Economy

Forecasts, reports, earnings.

President Obama's cry for help in a feeble campaign speech to a joint session of Congress probably hurt him politically more than it helped him. It will do nothing for the American economy.

What a disgraceful pander to public sector and construction unions. How empty can a presidential suit look and sound? Now we've see and heard one of the weakest and most self serving speeches a president has ever delivered in an appearance before Congress.

Mitt Romney introduced his economic reform plan today in USAToday. The 59 points follow:

Every Friday, Jennifer Rubin, the Right Turn blogger on the Washington Post web site, asks her readers a question. On Sundays, she picks one or two answers posted by commenters on her blog and comments on the thread that she started.

This week's question: "What does [Rick] Perry need to do to maintain his momentum and begin to minimize doubts about his electability?"

This morning she picked two answers. My post about my eight ideas for stimulating consumer spending and hiring was one of the two answers she picked out of a bunch of good comments that followed her question. That thread is here. My slightly edited and expanded version of my comment, which I posted on this blog, is here.

Rubin summarized the answers this way:

I was struck by two important assumptions running through the answers. First, unlike many in the right blogosphere, the readers did not dismiss criticisms of Perry out of hand or characterize them as creations of the liberal media. They want to put Perry through the paces, and they understand there are real concerns about his candidacy. Second, it is apparent that readers are sick of platitudes and one-liners; they want detailed proposals and an explanation as to how the candidate’s background equips him to deal with our current national challenges. If Right Turn readers are representative of the Republican primary electorate, the party is in very good hands. The primary process is a time for not only choosing, but probing and testing.

U.S. House Majority Leader Rep. Eric Cantor (R-VA) is promising to work with President Obama to stimulate consumer spending that is needed to create jobs, and he asked for comments on his response to Friday's dismal jobs report. I doubt that President Zero really wants to work with Cantor or the Republicans, because that would cost him the support of the House Progressive Caucus and the Hard Left.

I posted this comment, which I've edited and expanded a bit:

How to stimulate consumption that will cause businesses to hire more people:

Republicans and Democrats need to read Tyler Cowen's new 15,000-word book, The great stagnation: How America ate all of the low hanging fruit of modern history, got sick and will (eventually) feel better. It's a $4 ebook at Amazon and will be published in hard cover June 9. 
 
The highly regarded economist and blogger (http://www.marginalrevolution.com), blames the financial crisis on the reality that "We thouight that we were richer than we are." Further, he says we're still stuck with the dangerous optimism that we can grow out of what may become a double dip recession.  
 
That won't happen, he warns, because the low hanging fruit of innovation and great opportunities have been picked for 40 years and it will be awhile before a new development like free 18th and 19th century land, the rail roads, telegraph, phones, autos, air planes, etc. comes along.  
 
Thus, politicians can no longer credibly promise that tax cuts or more government spending will cause the economy to grow more than 2% a year. He predicts that as a result, Big Government growth will slow or even disappear and that our future depends on our ability to reform education and encourage our brightest to become scientist and engineers. He says we must celebrate scientists and engineers and give them the status of today's investment bankers, lawyers and physicians. 
 
Bottom line: No president nor Congress can claim to have the solution for our slow economic growth. To make such claims shows a lack of integrity and a total misunderstanding of where we are in the economic development cycle. 
 
Along the way, Cowen relates how America picked the low hanging fruit to become the most prosperous and powerful nation in the world. He explains that modern communications generated Big Governments around the world, that increased spending on education since 1970 has provided few benefits to kids and that increased government spending on health care is not stimulating growth. 10% of the book is filled with fascinating notes. There is no index. 
 
David Brooks calls the book the most debated book of the year. This week's Business Week has a glowing story about Cowen. Take a couple of hours and catch up on the thinking of one of today's leading and best informed libertarians and economists.

Presumed Republican presidential candidate, Mitt Romney, writes in USA Today that the GOP's deal with President Obama will hurt employment and the U.S. economy over the long term. While the short-term deal looks like a pretty good compromise for Obama's re-election prospects and for tax payers, Romney is correct when he says the deal will not produce the desired increases in employment because during the next two years, politicians will be fighting over extending the deal instead of reforming our broken tax and spend culture. Meanwhile, Romney is showing that he is in Sen. Jim DeMint's (R-SC) camp and agrees with fiscally conservative tea party supporters. LiNK: Why tax cut is a bad deal, by Mitt Romney.

President Obama and Colorado's Democrats in Congress apparently will agree to extend the Bush tax cuts and avert more Obama tax hikes only if Republicans agree to higher spending on extended unemployment benefits.

 Extending the unemployment benefits will ensure high levels of unemployment for years to come. Too many of the unemployed make more by avoiding low-paying jobs and staying on the dole. If the benefits were cut, unemployment rates would soon dip. How much they would drop if benefits weren't extended is hard to predict. At least I haven't seen any predictions on what would happen if benefits weren't extended.

Both Democrats and Republicans are playing to their bases in the deal that Obama announced last night, which is subject to approval by hard left Democrats who control Congress until next year.

Republicans are reasonably assuming that averting the Obama Democrats' tax hikes and new tax cuts that will be part of the deal will help the economy more than the additional spending will hurt it.

The tentative agreement to exempt estate, or death taxes, on the first $5 million in an estate and then tax the balance at 35% looks like a pretty good compromise, too. Of course, it would be smarter to completely eliminate estate taxes, but the redistributionists make that politically impossible.

Compromise has made America the wealthiest country in the world, and it's good to see a little compromise after two years of Obama's way or the highway.

Since 9/11, we've flown only once or twice a year, if that, because I don't like to go through security at airports. Big government is too intrusive. Politicians are spending billions scanning everyone and everything and making little kids and old folks go through ridiculous security checks. From George W. Bush to Barack Obama and the Congresses that have enabled them, the politicians have imposed airport security checking systems to protect themselves from public criticism if a plane is blown up, not just to protect the traveling public. To be politically correct, politicians force everyone to go through security. It is time to use racial, ethinic and other available techniques that screen people who are real threats, not everyone. We shouldn't be giving terrorists such a huge victory by letting them cripple our economy and take away our rights to privacy and to move around the country and world freely. No trip is so important that you have to get some place overnight. It is time for all travelers to drive or stay home until the politicians come to their senses. 

Appointed Obama Democrat Sen. Michael Bennet (D-Washington, DC) says he won’t vote for the $50 billion to $350 billion in new spending on infrastructure that President Obama is proposing in an effort to show that he’s finally getting serious about fixing the economy that he’s helped depress since taking office in 2009.

While President Obama this week will proposed another $50 billion in spending on roads, bridges, smart grids and other pork projects in an effort to save and create jobs, consumers will react by cutting their spending because they know that Obama will pay for his $50 billion binge by increasing the Federal budget deficit and debt and by increasing taxes. More government spending and higher taxes on the 50% of Americans who pay income taxes and buy the most stuff will kill jobs.

Appointed Obama Democrat Sen. Michael Bennet (D-Washington, DC) gets national attention for his fiscal hypocrisy in the Washington Post. Opening graphs:

It’s the last week of August, only a few weeks until Coloradans begin voting, and second-term U.S. Rep. Ed Perlmutter (CD-7) doesn’t know what to say.

How maddening. Both Scott McInnis and Dan Maes have blown opportunities to sell themselves in today’s Denver Post. When you’re interviewed by the editorial board of a newspaper, show some respect by doing your home work, preparing for predictable questions and taking clear stands on tough issues. Be articulate.

Both interviews were way too short to give the candidates time and space to discuss the issues in depth. That’s the difference between a space-limited printed newspaper and a blog, where space is unlimited.

LINKs:

A conversation with Scott McInnis. Denver Post editorial board transcript.

A conversation with Dan Maes. Denver Post editorial board transcript.

McInnis’ record shows slow steps to the right. By Karen E. Crummy.

Gubernatorial candidate McInnis’ voting record inconsistent on abortion. By Karen E. Crummy.

Vice President Joe Biden is coming to Colorado to boast that the government has granted Longmont-base UQM Technologies $45 million that the company will use to build a factory, Chris Hubbard reports.

I’ve been following UQM off and on for about a dozen years, mostly because my former investment club owned it a few times.

The stock peaked at the beginning of the year at $7.45 and is trading at $4.10 now. It’s been trying to sell its technology for years, but investors haven’t seen enough potential to fund its expansion. When a company needs government support to stay in business and/or grow it, you know that the smart investors don’t think much of it. And if they don’t like it, it’s a loser. You can research UQM by searching “UQM stock” or by reading about it on Yahoo.

So we have the Democrats trying to pick winners and losers in the energy business. And, as usual, they’ve picked a long-term loser to back. You have to wonder about the political connections that brought the funding to UQM. Which top executives, directors, consultants, lawyers, lobbyists or large investors used their political influence to bring $45 million of taxpayers’ money to UQM?

Or is this just another effort by the Obama administration to use taxpayers’ money to buy votes for appointed Democrat Senator Michael Bennet and hard left Democrat U.S. Rep. Betsy Markey (D, CD-4) who represents Longmont in Congress? 

Why hasn’t anybody bothered to buy this wonderful company and grow it? Why has the stock dropped so sharply since the beginning of the year? Why are its charts saying sell big time? The stock’s point and figure price objective is $1.00.

This is truly a big Biden/Obama deal that shouldn’t be happening.

For educational purposes only. Investigate before you speculate. I am not recommending any trades and take no responsibility for how others trade stocks, ETFs, commodities or anything else.

Taking the gloves off, former Colorado Lieutenant Governor Jane Norton said in an 85-minute interview in her Centennial office today that Ken Buck, her opponent for the Republican nomination for the U.S. Senate, is the real Washington insider and that she’s the fiscal conservative in the race.

“I am not the Washington insider in this race. That would be Ken Buck. Ken has a Washington insider 527 running over $1 million of ads on his behalf. And he received over a third of all his donations from employees of one company that relies on stimulus money and millions of dollars of special interests contracts,” Norton said.

(Her campaign provided me with a list of employees of Greeley-based Hensel Phelps Construction Co. who have contributed $141,800 to Buck’s Senate campaign.)

In reply to the Buck campaign’s charges that Norton is a Washington insider because she is backed by Sen. John McCain (R-AZ) and is related to a Washington lobbyist, Norton said, “Ken Buck was Governor Bill Ritter’s best man. If we’re going to play the guilt by association game, that’s an interesting connection.”

Like Buck, Norton says she would not vote for a bill that would help Colorado if it included a tax increase.

Appointed Democrat Senator Michael Bennet “is totally out of touch with Colorado values. . . He’s a rubber stamp for anything the Obama administration wants.”

As executive director of the Colorado Dept. of Public Health and Environment between 1999 and 2002, Norton said, “My general fund request was down 28% when I left office. We eliminated programs that were not authorized by the state statute or in the state constitution.”

Norton also noted that when she ran for lieutenant governor, she took an unpaid leave of absence from her state job. Ken Buck continues to serve as the district attorney of Weld county even though he’s often absent so that he can attend campaign events, she said.

She also clarified her role at the Englewood-based Medical Group Management Association, where she was in charge of monitoring changes in states’ laws and regulations and informing managers of some 7,000 medical group practices about how they could comply with new state laws. She wasn’t in charge of the MGMA’s lobbyist in Washington and she never managed lobbyists or served as a lobbyist, she said.

“I have never been a lobbyist,” she said.

To see the 27 questions and answers, please click on the hed of this story. If you’re viewing this story at Rocky Mountain Right or Peoples Press Collective, go to www.businessword.com.