AUGUST EMPLOYMENT REPORT

President Obama stated to Diane Sawyer in an interview last January, “The purpose of a politician is to get re-elected.” A bothersome statement coming from a president…but insightful. With the campaigning for the mid-term elections in play, it’s foreseeable that the August jobs report could be used politically not economically. Washington and the press suggest the report demonstrates a turn around. A closer look suggests otherwise.

The August unsuccessful numbers were the third month in a row. This would suggest that government spending and control over the credit markets are failing to meet the goal of job creation. From the report: 54,000 job losses this past month. An unemployment rate at 9.5%. The recovery strategies are not creating enough new jobs to decrease the ranks of the 14.9 million unemployed. (Possibly political, the report did not include the involuntary part time workers of 8.9 million.) One in seven people are unable to find a full time job. So how is the private sector doing?

For profit businesses added 67,000 jobs for an overall labor force expansion of 550,000 since May. Average hourly wages increasing .3% in August. Manufacturing jobs receded in August, yet, since January a successful sector. Construction and healthcare continue to expand.

A number of pundits suggest a double dip recession. The August report points to something other than recovery. The August numbers, put into the perspective of an 18 month trend show that continued slow and low growth may continue. With the failure of previous stimulus spending, politicians doing their job “to get re-elected” will pull out a few tricks for votes. Some will divert attention from the economy, some will promote little jolts like cash for clunkers and home buyer tax credits – short term small impacts that the past 12 months show did not help.

It appears government spending does not have the positive impact on unemployment as we would hope. Ten years ago the United States was the top industrialized nation for employment. Now it is the worse. Will the political messaging change this fall to divert attention away from the reality of the economic reports?

PUBLIUS

Economist Hats

Years ago, I had a friend from India who often marveled at our great country. One day I asked him: what are the top three things about the U.S. that are most impressionable from his cultural perspective. He said: 1) The interstate; 2) the supermarket; 3) you can put dog do-do on a hat and people will line up to buy it. I found this to be a fascinating comment on our society. He was suggesting that Americans will buy into just about anything. And so goes our perspective on economic policy.

The past couple years have been described as the worst economy since The Great Depression. President Clinton used that line in 1991 to defeat George Herbert Walker Bush and we bought it. “It’s the economy stupid.” Is it? Did the government create the recession? Or did the markets? Can you honestly show the data as to which? President Obama took Secretary Geithner’s advice and pumped more money into the economy since….since ever. The headlines said the U.S. Government has spent more money than spent by all previous administrations since President Washington. Did you see a figure for that, or just repeat it? Does the General Accounting Office have the balance sheets back to 1780? Tax cuts for small businesses encourage hiring, right? Or do tax cuts hurt the federal government’s ability to stimulate the economy? Will 1990s Japan-like deflation happen, or is inflation on the horizon? Is gold on the rise because of the devaluation of the dollar? Will the stimulus package create jobs? What questions should I be asking anyway?

Well, it depends on the economist and the ideology you follow. Each expert sees things differently. The stimulus package should have been bigger. The stimulus package is why unemployment is so high. Hyperinflation, I’m told on Tuesday, is coming. Thursday I’m told no need to be concerned about it. Unemployment is 10.3% and dropping. Unemployment is around 17%. What are you hearing on CNN, Fox, Patriot Radio, Radio America, etc? Ed Leamer, UCLA economics professor suggests all this is “faith-based econometrics”.

John Maynard Keyes’ theories of government “pumping” money into the economy to stimulate the markets was credited for the success of the country moving out of The Great Depression. Yet, why did the country come out of the depression only after WWII started?. To get out of a recession, President Kennedy followed a new theory and cut marginal taxes resulting in an economic boom during the 1960s. Most economists sidelined Keyes after the 1970s stagflation experience. Then along comes President Obama and we cycle back to the 1930s.

Are we using economic theories and talk show hosts to support our ideological positions and biases? Conservatives loved Ronald Reagan’s faith in the lessons of the Laffer Curve. Progressives support President Obama’s Keynesian approach. Great economists like Adam Smith and Milton Friedman would just nurse a headache listening to all this policy rhetoric.

Have economists moved from philosophical theorists, to empirical scientists, to being members of the political establishment? We should note, there are economic principals that are universally accepted. Certainly economists agree that inflation and money supply are related. This is the primary mission of The Federal Reserve afterall. Even non-economists seem to understand that incentives energize business, trade creates wealth, and middle class tax cuts get you re-elected. Policy makers and their regulations will always be debated. Economic cycles, it seems, are unpredictable, and economists don’t really know for sure how to steer them. When will we accept that economists are working from immature theories, and not just listen to the ones who share our politics without verifying the communiqué? When will we realize that political ideologies exploit the void?

There are thousands of variables to the economy. Any ideology can use these variables to gather followers and loyalists. After 80+ years, economists continue to debate what started and what stopped The Great Depression. Earlier this year, the Obama administration sited a GDP report of 5.2% as evidence that the recession is over. The Wall Street Journal reported that when adjusting the GDP number for post-Christmas shelf restocking, the economy grew 2.5%, not 5.2%. The economy is complex and our ability to apply a universal theory lacking. We need to listen less to the ideological economic viewpoints and gather more perspective from discussion. Or else we’ll find ourselves buying one of those “doggy do-do” hats.

President Reagan summed up economics best when he quipped: “Are you better off today than you were four years ago?” Taking the interstate to the grocery store will help answer that question better than visiting the hat shop. -Publius

One Term President?

February 27, 2010

History teaches that those presidents who are able to move from the extremes of campaign mode, to governing in a more balanced manner early in their first term, have a better chance of being a two term president. In many instances, this required a departure from the previous administration’s path to something more in line with the American mood. During an interview with Diane Sawyer on January 25th, President Obama stated “I’d rather be a really good one-term president than a mediocre two-term president.” Interesting comment. One could interpret that to mean his current ideology’s policies, unpopular as they are, will remain for the next three years. Will he learn from history? Will he learn from members of his party, recent elections, polling results and the popular mid-term candidates giving incumbents some difficulty? Does he understand the American appetite for less extremes and a path towards the center?

Recently, Arkansas Democrat Blanche Lincoln got a sense of how potentially harmful this “really good one-term president” can be for her 2010 re-election. In step with her own epiphany on the mood of the country, she lamented that it would be best if the President, and his administration, distance themselves from “people who want extremes…and seek to find “common ground” with Republicans. Especially if promoting legislation which provides a “certainty” for jobs creation. Obama responded with “the price of certainty is essentially for us to adapt the exact same proposals that were in place leading up to the biggest economic crisis since The Great Depression…the result is going to be the same.” To Obama, moving to the center where the nation would like its leaders to be means emulating George W. Bush. Apparently, to President Obama, politically, good ole’ “W” was a two-term looser. If President Obama is unable, or unwilling to listen to members of his own party, he may end up a one term mediocre president. He seems not to understand that America would prefer a move to the center. Fifteen months ago he had a 70% approval rating. Recent Gallop Polls show him running even with a theoretical “centrist” (i.e. George W) in a 2012 election bid.

President Obama misses all of this and the reasoning behind his drop in popularity. When taking office after President Bush, he did not take a path that “avoids repeating the failed policies of the past.” He joined in with Pelosi’s Congress and continued the spending he so earnestly attacked “W” for. Only the spending has been exponentially more. The spending, as it was presented, was to prop up the economy. However, Congressional Budget Office reports indicate the majority of the money as discretionary and earmark in design. Where is the departure from the past?

History shows that bold moves by presidents towards the prevailing view of the American people often leads to success. FDR made a bold move from Herbert Hoover’s direction and increased government’s presence in America’s daily business. Ronald Reagan moved away from Jimmy Carter. But in 1982 President Reagan’s approval rating was lower than President Obama’s is now. Simultaneously, the Republicans lost significantly in the mid-term elections. However, by 1984 The Great Communicator won a second term with a 49-state landslide. Ten years later President Clinton overcame a similar scenario.

These presidents listened and learned that the mandate given to them was not their extreme ideological desires, but the populist sentiment Of and For The People. They took off the campaign-mode persona and went to work on the fundamentals of governing FOR The People. As President Reagan was fond of saying: “get the government off the backs of the people”. President Clinton charged up the nation by compromising and accepting Republican initiatives that the populist wanted: balanced budget; tax cuts; welfare reform; etc. And today, the populist sentiment continues the tradition of signaling where it would like its leaders to move. Americans have a theme song they’d like to see Obama download to his I-Pod. The simple, clear, catchy, easy to dance to tune of less spending; less government; less taxes; leave the healthcare system alone.

So far, the song has attracted some impressive results. Virginia Democrats giving way to the Republicans in the top offices of Governor, Lt. Governor and Attorney General. In New Jersey, Chris Christie saw the largest victory for a New Jersey Republican in 25 years by his win over Corzine. And recently, the latest Cinderella story of Mr. Brown defeating Ms. Coakley in Massachusetts. A Quinnipiac poll suggesting a 45% disapproval rating of the President’s governing seems to reflect his fallen “American Idol” status. As the mid-term elections begin to organize, some surprising individuals are making a move down a different path. Inexperienced, but they understand what President Obama and the Washington establishment do not seem to grasp. To name a few: Jim Ward of Arizona (former President of LucasArts); Jon Runyan of South Carolina (Offensive tackle for the San Diego Chargers); Todd Yound of Indiana (Attorney); Stephen Fincher of Tennesse (Farmer); Brian Rooney, Michigan (Businessman); Scott Rigell, Virginia (Car Dealership Owner). Six Republicans running in Democrat establishments with notable early results. None of them having held office before.

They’re singing what President Obama’s I-Pod won’t play…Americans seeking distance from his extremes. We await Barack Obama’s mark on Presidential history.

Publius

The Constitution Affirmed

January 30, 2010

These past 12 months have been good for The U.S. Constitution. The Supreme Court has shown its ability to rationally stand above patrician politics, political correctness, and conservative extremes and do their job. Our Founders designed it to work that way. And our current judges are living up to the responsibility.

In the spring of 2009 the Supreme Court handed down the Heller decision regarding the right of citizens to own a handgun in Washington D.C. “A well regulated Militia, being necessary to the security of a free State, the right of the people to keep and bear Arms, shall not be infringed” states The Constitution. The high court made a “common sense” decision when interpreting the Second Amendment’s clause on the right to bear arms. You, as a citizen, have the constitutional right to own a handgun. Our constitutional rights upheld.

Recently, the Supreme Court announced another common sense decision regarding the freedom of speech. The court’s decision in Citizens United vs Federal Election Commission strengthens the First Amendment and freedom of speech. On docket was a nonprofit political advocacy group film about Hillary Clinton who at the time was a presidential candidate. The film was not supportive of Mrs. Clinton. Under the 2002 Bipartisan Campaign Finance Act (McCain-Feingold), corporations and unions were band from “electioneering communications” within 30 days of a primary or 60 days of a general election. The foundation of the decision addressed two issues. First, does the First Amendment protect all speech, especially criticism of powerful political figures? Second, who should decide how much Americans can speak during elections?

Our First Amendment states: “Congress shall make no law…abridging the freedom of speech…” The Constitution does protect the freedom of speech of every citizen. However, only from the restrictions set by Congress, and, as interpreted in the 14th Amendment, by state legislatures, too. There are other areas where speech can be abridged or suppressed. For example, in the work place, where employers can restrict your right to speak about politics, religion, legal issues, and just about any other subject. While the government could not prohibit the sale of any newspaper which would abridge the freedom of the press, news stands may or may not carry any papers its owners' wish.

With the Citizens United vs Federal Election Commission decision, the high court rejected limits on corporate spending when expressing their viewpoints as unconstitutional. Corporations and unions have the same rights as individuals to spend money on political speech. Justice Kennedy pointed out that to do so otherwise is akin to censorship which is at odds with the fundamentals of First Amendment principles. “Because speech is an essential mechanism of democracy…it is the means to hold officials accountable to the people…political speech must prevail against laws that would suppress it by design or inadvertence,” he wrote.

The era of the arbitrary exemption of media corporations under McCain-Feingold, is now over. The decision was expressed this way. A corporation that owns its own newspaper retains its First Amendment right to speak freely. “At the same time, some other corporation, with an identical business interest but no media outlet in its ownership structure, would be forbidden to speak or inform the public about the same issue,” wrote Justice Kennedy. “This differential treatment can not be squared with the First Amendment.”

President Obama wasted no time with his latest populist persona by referring the decision “a major victory for big oil, Wall street banks, health insurance companies” and other “special interests.” Any mention of the SCEU and other unions supportive of Obama was absent. The political spending of these unions are also protected by the ruling. It will be difficult to accept that no longer will any one group have a monopoly on free speech.

The 2002 Bipartisan Campaign Finance Act banned corporate contribution under the assumption of preventing corruption. Such corporate spending, the law suggested, would distort elections. It is assumed that the amount of money corporations have available creates inequities in speech, thus unfairly controlling democracy. However, this position was at odds with previous Supreme Court decisions that stated creating a political level playing field could not justify campaign finance restrictions. The reasoning of the court being that in order to create that level playing field, the government would be forced to ensure some people or groups spent less than they desired. The United Citizens decision affirmed that an equality of speech is contrary to protecting government’s intrusion on speech…which is at the essence of The Constitution’s conception of speech.

It’s been proposed that under the new ruling, businesses will have a dominate position in the candidate discussions during elections. Prior to the Bipartisan Campaign Finance Act, corporations could spend freely on advertisements for or against a candidate. However, this made up a rather small part of election-related speech. (After all, being partisan is not good for business). Special interest groups dominated election-related speech.

Vice President Biden argues that a flood of foreign dollars, and thus influence, will corrupt our democracy. But foreign corporations will not be able to determine the outcome of an election. The Citizen’s decision nullifies the blanket band on corporate contributions as outlined in Part 2 US Code 441b. However, Part 2 US Code 441E, which specifically bands foreign interests and nationals from making contributions to a political campaign, is not addressed in Citizens United vs Federal Election Commission. It is left alone. Therefore, this band will continue.

The Supreme Court has supported that the First and Second Amendments do have force. The American people have the right to bear arms and decide how much to spend on political speech. Congress’s endless and misguided gun laws and campaign finance arguments have reached a Constitutional dead-end. And the Constitution has been affirmed.

Publius

One Year Ago

January 20, 2010

Recently, I noticed an interesting pattern with the parents of my son’s friends. When it’s time to pick up their child from our house after a day of hanging out with my son, there’s no honk of the horn or knock on the door. Mysteriously, my son’s friends start putting on their coats and shoes, say goodbye, and head out the door to a waiting car. This has been going on as far as I could remember. But only recently did I take note of why this was happening. Simple reason: a text message from parent to child! Of course I would miss it. We don’t have the cell phones in the palms of our kids.

The dot that was suddenly connected for me was the “disconnect”. Are we that disconnected with one another that we privately text our child from the driveway and no longer knock on the door and visit with the parents of our children’s friends? How many times do I just drive up, push the garage door button, drive in and close the door behind me without a thought to visiting my neighbor who is out mowing his lawn? When was the last time I gave a casual hello in passing at Duncan Donuts to the woman who sits across the pew from me every Sunday? Disconnected we are as a people. Why should our government be any different?

One year ago Barack Obama flipped the political world with a resounding national election victory. Tapping our mood and our concerns was his preoccupation. But what a year makes. Virginia Democrats gave way to the Republicans in the top offices of Governor, Lt. Governor and Attorney General with significant margins. (McDonnell won by 17% margin for one). In New Jersey, Chris Christie saw the largest victory for a New Jersey Republican in 25 years by his win over Corzine. And recently, the latest Cinderella story of Mr. Brown defeating Ms. Coakley in Massachusetts. The Tea Parties this past summer were the tracer shots leading to what the latest Quinnipiac poll discovered: a 45% disapproval rating of the President’s governing. Obama clearly is not in the same room as the American People. He is preoccupied with something else.

For Americans, how the president presents himself, what he says and the flare in which it is communicated, does not matter much. We are a people for whom what a president does is what matters. There in lies his disconnect. For example. Obama’s undying commitment to his health-care plan that has a 35% approval rating. He does not seem to take notice or care. And each day he forces this plan through with stubborn determination. Each day he works with Congress to come up with any way possible to negotiate a bill. Is he so disconnected that he has not noticed how much the people dislike Congress?

The disconnect represents a growing distance between We The People, and our Government sent to serve us. One year ago we began to reap with intensity this gulf of disconnect. It is a metaphor of who we have become. And a symptom of the breaking up of the Republic. My advice to President Obama? Leadership takes listening first and foremost. We aren’t connecting with your speeches. Try hearing us.

Publius

Missed Insult

January 15, 2010


This past week, for a day or two, the sensationalism of comments about President Obama that Senate Leader Harry Reid had made in his recently released book made the media stories. Senator Reid pointed out the obvious about our culture. That part of Obama’s acceptance had to do with the subtleness of his minority side. Light skin, doesn’t speak with an African American intonation.

The media and all of America responded by demanding an apology for insulting Obama. A small attempt on the part of the Republicans to grab some payback for Senator Trent Lott’s innocent comments years ago was made. I suppose with the Tiger Woods story in our distant memory, this was as good as any misguided tabloid to grab a few viewers one evening or two. But the President responded appropriately. He was above it all. He saw it for what it was. He didn’t miss the reality. (Tiger is light skinned too after all).

The statements are a truthful reflection on our culture. How did Jesse Jackson and Alan Sharpton fair during their attempts at the higher office years ago? They had similar messages as President Obama, but we could not get past their “blackness”. If this is prejudice, well, ok. Let’s be honest. It was not the President who should have been offended. It was black Americans in general. And as I said, the President responded appropriately. To go further and point out the fullness of Reid’s comments would only have divided us more. Sometimes it is best to let sleeping dogs lie, as they say.

But again, for a few days, we focused in the wrong direction and made it a political party issue. And missed the truth of the insult.

Publius

Leading The Disheartened

January 3, 2010

This past fall, the “government experts” declared that hard times are ending. Economic numbers showed growth at 3.5% and unemployment dropped 0.2%. (Temporary hiring for the Christmas shopping season). But as talk shows debated the numbers, America was not celebrating. Public confidence in these experts waned.

Media sensationalism and political pundits have us caught up in endless debate with parroted arguments that the biggest threats to America include: spending; deficits; Chinese ownership of our debt; world terrorism; mid-east war; H1N1 pandemics; healthcare; and climate change. Government experts up to the President each drive the crisis in our country. What is the root cause? This threat is the American people’s disheartening attitude towards government leadership. It is growing and deepening, and soon will hit a tipping point.

I’m old enough to remember the recession of the 1970s and 1980s. Interest rates of 20%; unemployment above 10%; stagflation; gas lines; President Carter’s “Misery Index”. By any economic measure, that period was more severe than now. But back then, there was a sense of hope. We believed our leaders would come together and show us a way through. We knew we’d get out of it and we did. Today, people don’t see it that way. Have you heard someone say “hang in there…Obama and the Democrats will make it better”? Or, “just follow the Republicans, they know the way out of this”? Americans are beginning to think the problems won’t be solved.

The problems are overwhelming. And our government leadership proves every day an inability or incompetence to make things better. Where are the new solutions? Tax then spend more; regulate more; borrow more money for a bigger government, have historically proven not to work. Even William Bradford, the first leader of the Pilgrim settlement, early on learned that these methods result in failure, and quickly moved away from them. The American people know they are not the solution.

Borrowing, spending and saddling the engines of the economy via regulatory fiat, are an odd way to lead us out of debt and a slow economy. When your household debt grows beyond your ability to pay, you cut back expenses. To do otherwise worsens the problem. Do our leaders not have a conscious or understanding of the impact of these decisions? Do they believe America is strong enough to handle such abuse?

Did growing up in the post war expansion, roaring 80s and a country of unprecedented wealth and strength spoil our leaders? They’ve grown up with the sayings: “Strongest nation”; “Worlds only superpower”; “Highest standard of living.” Are our leaders that irresponsible to put these phrases and all that they stand for at risk? Or do they believe they could never erode the fundamentals that built the nation? Do the children of abundance believe the party can or should go on no matter what? Maybe being laid off, living paycheck to paycheck, or experiencing a foreclosure should be a requirement for governmental leadership. Maybe then they will not be so callous, and notice when the American people no longer believe in them.

Publius

Uphold Our Liberties

March 22, 2009

An article in the Army Times (9/30/08) stated that the “1st Brigade Combat Team will be under the day-to-day control of U.S. Army North, the Army service component of Northern Command, as an on-call federal response force for natural or manmade emergencies and disasters, including terrorist attacks.” The article goes on to describe its objectives to serve as a military police force. A most high principle of the victorious colonies was that a national standing army never be used for domestic law enforcement. This was reinforced and secured in 1878 by the passage of the Posse Comitatus Act and the Insurrection Act. These substantially limited the powers of the federal government to use the military for law enforcement. Our government has violated its own principles and laws. And “you” did not even know about it.

In the past few months we’ve seen the bailouts and the bailouts of the bailouts. Everyone points the fingers, but the truth is not spoken regarding these payoffs. The vast majority of these dollars are earmarks, pork and payback for election contributions. They also nationalize private industry – the government now owns controlling interest in our banks. These banks can tell you that 95 plus percent of the U.S. economy is based on small businesses of 100 employees or less. Less than 1% of the stimulus package helps these economic drivers. In the first 30 days of 2009, our government has spent more than what was spent in the previous eight years. Why are they selling us out while telling us this is change from the excesses of the past? It appears to be an orchestrated effort to take over the economy.

Recently, we’ve all heard the news about A.I.G. I personally am tired of rehashing the story. But there’s a side to the story that the press either omits or refuses to report. The dollars given A.I.G. included two things. First, the U.S. Government would own 79.9% of the company and oversee its governance. Second, as offered by the Treasury, signed by Gietner and Christopher Dodd, and approved by President Obama, retention bonuses were written into the contract. An interesting side note: Dodd and Obama both took campaign contributions from A.I.G. in excess of $100,000 this year. Dodd denied this at first on CNN, but when the truth came out stated that he “had misspoken”. But what makes this egregious is the movement in the Congress and Senate to break that contract via legislation. The basis of our nation’s legal system is “common law”. One of the principles of that law is to honor contracts and covenants. The government has again, chosen to violate constitutional principles and violate its own contract. If you don’t like the retention bonuses, you have only your own government to blame. They own the company and agreed to the bonuses. But like it or not, the atrocity is the government reneging on its own contract.

Allegiance to our Constitution preserves our liberties and way of life. Most of the problems and frustrations that trouble our republic are due to the tendency of our elected officials and judicial representatives to brush off or abuse constitutional law. Only fidelity to the Constitution will repair the damage done by our corrupted government.

As free people, we are all called to uphold and defend the principles that ensure our liberty. The U.S. Constitution, Bill of Rights, and Declaration of Independence contain and protect that liberty. Thus, it is the responsibility of every American to studiously familiarize himself with these principles. Even more importantly, it is the duty of each American to aggressively hold their elected representatives accountable to his or her oath to the Constitution. The U.S. Constitution is a contract made between the civil magistrates and “We the People”. If this contract can be broken by our elected officials trampling on the Posse Comitatus Act and the Insurrection Act, through the political payoffs of the stimulus and bailouts, and by demonizing executives and reneging on the contract they made with them, how much further will they go with ignoring or limiting your liberties?

Publius