When we all heard his speeches during the 2008 campaign, it was something akin to the Lesley Gore’s Sunshine, Lollipops, and Rainbows. He promised more transparency and a return of civility in politics. He was everything George Bush wasn’t, which provided the hot air that led him to the presidency. Bush did run deficits and the orgy of spending and corruption scandals that plagued Republicans in 2006, that were not forgotten in 2008, allowed Democrats to control the narrative on a key Republican issue: Taxes and Spending. The “tax and spend label” that usually sinks liberal candidates, or at least makes the race a competition, faded away. Obama vowed to cut the deficit in half by the end of his first term and that was music to the ears of independent voters sick of Dubya. However, when the ballots closed that miserable day in November, Barack Obama rode that wave of “hope and change” into 1600 Pennsylvania Avenue on a flawlessly executed campaign that ushered in our first black president. However, after a $800 billion dollar stimulus, a trillion dollar new entitlement program, stagnant economic growth, a volatile job market, and high unemployment, the banner of hope and change is looking more like a Kafka-esque nightmare. We’ve all transformed into beetles.
As for the so-called “stimulus,” we should thank the president. He finally and irrevocably proved that government spending doesn’t spur economic growth and, therefore, killed the cornerstone of Keynesian economics. We’ve had eleven recessions and recoveries in the past sixty years and, as Harvey Golub wrote in the Wall Street Journal yesterday:
This recovery is near the bottom of all 11. Cumulative nonfarm job growth is just 1.9% 34 months into recovery, the ninth-worst performance and well below the average job growth of 6.5%. Cumulative GDP growth is just 6.8% 11 quarters into this recovery, less than half the average (15.2%) and the worst of all 11…fiscal policy, under the control of the president and his party, increased expenditures by about $700 billion per year since 2008 and launched a spending package of about $800 billion (along with various “targeted” temporary tax reductions), all of which resulted in an increase in national debt of over $5 trillion. In other words, we borrowed $5 trillion, for which we will pay interest for who knows how long, in order to stimulate the economy now.
This is a follow up to mypostyesterday. Kalifornia is really boned. And the masses are out protesting and will likely get violent. Enjoy your Communist holiday.
The weekend produced a spate of dang-this-is-bad articles on the economic situation in California. Steven Greenhut’s for the Orange County Register is entitled “California to middle class: drop dead.” At The Daily Beast, Joel Kotkin laments that “As California Collapses, Obama Follows its Lead.” (H/t – and a “Read it, people!” shout-out – to Ed Driscoll at PJM.)
But what does all this look like in terms of numbers? What’s the how much and where and whom of the Golden State collapse? Perhaps the most interesting and telling thing is that it really is as bad as it looks. And the reasons are pretty much what you’d expect. Here’s the California story, in numbers.
According to a March 2012 report, 855,000 is how many private-sector jobs California has lost since the recession started four years ago. (H/t: California Political News & Views.) The state today enjoys an unemployment rate of 11%, compared with the official national average of 8.3%
Texas, by contrast, has added 139,800 jobs, posting the biggest absolute gain among the 50 states. (California’s is the biggest absolute loss.) Texas’ unemployment rate is 7.1%. Number 3 on the job-growth list? The District of Columbia, with 21,000 added private-sector jobs. Government is big business.
California’s superwealthy progressives seem intent on destroying middle-class jobs.
Few states have offered the class warriors of Occupy Wall Street more enthusiastic support than California has. Before they overstayed their welcome and police began dispersing their camps, the Occupiers won official endorsements from city councils and mayors in Los Angeles, San Francisco, Oakland, Richmond, Irvine, Santa Rosa, and Santa Ana. Such is the extent to which modern-day “progressives” control the state’s politics.
But if those progressives really wanted to find the culprits responsible for the state’s widening class divide, they should have looked in a mirror. Over the past decade, as California consolidated itself as a bastion of modern progressivism, the state’s class chasm has widened considerably. To close the gap, California needs to embrace pro-growth policies, especially in the critical energy and industrial sectors—but it’s exactly those policies that the progressives most strongly oppose.
Even before the economic downturn, California was moving toward greater class inequality, but the Great Recession exacerbated the trend. From 2007 to 2010, according to a recent study by the liberal-leaning Public Policy Institute of California, income among families in the 10th percentile of earners plunged 21 percent. Nationwide, the figure was 14 percent. In the much wealthier 90th percentile of California earners, income fell far less sharply: 5 percent, only slightly more than the national 4 percent drop. Further, by 2010, the families in the 90th percentile had incomes 12 times higher than the incomes of families in the 10th—the highest ratio ever recorded in the state, and significantly higher than the national ratio.
I’m not an economist and don’t claim to be one, but, I know failure when I see it. And every time Keynesian economics has been tried, it has failed miserably.
Here’s an article from CATO that should remind you of that very fact.
There’s an old saying that insanity is doing the same thing over and over again while expecting different results. This certainly is a good description of Keynesians, who relentlessly push more government spending as some sort of magic potion for the economy – notwithstanding a record of failure.
The latest example if Larry Summers, the former economist for the Obama White House, who says Europeans need to make government bigger.
Here is some of what he writes for today’s Washington Post.
European efforts to contain crisis have fallen short. …Much of what is being urged on and in Europe is likely to be not just ineffective but counterproductive to maintaining the monetary union, restoring normal financial conditions and government access to markets, and reestablishing economic growth. The premise of European policymaking is that countries are overindebted and so unable to access markets on reasonable terms, and that the high interest rates associated with excessive debt hurt the financial system and inhibit growth. The strategy is to provide financing while insisting on austerity, in hopes that countries can rein in their excessive spending enough to restore credibility, bring down interest rates and restart economic growth.
The good news is that Summers recognizes that there has been “excessive spending.” The bad news is that he uses the wrong definition of austerity.
We know that many on the racist right have tried to play up Papa Obama’s deficit spending as having no end in sight. But, through my sources at DNC, I have been given inside knowledge of Papa Obama’s theory on deficit spending. Papa Obama has actually found a universal constant to spending.
Apparently, he has based it on another’s work but not as smart as Papa Obama to see the big picture
E= MC2
where:
E= socialist egalitarianism
M= Gross National Product
C= speed of spending- which is a constant
It is so simple and beautiful
Let us approximate on our current deficit spending to show us how this works
Does this really surprise anyone? Not me. And if he’s reelected, then what? You liberal shit bags can’t keep covering up the SCOAMF’s screw ups. Some moron in the comments earlier said it was racist to point out the SCOAMF’s declining poll numbers.
CBS News The National Debt has now increased more during President Obama’s three years and two months in office than it did during 8 years of the George W. Bush presidency.
The Debt rose $4.899 trillion during the two terms of the Bush presidency. It has now gone up $4.939 trillion since President Obama took office.
The latest posting from the Bureau of Public Debt at the Treasury Department shows the National Debt now stands at $15.566 trillion. It was $10.626 trillion on President Bush’s last day in office, which coincided with President Obama’s first day.
The National Debt also now exceeds 100% of the nation’s Gross Domestic Product, the total value of goods and services.
Mr. Obama has been quick to blame his predecessor for the soaring Debt, saying Mr. Bush paid for two wars and a Medicare prescription drug program with borrowed funds.
The federal budget sent to Congress last month by Mr. Obama, projects the National Debt will continue to rise as far as the eye can see. The budget shows the Debt hitting $16.3 trillion in 2012, $17.5 trillion in 2013 and $25.9 trillion in 2022.
Federal budget records show the National Debt once topped 121% of GDP at the end of World War II. The Debt that year, 1946, was, by today’s standards, a mere $270 billion dollars.
Mr. Obama doesn’t mention the National Debt much, though he does want to be seen trying to reduce the annual budget deficit, though it’s topped a trillion dollars for four years now.
President Obama’s national health care law will cost $1.76 trillion over a decade, according to a new projection released today by the Congressional Budget Office, rather than the $940 billion forecast when it was signed into law.
Democrats employed many accounting tricks when they were pushing through the national health care legislation, the most egregious of which was to delay full implementation of the law until 2014, so it would appear cheaper under the CBO’s standard ten-year budget window and, at least on paper, meet Obama’s pledge that the legislation would cost “around $900 billion over 10 years.” When the final CBO score came out before passage, critics noted that the true 10 year cost would be far higher than advertised once projections accounted for full implementation.
Some 10,215 new federal regulations from the Obama administration are costing consumers, businesses and the economy overall $46 billion annually, more than five times the regulatory price tag of former President Bush in his first three years in office. Worse: just implementing those regulations had a one-time additional cost of $11 billion, according to a Heritage Foundation analysis provided to Washington Secrets.
Ironically, Bush instituted more regulations, 10,674, but they cost just $8.1 billion annually, said the Heritage report, titled “Red Tape Rising: Obama and Regulation at the Three Year Mark.” It will be released Tuesday.
The analysis backs ups complaints from the U.S. Chamber of Commerce and other business groups that the president’s regulations are stalling the economy and employment growth. It also calls into question Obama’s promise to put the breaks on new regulations and his State of the Union bragging about issuing less red tape than Bush.
The fact is, said Heritage’s review, hundreds more costly regulations are coming, especially those targeting energy companies and Wall Street. They threaten “to further weaken an anemic economy and job creation,” said Heritage’s James Gattuso and Diane Katz.
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