The policies of this administration make it risky to lend money, with Washington politicians coming up with one reason after another why borrowers shouldn’t have to pay it back when it is due, or perhaps not pay it all back at all. That’s called “loan modification” or various other fancy names for welshing on debts. Is it surprising that lenders have become reluctant to lend?
Private businesses have amassed record amounts of cash, which they could use to hire more people — if this administration were not generating vast amounts of uncertainty about what the costs are going to be for ObamaCare, among other unpredictable employer costs, from a government heedless or hostile toward business.
As a result, it is often cheaper or less risky for employers to work the existing employees overtime, or to hire temporary workers who are not eligible for employee benefits. But lack of money is not the problem.
Those who are true believers in the old-time Keynesian economic religion will always say that the only reason creating more money hasn’t worked is because there has not yet been enough money created. To them, if QE2 hasn’t worked, then we need QE3. And if that doesn’t work, then we will need QE4, etc.
Like most of the mistakes being made in Washington today, this dogmatic faith in government spending is something that has been tried before — and failed before.
[…]It is not politically possible for either the Federal Reserve or the Obama administration to leave the economy alone and let it recover on its own.
Both are under pressure to “do something.” If one thing doesn’t work, then they have to try something else. And if that doesn’t work, they have to come up with yet another gimmick.
All this constant experimentation by the government makes it more risky for investors to invest or employers to employ, when neither of them knows when the government’s rules of the game are going to change again. Whatever the merits or demerits of particular government policies, the uncertainty that such ever-changing policies generate can paralyze an economy today, just as it did back in the days of FDR.
The number of Americans filing for jobless aid rose to an eight-month high last week and productivity growth slowed in the first quarter, clouding the outlook for an economy that is struggling to gain speed.
While the surprise jump in initial claims for unemployment benefits was blamed on factors ranging from spring break layoffs to the introduction of an emergency benefits program, economists said it corroborated reports this week indicating a loss of momentum in job creation.
New claims for state jobless benefits rose 43,000 to 474,000, the highest since mid-August, the Labor Department said on Thursday. Economists had expected claims to fall.
[…]Other reports this week showed weaker employment growth in the manufacturing and services sectors in April and a step back in private hiring, suggesting Friday’s closely watched data could prove weaker than economists have been expecting.
An industry survey released on Thursday found hiring by U.S. small businesses almost ground to a halt in April.
This isn’t surprising. Government spending takes money OUT of the private sector and puts money IN to the non-productive public sector.
Indeed, President Obama’s stimulus bill failed by its own standards. In a January 2009 report, White House economists predicted that the stimulus bill would create (not merely save) 3.3 million net jobs by 2010. Since then, 3.5 million more net jobs have been lost, pushing the unemployment rate above 10 percent.[1] The fact that government failed to spend its way to prosperity is not an isolated incident:
During the 1930s, New Deal lawmakers doubled federal spending–yet unemployment remained above 20 percent until World War II.
Japan responded to a 1990 recession by passing 10 stimulus spending bills over 8 years (building the largest national debt in the industrialized world)–yet its economy remained stagnant.
In 2001, President Bush responded to a recession by “injecting” tax rebates into the economy. The economy did not respond until two years later, when tax rate reductions were implemented.
In 2008, President Bush tried to head off the current recession with another round of tax rebates. The recession continued to worsen.
Now, the most recent $787 billion stimulus bill was intended to keep the unemployment rate from exceeding 8 percent. In November, it topped 10 percent.[2]
So obviously government spending reduces employment – it could never happen any other way. And everyone who has ever held a job in private industry knows this. Government spending only works in the university classrooms, where the right answer is always the answer that makes academic wordsmiths feel good about themselves. Good intentions are the right answer in the classroom – good results are the right answer in the free market.
Drilling moratorium = higher gas prices = low consumer confidence
Consumer confidence dropped last week to the lowest level in more than a month as rising fuel costs squeezed American household budgets.
The Bloomberg Consumer Comfort Index decreased to minus 46.2 in the week ended May 1, the lowest level since the end of March, from minus 45.1 the prior period. Another report showed claims for unemployment benefits unexpectedly surged last week, raising the risk the improvement in the jobs market has stalled.
Stocks dropped and Treasury securities rose on concern that rising expenses, including the highest gasoline prices in almost three years, may prompt companies and households to cut back on spending. The reports bolster the arguments of Federal Reserve policy makers like Chairman Ben S. Bernanke who’ve said job growth is too slow to remove record monetary stimulus.
Obama has been printing money in order to goose people into spending more instead of saving. The problem with devaluing the currency, which is what he is doing, occurs when you reach the stage where consumers stop spending because prices must increase when you print money. We are now at that stage, and our economy is about to go down the drain. Interest rates will have to rise, which is going to slow economic growth even more. This is all known.
When you don’t understand economics, you take the whack-a-mole approach to fixing the economy. That’s what Obama has done. He keeps trying to control things from the top instead of trusting businesses and consumers with their own money. Everything Obama does makes the economy worst. He doesn’t know what he is doing, and he won’t listen to people who do know. His baseless confidence (arrogance) should have been a red flag to the American people. There is nothing worse than hiring someone who thinks that they know everything, but who hasn’t the qualifications to run a lemonade stand.
I have never before seen Krauss debate, but the physicist opened up explaining he did not particularly like them. I was shocked to discover that Krauss’ entire opening statement revolved around criticizing Craig’s well-known arguments as “God-of-the-gaps.” He also mentioned that quantum mechanics demonstrates that physics does not conform to the laws of logic (thus, in my view, demonstrating a fundamental equivocal misunderstanding of the term “logic.” It does not mean, as Krauss here seems to suggest, “common sense” or “what we would expect.” This is the most charitable view as the only other sense he could mean is that it is reasonable to assume reason does not apply to physics, while also giving us a reason, which is self-contradictory.). He also suggested God cannot be the grounds of objective morality since God can’t will evil things to be good.
[…]In Craig’s second rebuttal he again focused the debate topic. Craig does this to show both what he has argued and to show that the rebuttal was not at all relevant to the topic at hand. I wished he had discussed more cosmology and why inflationary models require an absolute beginning, but he at least mentioned these rebuttals. He completely tore apart the Humean argument against miracles by pointing out that he did not have the probability calculus back in that time. Craig seemed perfectly comfortable by this point and not at all rushed; however he had fewer points to argue against as Krauss was defaulting to “desire” as a motivator over scientific evidence.
By the time of Krauss’ second rebuttal, he was struggling for words. He seemed to have run out of things relevant to say. He did eventually get going, but made such contradictory statements as “there is no purpose in the universe.” As Ryan Hedrich said to me during the debate, “There’s no meaning, no purpose, and yet there he is, arguing away for God only knows what reason (literally).”
And he even reviews the Q&A. This is a really good review.
In this post you can find links to the audio, video, and my snarky summary on Krauss’ speeches.
WINTERY KNIGHT 