Tag Archives: CNBC

The Economy Is Humming Along

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CNBC is reporting today that the economic news for April is very good.

The article reports:

The U.S. jobs machine kept humming along in April, adding a robust 263,000 new hires while the unemployment rate fell to 3.6%, the lowest in a generation, the Labor Department reported Friday.

Nonfarm payroll growth easily beat Wall Street expectations of 190,000 and a 3.8% jobless rate.

Average hourly earnings growth held at 3.2% over the past year, a notch below Dow Jones estimates of 3.3%. The monthly gain was 0.2%, below the expected 0.3% increase, bringing the average to $27.77. The average work week also dropped 0.1 hours to 34.4 hours.

Unemployment was last this low in December 1969 when it hit 3.5%. At a time when many economists see a tight labor market, big job growth continues as the economic expansion is just a few months away from being the longest in history.

The growth in the economy is the result of economic policies put in place by President Trump–tax cuts, revised trade deals, cuts to regulations, and generally making the economy more welcoming to companies who want to do business in America.

The article concludes:

GDP increased 3.2% during the first quarter, far exceeding expectations, while productivity during the quarter jumped 3.6% for its best gain in five years. Pending home sales rose 3.8% in March, providing some hope in the real estate market so long as rates are held in check.

Earlier this week, the Federal Reserve held the line on its benchmark interest rate, characterizing economic growth as solid even as inflation remains tame. The central bank watches metrics like the nonfarm payrolls report closely for clues both on job creation and wage pressures.

Fed Chairman Jerome Powell said current indications point to a prolonged period of holding pat on increases or decreases in rates. President Donald Trump has said he wants the Fed to cut rates by a full percentage point.

The economy plays a big role in deciding elections. None of the policies espoused by the current group of Democrat Presidential candidates for 2020 will continue this economic growth.

Bouncing Back

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Yesterday CNBC reported the following:

After a disappointing February in which just 20,000 jobs were added to the economy, the job market is back on track, adding 196,000 jobs in March.

That’s according to the latest report from the Bureau of Labor Statics, which also showed unemployment remaining at 3.8% and wages increasing by 3.2% from a year ago.

“I think the March report will reassure investors after the weak report in February brought about concerns of a possible slowing economy,” Glassdoor’s chief economist Andrew Chamberlain tells CNBC Make It. “The report is strong across the board and it’s hard to find any weaknesses. It shows that even after 102 months of positive job gains, the economy still has room to grow.”

At some point the economy will slow down. We have not yet dealt with the debt that runaway spending has created in recent years, and we have not yet fully revised trade deals that were detrimental to our country. However, March was a good month for Americans looking for work and Americans in the workforce.

The article reminds us that there may be a recession in the future, but not in the near future:

Though February’s numbers may have been alarming to some, Hamrick, Gimbel and Chamberlain agree that there’s no need to worry about a recession just yet.

“There’s no sign that one is imminent,” says Hamrick, though he adds, “we know that one is inevitable at some point.”

Gimbel adds that, “In 2018, we created, on average, about 200,000 jobs per month. That is astonishing at this point in the recovery and highly unlikely that the economy is going to keep that up moving forward. So if we drop down to creating 180,000 jobs a month, or 150,000 or even 100,000, that is OK.”

Having a businessman as President has been a good thing for the majority of Americans.

The Numbers On The Economy

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On March 13th, CNBC posted at article about the impact of President Trump’s economic policies on wages.

The article reports:

The recent jump in paychecks has come with an unusual characteristic, as workers at the lower end of the pay scale are getting the greater benefit.

Average hourly earnings rose 3.4 percent in February from the same period a year ago, according to a Bureau of Labor Statistics report last week. That’s the biggest gain since April 2009 and seventh month in a row that compensation has been 3 percent or better.

What has set this rise apart is that it’s the first time during an economic recovery that began in mid-2009 that the bottom half of earners are benefiting more than the top half — in fact, about twice as much, according to calculations by Goldman Sachs. The trend began in 2018 and has continued into this year, and could be signaling a stronger economy than many experts think.

The article concludes:

“Taken together, our findings suggest a relatively optimistic consumption outlook given solid income growth across income levels,” Choi wrote. “Even if employment growth slows as labor supply constraints start to bind, this should be partially offset by the continued firming of wages, particularly among lower income workers with higher marginal propensities to consume.”

One danger is that higher wages could start to eat into corporate profits, which have doubled since the financial crisis.

However, it could take years for that to be a significant factor, according to an analysis by AB Bernstein.

“While pressure on capital share is likely to remain, that doesn’t mean that profits are going to fall – in fact profits can lose share at a rate up to about 100bps per year [1 percentage point] and still expect to have positive profit growth,” Philipp Carlsson-Szlezak, chief U.S. economist at AB Bernstein, said in a note. “In other words, overall expansion of net value add can be strong enough to protect profit growth even in the face of a rising labor share.”

Carlsson-Szlezak said wage pressures more likely would be felt at a sector level in industries where labor takes a bigger share of output. For example, information technology and extraction likely would feel the least effects, while hospitality and retail would be hit hardest.

The piece of the puzzle that is missing to ensure a continuing strong economy is getting the federal deficit under control. Unfortunately Congress has been unwilling to do this. If it is not done fairly quickly, all of the positive economic growth we have seen under President Trump will evaporate.

More Businesses Leaving California And Heading For Texas?

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CNBC is reporting today that San Francisco’s Proposition C, which will tax the city’s biggest businesses to raise funds to combat homelessness, passed Tuesday.

The article reports:

Proposition C will increase gross receipts taxes for companies with more than $50 million in annual revenue by an average of 0.5 percent, generating up to $300 million a year to combat the city’s homelessness crisis through initiatives like new beds in shelters and increased mental health services.

…Critics of the proposition argued that it lacked proper accountability and oversight, and would unfairly affect financial services companies like Square. Outside the tech industry, San Francisco Mayor London Breed and state Sen. Scott Wiener opposed the measure as well.

In the weeks leading up to the election, the measure became a point of tension in a city where tech-fueled wealth stands in stark contrast with the human suffering on display on its sidewalks.

Overall, more than 7,000 people experience homelessness in San Francisco. The median house price hit $1.6 million earlier this year and one-bedroom apartments rent for an average of $3,300.

Although I agree with the idea of helping the homeless, has it occurred to the residents of San Francisco that if you increase taxes on companies, some of those companies will relocate? When those companies relocate, you will have fewer jobs, less tax revenue, more unemployment, and possibly more homelessness–exactly the opposite of your intention. The only good news is that as people leave the area, you might have a housing glut that causes the price of housing to go down. No one will want to live there because of the scarcity of jobs, but housing might become more available.

There Are Unbalanced People On All Sides Of The Political Spectrum

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In June of 2017, Steve Scalise was shot on a baseball field in Alexandria, Virginia, by a Bernie Sanders supporter.

In June 2018, Maxine Waters said the following:

“If you think we’re rallying now, you ain’t seen nothing yet. You have members of your cabinet being booed out of restaurants. You have protesters taking up at their house. We say no peace, no sleep. No peace, so sleep. And guess what? We’re going to win this battle, because while you try to quote the Bible, Jeff Sessions and others, you really don’t know the Bible. God is on our side. On the side of the children. On the side of what’s right. On the side of what’s honorable. On the side of understanding that if we can’t protect the children, we can’t protect anybody, and so let’s stay the course. Let’s make sure that we show up where ever we have to show up. If you see anybody from that Cabinet in a restaurant, in a department store, at a gasoline station, you get out, and you create a crowd, and you push back on them, and you tell them they’re not welcome anymore, anywhere.”

How many Republican officials and lawmakers have been forced out of restaurants by angry mobs in recent months? The political rhetoric has reached a dangerous level in recent months. I do not think all of the blame for this falls on President Trump–I watched a few minutes of CNN yesterday and was truly surprised at the incendiary language used to malign the current President.

Today we have a suspect in the recent bombings. CNBC is reporting that the suspect has been in trouble with the law before.

The article reports:

Public records reveal that in 2002, Sayoc was arrested in Florida for allegedly making a threat to throw, place, project or discharge a destructive device, according to public records.

Sayoc, who is originally from New York, also had previously been arrested in Florida on multiple charges of theft and possession of steroids. He was convicted of grand theft in 1991 in Florida and placed on probation.

In 1994, a woman who had the same name as Sayoc’s grandmother accused him of domestic violence in the civil division of domestic violence court in Broward County, Florida. If it was Sayoc’s grandmother, she would have been about 80 years old at the time.

Sayoc filed for bankruptcy in 2012, public records show.

The mainstream media is making a big deal of the fact that the man is a registered Republican and has Trump stickers all over his van. I would just like to mention that one of the nicest people I know is a registered Republican and has Trump stickers all over his truck. The linking of this to President Trump is disingenuous at best and incendiary at worst.

Let’s tone down the rhetoric and try to work together to make America a better, safer place.

What Did He Do?

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CNBC announced today that economic growth for the second quarter of 2018 was 4.1 percent. That is the fastest pace in nearly four years. So exactly what did President Trump do to help the economy come out of the slump it has been in? First let’s look at some history.

In March 2017 The New York Post reported the following:

With Thursday’s final revision of fourth-quarter GDP growth to 2.1 percent from its previous 1.9 percent level, President Obama is the only president since Herbert Hoover to not have guided the US economy to 3 percent growth in any year he was in office.

…Obama’s best year, as far as growing the economy, was 2015 when it grew 2.6 percent from 2014 — after growing 2.4 percent that year from 2013.

To understand the roots of the rapid economic growth, we need to look at some of the things President Trump has done since taking office.

In April of 2018, The Daily Caller reported:

In celebration of Earth Day, The Daily Caller News Foundation takes a look at the biggest climate regulations and agreements President Donald Trump’s administration has put on the chopping block, unshackling U.S. businesses from burdensome regulations and curtailing former President Obama’s climate legacy.

Here is a list of some of the regulations that ended or were changed:

Environmental Protection Agency administrator Scott Pruitt would sign a proposed rule to repeal the CPP (Clean Power Plan), he announced on Oct. 10, 2017. Undoing the rule will save Americans $33 billion in compliance costs, despite the previous administration claiming it would only cost $8.4 billion and save millions through public health benefits, EPA officials estimated.

…Trump signed an executive order on February 28, 2017, calling for a review of the plan (Waters of The United States). On June 27 of that year, Pruitt would repeal the rule, he announced. The EPA is now in the process of reissuing the order but with a more clear definition of “waters of the U.S.” meant to lower compliance costs to businesses and minimize intrusion to private property.

…In December 2017, Obama utilized a provision in the Outer Continental Shelf Lands Act to prohibit offshore drilling in large portions of the Atlantic and Arctic Oceans. Enacted during the waning days of his presidency, the move was meant to cement the former president’s environmental legacy.

Just four months later, Trump signed an executive order undoing all of this. The “America-First Offshore Energy Strategy” — Trump signed on April 28, 2017 — is an executive order that makes millions of acres of federal waters available for offshore drilling and exploration. Vice President Mike Pence referred to the order as a job creator and “an important step toward American energy independence.”

You get the picture. This was a very targeted approach–first you free businesses from over-regulation by the government, then you help America become energy independent (which is also a good idea for security reasons). Then to top it off, you pass a tax cut to allow American taxpayers to keep more of the money they earn.

Just for the record, Forbes reported in October 2017, America had reduced its carbon emissions. It is possible to limit both regulations and carbon emissions.

These are the strategies that have caused the rapid growth in the American economy. They are common-sense strategies that anyone could have implemented. The obvious question now is why didn’t someone do this before? We need to remember that businessmen solve problems and politicians talk about problems and calculate votes. It has become increasingly obvious that a President who is a businessman will do more good for America than a President who is a politician.

Where Some Of The Political Money Comes From

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The Daily Caller is reporting that Demand Justice (DJ), a group organized and financed by a 501(c)(4) called the Sixteen Thirty Fund, which collected some $2.2 million in contributions from the Open Society Policy Center (OSPC), one of George Soros’ primary donation vehicles, between 2012 and 2016, has pledged to put $5 million behind an effort to stop Judge Brett Kavanaugh’s confirmation to the U.S. Supreme Court . If George Soros opposes Judge Kavanaugh, then I have one more reason to support the Judge.

The article reports:

A Daily Caller News Foundation review has found that the group’s primary financial supporter is a nonprofit to whom Soros has given millions.

The group, Demand Justice (DJ), is organized and financed by a 501(c)(4) called the Sixteen Thirty Fund, which collected some $2.2 million in contributions from the Open Society Policy Center (OSPC), one of Soros’ primary donation vehicles, between 2012 and 2016.

…Demand Justice was formed in the spring of 2018 as the progressive counterpart to a constellation of conservative advocacy groups which advertise and organize around judicial confirmations. Republicans have significantly outpaced Democrats in this space in recent years, given conservative voters’ sustained interest in the federal courts.

Executive director Brian Fallon told The New York Times that DJ hopes to “sensitize rank-and-file progressives to think of the courts as a venue for their activism and a way to advance the progressive agenda.”

Its ranks are staffed by alums of the Obama administration and former Secretary of State Hillary Clinton’s 2016 presidential campaign: Fallon, the former Clinton campaign press secretary, serves as executive director and longtime Obama aide Christopher Kang is chief counsel. Other Clinton veterans involved with the group include Gabrielle McCaffrey and Diana Bowen, according to LinkedIn.

The Fund serves as Demand Justice’s fiscal sponsor. As such, DJ does not have to submit its own tax returns or disclose its supporters. The Fund registered the trade name “Demand Justice” with the Washington D.C. Department of Consumer and Regulatory affairs on May 2.

George Soros is an naturalized American citizen and can legally donate his money to any cause he chooses. However, I would like to remind him that money in politics does not always equal success. On November 7, 2016, CNBC reported the following:

Still, the spending patterns offer some insight into the strategies pursued by the two rivals. As of Oct. 19, Clinton had raised some $513 million and spent $450 million on itemized expenses. The Trump campaign had raised $255 million and spent $239 million.

I hope the Soros-funded group is as successful in blocking Judge Kavanaugh as Hillary Clinton was in winning the presidency.

Some Good News For A Change

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CNBC reported today that all twelve soccer players have been rescued from the cave in Thailand where they have been trapped for more than two weeks. Unfortunately Petty Officer Saman Gunan, a former Thai navy diver, died while delivering oxygen to the trapped boys.

The article reports:

The eight boys brought out on Sunday and Monday were in good health overall and some asked for chocolate bread for breakfast, officials said earlier.

Two of the boys had suspected lung infections but the four boys from the first group rescued were all walking around in hospital.

Volunteers from as far away as Australia and the United States helped with the effort to rescue the boys. U.S. military personnel also helped.

…The boys were still being quarantined from their parents because of the risk of infection and would likely be kept in hospital for a week for tests, officials said earlier.

This is news we can all celebrate.

 

 

Good Economic News

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Trading Economics is reporting today:

Labor Force Participation Rate in the United States increased to 62.90 percent in June from 62.70 percent in May of 2018 as the civilian labor force grew by 601,000. Labor Force Participation Rate in the United States averaged 62.99 percent from 1950 until 2018, reaching an all time high of 67.30 percent in January of 2000 and a record low of 58.10 percent in December of 1954.

CNBC is reporting today:

The employment part of the economy continued to power forward in June, adding another 213,000 jobs though the unemployment rate rose to 4 percent, according to a government report Friday.

Economists surveyed by Reuters had expected a nonfarm payrolls gain of 195,000 and the jobless rate to hold steady at 3.8 percent, which had been tied for the lowest since 1969.

Another solid month of job gains provided little help to wages. In addition to the payroll gains, average hourly earnings rose 2.7 percent year over year, a bit below expectations of a 2.8 percent increase.

Despite increasing talk about the economy being near full employment, hiring continues to grow. Along with June’s upside surprise, the Bureau of Labor Statistics revised April’s count up from 159,000 to 175,000 and May’s from 223,000 to 244,000, a total of 37,000 more than initially stated.

The report at CNBC also states:

While the meeting summary indicated a belief that the labor outlook “had continued to strengthen,” there also was concern that businesses are having a hard time filling jobs. While some of the Fed’s contacts indicated they are raising pay, the overall feeling was that wage pressures remain subdued, which was confirmed by Friday’s report.

The bottom line here is that the economy is improving. It may not be as rapidly as some would like, but it is moving in the right direction at a brisk pace. As Americans, we might want to look at the statement that businesses are having a hard time filling jobs. If businesses are having a hard time finding qualified workers, where is the problem? Have we created a society where it is more lucrative to stay home than to work, or is the problem in our education system? Why are our schools not turning out more skilled workers? What do we need to do to change that? Is it time to bring back vocational schools and apprenticeships? Answering those questions might create an economy that continues to thrive.

The New Economic Advisor

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Bloomberg reported yesterday that Larry Kudlow was chosen to be the new White House economic adviser.  Mr. Kudlow is an economist frequently seen on CNBC.

The article outlines some of his views:

Kudlow spoke at length on the U.S. currency, including its appropriate valuation, saying he would like to see it “a wee bit stronger than it is currently, but stability is the key.” He said the president shares his views.

“A great country needs a strong currency, he knows that,” said Kudlow, after being chosen to replace Gary Cohn as director of the White House National Economic Council. “I have no reason to believe that President Trump opposes a sound and stable dollar.”

…He said the administration will pursue a “phase two” of Trump’s tax overhaul, seeking to make tax cuts for individuals permanent. Making the tax changes permanent would add $500 billion to the budget deficit, while tripling the amount of economic growth, according to a paper earlier this month from two Harvard economists.

The next phase, Kudlow said, should include a lower capital gains rate — and a rate that’s indexed for inflation. The top rate for long-term capital gains was left untouched at 20 percent.

Kudlow said he is “on board” with the duties Trump has imposed on steel and aluminum imports. He said he was encouraged by the president’s move to grant temporary waivers to allies including Canada and Mexico.

Bloomberg is not known for his support of conservative politics, so the article goes on to list some of the times that Larry Kudlow has been wrong or not supported President Trump. Be that as it may, Kudlow has been a supporter of reasonable economic policies in the past, and I am sure he will do a good job as economic advisor.

President Trump has been willing to shuffle his cabinet to get the most qualified people in the right positions. I think the choice of Larry Kudlow is a good choice.

 

 

The Jobs Report Is Out

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CNBC posted the numbers from today’s jobs report on December 2017. Overall it is a positive report, although some numbers are not changing as rapidly as we might hope–the labor force participation rate is holding steady at 62.7.

There is a lot of good news in the report.

Breitbart also posted an article about the jobs report.

Here are some of the highlights from that article:

…the unemployment rate for black Americans dropped to just 6.8 percent, which is the lowest ever recorded. Prior to this month, the previous record was 7.4 percent in 2000.

The Hispanic unemployment rate remains at a near record low of just 4.9 percent, up just a bit from the record of 4.7 percent in November of last year.

White unemployment sits at 3.7 percent, while only 2.5 percent of Asians are unemployed.

The overall unemployment rate is just 4.1 percent.

The article at Breitbart concludes:

With unemployment so low, job growth should mean wage gains. More jobs than people looking for them puts employees in the driver’s seat. Also good news for workers is the Trump administration’s crackdown on illegal immigration. This can only mean better wages and more job opportunities, especially for unskilled, entry, and blue-collar workers — those who have been left behind more than any other group.

That is good news for all Americans. As wages rise, it becomes less attractive to collect welfare. Hopefully, we will see the welfare rolls decrease as the tax cuts and wage increases take hold.

A Picture Is Worth A Thousand Words–But It Can Be Edited

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CNBC posted the following video on YouTube:

This is the caption underneath the video:

President Donald Trump Gets Snubbed By Poland’s First Lady Agata Kornhauser-Duda | CNBC

Wow. Sounds Awful.

This is the full video, also posted on YouTube (that the CNBC audience never saw):

And this is a classic illustration of how the media twists the news. Fake news on parade!

With Friends Like These…

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The friendship between President Obama and Warren Buffett is not news. Warren Buffett supported President Obama’s tax increase proposals saying that his secretary paid higher taxes than he did. The failure of the Obama Administration to permit the Keystone Pipeline to be built allows the Burlington Northern Santa Fe railroad, owned by Berkshire Hathaway, owned by Warren Buffett, to transport the oil (see rightwinggranny.com) from the oil fields to other areas of the United States.

Well, President Obama has often stated that companies that move their headquarters overseas are unpatriotic. He has stated that it is patriotic to stay in America and pay higher taxes. I guess Warren Buffett does not let President Obama’s opinion interfere with his business decisions.

Today’s Washington Post is reporting that Burger King is buying Canadian chain Tim Hortons Inc.. CNBC is reporting today that Berkshire Hathaway (Warren Buffett) is helping to fund the deal by committing $3 billion of preferred equity financing. Berkshire Hathaway will not play a role in the management, it is only providing the financing.

So why is this ironic? This acquisition will allow Burger King to move its headquarters to Canada where the corporate tax rate is 26.3 percent as opposed to America where the corporate tax rate is 39.1 percent.

It is not unpatriotic to want to save money. Burger King is accountable to its stockholders for its finances. It is not illegal for the company to move its headquarters to Canada to avoid an unreasonable tax burden. The solution to the exodus of corporations from America would be for Congress to lower the corporate tax rate. The Laffer Curve illustrates that this would create income for the government–not reduce income.

An Invitation To Identity Theft

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ObamaCare could have a very negative affect on my life in the coming months. My husband and I will be losing our health insurance on January 1. The questions is, “Do we go to the ObamaCare website and risk having our identity stolen, or do we go without health insurance?” How dangerous is it to type your personal information into the ObamaCare website? Well, an article posted at the CNBC website last Monday provides answers to that question.

The article reports:

It could take a year to secure the risk of “high exposures” of personal information on the federal Obamacare online exchange, a cybersecurity expert told CNBC on Monday.

“When you develop a website, you develop it with security in mind. And it doesn’t appear to have happened this time,” said David Kennedy, a so-called “white hat” hacker who tests online security by breaching websites. He testified on Capitol Hill about the flaws of HealthCare.gov last week.

“It’s really hard to go back and fix the security around it because security wasn’t built into it,” said Kennedy, chief executive of TrustedSec. “We’re talking multiple months to over a year to at least address some of the critical-to-high exposures on the website itself.”

This is not encouraging. Another online security expert stated that the ObamaCare website needs to be torn down and rebuilt from scratch.

The article further reports:

Last month, a Sept. 27 government memorandum surfaced in which two HHS officials said the security of the site had not been properly tested before it opened, creating “a high risk.”

HHS had explained then that steps were taken to ease security concerns after the memo was written, and that consumer information was secure. Technicians fixed a security bug in the password reset function in late October, the agency said.

But on CNBC, Kennedy disputed those claims, saying vulnerabilities remain on “everything from hacking someone’s computer so when you visit the website it actually tries to hack your computer back, all the way to being able to extract email addresses, users names—first name, last name—[and] locations.”

It really is time for Plan B.

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Quote Of The Week

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Reported at Townhall.com and other places:

Health and Human Services Secretary Kathleen Sebelius stated, “The majority of people calling for me to resign I would say are people who I don’t work for and who do not want this program to work in the first place. I have had frequent conversations with the president and I have committed to him that my role is to get the program up and running and we will do just that,”

Also from the Townhall article:

An online (unscientific) CNBC poll shows 85 percent of people think Sebelius should be fired:

photo ScreenShot2013-10-25at62111AM_zps1a1b8ccf.png

Maybe I’ve missed something here, but I thought Kathleen Sebelius worked for the American people.

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Sifting Through The Jobs Numbers

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Ed Morrissey at Hot Air posted an article today about the jobs numbers just released by the Bureau of Labor Statistics. The news that you will probably hear Democrats talk about is that the unemployment rate has gone down to 8.1 percent. Obviously that number is nothing to brag about, but at least it went down. But when you take a look at the numbers that are part of that number, unemployment is a problem.

The article mentions that the workforce shrank by 368,000.

CNBC reported:

But job reports for June and July were revised lower. The June count fell from 64,000 to 45,000, while July’s number came in at 141,000 from an originally reported 163,000.

Despite hopes that job creation would be better than expected, the monthly report fell short of economist expectations that 125,000 jobs were added for the month. The government said private payrolls increased by 103,000, about half the 201,000 that ADP reported Thursday.

The article at Hot Air explains that the decline in unemployment was due to people leaving the workforce. The employment-population rate in August was 58.3 percent.

The article at Hot Air points out:

That’s a new 30-year low in the civilian participation rate, lower than April’s 63.6%.  That’s the reason for the decline in the jobless rate.  The workforce decline artificially depresses the official unemployment rate.  If we had the same level of civilian participation as we did at the beginning of the recovery in June 2009 (65.7%), we’d be looking at a jobless rate of well over 10%.  The employment-population ratio dropped to 58.3% in August, not as low as last year’s 58.2%, but still bouncing along a generational bottom.  That measure was 59.4% at the beginning of the recovery.

There is talk of another quantitative easing (it would be QE3) by the government, but considering that QE1 and QE2 were not overly popular, it is questionable whether this will happen.

There is a political class in Washington that wants to remain in power–it includes both Congress and the Executive branches of government. There have been a few cracks made in that power by the Tea Party, but it remains to be seen if they will be corrupted by their new acquisition of power. If the Tea Party is not corrupted by Washington, they will provide the only hope to turn this mess around. Meanwhile, it will be interesting to see what those currently in power are willing to do to the economy to get themselves re-elected.

 

 

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The U-6 Unemployment Number

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The U-6 unemployment number was up to 15 percent in July. The overall unemployment number is currently at 8.3 percent.

The DRUDGE REPORT posted the following links today:

THEY BOTH CANT BE RIGHT:

Reuters: Labor market slowed sharply after strong gains in winter, spelling trouble for Obama…

AP: Stronger job creation could help Obama’s re-election hopes…

The unemployment number announced today is 8.3 percent, but that number only includes those people who are currently looking for work. If every unemployed worker stopped looking for work, the number would drop to 0 percent–which logically makes absolutely no sense.

CNBC posted a story today about the U-6 number, which includes discouraged potential employees who have quit looking, and those who are underemployed — wanting to work full-time but forced to work part-time. The U-6 numbers in various states are alarming.

The article at CNBC reports:

Consider: Nevada‘s U-6 rate is 22.1 percent, up from just 7.6 percent in 2007. Economically troubled California has a 20.3 percent real rate, while Rhode Island is at 18.3 percent, more than double its 8.3 percent rate in 2007.

Those numbers compare especially unfavorably to the national rate, high in itself at 14.9 percent though off its record peak of 17.2 percent in October 2009.

Only three states — Nebraska (9.1 percent), South Dakota (8.6 percent) and North Dakota (6.1 percent) — have U-6 rates under 10 percent, according to research from RBC Capital Markets.

Note that the states with the low U-6 rates are the states involved in developing America’s energy resources contained in the Bakken Shale Oil Formation. That might be a clue as to what we need to do to turn around America’s economy.

Meanwhile, the bottom line is simple–the current recovery is as bad, if not worse, than the recession. It’s time to change the people in charge.

Investors.com reports today:

Looked at another way, the labor force participation rate fell to 63.7% in July. That’s down from 65.7% in June 2009, and it’s just above the lowest since January 1982. Back then the economy was in the midst of a deep 16-month recession and the share of women in the work force was still significantly lower.

This continues a trend set since the economic recovery officially started in June 2009. Sluggish job growth has failed to keep pace with population growth, creating an ever larger pool of people who either don’t have jobs or have given up looking for one.

In fact, since June 2009, the number of people in the labor force has climbed just 283,000, while the number of people not in the labor force has exploded by 7.5 million.

This is not a recovery.

So why is the stock market going up today? I suspect it is factoring in the fact that these numbers will make it more difficult for President Obama to be re-elected. Governor Romney is an experienced businessman. If anyone can turn this mess around, he can.

 

 

 

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The Cost Of Raising Taxes In Maryland

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Maryland Governor Martin O’Malley pushed through a millionaires tax that went into effect in 2007 and expired in 2010. Yesterday CNBC reported that during that time Maryland lost approximately $1.7 billion in lost tax revenues. The tax imposed a rate of 6.25 percent on incomes of more than $1 million a year. Approximately 31,000 residents left the state during the time the tax was in effect.

Obviously, there is no proof that the people who left the state left because of the additional tax, but if you look at population growth in various states, you find that statistically, states with the lowest tax rates are growing and states with the highest taxes are losing population (e.g. Californians are migrating to Texas). On December 19 of last year, I posted an article (rightwinggranny.com) about the migration of people from states with high taxes to states with low taxes.

The December article at rightwinggranny stated:

There are also some interesting statistics on what happened in Maryland after the state passed a millionaires’ tax in 2008–there was a 33 percent decline in tax returns from millionaire households. The article also reports that Maryland lost $1 billion of its net tax base in 2008 because of out-migration.

There is a point at which raising taxes is counterproductive. President Obama’s statement yesterday that he would keep the tax breaks for people making under $250,000 a year was interesting for a number of reasons. First, it contradicts his previous statement that it is unwise to raise taxes during a recession (technically we are no longer in a recession, but we currently have a very weak economy). Secondly, it changes the subject–instead of looking at the impact President Obama’s policies have had on the economy, this debate will stir up class envy and paint the Republicans as the party of the rich. This is getting old.

Raising taxes in a weak economy is economic suicide. The Obama Administration knows that and knows that the President will not win this debate, but as long as we are talking about raising taxes, we are not talking about the President’s record on the economy.

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Why America Needs To Be Energy Independent

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President Obama’s blocking of the Keystone Pipeline had an obvious negative impact on jobs–the pipeline would have created thousands of jobs instantly–but it had a more dangerous long term impact on America’s energy independence. Alternative energy will not give us that independence at this time–we are a carbon based economy. The fruits of the decision to block the Keystone Pipeline and limit domestic energy production are becoming very obvious today.

Reuters is reporting today that Iran has stopped selling crude oil to British and French companies in retaliation for sanctions imposed because of Iran’s nuclear program.

The article reports:

Iran was supplying more than 700,000 barrels per day (bpd) to the EU plus Turkey in 2011, industry sources said.

By the start of this year imports had sunk to about 650,000 bpd as some customers cut back in anticipation of an EU ban.

Saudi Arabia says it is prepared to supply extra oil either by topping up existing term contracts or by making rare spot market sales. Iran has criticized Riyadh for the offer.

The European country most impacted by the Iranian move is Greece.

CNBC reported today that in December Saudi Arabia cut its oil production and exports.

CNBC reports:

Iraq, another frequently-cited supplier to make up for part of the Iranian oil shortfall following European Union sanctions,  reported no major changes to its supply and export regime. Authorities there are pursuing an ambitious production expansion plan with the aim of reaching 12 million bpd by 2016.

The Reuters article reports:

Brent crude oil prices were up $1 a barrel to $118.35 shortly after Iran’s state media announced last week that Tehran had cut oil exports to six European states. The report was denied shortly afterwards by Iranian officials.

“We have our own customers … The replacements for these companies have been considered by Iran,” Nikzad said.

This is not good news for the western world. Now is the time for America to develop any and all of its energy sources. Even if we drilled everywhere today, we would still be facing a summer of at least $5 a gallon gasoline, but if we drilled everywhere today, we would at least have a better outlook for the future.

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This Is Simply Disturbing

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Ed Morrissey at Hot Air posted a story yesterday about comments Representative Nancy Pelosi made about the Boeing plant that is attempting to open in South Carolina.

The article reports:

In an interview late last week, House Minority Leaeder Nancy Pelosi (D-CA) told CNBC that Boeing should either unionize its production facilities in South Carolina, or shut them down entirely.

“Do you think it’s right that Boeing has to close down that plant in South Carolina because it’s non union?” asked host Maria Bartiromo. Pelosi’s reply: “Yes.”

The minority leader quickly added that she would rather it simply unionize and stay open. But barring unionization, by Pelosi’s reasoning, it should simply shut down.

Mr. Morrissey also points out:

Pelosi may or may not know that workers at the South Carolina plant in question voted resoundingly (199-68) to decertify their union two years ago. Government policies that would close the plant for being a non-union shop would simply be punishing those workers for exercising their right to determine union representation for themselves.

As long as the Democrat leadership is in the pockets of the unions, it will be very hard to shrink the size of government and turn the economy around. The workers in South Carolina voted not to unionize. That should have been the end of the story. It is unfortunate that the union-bought Obama Administration chose to get involved through the National Labor Relations Board. We need to understand that even if the plant in South Carolina eventually opens, the amount of time and money spent on the legal battle to open the plant will be a lesson to other companies seeking to open plants in right-to-work states. Again, we need to take a good look at where political money is coming from and vote out anyone being heavily funded by unions.

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You Always Get In Trouble When You Try To Alter Things After The Fact

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Yesterday National Review Online reported that a number of press releases previously released by the Department of Energy have been retroactively changed in order to remove the name of a solar company that may fail.

CNBC reports:

The changes occurred in two press releases from the Department of Energy’s loan guarantee program — the same program that has been the center of controversy surrounding the failed solar company Solyndra.

Both were changed to remove the name of a company that has received negative press attention in recent days, SunPower, and replace it with the name of another company, NRG Energy.

In the April case, the Department of Energy loan programs office announced in a press release on April 12 “conditional commitment” to a $1.187 billion loan guarantee to support the California Valley Solar Ranch project, which it said was “sponsored by SunPower Corporation.”

But that release was later changed on one website to say the project was “sponsored by NRG Energy.” The date on the release remained “April 12, 2011.”

National Review Reports:

Naturally, the DOE blames ‘outside contractors,’ who “inadvertently” altered the news bulletins while updating the loans program website.

The article at National Review goes on to look at the financial situation of SunPower. The company is deeply in debt and has stated that it will lower its earnings projections for 2011. Meanwhile, the total value of company’s stock dropped from an all-time high of $13 billion to $800 million. Unfortunately, the company has a debt of $820 million. This does not bode will for the future of the company.

The problem here is that old press releases were altered in a way that looks questionable. Unfortunately that seems to be part of the lack of transparency and behind the scenes manipulation that seems to be inherent in this administration.

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Warren Buffett Opposes The Buffett Tax

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On Friday the Washington Examiner posted a transcript of an interview of Warren Buffett on CNBC where Mr. Buffett stated that he did not support President Obama’s new tax pollicy. Howeber, Mr. Buffett did state that Counselor to Treasury Secretary Tim Geithner had called him to ask his permission to use his name for President Obama’s new tax policy.

The transcript states:

CNBC: Does that you mean you disagree with the president’s new jobs proposal which would be paid for by raising taxes on households with incomes over $250,000?

Buffett: There is another program that I won’t be discussing. My program is to have on ultra rich people who are paying very low tax rates. Not just all the rich people. And it would probably apply to 50,000 people in a population of 300 million.

It doesn’t sound as if Mr. Buffett is totally on board with the White House. The thing to remember here is that there is only so much money you can actually get by taxing the ‘rich.’ The rich have tax lawyers and CPA’s to help them avoid paying any more taxes than they are required to pay. When the government decides it wants more money coming in and does not want to cut spending, eventually it works out that the middle class pays more taxes because that’s the tax bracket that encompasses the majority of Americans. The best example of that is the Alternative Minimum Tax (AMT) which was originally only supposed to impact a very small number of Americans. In 1970, only 19,000 taxpayers owed an AMT. It is now estimated by the Congressional Research Services that if the cuts to the regular income tax are made permanent, the number of taxpayers subject to the AMT will increase from about 1.8 million in 2001 to over 41 million by 2013. We need to remember as the President’s tax proposals are debated, that even when we are told that taxes are only going to impact the rich, they eventually impact the rest of us. New taxes are always a bad idea. Fiscal responsibility on the part of Congress and the President is what is needed.


 

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