Category Archives: Economics

Miscellaneous economy stuff

Jobs

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Here’s where we are, five years into the Obama “recovery” from the Panic of 2008:

  • 4.1 million fewer full-time workers today than in November 2007
  • 81% of workers are full-time now vs. 83% prerecession—and that per centage is of a smaller labor force than extant in 2007
  • per CBO, employment at the end of 2013 was about 6 million jobs short of where it would be if the unemployment rate had returned to its prerecession level…”if the participation rate had risen to the level it would have attained without the current cyclical weakness”

Real wages have gone nowhere in this recovery:

And this graph of the performance of the Obama “recovery:”

This recovery is some 10 per centage points below the recoveries of the three prior…recessions.

If this sounds like a broken record, it’s because this “recovery” is a broken record.

Sanctions and Competition

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Hungary, Poland, Slovakia, and Czech Republic have directly appealed to our Congressional leadership to expedite turning on the export spigot for our natural gas.  These four nations see the directness and immediacy of the advantage of buying natural gas from us rather than from the Russians.

There’s another effect, though, from our increasing our gas, and oil, exports as quickly and as far as we can.  That’s the effect on oil and gas pricing in the global markets.  Such a large and easy increase in supply will depress those prices, which will have a competition-based double whammy on Russia: it will deprive Russia of billions of dollars in income from its own oil and gas exports by lowering the price, sharply, that Russia can demand, through depriving Russia of its energy monopoly.  Keep in mind, also, that the Russian economy almost exclusively is built on oil and gas exports—it has nothing else other than cheap, second tier military equipment, and while that remains a strong Russian industry, it’s not strong enough to carry the Russian economy, much less provide the funding necessary for Russian…adventurism.

The other whammy also is in those sharply lower oil and gas prices.  That decrease will make it easier for erstwhile Russian “clients,” including Hungary, Poland, Slovakia, Czech Republic, Ukraine, the EU (Germany, France, and Great Britain especially) to get their energy from somewhere more reliable than Russia, and at a cheaper price.

That cheaper price for these others produces a separate whammy for them: cheaper energy can be only to the good for their economies as they struggle to break out of the doldrums remaining from the global Panic of 2008.

But that’s what competition does—it lowers prices and sets economies free to generate prosperity.  An attempt to boycott Russian oil and gas is unnecessary.

Budget Lies

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President Barack Obama, aided and abetted by the mendacious NLMSM, is touting his latest “budget” proposal as cutting spending by $600 billion over the next 10 years.  But Scott Rasmussen, cited in The Wall Street Journal, has noted,

in the current year, the federal government is expected to spend $3,651 billion.  …the president’s budget calls for spending $3,901 billion in 2015.  That’s $250 billion more than this year.  It’s not a one-year aberration either.  Spending increases are projected every single year for the next decade and beyond.

Calling that a spending cut is an outright lie.  Even if the spending increases are smaller increases than originally planned, they’re still increases, not cuts.

As Rasmussen also pointed out, this isn’t unique to Obama, though; it’s been going on since at least the ’70s.  But it’s got to stop.  Full stop.

Speaking of Out of Touch

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Senator Bernie Sanders (I, VT) demonstrated the depth of his condition of out of touchness in a Tuesday op-ed in The Wall Street Journal.  Although Sanders’ out of touchness is amply demonstrated by his full-throated defense of the dinosaur that is the United States Postal Service, I want to look at a couple of other things he said in his piece.

First, there’s this:

There are very powerful and wealthy special interests who want to privatize or dismember virtually every function that government now performs, whether it is Social Security, Medicare, public education or the Postal Service.  They see an opportunity for Wall Street and corporate America to make billions in profits out of these services….

He says this in all seriousness, as if shrinking government and returning the bulk of its functions to the private sector where they belong is somehow a bad thing.  And that there would be profit in that private sector (and not only for “Wall Street and corporate America,” but also for medium-sized and small businesses and the Americans these would employ) is something only an avowed Democratic Socialist like Sanders would decry.  Moreover, it’s not only the powerful and special interests who want this shrinking of government and a divestment of its present array of “functions.”  Apparently he’s missed the Tea Party revolution that’s been going on these last five years.

He also had this (with some overlap with the quote above):

They see an opportunity for Wall Street and corporate America to make billions in profits out of these services, and couldn’t care less how privatization or a degradation of services affects ordinary Americans.

This is a false dichotomy.  Privatization doesn’t at all degrade services—it improves those extant and leads to vast expansion of new services, and at lower prices than before.  This is the example of the breakup of Ma Bell, effective at the start of 1984.  Under Ma Bell, we had a very good land line telephone system.  After the breakup, we got an even better land line system of competing companies (until their effective remerger); a cell phone system of competing companies; a cable system of more-or-less competing companies, which also compete for telephone business; and all of them competing for Internet business—including telephony communications.

A further example is the USPS, which prior to the divestment of package delivery and mail service other than first class, did a very good job of delivery.  Now we have competing package and special delivery service companies that are cheaper, faster, and even more reliable, and they have a broader range of special delivery services that the USPS is scrambling to match.  Additionally, all those communications services above are functionally competing for first class mail delivery, too, even though only the USPS can handle formal first class.  That’s what email, texting, Skype, AIM Chat, Twitter, and on and on—even that other dinosaur, faxing—are doing.

Apparently, Rip van Sanders has been sleeping through the end of the 20th century and this beginning of the 21st.

The President’s Defeatist Budget

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It’s illustrated by Table S-12 Economic Assumptions from the White House’s Summary Tables, repeated below.

The table is hard to read; the money line is the third one, labeled “Real GDP, percent change, year/year.”  Beginning in the year 2018—just four years from now—President Barack Obama and his “economic” advisors predict our nation’s economic output—our GDP—growth rate to shrink from 3.1% growth per year to an historic low rate, and abysmal rate, to 2.36% in 2-019, and then to less than 2.5% after that.  And to stay at that abysmal level as far as the prediction can see.

This is the defeatist attitude of the Progressive.  1979 Presidential Candidate Ronald Reagan had a different vision [emphasis added]:

Someone once said that the difference between an American and any other kind of person is that an American lives in anticipation of the future because he knows it will be a great place. Other people fear the future as just a repetition of past failures.  There’s a lot of truth in that.  If there is one thing we are sure of it is that history need not be relived; that nothing is impossible, and that man is capable of improving his circumstances beyond what we are told is fact.

There are those in our land today, however, who would have us believe that the United States, like other great civilizations of the past, has reached the zenith of its power; that we are weak and fearful, reduced to bickering with each other and no longer possessed of the will to cope with our problems.

Much of this talk has come from leaders who claim that our problems are too difficult to handle.  We are supposed to meekly accept their failures as the most which humanly can be done.  They tell us we must learn to live with less, and teach our children that their lives will be less full and prosperous than ours have been; that the America of the coming years will be a place where—because of our past excesses—it will be impossible to dream and make those dreams come true.

I don’t believe that.  And, I don’t believe you do either.  That is why I am seeking the presidency.  I cannot and will not stand by and see this great country destroy itself.  Our leaders attempt to blame their failures on circumstances beyond their control, on false estimates by unknown, unidentifiable experts who rewrite modern history in an attempt to convince us our high standard of living, the result of thrift and hard work, is somehow selfish extravagance which we must renounce as we join in sharing scarcity.  I don’t agree that our nation must resign itself to inevitable decline, yielding its proud position to other hands.  I am totally unwilling to see this country fail in its obligation to itself and to the other free peoples of the world.

The crisis we face is not the result of any failure of the American spirit; it is a failure of our leaders to establish rational goals and give our people something to order their lives by.

We can, indeed, do better than that Progressive budget implies.  We just need to get the Progressives out of the way.  Beginning this year, but necessarily continuing in 2016 and the election cycles beyond.