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Video: Can 8-28 rally-goers match spending facts with the right president?

August 28, 2010 By Jeff Leave a Comment

The gang over at Bankrupting America took their camera’s to the Restoring Honor rally in D.C. today to test the attendees government spending IQ… The result are interesting.

Before watching the video see if you can answer the following questions:

  1. Bush or Obama? This president spent a record-breaking $3 trillion in a single year.
  2. Bush or Obama? This president bailed out hundreds of large banks and corporations.
  3. Bush or Obama? This president spent billions of taxpayer dollars on “stimulus” spending during a recession.
  4. Bush or Obama? This President increased spending by many times the rate of inflation across most non-defense categories – such as education, Medicare, Medicaid, income security and regional development.
  5. Bush or Obama? This president passed an expensive healthcare bill.

The answers are here and supporting documentation are here.

That’s right the answer to all five questions is both… I’ve made this point before, but it’s worth repeating:

Every presidential administration and every Congress since Ronald Reagan left office has grown government.

When Richard Nixon left office the Federal Register, where the government publishes all current and proposed regulations, contained just over 29,000 pages. It ballooned to roughly 58,000 pages under Ford, and to nearly 73,000  pages under Carter. Under Ronald Reagan it shrank to roughly 55,000 pages, since then it has grown steadily to over 79,000 pages at the end George W. Bush’s term.

Yes, I know, counting the number of pages in the Federal Register is crude way measuring the size or intrusivenss of government, but it helps illustrate the the problem… Neither party has been particularly faithful to our Founders Fathers idea of limited, fiscally responsible government.

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CNBC: Economy Caught in Depression, Not Recession

August 25, 2010 By Jeff Leave a Comment

I be the first one to admit I’m a pessimist on the economy, but not even I’m this pessimistic:

Positive gross domestic product readings and other mildly hopeful signs are masking an ugly truth: The US economy is in a 1930s-style Depression, Gluskin Sheff economist David Rosenberg said Tuesday.

Writing in his daily briefing to investors, Rosenberg said the Great Depression also had its high points, with a series of positive GDP reports and sharp stock market gains.

But then as now, those signs of recovery were unsustainable and only provided a false sense of stability, said Rosenberg.

Rosenberg calls current economic conditions “a depression, and not just some garden-variety recession,” and notes that any good news both during the initial 1929-33 recession and the one that began in 2008 triggered “euphoric response.”

“Such is human nature and nobody can be blamed for trying to be optimistic; however, in the money management business, we have a fiduciary responsibility to be as realistic as possible about the outlook for the economy and the market at all times,” he said.

Mr. Rosenberg’s argument it compelling, I’m not sure agree with him, but like I said I’m a pessimist on the economy. I’ve thought all along this so called recovery was more akin to a dead cat bounce than an actual meaningful sustained recovery… And that’s what the data seems to indicate. All the indicators I’m looking at, employment, housing, durable goods, and consumer confidence are pointing to anything but a recovery. Are we actually in a depression? I don’t know, but I think it’s safe to say this isn’t a garden variety recession.

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Weekly Initial Jobless Claims Rise… Unexpectedly… Yet Again…

July 1, 2010 By Jeff Leave a Comment

This is getting silly, it seems like every time new jobless claims rise the media uses words like “unexpected’ or “surprising” to describe the news… There’s nothing surprising or unexpected about this week’s jobless report, not after reports on plunging new home sales in May, and the sharp drop in consumer confidence.

Suffices to say and up tick in new jobless claims was entirely expected by anyone with half a brain… and that’s exactly we got:

WASHINGTON (MarketWatch) — The number of people filing first-time claims for unemployment benefits climbed 13,000 in the latest week to 472,000, indicating continued weakness in the labor market.

Although claims have fallen 22% from one year ago, they are up 4% since the start of 2010, according to data from the Labor Department. Weekly claims typically would have to fall below 400,000 to signify improved nationwide hiring trends.

Economists surveyed by MarketWatch had expected initial claims to fall to 455,000. See our complete economic calendar and consensus forecast.

The four-week average of initial claims — a better gauge of employment trends than the volatile weekly number – rose by 3,250 to 466,500, the highest level in almost three months.

While claims tend to align with job growth over the longer term, the weekly data is prone to sharp fluctuations. A clearer picture of job growth will emerge Friday when the government releases its monthly employment report for June.

Tomorrow’s monthly unemployment report should be interesting, economists are reportedly expecting the economy will have added 110,000 jobs in June, excluding the departure of temporary Census workers from government payrolls. Personally, I’m kind of pessimistic about about those forecasts, most of today’s economic news today is discouraging… Manufacturing declined in June, so did construction spending, and pending home sales. All in all this is look more like a dead cat bounce than a recovery.

Ed’s got a great chart illustrating just how unexpected today’s news is over at Hot Air.

What say you:

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Initial Jobless Claims Rise… Unexpectedly… Again

February 25, 2010 By Jeff Leave a Comment

Here we go again, another week and another, um, “unexpected” rise in initial jobless claims:

The number of new claims for unemployment benefits jumped unexpectedly last week as heavy snows caused layoffs to rise.

In addition, many state agencies in the mid-Atlantic and New England regions that process the claims were closed due to the storms and are now clearing out backlogs, a Labor Department analyst said.

The department said Thursday that first-time claims for unemployment insurance rose by 22,000 to a seasonally adjusted 496,000. Wall Street analysts polled by Thomson Reuters expected a drop to 455,000.

Bad weather can cause job losses in construction and other industries sensitive to weather.

I’m sorry but I have to ask… Unexpectedly by whom???

JWF sums things up nicely:

It’s comical how every story about job losses always calls it unexpected, with pointy-headed experts baffled by the news. Maybe someone can ask Professor Obama about this grim news today during his six-hour lecture to Republicans.

Um, yeah, I’d pay money to see that!

Anyway, it’s not the weather that’s driving these new jobless claims it’s the slumping consumer confidence and  home prices coupled with the Millions of Americans who are underwater on their mortgages… roughly 300,000 of them are facing foreclosure each month. Americans simply don’t have the discretionary capital to invest or consume they they used to. Bottom line we’re not going to see anything resembling a meaningful recovery until that changes.

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New Jobless Claims Rise… Unexpectedly… Again…

February 18, 2010 By Jeff Leave a Comment

Here we go again… another week, another “unexpected” rise in new jobless claims:

The number of U.S. workers filing new applications for unemployment insurance unexpectedly surged last week, while producer prices increased sharply in January, raising potential hurdles for the economic recovery.

Initial claims for state unemployment benefits increased 31,000 to 473,000, the Labor Department said on Thursday. That compared to market expectations for 430,000.

Another report from the department showed prices paid at the farm and factory gate rose a faster than expected 1.4 percent from December after a 0.4 percent gain in December, as higher gasoline prices and unusually cold temperatures helped boost energy costs.

To be honest I’m more concerned the sharp rise in producer prices than I am about the increase in new unemployment claims. In short, inflation is starting to rear its ugly head; frankly I think we’re head for a dead cat bounce rather than a recovery. What say you?

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WSJ: Andrew Cuomo has more to answer for than does Bank of America

February 8, 2010 By Jeff Leave a Comment

Politicians love to blame the financial crisis and by extension the recession on greedy bankers, but as the Wall Street Journal notes today many of them, like New York Attorney General and former Clinton Administration Secretary of Housing and Urban Development Andrew Cuomo have much to answer for:

With his fraud lawsuit last week against Bank of America, New York Attorney General Andrew Cuomo has joined the long queue of politicians blaming bankers as the chief culprits in creating the financial panic and recession. We dealt with the merits of those BofA charges on Saturday, but that isn’t the end of this story. There’s also the not so small matter of Mr. Cuomo’s own role in promoting policies that fed the housing mania and set the stage for the meltdown.

Before he pursued statewide office in New York, Andrew Cuomo was Secretary of Housing and Urban Development during Bill Clinton’s second term. And lest you think his tenure is forgotten, the HUD Web site has an instructive item in its Archives section.

Entitled, “Highlights of HUD Accomplishments 1997-1999,” the document chronicles the “accomplishments under the leadership of Secretary Andrew Cuomo, who took office in January 1997.”

HUD’s Web visitors learn that in 1999 “Secretary Cuomo established new Affordable Housing Goals requiring Fannie Mae and Freddie Mac—two government sponsored enterprises involved in housing finance—to buy $2.4 trillion in mortgages in the next 10 years. This will mean new affordable housing for about 28.1 million low- and moderate-income families. The historic action raised the required percentage of mortgage loans for low- and moderate-income families that the companies must buy from the current 42 percent of their total purchases to a new high of 50 percent—a 19 percent increase—in the year 2001.”

It’s a sign of Washington’s continuing failure to examine its own failures that HUD still views such a policy as an “accomplishment.” It’s as if the Pentagon described Pearl Harbor as a victory.

The Village Voice has much more on Mr. Cuomo’s actions at HUD here.

Bottom line the Federal Government and Federal Reserve are every bit as culpable as bankers are in creating this mess… Andrew Cuomo is just one of several prominent political figures who have to answer for his role his roll in creating the financial crisis. Unfortunately, I doubt Washington’s policy makers will ever admit to their culpability, it’s much easier to demonize and scapegoat Wall Street’s greedy bankers.

Peter Schweizer does a good job of laying out the anatomy of the crisis in Architects of Ruin: How big government liberals wrecked the global economy—and how they will do it again if no one stops them. If you haven’t read it, I’d suggest picking up a copy.

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Unemployment Rate Drops to 9.7%

February 6, 2010 By Jeff Leave a Comment

I was going to post this yesterday, but there was something about the numbers that just didn’t make sense to me so I decided to hold off until I could dig through the report.

Anyway, the Associated Press got to use it’s favorite adverb, “unexpectedly“, again today:

The job market is lurching toward improvement. It just has a long way to go.

The outlook for jobs became a bit less bleak Friday when the government released January’s unemployment rate showing an unexpected decline from 10 percent to 9.7 percent. It was the first drop in seven months.

Still, the government now estimates 8.4 million jobs vanished in the Great Recession. And economists say the nation will be lucky to get back 1.5 million of them this year. They also warn it will take until the middle of the decade for the job market to return to normal.

The economy is growing, and normally job creation would be strengthening. But the job market is weighed down by employers who remain slow to hire because consumers are not spending enough. Companies worry about their prospects once government stimulus aid fades. They also fret about possibly higher costs related to taxes or health care measures from Congress and statehouses.

Heh, I hate to break this to you folks at the AP, but this wasn’t unexpected if you’ve been watching the trends over the last couple of months it was foregone conclusion that the unemployment rate hold steady or decline.

Why? For starters lets take a look at Table A-12 in the Household Survey, the number of long term unemployed, that is those who have been unemployed for 27 weeks or longer, has been rising steadily for the last several months. For statistical reasons those people are no longer considered part of the workforce.

Second take a look at Table B-1 in the Establishment Survey, the total number of jobs in the marketplace has dropped sharply from roughly 133 million in January 2009 to an estimated 129 million in January 2010… In fact if we look at the historical data the drop is even sharper… From 137 million in January 2008.

Bottom line the decline in unemployment is the result of statistical manipulation not real job growth. In short if fewer jobs in the marketplace means you’re naturally going to have a lower percentage of those unemployed.

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First-time Jobless Claims Rise Unexpectedly… Again

February 4, 2010 By Jeff Leave a Comment

This is getting ridiculous, and as predictable as sunrise… Just how many times can new jobless claims rise “unexpectedly” before the Associated Press realizes there’s nothing unexpected about it:

The number of newly laid-off workers filing initial claims for jobless benefits rose unexpectedly last week, evidence that layoffs are continuing and jobs remain scarce.

The rise is the fourth in the past five weeks. Most economists hoped that claims would resume a downward trend that was evident in the fall and early winter.

The Labor Department said Thursday that new claims for unemployment insurance rose by 8,000 to a seasonally adjusted 480,000. Wall Street economists had expected a drop to 460,000, according to Thomson Reuters.

The four-week average, which smooths fluctuations, rose for the third straight week to 468,750.

The figure is the highest in the past two months. Initial claims dropped sharply in late December, raising hopes among economists that layoffs were nearing an end and the economy would soon start generating net gains in jobs.

When you couple this report with yesterday’s news that planned layoffs have begun increasing again things don’t bode well for this so called recovery… Of course if tomorrow’s announcement from the Bureau of Labor Statistics about unemployment and job creation for January turns out to be bad news, the media will undoubtedly call it “unexpected”.

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Train Wreck: Retail Sales Fall, Jobless Claims Rise, Foreclosures set Record and the Dollar Crisis

January 14, 2010 By Jeff Leave a Comment

Whew, I can’t believe I got all that in headline!

Anyone who has read this blog for any period of time knows I’m a pessimist on the economy, in short I don’t see any reason to be hopeful:

Retail sales unexpectedly fell in December, leaving 2009 with the biggest yearly drop on record and highlighting the formidable hurdles facing the economy as it struggles to recover from the deepest recession in seven decades.

In another disappointing economic report, the number of newly laid-off workers requesting unemployment benefits rose more than expected last week as jobs remain scarce.

Still, many economists, puzzled by the retail sales decline that follows reports from retailers of brighter holidays, cautioned that the December figures don’t necessarily signal a big consumer pullback and could be a blip.

Right, retail sales fell 0.3 percent in December, overall sales for 2009 fell 6.2 the sharpest decline on government records going back to 1992.

On the jobs front, the Labor Department reports that new claims for unemployment insurance rose by 11,000 to a seasonally adjusted 444,000, sharply higher than the 3,000 new claims forecast by economists.

Add to that a record number of foreclosures:

A record 2.8 million households were threatened with foreclosure last year, and that number is expected to rise this year as more unemployed and cash-strapped homeowners fall behind on their mortgages.

The number of households that received a foreclosure-related notice rose 21 percent from 2008, RealtyTrac Inc. reported Thursday. One in 45 homes were sent a filing, which includes default notices, scheduled foreclosure auctions and bank repossessions.

In December, more than 349,000 households, or one in 366 homes, were hit with a foreclosure-related notice. That represents a 14 percent spike from November and a 15 percent jump from December 2008.

Banks repossessed more than 92,000 homes, up 19 percent from November. That increase was likely due to lenders working to clear their books at the end of the year, RealtyTrac said.

And the looming dollar crisis:

The United States must soon raise taxes or cut government spending to curb its debt, and failure to act will risk a crippling dollar crisis as investor confidence ebbs, a panel of experts said on Wednesday.

“It has got to be done. It will be done some day. It may be done with enormous pain. Or it may be done more rationally,” said Rudolph Penner, a former head of the nonpartisan Congressional Budget office who co-chaired the 24-strong Committee on the Fiscal Future of the United States.

President Barack Obama’s administration will present his budget for fiscal 2011 early next month amid intense pressure to live up to election campaign promises not to raise taxes on middle class Americans, while confronting a record deficit.

As a result, Obama is expected to focus on long-term fiscal discipline, while maintaining policy support for an economic recovery in the near-term as the country rebuilds after its worst recession since the Great Depression.

And you can understand why I’m pessimistic about the chances for a meaningful economic recovery anytime soon. I’m sure there’s reasons for optimism, but I can’t find them. Everything I seen is pointing towards 1970s style stagnation.

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December Unemployment Holds Steady at 10 Percent

January 8, 2010 By Jeff Leave a Comment

I’m looking for good news in the December Jobs Report, but I can’t find any…

From Reuters:

U.S. employers cut 85,000 jobs in December, confounding expectations the labor market was finally stabilizing and piling pressure on President Barack Obama to spur job growth.

Unemployment, which held steady at 10 percent, remains the Achilles heel of the economy’s recovery from its worst recession in 70 years. Creating jobs is critical to sustaining the recovery when government stimulus fades.

November payrolls were revised to show the economy actually added 4,000 jobs rather than losing 11,000, as initially reported, breaking a streak of 22 consecutive monthly losses, the Labor Department’s report on Friday showed.

With revisions to October, however, the economy lost 1,000 more jobs than previously estimated over the October-November period and the stable unemployment rate in December reflected a surprisingly large number of discouraged jobseekers leaving the labor force.

December’s payrolls plunge was much worse than what economists had expected. Wall Street had forecast a flat reading and a tick up in the unemployment rate to 10.1 percent.

Payrolls fell in the manufacturing, construction and the service-providing sectors. Government employment also dipped.

Still, analysts said the data suggested a broad trend toward a labor market recovery was intact.

Intact??? Not hardly, if it hadn’t been for another 600,000 plus workers dropping out of workforce, unemployment rate would have been 10.4 percent. In other words the unemployment rate dropped because 600,000 plus people gave up looking for work and are no longer being counted as part of the workforce… it’s statistical hocus pocus not a labor market recovery. Take a look at the Bureau of Labor Statistics’ Alternative measures of labor underutilization table here… Two things standout first U-1 or Persons unemployed 15 weeks or longer, as a percent of the civilian labor force has increased in each of the last four months from a seasonally adjusted 5.5 percent in September to 5.9 percent in December. Second U-6 or the Total unemployed, plus all marginally attached workers, plus total employed part time for economic reasons, as a percent of the civilian labor force plus all marginally attached workers climbed back up to 17.3 percent in December.

If there’s recovery, it’s a jobless one.

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