Bill Whittle explains. (7 minutes)
This is not to mention his record on abortion – the most pro-abortion President ever. Or the election of hardline Muslim extremists in Egypt.
The man is a catastrophic failure.
Tag Archives: Economics
Iraq plunges into chaos as U.S. troops withdraw
From the Heritage Foundation.
Excerpt:
The Obama Administration’s risky decision to seek the quickest possible exit from Iraq has contributed to a mushrooming political crisis there that is rapidly unraveling the hard-won gains of U.S. troops and threatens to plunge the country into a civil war that will greatly benefit Iran.
Shortly after the December 15 end-of-mission ceremony for U.S. troops, Iraqi Prime Minister Nouri al-Malikipurged many senior Sunni Arab political leaders from his fractious governing coalition. Maliki’s government, dominated by Shiite political parties of various stripes, also announced that it will prosecute Vice President Tareq al-Hashemi, a leader of the predominantly Sunni Arab Iraqiyah party, on terrorism charges. Hashemi, who denounced the allegations as propaganda cover for a political coup, has fled to the semi-autonomous Kurdish region in northern Iraq.
Iraq’s fragile unity is now dissolving in growing political tensions between the leaders of the Shiite majority and Sunni minority and between the Shiite-dominated central government and the non-Arab Kurdish minority. But the Obama Administration, blindsided by simmering tensions that it had downplayed in its rush for the exit, appears to be on auto-pilot.
The Administration gave a higher priority to domestic political considerations than to Iraq’s long-term security needs when it neglected to negotiate an extension of the U.S. troop presence past the end-of-year deadline set by the 2008 Status of Forces Agreement. Although the Bush Administration had envisioned a follow-on agreement to extend the military presence, and the Obama Administration had initially planned for a smaller residual force of military trainers and advisers, in the end politics trumped security in the White House’s deliberations.
Pulling troops out of the Middle East will make it harder for us to gather intelligence and support our allies against Islamic aggression. This decision to pull troops out ahead of the 2012 election is very similar to the decision to delay the Keystone XL pipeline until after the election.
Excerpt:
In November, the White House announced it would delay deciding on the project until after next year’s election. Administration officials claim they need more time to evaluate the potential environmental impacts of the $7 billion, 2,100-mile project to transport crude oil from Alberta, Canada, to major American refineries in the Gulf Coast.
Not content to wait until 2013, Republicans inserted a Keystone approval provision into the payroll tax extension. The result of that move is still in flux, as House Republicans have rejected the Senate’s measure.
Regardless of the outcome, President Obama’s desire to delay the pipeline is just the latest example of his pernicious proclivity for putting politics over sound policy when it comes to energy regulations.
The president simply doesn’t want to bear the political costs of deciding either way on Keystone until after his re-election bid. He’s wants to remain non-committal.
[…]Shambling on Keystone might be smart politics — but there’s no good policy reason to delay approval. And there is a huge cost of delay, which can be captured in just four letters: J-O-B-S.
Keystone XL requires miles of pipe to be welded and installed, and at least 30 new pumping facilities to be constructed. American workers would staff many of those operations.
Indeed, if Keystone XL were allowed to proceed as planned, oil sands development and related operations would directly create thousands of new jobs. Tens of thousands additional positions would be created indirectly at businesses along the pipeline’s pathway.
That same political strategizing driving the Keystone delay also undergirds the White House’s stance on hydraulic fracturing.
Colloquially know as “fracking,” this technique has proven invaluable in extracting natural gas buried under the earth’s surface. It involves pumping a high-pressure mixture of water and sand into the rock surrounding deposits to free up gas for collection.
In the Marcellus shale — a massive reserve running from Ohio and Pennsylvania into New York — fracking is the only way for developers to get access to gas located deep underground. Unfortunately, policymakers high and low have succumbed to environmentalist alarmism on fracking.
New York — with the tacit support of the White House — has instituted a fracking moratorium and effectively prohibited exploration of the parts of the Marcellus that run under the state.
Again, the cost of currying favor with environmentalists? Jobs. According to the Department of Environmental Conservation, Marcellus development in New York could generate up to 80,000 new local positions.
The more we decline to develop our own energy resources here at home, the worse it is for our economy. But it’s also bad for our national security to continue to buy oil from people who don’t like us very much. If we could develop our own energy resources at home – and buy from Canada – then we could use the money we save to keep our commitments in the Middle East. It’s not good for our economy or our national security to make short-sighted decisions that are going to hurt us in the long-run.
Wow: Ezra Klein admits the real unemployment rate is 11 percent
From the left-leaning Washington Post, of all places.
Excerpt:
Typically, I try to tie the beginning of Wonkbook to the news. But today, the most important sentence isn’t a report on something that just happened, but a fresh look at something that’s been happening for the last three years. In particular, it’s this sentence by the Financial Times’ Ed Luce, who writes, “According to government statistics, if the same number of people were seeking work today as in 2007, the jobless rate would be 11 percent.”
Remember that the unemployment rate is not “how many people don’t have jobs?”, but “how many people don’t have jobs and are actively looking for them?” Let’s say you’ve been looking fruitlessly for five months and realize you’ve exhausted every job listing in your area. Discouraged, you stop looking, at least for the moment. According to the government, you’re no longer unemployed. Congratulations?
Since 2007, the percent of the population that either has a job or is actively looking for one has fallen from 62.7 percent to 58.5 percent. That’s millions of workers leaving the workforce, and it’s not because they’ve become sick or old or infirm. It’s because they can’t find a job, and so they’ve stopped trying. That’s where Luce’s calculation comes from. If 62.7 percent of the country was still counted as in the workforce, unemployment would be 11 percent. In that sense, the real unemployment rate — the apples-to-apples unemployment rate — is probably 11 percent. And the real un- and underemployed rate — the so-called “U6” — is near 20 percent.
There were some celebrations when the unemployment rate dropped last month. But much of that drop was people leaving the labor force. The surprising truth is that when the labor market really recovers, the unemployment rate will actually rise, albeit only temporarily, as discouraged workers start searching for jobs again.
Yeah, because taking money away from private sector job creators costs jobs. That is straight out of Henry Hazlitt’s “Economics in One Lesson”: Public Works Means Taxes.
Look:
From the Weekly Standard.
Excerpt:
When the Obama administration releases a report on the Friday before a long weekend, it’s clearly not trying to draw attention to the report’s contents. Sure enough, the “Seventh Quarterly Report” on the economic impact of the “stimulus,” released on Friday, July 1, provides further evidence that President Obama’s economic “stimulus” did very little, if anything, to stimulate the economy, and a whole lot to stimulate the debt.
The report was written by the White House’s Council of Economic Advisors, a group of three economists who were all handpicked by Obama, and it chronicles the alleged success of the “stimulus” in adding or saving jobs. The council reports that, using “mainstream estimates of economic multipliers for the effects of fiscal stimulus” (which it describes as a “natural way to estimate the effects of” the legislation), the “stimulus” has added or saved just under 2.4 million jobs — whether private or public — at a cost (to date) of $666 billion. That’s a cost to taxpayers of $278,000 per job.
In other words, the government could simply have cut a $100,000 check to everyone whose employment was allegedly made possible by the “stimulus,” and taxpayers would have come out $427 billion ahead.
When the government takes a dollar from a job creator, they take half of it for themselves, and then they often give the other half to some favored group, like a “green energy” company or Planned parenthood or a labor union. Then they who turns around and give half of that handout right back to Obama as a campaign donation. The only way to stop them from doing more of this stimulus is to stop giving them money.
Do you know what has been proven to create jobs, though? TAX CUTS FOR THE RICH.
Consider this article by the Cato Institute, which discusses how the Reagan tax cuts affected the unemployment rate.
Excerpt:
In 1980, President Carter and his supporters in the Congress and news media asked, “how can we afford” presidential candidate Ronald Reagan’s proposed tax cuts?
Mr. Reagan’s critics claimed the tax cuts would lead to more inflation and higher interest rates, while Mr. Reagan said tax cuts would lead to more economic growth and higher living standards. What happened? Inflation fell from 12.5 percent in 1980 to 3.9 percent in 1984, interest rates fell, and economic growth went from minus 0.2 percent in 1980 to plus 7.3 percent in 1984, and Mr. Reagan was re-elected in a landslide.
[…]Despite the fact that federal revenues have varied little (as a percentage of GDP) over the last 40 years, there has been an enormous variation in top tax rates. When Ronald Reagan took office, the top individual tax rate was 70 percent and by 1986 it was down to only 28 percent. All Americans received at least a 30 percent tax rate cut; yet federal tax revenues as a percent of GDP were almost unchanged during the Reagan presidency (from 18.9 percent in 1980 to 18.1 percent in 1988).
What did change, however, was the rate of economic growth, which was more than 50 percent higher for the seven years after the Reagan tax cuts compared with the previous seven years. This increase in economic growth, plus some reductions in tax credits and deductions, almost entirely offset the effect of the rate reductions. Rapid economic growth, unlike government spending programs, proved to be the most effective way to reduce unemployment and poverty, and create opportunity for the disadvantaged.
The Heritage Foundation describes the effects of the Bush tax cuts.
Excerpt:
President Bush signed the first wave of tax cuts in 2001, cutting rates and providing tax relief for families by, for example, doubling of the child tax credit to $1,000.
At Congress’ insistence, the tax relief was initially phased in over many years, so the economy continued to lose jobs. In 2003, realizing its error, Congress made the earlier tax relief effective immediately. Congress also lowered tax rates on capital gains and dividends to encourage business investment, which had been lagging.
It was the then that the economy turned around. Within months of enactment, job growth shot up, eventually creating 8.1 million jobs through 2007. Tax revenues also increased after the Bush tax cuts, due to economic growth.
In 2003, capital gains tax rates were reduced. Rather than expand by 36% as the Congressional Budget Office projected before the tax cut, capital gains revenues more than doubled to $103 billion.
The CBO incorrectly calculated that the post-March 2003 tax cuts would lower 2006 revenues by $75 billion. Revenues for 2006 came in $47 billion above the pre-tax cut baseline.
Here’s what else happened after the 2003 tax cuts lowered the rates on income, capital gains and dividend taxes:
- GDP grew at an annual rate of just 1.7% in the six quarters before the 2003 tax cuts. In the six quarters following the tax cuts, the growth rate was 4.1%.
- The S&P 500 dropped 18% in the six quarters before the 2003 tax cuts but increased by 32% over the next six quarters.
- The economy lost 267,000 jobs in the six quarters before the 2003 tax cuts. In the next six quarters, it added 307,000 jobs, followed by 5 million jobs in the next seven quarters.
The timing of the lower tax rates coincides almost exactly with the stark acceleration in the economy. Nor was this experience unique. The famous Clinton economic boom began when Congress passed legislation cutting spending and cutting the capital gains tax rate.
It worked for Reagan and it worked for Bush – they made unemployment go down, while Obama’s public works spending has made unemployment go up. Those are the facts. And we have to live in the world as it is. We may not like it, it may not be intuitive to us, it may not line up with our feelings, but that is the way the world is. When you let people with capital keep more of the money they earn, they hire more people and they try to make more money. When the rich risk their capital, they take the rest of us up with them – either by giving us jobs, or by offering us things that we are free to buy or not. Things like iPods, laptops and kitchen appliances. And the more competition there is among sellers in a free market, the lower the prices go, and the higher the quality gets.
WINTERY KNIGHT 