Economy

Forecasts, reports, earnings.

Without more and better educated people we have:

Divider-in-Chief Obama is sending America over the fiscal cliff he created and is trying to use to turn America into a one-party, Chicago style corrupt and bankrupt country. Sec. of Treasury Geithner, a leading liar for Obama, says the country will reach the debt ceiling on Dec. 31, 2012, Previously he had warned the ceiling would be reached in February.  All House GOP Members should sign a letter to Obama that says the debt ceiling will be raised for one year when: 

As Jennifer Rubin reports, a Gallup poll confirms that most Democrats are socialists and most Republicans are capitalists.

For Democrats, profits are all about greed. That's because the people who believe this in general have never risked anything or lost anything in their efforts to make profits. They think there is a straight line from startup to profitability and that once profitable, you've got it made. 
 
Not so. Most new ventures lose money, sometimes for years. Sports Illustrated lost money for decades before turning profitable. Amazon still is basically a dark hole because it's plowing all of its positive cash flow into building the company. Its socialist customers applaud its small profit margins. When and IF it starts to make money, Amazon's customers will be very angry. Discounted books and stuff are a right for them. 
 
As for profitability, look at Hewlett-Packar, Nokia, Dell and some of their suppliers like AMD, the chip maker. They're on the ropes due to changes in technology and consumer demand (iPads v. laptops). Socialists overlook the hard times that businesses and investors go through when markets change and they make mistakes.  
 
Successful companies weather their bad days while they restructure. See GE, IBM, CAT, Goldman Sachs, Macy's, etc. Unsuccessfull businesses go into chapter 7 bankruptcy. See Hostess, Borders, etc.

Monetary economists say monetary policy, not fiscal policy, affects the health of the U.S. economy. Now we have Keynesian Republicans like Sen. Lindsey Graham (R-SC) and Saxby Chambliss (R-GA) saying they'd raise taxes or cut tax deductions and cut entitlement spending if that would be good for the country.

Would cutting entitlement spending, raising tax revenues and holding defense spending near current levels help or hurt the economy? Or would all of the "doing something" churning in Washington do nothing but roil the stocks, bonds, currencies and commodities markets and put more people out of work? Would all of this affect the budget deficit or national debt?

LINKS:

Lindsey Graham: I would violate Norquist's pledge, By Tim Mak, 11.25.2012

Why the fiscal cliff matters, By Diana Furchtgott-Roth, 11. 23.2012

Because he's so political and intellectually corrupted by power, it's hard to believe anything former Obama economic adviser, Larry Summers, says. But one thing he's saying probably signals Obama's plans to impose carbon and sweets taxes after using the fiscal cliff to hike taxes and cut defense spending. Nanny state Obama Democrats always are looking for new opportunities to tax, but it won't happen as long as Republicans control the U.S. House of Representatives.

LINKS:

President Obama wants to kill the Republican Party by getting the House GOP to renege on its 20-year-old pledge to not raise taxes. There is a 25% to 35% chance he may get them to commit political suicide. If the House GOP caves on the fiscal cliff, a lot of economic conservatives will stay home in 2014. But there are some interesting questions about  the fiscal cliff and what would happen if we went over it next year.

1. Whose tax credits, tax loopholes, depreciation schedules, government contracts and government subsidies is Norquist protecting?
2. If we go over the cliff, what percent of working Americans will NOT pay income taxes? 47%, 35%, 30%, or what?
3. If we go over the cliff, wouldn't it advance future tax votes if more Americans had to pay the increased taxes and pressed Congress to NOT raise taxes again?
4. If defense is cut another $500 billion, what welfare programs, health benefits, retirement benefits and pork for contractors would be cut first?
5. What kind of security threat would it take to get Congress to reinstate most defense spending? Isn't the Middle East mess enough as it is?
6. Since the fiscal stimulus bill of 2009 and ObamaCare upped spending some $1 trillion over 10 years, maybe $2T, wouldn't it be easy to cut spending under sequestration?
7. If Sequestration made Obama stop picking energy winners and losers with his crony capitalism spending on his favored few ethanol and wind tower makeris, wouldn't we see revivals in petroleum exploration and coal? Wouldn't markets work?
8. With sequestration, would infrastructure spending increase and use up the increased tax revenues? Or would the need to pay down the debt, House refusals to spend on infrastructure unless defense spending was increased again cause more gridlock and help reduce all spending? 
9. While stock markets might drop 5% or so if we went over the cliff, would there be enough certainty for businesses to begin investing and hiring again as the economy recovered?

If we go over the cliff, I blame Obama more than the GOP. Obama Democrats are so greedy for political power that they'll do anything to win it, including putting lots of Americans out of work in the process. Obama Democrats are just like the Hostess union leaders who fund them.

The problem is that few trust or believe Obama Democrats or Republicans. That makes it hard to get anything done. The markets have to clear out the dead wood in a bunch of markets before there can be a recovery.

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.