode, "regardless of which party is in charge." This is an enduring legacy of Vietnam and Watergate. Now, as then, American voters horrified by loss of life in a time of war will cast ballots without having all the facts that might inform their choice.

Wednesday, October 17, 2012

Simple Map, Shared View

“Norwegians really do have a sense of humour. The EU may be getting the booby prize for peace because it sure hasn't created prosperity[, having instead] created poverty and unemployment for millions.”

--Nigel Farage, leader of the UK Independence Party 
The Norwegian parliamentarians who choose Nobel Peace Prize winners care about global warming (winner, Al Gore), detest American "cowboy" president George W. Bush (winner, the “not Bush” Barack Obama in his first few months as president), and hope to keep Europe unified (winner, the EU [European Union]). Hold the left together. Keep right-wing Americans and Europeans at bay.

The establishment and metro America are more comfortable with mainstream Europeans than they are with their countrymen in “fly over” states between California and the Northeast (see above map). Liberals are about 20% of the U.S. population, but dominate elites on both sides of the Atlantic. These progressives are secular, not religious, yet quite intolerant of opposing viewpoints.

The EU with its meritocracy caring for the masses top-down, democratic socialists guiding economies, guaranteeing health care, and linked closely to government unions demanding pensions, vacations, and early retirement, all nurtured by the Value Added (VAT) and other high taxes, is what our Democratic Party can only hope to become.

Collectively, they want ever bigger, ever more controlling government. As such, they seem doomed. For as Margaret Thatcher said, "The problem with socialism is that eventually you run out of other people's money.”

Tuesday, October 16, 2012

Propaganda: Hollywood

“Won’t Back Down” is an excellent movie that dramatizes what’s wrong with American public education today. Top acting, with Academy Award nominee Maggie Gyllenhaal as a working-class single mom, Academy Award nominee Viola Davis as a beaten-down-by-the-system teacher, and Academy Award winner Holly Hunter as a teachers’ union official with a heart. A story that personalizes the facts behind the highly-respected documentary “Waiting for ‘Superman’” by focusing on a fictional single, inner-city school in Pittsburgh. And does so with well-rounded, believable characters.

It’s a tough film subject for Democrats, to be sure. The cause the movie champions pits liberals who truly care about improving dead-end public schools against the teachers unions and their politician friends who tenaciously preserve the status quo. An example of a liberal education reformer is Davis Guggenheim, the documentarian who made “An Inconvenient Truth” about Al Gore’s fight against global warming before taking on education reform in “Waiting for ‘Superman.’” One would think the liberal critics who tolerated “Waiting for ‘Superman’” would at least give “Won’t Back Down” a fair shake.

One would be wrong. Critics are overwhelmingly scorching “Won’t Back Down.” Mary Pols in TIME calls it “cheesy, wholly manipulative. . .blatantly political and intended as much more than pure entertainment,” that turns the teachers union “into public school enemy number one.”

What? A movie pushing a cause? How could that be?

Kenneth Turan of the Los Angeles Times similarly writes the movie is “shamelessly manipulative and hopelessly bogus” and “has no hesitation about creating a villain for all seasons: teachers unions” (Turan’s review even quotes American Federation of Teachers President Randi Weingarten calling one film claim "an egregious lie.") Turan’s advice: “Anyone who values their one and only life would be well-advised not to spend two hours of it here.”

Ella Taylor of NPR brands the movie “a propaganda piece with blame on its mind,” [emphasis mine] and adds (thank you, Ms. Taylor, for this gratuitous warning) that if we replaced unions “with a rainbow coalition of local parents and educators coming together to create the kind of school they want, the result would be chaos, not to mention an end to the tattered remains of our common culture.” Like Turan, Taylor has gone beyond a movie review’s normal scope to tell us the movie’s producer, Philip Anschutz, funds creationist curricula in schools (according to Anschutz’s Wikipedia entry, that’s not true).

For more movie critic attacks on “Won’t Back Down,” please go here. “Metacritic’s” overall rating for the film is a low 42, and “Rotten Tomatoes’” critics rate it 32, definitely rotten. Even though the audience at both sites likes the movie, “Won’t Back Down” is bombing at the box office, making only $5.1 million in its first 3 weeks. The critics have won.

Hollywood and the establishment rabidly oppose conservative movie messages the same way they oppose conservative blacks (Clarence Thomas) and women (Sarah Palin). It’s blasphemy to use a movie to advance a conservative cause. As we have argued, movies are the establishment’s Bible, pushing national behavior and culture down the correct liberal path. Deliberately departing from that path is akin to burning the Quran.

It’s all so sad.  Sooner or later, someday, Democrats will take on the teachers unions and provide poor students what they so desperately need--an alternative to no-choice bad schools. Obviously that day has yet to arrive.

In the meantime, Matthew Continetti at the conservative “Washington Free Beacon” has found an example of how the Washington establishment corruptly rewards its Hollywood friends:
Hollywood. . . benefits from complicated tax expenditures for film and television production. No one personifies the rotten relationship between Hollywood and the Obama administration better than DreamWorks SKG executive Jeffrey Katzenberg, one of the largest donors to Priorities USA, who has raised at least $6.6 million for the president since 2008. Katzenberg relied heavily on his ingénue in the White House to secure a lucrative distribution deal on behalf of the MPAA, Hollywood’s trade association—a deal that was personally negotiated between Vice President Biden and incoming Chinese leader Xi Jinping. Soon came under SEC scrutiny. Shortly after the distribution deal was announced, DreamWorks Animation unveiled plans to build a $350 million animation studio in China; according to the New York Times DreamWorks’ partner in the deal is “Jiang Mianheng, the 61-year-old son of Jiang Zemin, the former Communist Party leader and the most powerful political kingmaker of China’s last two decades.”

Wednesday, October 10, 2012

Propaganda: Media

"The modern press is at times sycophantic of the incumbent president and at other times trying to mimic Woodward and Bernstein; it all depends on which party is in office. With a Democratic president cut from the same cloth as they, many journalists have done everything in their power to set the national conversation in ways that favor Obama."

--Jay Cost, Weekly Standard

Our last post alluded to the fact that the establishment’s grip on the country is slipping. The “Blue Model”--the dominant coalition of big government, big business, and big labor that under Democratic leadership successfully ran America from 1933 to 1968--no longer works, and the establishment strains to hold its remaining pieces together.

Something similar is happening to the legacy media, the follow-on force that in effect ran the country as it in succession terminated the presidencies of Lyndon Johnson, Richard Nixon, Gerald Ford, and Jimmy Carter (1968-80), with CBS’s Walter Cronkite emerging at the time as our surrogate national leader. The media then were bigger than the White House, bigger than the Democrats. They were The Powers that Be, as David Halberstam described media giants at the time.

Long ago and far away. Now the legacy media are fighting for their collective lives against the immediacy of the internet and 24 hour cable news. No longer dominant, now with their continued high status dependent upon an Obama victory, the legacy media are content to serve as the establishment’s propaganda arm.

Yes, propaganda arm. From the Merriam-Webster dictionary:
pro·pa·gan·da   noun
ideas, facts, or allegations spread deliberately to further one's cause or to damage an opposing cause
Propaganda. The work of today’s media.

Listen to Matt K. Lewis, in the conservative Daily Caller:
President Barack Obama was a guest at the wedding of vice presidential debate moderator Martha Raddatz. . . The bigger story is about the incestuous relationship that exists between the elite opinion leaders in America — and Democratic politicians. The Obama/Raddatz connection simply illustrates it.
And listen to Andrew Klavan, in the conservative City Journal:
The mystery Obama. . . is not a creation of his own making. . . It emanates instead from a journalistic community that no longer in any way fulfills its designated function, that no longer even attempts the fair presentation of facts and current events aimed at helping the American electorate make up its mind according to its own lights. Rather, left-wing outlets like the New York Times, the Los Angeles Times, the Washington Post, TIME, Newsweek, NBC News, ABC News, CBS News, and the like have now devoted themselves to fashioning an image of the world they think their audiences ought to believe in—that they may guide us toward voting as they think we should. They have fallen prey to that ideological corruption that sees lies as a kind of virtue, as a noble deception in service to a greater good.
Also conservative Erick Erickson, in “RedState”:
Time and again, the media decides something is so or something is not so and reports it as the media sees it even when a sizable portion of the country disagrees with them, whether it be abortion, gay marriage, global warming, war, poverty, Hurricane Katrina, Mitt Romney’s campaign, Obamacare, and the list goes on and on and on.
Noemie Emery, writing in the conservative Washington Examiner, tells us why it’s especially difficult to separate the legacy media from liberal Obama:
It had been the real thing, not a commonplace fling with your generic Democrat, but the love of a lifetime, the genuine article, the sum of all dreams: He was not just a Democrat, he was also a liberal. He was not just a liberal, he also biracial, also multinational; also hip, cool, and clever. He was themselves as they wanted to be. Like them, he was gifted at writing and talking (and, as it turned out, not much beyond that), like them, he stood up for Metro America; like them, he viewed the people outside it with a not-very-measured disdain.
But it is Democrat Pat Caddell, a FOX News commentator, who is most upset at the legacy media’s failure to carry on the job to which the constitution in effect assigned it: question authority.  Says Caddell, in a tone of true despair:
We designed a constitutional system with many checks and balances.  The one that had no checks and balances was the press, and that was done under an implicit understanding that, somehow, the press would protect the people from the government and the power by telling—somehow allowing—people to have the truth.  That is being abrogated as we speak, and has been for some time.
The fundamental danger is this: . . .The press’s job is to stand in the ramparts and protect the liberty and freedom of all of us from a government and from organized governmental power.  When they desert those ramparts and decide that they will now become active participants, that their job is not simply to tell you who you may vote for, and who you may not, but, worse. . . what truth that you may know, as an American, and what truth you are not allowed to know,  they have, then, made themselves a fundamental threat to the democracy, and, in my opinion, made themselves the enemy of the American people.  And it is a threat to the very future of this country if we allow this stuff to go on.
Question authority. “Afflict the Comfortable”. Media, do your job.

Tuesday, October 09, 2012

Establishment = Obama

"the grandees of the universities, the foundations, the arts, the unions, and the government employees are all heavily invested in Obama — the class warrior who assures those of the upper classes that class and racial resentment will be turned against others."

--Victor Davis Hanson, “PJ Media”

“Republicans often say 'Obama and Biden want to raise taxes by a trillion dollars.' Guess what? Yes, we do.”

--Joe Biden

“the most important lesson I’ve learned is that you can’t change Washington from the inside.”

--Barack Obama

We are blessed with the way Obama and Biden unintentionally speak the truth. Obama is Washington, is the Establishment, is big government, and this picture isn’t going to change from inside big government Washington with Obama at the helm. And as Biden honestly says, our big government needs more, ever more in taxes to keep going.

Here is the Merriam-Webster definition of:
es·tab·lish·ment   noun
an established order of society: as a group of social, economic, and political leaders who form a ruling class (as of a nation)
It’s a fact. We have an establishment, and it’s represented at the top by Obama. The establishment is our most important club. Our leading universities initiate pledges into the club, which has its founding chapter in New York City, and its largest, most active chapter in Washington.

Once in the establishment, it matters not what path members followed to arrive, their most important job becomes to retain membership status and to pass it on to their children. In pursuit of that objective, all is fair; the end justifies the means.

Let me be clear. The establishment not only professes in our democracy to rule on behalf of the people, members truly, deeply believe the people’s best interests are served by their continuous rule. Do not underestimate the ruling class's sincerity.

The establishment see themselves differently than outsiders see them. They lie with the greatest of fluency because they view themselves as acting on behalf of the oppressed. Or as Leon Trotsky wrote, "The ruling class forces its ends upon society and habituates it to considering all those means which contradict its ends as immoral. That is the chief function of official morality."

Life works like this. Your perspective changes when you are welcomed inside the establishment. Your number one goal, however, remains constant: preservation.

Our current establishment is centered on government. Hence Washington’s dominant role; hence the president’s leadership. As Karl Marx was at his most effective as an outsider analyzing capitalism, so too do free market conservatives do best today at analyzing big government’s failings.

Listen to conservative Michael Barone, writing in "RealClearPolitics", “Overall, Obama stands for maintaining and expanding the welfare state that operated tolerably well in the big [blue] America of half a century ago but is coming apart in our early-stage information society today.”

Barone tells us how the establishment protects its own at the expense of the masses:
just as housing policies created a housing bubble, college loan policies have created a higher education bubble. The flood of money has been captured by colleges and universities through above-inflation tuition increases and administrative bloat. The Obama administration does not crack down on them, however, but on graduates or dropouts with thousands in college loan debt that they can't escape through bankruptcy.
Obama's policies, from Obamacare to high-speed rail, treat people as identical cogs in a very large machine, part of a mindless mass that would not be able to get along without government guidance. In the information age, these industrial age policies have prevented the vibrant economic growth which gives young people the opportunity to find work and community service that maximizes their own special talents and interests -- to shape their own world and choose their own future.
We have talked at length about the amazing phenomenon of national wealth collecting in the Washington metro area. The phenomenon underlines the fact that big government increasingly dominates our lives, and to our national detriment.

Or so says conservative Steve Huntley of the Chicago Sun-Times:
Household incomes rose in most counties around Washington last year, even as they continued to sink around the country . . .Yes, the system is rigged under Obama, rigged to favor the growth of the federal government — its bureaucrats and the lobbyists, lawyers and special-interest groups that feed off taxpayers — at the expense of reviving the private economy where taxpayers live. Perhaps nothing summarizes Obama’s failures better than this picture of government affluence funded on the backs of the middle class.

Friday, October 05, 2012

For Obama--The Job Report from Heaven

President Obama got the pre-election jobs report he could only dream of. While the number of jobs created in September--a modest 114,000--fell in line with lackluster reports earlier this year, the total number of workers employed--as measured by the separate household survey used to set the unemployment rate--surged by 873,000, the highest one-month jump in 29 years.

The total of unemployed people tumbled a dramatic 456,000, but the total labor force grew by 418,000, which kept net job growth from soaring even further. Still, the unemployment rate dropped from 8.1% to 7.8% to match precisely the pre-election target Obama wanted, since that was the exact unemployment rate when Obama took over in January 2009 (see chart below). Bullseye!

Other numbers released today were also encouraging. The Labor Department revised job gains for August up from 96,000 to 142,000, and for July from 141,000 to 181,000. The labor force participation rate, which reflects those working as well as looking for work, edged up from 63.5% to 63.6%, the average work week, which suggests future hiring, edged higher to 34.5 hours, while average hourly earnings, which measures income growth and suggests future spending, increased 7 cents to $19.81.

We have been tracking Obama’s monthly progress toward the two most obvious job creation goals--number employed and unemployment rate. As the chart below shows, he has essentially met his minimum targets--net jobs are where they were when he took office. We had not foreseen this happening, even a month ago.

Thursday, October 04, 2012

Inconvenient Middle Class Truths

“the middle class . . . has been buried the last four years”

--Joe Biden

Fact: the middle class is doing poorly under Obama/Biden.  We earlier mentioned that since the Great Recession ended in June 2009,  median household income in America has fallen 4.8% under Obama.  Here's more:
  • From MarketWatch’s Ruth Mantell:
The Census report . . . showed that inequality increased in 2011. One gauge showed that inequality increased 1.6%, the first annual gain in the almost-two-decades of available data.
  • From Jim Tankersley, National Journal:
a 40-year-old man with a high school diploma earns 5% less today, in real terms, than he did in 1980, while a college graduate who’s 40 earns 25% more than before. The jobs available to high school graduates today also offer less prospect for rising pay. Levy’s research suggests that a male high school grad in 1980 could expect his income to grow by about 75% before peaking in his mid-40s, versus just 61% today.

So you think young college grads are making out? Think again. Of course, it is even worse if you don’t make college.
  • From Jordan Weissmann, the Atlantic: “About 1.5 million, or 53.6%, of bachelor's degree-holders under the age of 25 last year were jobless or underemployed.”
  • From Robert Samuelson, Washington Post:
A study from economists at the Kansas City Federal Reserve reports: Fewer than 60% of college freshmen graduate within 6 years; student debt now totals about $1 trillion; for 25% of borrowers, annual repayments exceed $4,584; default rates are almost 9%. "Defaulted borrowers may be sued, tax refunds may be intercepted, and/or wages may be garnished," the report notes.
Only one-third of children born to the poorest fifth of Americans graduate high school with at least a 2.5 grade-point average and without having become a parent or been convicted of a crime [emphasis added]. . . Brookings Institution [] economist Isabel Sawhill notes that gaps have widened between the children of poor and well-to-do families on school test scores, college attendance and family formation.

Where will the middle class find jobs? No small business creation, no jobs.
  • From Steve Huntley, Chicago Sun-Times:
Small businesses are a prime generator of jobs, yet fewer new firms are being established. According to the Bureau of Labor Statistics, the number of startups peaked at 667,000 in 2006 and has declined ever since, reaching 548,000 in 2009 and dropping again to 505,000 in 2010, the first full year of the recovery.
“The state of entrepreneurship in the United States is, sadly, weaker than ever,” observes Tim Kane of the Hudson Institute who analyzed the numbers. He cites “anecdotal evidence that the U.S. policy environment has become inadvertently hostile to entrepreneurial employment.” That includes uncertainty over taxes and regulations, among them the looming new taxes and rules from ObamaCare.
So if “President Obama is fighting to grow the economy from the middle class out,” as his campaign website proclaims, it’s not showing in the results.