progressive

Obama on Jobs: Reality is Not Optional

/ L. M. Walker / 2 Comments

Reality is not optional

To: Obama and other Quasi-Socialist Progressive Fundamentalist Racism Chasers

In response to various comments regarding my last blog post: Obama on Jobs: Worst Track Record in History.

By: Larry Walker, Jr.

Actually the full quote as attributed to Economist, Thomas Sowell was: “Hope is not reality, and reality is not optional.”

Of all the jobs created, and recovered before progressives co-opted the Democrat party, how many were created by the lie that it is up to the Government to borrow money and use it to provide economic stimulus? The answer is none. The old liberal policy used to be called tax and spend (i.e. get the money first and then spend it). The tried and true conservative policy is to cut taxes and let the people spend their own money (i.e. let the free market dictate). The progressive slant has regressed into a new policy called, borrow and spend (i.e. borrow money by the trillion, spend it first, and then tax the hell out of anyone who survives).

We know that the first two methods worked to some degree, although we often disagreed on which was better. All we have to do is go back in history to measure their results. The goal has always been to grow our economy in line with the population, with limited inflation and full employment. But under this new borrow and spend philosophy, all we have is the hope that, if you are ever able to get your head above water, you will be taxed back into oblivion to pay for all the money spent to get you there. In the meantime you just hope that the $250 or $400 per year government handout is enough to get you by.

The hope that an unproven policy will be able to produce the same result as proven methods is not only uncertain, but in this matter impossible. Uncertainty is optional, but reality is not.

Joe Biden recently stated, “We will never be able to recover the eight million jobs that were lost.” Why would he say that? Because there is no way that it can be done under progressive ideology. It doesn’t take a rocket scientist to figure that out.

Under progressive ideology, the economy is something that will continue to function efficiently no matter which policies are crammed down its throat: stimulus, health care, energy policy, financial reform, etc… All of which may be noble goals in a fictitious world, but neither has anything to do with economic growth, nor job creation. True, each may create a few (net) jobs in the next 20 to 40 years, but there may not be any need by that time. In the end, you may be able to force all of these wonderful policies upon the peons, but by then no one will care because the great economy that once existed will be no more.

We need an economy that works for us today, not 20 years from now.

In reality, mandatory health insurance won’t do much good if there are no doctors or hospitals to visit. And where will one go to purchase it when all the insurance companies are gone? Renewable energy and carbon taxes won’t do much for the masses then living in cardboard boxes. Financial reform will be for naught if no one has any money left to save or invest. You can’t have it both ways. Either you put jobs and the economy first, or you fail on all counts.

Hoping that an unproven set of policies will work is not reality. We gave it a shot by spending well over $1 trillion, and it didn’t work. The national debt is now almost 100% of GDP and there is nothing to show for it. So what do you want to do? Do you want to keep on borrowing and stimulating until there’s nothing left? Or should we perhaps pause and consider making a u-turn? I say we heed the warning and make a u-turn before it’s too late.

We know what works, all we have to do is look back in our history at the policies that made America great.

“Reality is not optional.”

___________________________

My previous blog post may also be found at the following sites:

http://www.bookerrising.net/2010/06/larry-walker-jr-commentary-obama-on.html and,

http://aipnews.com/talk/forums/thread-view.asp?tid=15308&posts=1#M40159

Obama on Jobs: Worst Track Record in History

/ L. M. Walker / 3 Comments

Obama: Worst President in History Award

Progressive Policies are Losing 4.2 Million Jobs Annually

By: Larry Walker, Jr.

On January 9, 2009, a staff writer for the Wall Street Journal wrote a smear piece entitled, “Bush On Jobs: The Worst Track Record On Record,” in which an attempt was made to show that Bush was somehow the worst President, and that therefore, Conservative economic policies (i.e. tax cuts) don’t work.

According to the staff writer, George W. Bush created a dismal +375,000 jobs per year during his eight year term; Bill Clinton created +2.9 million jobs per year; while George H.W. Bush created +625,000; Reagan prospered by +2.0 million; Carter by +2.6 million; etc… The staff writer also went into population growth during each term and the percentage of change in the population (for whatever reason). You can find the smear piece and the WSJ table here. Following is an excerpt:

President George W. Bush entered office in 2001 just as a recession was starting, and is preparing to leave in the middle of a long one. That’s almost 22 months of recession during his 96 months in office.

His job-creation record won’t look much better. The Bush administration created about three million jobs (net) over its eight years, a fraction of the 23 million jobs created under President Bill Clinton’s administration and only slightly better than President George H.W. Bush did in his four years in office.

Naturally it is important to use this same benchmark to measure how Barack H. Obama stacks up against his predecessors. So I went over to the good old Bureau of Labor Statistics website and made up my own table, based on the raw data. I brought my chart up to date through May 31, 2010. True, Obama has only been in office for 17 month’s, but we can at least get an idea of how he measures up.

Like the WSJ writer, the counts are based on total payrolls between the start of the month the president took office (using the final payroll count for the end of the prior December) and his final December in office (May 31, 2010 for Obama). Thus, there is no blaming the last POTUS for inheriting a bad economy, and no foul in taking credit for inheriting a good one. After all, being President is about leadership, and leaders take what is in front of them and do the best they can.

Net Job Creation by President (Click to Enlarge)

According to my table, Barack Obama has lost a total of -4.2 million jobs per year, making him, to date, the worst President in history. G.W. Bush actually created 1.1 million jobs per year during his eight-year term. Bill Clinton is responsible for 2.3 million jobs in each of his years. George H. W. Bush can lay claim to 881,000 during each of his four years. Reagan gets credit for 2.0 million jobs per year. And finally, even Jimmy Carter can boast in having created 2.6 million jobs per year. Net job creation is so much better than, economy killing, Progressive policies that there really is no comparison.

Now I am not naïve enough to believe that Presidents, or that governments for that matter, are responsible for job creation, but if you want to make that case, at least get the numbers right. It looks like the WSJ staffer padded Clinton’s numbers while taking away from both of the Bush’s. At the same time, he did manage to get both Reagan’s and Carter’s numbers right.

In conclusion, thus far, the Progressive policies of Barack H. Obama are failing. There ought to be a law. Actually there is a law. It’s called, ‘The Law of Supply and Demand’. When prices fall, demand increases. When taxes are reduced, investment, production and employment increase. And when supply is increased, prices fall, leading to increased demand. Government intervention in the private sector has never worked, and it never will. Reducing the size of government, lowering taxes, and decreasing government regulation actually work after all. We will most definitely be following up.

References:

ftp://ftp.bls.gov/pub/suppl/empsit.cpseea1.txt

http://blogs.wsj.com/economics/2009/01/09/bush-on-jobs-the-worst-track-record-on-record/

Progressive Regression II | Financial Regulation Crisis

/ L. M. Walker / 4 Comments

– By: Larry Walker, Jr. –

Government Regulation vs. Self-Regulation

Once again, the Progressive Obama Administration’s magical solution, for all problems American, is more government regulation. But is government regulation really any better than self-regulation? Progressive government regulation is even worse. (A Progressive regulator is pictured to the left.)

I contend that banks and financial services companies have a direct interest in the safe, efficient, and profitable business of making loans, investments, and protecting assets. Would it benefit a bank to carelessly make loans to unqualified borrowers, taking the risk of never being repaid? No. Would it benefit a financial services company to recommend investments in financial instruments that continually lose money? No. Every private sector company has a direct interest in self-regulation.

Surely there will be incidents of fraud, theft, and abuse, but when such incidents occur, private companies will pay stiff fines under applicable Federal and State laws. When it is discovered that laws have been violated, corporate employees, and executives often face stiff fines and/or prison time. But what happens when government regulators screw up?

On August 9, 2007, former SEC Commissioner, Roel C. Campos officially announced his resignation.

On October 2, 2007, former SEC Commissioner, Annette L. Nazareth, a nine-year SEC veteran, officially announced her resignation.

On August 13, 2008, Florida’s top financial regulator, Don B. Saxon resigned before he could be fired. He was blamed for lax enforcement of state laws which allowed convicted felons to be licensed as mortgage brokers, including individuals who took part in mortgage fraud.

On January 26, 2009, Timothy Geithner, former President of the Federal Reserve Bank of New York, was sworn in as Secretary of the Treasury.

On May 7, 2009, Stephen Friedman, the former chairman of the Federal Reserve Bank of New York, abruptly resigned; days after questions arose about his ties to Goldman Sachs.

When regulators make costly mistakes most of them simply resign, disappearing into the shadows with taxpayer funded golden-parachutes. However, in some cases (Geithner) they get promoted. So there is no accountability when it comes to government regulation.

The case against more government regulation:

Raymond Richmond, in his latest article, Geithner and Summers Make Their Economic Mistakes Transparent, reminds us that the last major governmental intrusion into the private financial sector is what created our current recession. Instead of learning the valuable lesson that ‘government regulation equals no regulation’, the Progressive Obama Administration’s solution, like a junkie in relapse, is more of the same. “This time it will be different.”

“Here at home, we are on the verge of completing the most sweeping financial reform in more than 70 years.”

They failed to mention that the last major intervention in bank regulation caused this recession. Beginning in 1977 with the Community Reinvestment Act, every administration pressured the banks to make loans on easy terms, turning their eyes away from the housing bubble they were causing and the dangerous lack of collateral backing most mortgages. Government created two Government Sponsored Enterprises, Fannie Mae and Freddie Mac to create a secondary market for such ill-fated loans. Wall Street got into the act and created derivatives which brokers sold all over the world. When the housing bubble burst, the U.S. and Europe’s largest banks and insurance companies faced bankruptcy, and stock markets round the world collapsed. The U.S. does not need new bank regulations; it needs to keep the politicians from making decisions that should be left to the shareholders of private firms who have the major stake in the firm’s success. This is the lesson that should be learned around the world.

The past year and a half has seen unemployment grow in the U.S. to double digits, factories disappear, witnessed a worsening in the distribution of income, saw soaring government budget deficits, saw the U.S. dollar, the world’s standard, lose more than a third of its value in foreign exchange.

Prospects have never been worse. And all of these are the product of government intervention in the private economy. This is the lesson the G-20 ought to learn, government intervention in the economy usually does more harm than good. That would include intervention in the economy by the G-20, should it become an institution that makes and enforces decisions.

Michael Pomerleano in a Financial Times article entitled, The Failure of Financial Regulation, explains how government regulation failed. This is more proof that all of the time, effort, and money spent on government financial regulation has been for naught.

The regulation and supervision of the banking system rest on three pillars: disclosure to ensure market discipline, adequate capital and effective supervision.

Did the regulatory philosophy governing our financial markets withstand the test of the recent crisis? My conclusion is that all three regulatory pillars failed.

Was adequate information available before the crisis erupted? The information on the subprime exposure was out there for anyone who had the determination to collect and [analyze] the (sometimes patchy) data from quarterly 10Q reports filed with the Securities and Exchange Commission for US banks, supplemented by rating agencies’ and investment banks’ research reports.

A final question we need to ask is how effective was the supervisory apparatus in this crisis?

It is reasonable therefore to infer that the regulatory agencies would have taken notice of those estimates as early as the autumn of 2007. For a long time the regulatory and supervisory apparatus was silent.

We need to question why didn’t any regulator add up the potential size of the losses on the sub prime exposure, based on publicly available information, and verify them with on-site examinations?

Why wasn’t there a far more forceful response from the supervisory agencies? Equally, we should have expected credit rating agencies, investment research and investors to respond more forcefully. In this context, one can only express puzzlement and disappointment at the tepid regulatory reaction. Only after the monumental policy mistake of allowing Lehman Brothers to fail, did the authorities grasp the full significance of the problems and we witnessed a systematic effort to manage and contain the crisis.

Finally, Glenn Hubbard in his Harvard Business Review Article, Financial Regulation: It’s Not About More, reminds us that over-regulation by the government can do more harm than good.

…the economic concern that over-regulation of financial instruments and institutions in the name of safety can lead to aggregate harm — most obviously by raising the cost of funds to household and business borrowers. The key is to design regulation to insure proper pricing of risk and information about risk — such an approach (not that really taken in the bill winding its way through Congress) offers the right balance between protection of the individual and society.

The end result of the Progressive Obama Administration’s magical plan of more government regulation will lead directly to higher costs for American consumers and businesses. Businesses will pass their costs on to customers. Consumers will be hurt. Those who get hurt the most will be those on the lowest end of the economic food chain. Thus, the end result of Barack Obama’s cowardly, status quo, regressive, regulation policies will be to harm those that he claims to be helping.

Smaller government and less governmental regulation will lead to lower taxes, lower consumer prices, greater accountability, more freedom, and more opportunities for wealth creation. What exactly have we gotten in return for all of our money that has been squandered on regulating the financial industry? What will we get with Obama’s ‘more of the same’ approach?

Progressive Regression | Gulf Oil Disaster

/ L. M. Walker / Leave a comment

Government Regulation vs. Self-Regulation

– By: Larry Walker, Jr. –

The Progressive Obama Administration’s magical solution for all problems American is more government regulation. But is government regulation really better than self-regulation?

Companies like BP have a direct interest in the safe, efficient drilling and harvesting of oil. Would it benefit a private oil company like BP to carelessly blow up its own oil well and lose millions of gallons of the precious black gold into the sea? No. Did it benefit Exxon to crash the Valdez and leak millions of gallons of oil off the coast of Alaska? No. So every company has a direct interest in self-regulation.

Sure, accidents will happen. And when accidents happen, private companies will pay the price under applicable Federal and State laws. Many private sector executives have even found themselves behind bars when laws were violated. But what happens when government regulators screw up?

On May 27, 2010, Elizabeth Birnbaum, the former head of the Minerals Management Service (MMS), which is charged with monitoring and regulating offshore drilling, simply resigned.

On May 17, 2010, Chris Oynes, the associate director of Offshore Energy and Minerals Management at the Minerals Management Service simply announced that he was moving up the date of his retirement to May 31, 2010.

On May 11, 2010, Frank Patton, an unlicensed Minerals Management Service (MMS) engineer, who approved the plans for the Deepwater Horizon’s blowout preventer just four days before the blowout, admitted that he did so without ever seeing the blowout preventer plans. He further admitted that he has never seen any such documents on the more than 100 approvals his office issues each year. MMS regulation 250.416(e) requires would-be drillers to submit proof that the blowout preventer they are using to shut off the well will have enough power to shear a drill pipe in case of an emergency, but Patton was apparently unaware of this particular regulation. As far as we know, Patton will keep his job, and will probably get a promotion.

In September of 2006, Interior Department Inspector General, Earl Devaney told a House panel that the Minerals Management Service failed to include price triggers in leases signed with oil companies in 1998 and 1999. The Government Accountability Office estimated that the total cost to taxpayers during the two year period was over $10 billion, yet government officials once again were able to pass the buck.

The point is that U.S. taxpayers have been paying billions of dollars (that we don’t have) annually, for more and more government regulation, yet when it comes time to hold the government accountable we find that they are not.

Barack Obama, and his Progressive minion’s solution to every problem American is more government regulation. I see this cowardly pat answer as just another way of passing the buck. Should we feel confident when Obama, who’s on his way to going down as the worst president in American history, boldly declares that ‘the buck stops with him’? Obama, like his predecessor’s, will be long gone when it is discovered just how badly he screwed up.

In reality, and in general, all that government regulation does is to increase taxes in many forms (income, excise, fees, fines), which in turn makes products and services more expensive for all American consumers; and it creates a layer of unaccountable bureaucrats, who ultimately make us all less safe, secure and prosperous.

Progressive Obama worshippers say that we need more government regulation. I say we need less. It would benefit all Americans to begin dismantling our huge governmental bureaucracy. Increasing the size and scope of government regulation has not historically benefited a single soul, and it never will.

Less Government regulation leads to lower taxes, lower consumer prices, greater accountability, more freedom, and more wealth creation opportunities. What exactly did we get for all the money spent on regulating oil drilling in the Gulf of Mexico?