The day of reckoning looms: Seven charts that outline the true and terrible state of the economy.
Broken record: For the 31st time in the past three years the Obama administration warned the public “not to read too much” into this month’s high unemployment numbers.
Job growth amounted to a disappointing 80,000, below analyst expectations of 90-100K, while the jobless rate remained the same at 8.2%:
Read the whole article. There’s a lot more, all of its depressing and trending downward.
While no President should be blamed entirely for the unemployment numbers, the policies of any President do have a direct influence on those numbers, and should bear some responsibility, especially in this era where we have ceded so much power to the federal government. Consider this graph (below the fold), which shows the “total unemployed, plus all persons marginally attached to the labor force, plus total employed part time for economic reasons, as a percent of the civilian labor force plus all persons marginally attached to the labor force.” The steep upward swing, beginning in 2008, sadly corresponds too closely with the beginnings of the Obama administration. And it is with this administration that we have seen the worst deficits, the most regulation, and the biggest increase in the power of government in our lifetimes. It is thus no surprise the economy has crumbled.
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What comes through in the Moody’s assessment [the credit-rating downgrade of 15 banks] and in any review of their returns on equity is that banks have lost significant ability to generate earnings to offset the inevitable losses. The lost earnings power is surely due in part to reduced leverage, which helps protects taxpayers.
But 2,300 pages of Dodd-Frank and countless other federal efforts to put sand in the financial gears are also taking their toll. The Obama tax and regulatory frenzy, of which Dodd-Frank is a part, weighs on economic growth. Those are our words, not Moody’s, but the rating agency does note that the abysmal economic environment is a drag on ratings for everyone.
Not good: The number of available job openings in April showed the biggest drop in nearly 4 years.
The day of reckoning looms. Two stories:
“If you’re anxious, you sit on your hands.”
“The bad jobs report is just a very small taste of the nightmare that is coming.”
In his first two years in office, Democrats gave Mr. Obama everything he wanted, save for cap and trade and union card-check, which would have done even more harm to job creation. They passed stimulus, ObamaCare, multiple housing bailouts, Dodd-Frank and more.
Even after Republicans took the House, they gave Mr. Obama the payroll tax holiday he demanded first for 2011 and again for 2012. Far from some new fiscal “austerity,” overall federal spending hasn’t declined. Meanwhile, the Federal Reserve has delivered monetary stimulus after stimulus—QE I, QE II, Operation Twist, and 42 months of near-zero interest rates with the promise of 30 months more.
Mr. Obama has had the freest run of policy of any President since LBJ. So maybe the problem is the policies.
Maybe Milton Friedman was right that “temporary, targeted” tax cuts don’t change the incentives to invest or hire because people aren’t stupid. Maybe each $1 of new federal spending doesn’t produce a “multiplier” of 1.5 times that in added output. Maybe the historic burst of regulation of the last three years has harmed business confidence and job creation. And maybe the uncertainty that comes from helter-skelter fiscal and monetary policy has dampened the animal spirits needed for a durable expansion.
As I said yesterday, though no president or Congress is entirely to blame for the state of the economy, they both can do great harm if they make decisions that interfere with the freedom of the market. And sadly, having the government interfere with the freedom of the market has been Obama’s mantra since the day he took office.
Not good: The Labor Department announced today that the U.S. economy only added 69,000 jobs in May, the fewest in a year.
The unemployment rate went up slightly as well, Labor also adjusted downward the number of jobs created in the past two months to terribly comparable numbers.
While no president is ever entirely responsible for the state of the economy, Barack Obama’s policies have certainly done significant harm. High regulation, Obamacare, and a clear hostility to private enterprise in all fields except space exploration has helped produce what appears to be the longest period with a floundering economy in my lifetime.
Mexico has passed its own very strict climate change law.
The new law contains many sweeping provisions to mitigate climate change, including a mandate to reduce emissions of carbon dioxide by 30% below business-as-usual levels by 2020, and by 50% below 2000 levels by 2050. Furthermore, it stipulates that 35% of the country’s energy should come from renewable sources by 2024, and requires mandatory emissions reporting by the country’s largest polluters.
Some predictions:
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A Democratic triumph: 2011 was the first year since 1984 in which no new banks were chartered in the U.S.
The Obama recovery: Durable goods orders fell 4% in January, the worst drop in three years and four times more than expected.
Six charts from the Congressional Budget Office that will scare the bejeebers out of you.
We’re here to help you! Various environmental regulations or actions of the Obama administration have eliminated more than 2.6 million jobs.
Following a tax hike in January 2011, Illinois has lost more jobs than any other state.
This isn’t rocket science, nor is the data hard to find. Whenever government spending and taxes grow, private business inevitably shrinks.
The day of reckoning looms: Twenty-five signs that the financial world is about to hit the big red panic button.
By the spring of 2010, private sector job growth turned positive. In April job growth increased to 230,000 net private-sector jobs. The economy appeared on track for a normal recovery from an awful recession. The administration began confidently predicting a “Recovery Summer.” But Recovery Summer fizzled instead of sizzled. In May private sector job growth dropped sharply to less than 50,000 net jobs. Thereafter, monthly improvement in private job growth averaged just 6,500 jobs.
What else happened in the spring of 2010? Despite obstacles that many believed would kill the bill, Congress passed the Affordable Care Act. Within two months, the trend in job growth dropped sharply. Monthly job creation had been on pace to top out in the hundreds of thousands. Post-Affordable Care Act, it has barely kept pace with population growth. [emphasis mine]
and
The health-care measure raises business costs and makes planning for the future more difficult. It should be expected to slow hiring.
Federal Reserve officials report that the law has had exactly this effect. Dennis Lockhart, president of the Atlanta Fed, reports that “prominent among these (factors businesses explain are impeding hiring) is the lack of clarity about the cost implications of the recent health care legislation. We’ve frequently heard strong comments to the effect of ‘my company won’t hire a single additional worker until we know what health insurance costs are going to be.'” Surveys bear out these warnings. In a recent poll one-third of small business owners identified the healthcare bill as one of their top two obstacles to hiring. [emphasis mine]
Two-thirds of the country’s CEOs plan to freeze or downsize their workforce over the next year, according to a new survey.
“As I approach my 44th year in business, the last 20 as CEO, I can never remember a time when I felt so disenfranchised from our leadership in Washington. They seem determined to continue their ongoing anti-business attitude and to frustrate small and mid-sized businesses by uncertainty on taxes, government regulations, and simply too many bureaucratic restrictions. We desperately need a change in Washington.”
I guarantee that much of this reluctance to hire stems from uncertainty and fear of Obamacare and the regulations it brings.
The chart of the day, from John Merlune at Investor’s Business Daily:
Merlune’s article outlines in frightening detail how there has been a job boom in only one place during the Obama administration, the government regulatory industry.
Regulatory agencies have seen their combined budgets grow a healthy 16% since 2008, topping $54 billion, according to the annual “Regulator’s Budget,” compiled by George Washington University and Washington University in St. Louis. That’s at a time when the overall economy grew a paltry 5%.
Meanwhile, employment at these agencies has climbed 13% since Obama took office to more than 281,000, while private-sector jobs shrank by 5.6%.
Guess what happened to that Obama recovery?
There never was one. And this graph from the article says it all. The Obama recession stands out as the worst by far.
Ten signs that Americans have begun freaking out about the state of the economy.
Here’s another: Bank Of America is tanking again, as the firm may need $50 billion in fresh capital.
The ironies are endless: An Ohio restaurant referenced by President Obama last week as a beneficiary of the auto bailout is going out of business this week due to the bad economy and increased regulation.
If you think the state of the federal budget is irrelevant, read this: House prices predicted to drop another 20%.
The data in the article above is depressing, and suggests the consequences for the unrealistic craziness of the past decade have not yet played out entirely.
The bad economy since 2008 was only worsened by the Obama stimulus, according to one economist. Key quote:
“Today there is a dependency on people who have never been able to forecast anything,” Taleb said. “What kind of system is insulated from forecasting errors?
These charts say it all: Unemployment remains high with the economy stagnant.
All the discussion about the future of NASA must be put in some fiscal context, and here it is: the Debt and Deficit Commission that the Obama administration created to review the spending problems of the federal government has some bad news: there literally is no money for anything but Social Security, Medicare, and Medicaid. Key quote from the Washington Post article:
The commission leaders said that, at present, federal revenue is fully consumed by three programs: Social Security, Medicare and Medicaid. “The rest of the federal government, including fighting two wars, homeland security, education, art, culture, you name it, veterans — the whole rest of the discretionary budget is being financed by China and other countries,” Simpson said.
