Nearly HALF Of All Small Businesses Have Curbed Their Hiring As A Result Of ObamaCare

This is the economic equivalent of getting in a fight for your life against a guy with a sword who cuts off your right arm.  And you’re thinking, “Damn, I really needed that arm.”  Only it’s the economy fighting to live and Obama’s socialist takeover of health care is the sword.

The 2014 U.S. Bank Small Business Annual Survey Finds The ACA Is Causing Employers To Cut Staff And Reduce New Hires

FOR IMMEDIATE RELEASE

Contact:
Jenna Weisbord, 202-662-0766
jweisbord@franchise.org
WASHINGTON, April 24-Today, the Wall Street Journal reported that the 2014 U.S. Bank Small Business Annual Survey found that, “In January, nearly half of small-business owners with at least five employees, or 45% of those polled, said they had had to curb their hiring plans because of the health law, and almost a third – 29% – said they had been forced to make staff cuts, according to a U.S. Bancorp survey of 3,173 owners with less than $10 million in annual revenue that will be released Thursday.” (Sarah Needleman & Angus Loten, “Small Businesses Find Benefits, Costs As They Navigate Affordable Care Act,” Wall Street Journal, 4/23/14)

This research aligns with a November 2013 study conducted by Public Opinion Strategies on behalf of the International Franchise Association and the U.S. Chamber of Commerce, which found that 31 percent of franchise businesses have already reduced worker hours.

Both pieces of research support bi-partisan efforts to return to the traditional definition of full-time employment under the ACA. This month the House of Representatives passed the Save American Workers Act, sponsored by Rep. Todd Young (R-IN). Similar legislation was introduced in the Senate by Senators Susan Collins (R-ME) and Joe Donnelly (D-IN).

Below are highlights of the study:
U.S. Bank Small Business Survey Finds “Owners Remain Skeptical Of The Long-Term Impact Of The Affordable Care Act On Their Business” With More Than 60 Percent Saying It Will Be Negative For Their Business. “The 2014 U.S. Bank Small Business Annual Survey found that “slightly more than six in 10 owners now say the long-term impact of the Affordable Care Act will be negative on their business.” (2014 U.S. Bank Small Business Annual Survey, U.S. Bank, 4/24/14)

Additional Findings:

Nearly half of businesses with at least five employees (45%) say it has forced them to decrease forecasted new hires and almost one-third report it has led to cuts in staff (29%).

Larger businesses are more likely to have cut employee benefits or shifted the cost burden of higher benefits to employees as a result of the legislation.

The smaller the business the more likely they say the implementation of the Affordable Care Act has caused them to postpone or cancel planned investments in their business.

At least three out of five owners with a minimum of $1 million in revenue or five employees say the new healthcare law has resulted in higher premiums for their business.

Local Business Owner Tim Cain Argues That The Health Law Raises Operating Costs And “The Timing Couldn’t Be Worse.” “…if the number of enrollees in his health plans increases to 70 percent of his workforce, Mr. Cain estimates his costs could swell to more than $500,000. That might force him to raise prices, he says, at a time when the impact of this year’s harsh winter—and an extended drought in California—is already pushing up costs for fruit and vegetables. ‘The timing couldn’t be worse, really,’ he says.” (Sarah Needleman & Angus Loten, “Small Businesses Find Benefits, Costs As They Navigate Affordable Care Act,” Wall Street Journal, 4/23/14)
This survey echoes previous research conducted by Public Opinion Strategies on behalf of the IFA and the U.S. Chamber of Commerce.

According To A Public Opinion Strategies Survey, 31 Percent Of Franchise Businesses Have Already Reduced Worker Hours To Cope With Health Law. “Additionally, 27 percent of franchise and 12 percent of non-franchise businesses have already replaced full-time workers with part-time employees.” (Presentation of Findings From National Research Conducted Among Business Decision-Makers,” Public Opinion Strategies, 10/13)

Further, The POS Survey Found That More Than Half Of Businesses With 40 To 70 Employees Plan To Make Personnel Changes To Mitigate The Impact Of ACA. “Among businesses with 40 to 70 employees, 59 percent of franchise and 52 percent of non-franchise businesses plan to make personnel changes to stay below the 50 full time equivalent employee threshold. This accounts for 23 percent of all franchise and 10 percent of all non-franchise decision-makers surveyed.” (Presentation of Findings From National Research Conducted Among Business Decision-Makers,” Public Opinion Strategies, 10/13)
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About the International Franchise Association
The International Franchise Association is the world’s oldest and largest organization representing franchising worldwide. Celebrating over 50 years of excellence, education and advocacy, IFA works through its government relations and public policy, media relations and educational programs to protect, enhance and promote franchising. Through its media awareness campaign highlighting the theme, Franchising: Building Local Businesses, One Opportunity at a Time, IFA promotes the economic impact of the more than 825,000 franchise establishments, which support nearly 18 million jobs and $2.1 trillion of economic output for the U.S. economy. IFA members include franchise companies in over 300 different business format categories, individual franchisees and companies that support the industry in marketing, law and business development.

ObamaCare is evil.  It is simply evil.  And evil laws have evil consequences.

Obama keeps assuring us that his fascist takeover of health care has reduced costs.  His evidence?  An idiot study by the CBO that revised a previous idiot study.  (Let’s conveniently forget the fact that the CBO said costs would be lower than previously projected because people will get FAR crappier “health care” under ObamaCare than they had thought).  The problem is that the real world doesn’t march to the goose step of either Obama or the idiots at the CBO.  And actual businesses with actual employees who are on the verge of actually gutting their workforce to pay for this demonic law are screaming as their costs “necessarily skyrocket.”

Democrats are whining about a “war on women” – forget the fact that by their own rationale Obama is warring on women as his own administration pays women cents on the dollar earned by men – to distract people from their party’s WAR ON JOBS.

Obama has created a holocaust on jobs, which is why our labor participation rate – measuring the percentage of working-age adults who actually have a damn job in America – is at a historic low under his regime.  It now stands as the worst it has been in 37 years.  And Obama’s response is that it’s somehow Bush’s fault because it’s racist to hold him responsible.

The liars who gave us ObamaCare lied about EVERYTHING.  Obama lied when he assured us it would get more popular over time; it has become LESS popular.  He lied when he said it would bend the cost curve down (which he’s STILL falsely claiming); ObamaCare is MASSIVELY adding to the cost of healthcare – which is why businesses are faced with cutting hiring to pay the huge costs of this socialist mess.  He lied when he said if you liked your doctor you could keep your doctor.  And he lied when he said if you already had health insurance and you liked your plan you would be able to keep your plan rather than be forced to accept Obama’s damn plan.

This country is going down the toilet.  The liberal socialist elites – who preach “redistribution of wealth” but mean, “redistribute THE PEOPLE’S wealth to US” by means of manipulating markets, interest rates, federal reserve policies and government regulatory burdens – are ensuring it.

 

 

 

Even Head Of Obama’s Own Jobs Council Immelt Says Obama’s NLRB Attack On Boeing An Incredibly Stupid Idea

Jeffrey Immelt is Obama’s handpicked chairman of Obama’s jobs and competitiveness council.  He is clearly NOT a rightwing anti-union reactionary.

But get this: even Immelt thinks Obama’s war on Boeing for daring to create jobs in a non-union plant is utterly ridiculous.  From USA Today:

Asked about the fuss over the National Labor Relations Board investigating aircraft maker Boeing for opening a plant in South Carolina, Immelt said he was totally supportive of Boeing in the matter, given that the company is a major jobs creator.

“I can’t see one reason why we’d want to go down that road,” he said.  Immelt added that he felt his company has worked on improving relationships with unions, saying, “They are hungry for jobs.”

Getting good union-employer relationships requires an adjustment, he said. “It’s taken change on both sides.”

The NLRB sued Boeing in April, saying the aeronautics giant illegally retaliated against unionized Washington state workers when it opened a 787 passenger jet manufacturing line in South Carolina, a right-to-work
state.

Boeing hopes more than 1,000 non-union workers will eventually build three of the aircraft per month at the $750 million South Carolina plant, the largest industrial investment in the state’s history.

But Obama would rather see a Great Depression than allow non-union jobs.

Let me simply provide a single quote from the Seattle Times:

“The Machinists union has struck Boeing’s Puget Sound-area factories four times since 1989, most recently in 2008.”

Boeing has contracts to build the plane they are building at this South Carolina plant that specifically guarantee delivery of aircraft by specific dates.  They simply cannot play games with work-stoppage, which the union is documented to have done repeatedly.  The 787 Dreamliner has already had more than enough problems, and the last thing Boeing needs is a bunch of pampered union workers having a hissy-fit and stopping production because even though they get FAR more in salary and benefits than they deserve, it still isn’t enough for them.

Strike and its aftermath
The next major delay in the Dreamliner program came largely as a result of a 57-day machinists strike. The strike, which ended on November 1, 2008, according to Reuters, forced Boeing to delay the plane’s first flight and first delivery yet again, this time until well into 2009.

And then, just a month later, Boeing again announced delays, blaming them on supply shortages due to the strike, as well as problems with assembly. “The new schedule reflects the impact of disruption caused by the recent Machinists’ strike along with the requirement to replace certain fasteners in early production airplanes,” Boeing said at the time.

The problems continued to mount after that, and not all were due to the strike. In June of 2009, Boeing once again announced a delay in the first flight and the first delivery, this time “due to a need to reinforce an area within the
side-of-body section of the aircraft,” it said. “The need was identified during the recent regularly scheduled tests on the full-scale static test airplane. Preliminary analysis indicated that flight test could proceed…as planned. However, after further testing and consideration of possible modified flight test plans, the decision was made…that first flight should instead be postponed until productive flight testing could occur.”

On December 15, 2009, the first Dreamliner finally took air, lifting off from Payne Field in Everett, Wash., in front of a crowd of thousands of Boeing employees, fans, and journalists.

But that didn’t mean Boeing’s problems with the Dreamliner were done.

In August 2010, National Aviation Co. of India, the Indian-state-owned company that runs Air India, announced it was demanding compensation of $840 million from Boeing for delays in the 787 program. The company said the delays were hampering its growth plans, according to Bloomberg.

Boeing said at the time that it was negotiating with carriers over costs related to the delays.

As someone who has been in management, I can well-understand Boeing’s dilemma.  They can’t admit that the union has them by the balls and it really hurts when they squeeze, I mean strike.  That would be tantamount to an open invitation for the union to strike every time there was a significant deadline.  At the same time, these work stoppages are like cancer, and they have to do something to try to innoculate themselves from the cancer of unions even while they carefully try to avoid saying that the unions are bleeding them like particularly nasty leaches.  And the effects of strikes are far worse on the bottom line than they appear on paper; because after a lengthy strike, it takes workers some time to recover the groove they had been in (it’s like that famous Polock joke: “Why is it so expensive to give union workers hour lunches?  Because they have to retrain afterwards”).

So – without laying off so much as a single union worker – Boeing expanded its operation to a right-to-work state, and specifically, to a plant that HAD been union, but voted the union out as a bunch of trouble-making losers.

And that’s when Obama took off his incredibly foul-smelling loafer and began to slam it on the table shouting, “We will bury you!” at Boeing.

Barack Obama would rather see jobs go overseas to China than he would see them go to South Carolina.  That’s the bottom line.

Barack Obama is a fascist.  He is the Cloward and Piven president.  He doesn’t want a thriving America; he wants to control it no matter how small it has to become for fascist progressivist-liberalism to dominate it.

Allow me to give you a rather clear example of how Obama thinks.  As the following video of Obama in a Democrat debate will show, Obama would raise the capital gains rate EVEN KNOWING IT WOULD HURT ECONOMIC DEVELOPMENT AND RESULT IN LOWER INCOME TAX REVENUES.  He would do so in the name of “fairness.”

There is a pathological, reflexive Marxist mindset that forces Obama to punish job creators even though it will result in less job creation.  Because at the core of Barack Obama’s tiny shriveled little cockroach soul, he is a Marxist who believes the central tenant of Marxism: “From each according to his ability, to each according to his need.”  And Obama’s record – and the holocaust of jobs to go with the statements of small businesses that they’re not planning to hire any time soon –

But we don’t need the success of Republican policies, do we?  We don’t need to have unemployment rates of 3 and 4 percent like North Dakota and Nebraska.  We don’t need to have the incredible job creation of a Texas.  We certainly don’t need to ever balance a budget.  We’ve already slit our throats by voting for Democrats, and we really might as well just keep sawing until our heads fall off so that we can end up the way we’ve already basically been since 2006 when we started electing Democrats:  completely brainless and therefore completely clueless.

64% Of Small Businesses Planning To Wait Out Obama, Will NOT Be Adding New Jobs (12% Say They Will CUT Jobs)

There’s the old conundrum about the wolf, the goat and the cabbage:

A farmer and his wolf, goat, and cabbage come to the edge of a river they wish to cross.  There is a boat at the river’s edge that only the farmer can row.  The farmer can take at most one other object besides himself on a crossing, but if the wolf is ever left with the goat, the wolf will eat the goat; similarly, if the goat is left with the cabbage, the goat will eat the cabbage.  How can the farmer get all of them across?

There’s actually a solution to that problem.

Now we’ve got an even more intractable problem, involving a healthy job-creating economy, a Marxist president and a Marxist Democrat Party.

This one is unsolvable, because unlike the above dilemma involving the wolf, the goat and the cabbage, BOTH the Marxist President AND the Marxist Democrat Party will devour the economy unless it is somehow taken away from them.  Like the goat with the cabbage, they will insatiably eat every job they can and turn those jobs into dead crap.  Like the wolf with the goat, they will kill the economy and systematically devour it until only bones are left.

We are still over a year away from getting the chance to save ourselves from this insoluble dilemma.

And here’s the consequence:

Little Hiring Seen by Small Business
JULY 11, 2011
By SIOBHAN HUGHES

WASHINGTON—The U.S. labor market could stay sluggish for a while, with small-business executives reluctant to hire amid the murky economic outlook.

A survey of small business owners shows a lack of
confidence in the U.S. economy. More than two-thirds indicated they do not plan
to add payrolls in 2011 or 2012. WSJ’s Siobhan Hughes reports. Photo: Justin
Sullivan/Getty Images

Almost two-thirds—64%—of small-business executives surveyed said they weren’t expecting to add to their payrolls in the next year and another 12% planned to cut jobs, according to a U.S. Chamber of Commerce report to be released Monday. Just 19% said they would expand their work forces.

This comes after a Labor Department report Friday showed employers added few jobs in June, and unemployment rose to 9.2%. The bleak figures joined other data showing the recovery losing momentum in recent months, which has caused many analysts and policy makers to lower their forecasts for economic growth in the second half of the year.

The Small Business Administration says small businesses, defined as companies with fewer than 500 workers, employ about half of the workers in the private sector. In the Chamber’s survey of 1,409 executives, conducted by Harris Interactive, small businesses were defined as firms with revenue of $25 million or less.

More than half of the small-business executives in the June 27-30 survey cited economic uncertainty as the main reason for holding back on hiring. About a third blamed lack of sales, while just 7% pointed to problems getting credit.

“I think it’s safer to stay on hold and not hire workers,” said Harold Jackson, chief executive of Buffalo Supply, a Lafayette, Colo., distributor of high-tech medical equipment used in operating rooms.

Mr. Jackson said he has halved his staff to 15 workers since 2009 and was unlikely to start hiring soon even if his business picked up. “I can handle a reasonably large increase in business without having to increase the staff.”

Many of the executives surveyed were gloomy about the economy’s prospects. About 41% see the business climate getting worse over the next two years, compared with 29% who expect the climate to improve.

The modest hiring plans of small businesses don’t make up for the job losses in the past year, when some 29% let go workers, far outpacing the numbers that now plan to hire.

As the wise philosopher Scoobert Doo once put it upon hearing dire news, “Roh-roh.”

Between ObamaCare and the massive $500 billion in taxes it’s going to take out of the private sector, along with the 158 government bureaucracies and the thousands of pages of regulations; between the trillion dollars in NEW taxes Obama is demanding as part of any debt ceiling deal; between the Obama EPA which is simply ruling by fiat and imposing regulations that were actually voted down by Congress; between the fact that Obama won’t let us drill for our own oil even as his green energy sends the cost of energy (in his own words) “skyrocketing”; between the Obama NRLB that is openly warring with companies like Boeing for creating jobs in non-union states; between the Obama Labor Department, which is putting together some 100 job-killing regulations to strangle businesses from further hiring as we speak; and between the Dodd-Frank legislation which will systematically cut businesses off from credit, we are pretty well screwed.

We can have jobs, or we can have Obama and his Democrats.  But we’re not going to get jobs until we get rid of the people who are demonizing the job creators.  And that should just be an obvious fact by now.

Misery Index HIGHEST EVER, Hiring Only 70% Of 2006 Levels, And Boy Do We Ever Need A New President

Economics statistics are well on their way to becoming a Department in the 1984-style “Ministry of Truth.”

We start with misery, and the real apples-to-apples misery index that we can compare to the misrule of Jimmy Carter.  From Economic Policy Journal:

John Williams, over at Shadow Stats, compiles economic data for inflation and unemployment the way it used to be calculated pre-1990. Based on that data, the CPI inflation rate is over 10%, and the unemployment rate is over 15% (see charts). The Misery Index is the sum of the current inflation rate and the unemployment rate.  If it were to be calculated using the older methods, the Index would now be over 25, a record high. It surpasses the old index high of 21.98, which occurred in June 1980, when Jimmy Carter was president. Most believe the height of the Index along with the Iranian hostage crisis is what caused Carter to lose his re-election bid.

 

 

Using current calculation methods, April unemployment came in at 9.0% and the annualized April CPI number came in at 4.8%, for a Misery Index reading of 13.8.

The last time the Index came in with a higher reading with this index reading was in March 1983, with a reading of 13.90.

Ronald Reagan, of course, was president in 1983.  Reagan had a monster that Jimmy Carter largely created called out-of-control inflation.

As I previously explained:

The numbers told the sad story of the Jimmy Carter presidency: interest rates of 21%; inflation at 13.5%, and an unemployment rate of 7%.  And a relatively new economic device called “the misery index” – the combination of the unemployment and inflation rates which Carter had himself used to great effect in his 1976 campaign to win election – was at a shocking 20.5%.

And those who went through those dark and difficult times may soon be looking back to that period as “the good old days.”

Welcome back, Carter.

When Ronald Reagan took office from Jimmy Carter, inflation was at a meteoric 13.3% and the country was in the throes of a fierce recession. There was a real question as to whether workers’ wages would keep up with the costs of living, which made people afraid to either spend or save. And nobody knew how to control inflation – which had risen from 1.4% in 1960 to the aforementioned 13.3% in 1980 – causing a real erosion of confidence in the future. Jimmy Carter answered a reporter’s question as to what he would do about the problem of inflation by answering, “It would be misleading for me to tell any of you that there is a solution to it.”

But Ronald Reagan had a solution.  And by the time he left office, he had solved the problem of creeping inflation increases and had actually reversed the trend: he left behind a healthy inflation rate of 4.1%.

Reagan’s policies set the trajectory for growth that would last for 20 years.

Jimmy Carter didn’t have an answer for the economy, so he just made it worse and worse and WORSE.  Reagan had an answer.  He not only made it better; he established a trajectory of economic success.

And of course, we’re heading right back to that time of shocking inflation.  The cost of EVERYTHING is going up.  And there is absolutely no indication whatsoever that Barack Obama has an answer that is working.  Which is only going to make the pain last longer and the solution more difficult.  Presuming there is another Reagan waiting in the wings for that time when the American people overwhelmingly abandon Democrats and revile them for the failures that they are and basically always have been.

So what does the mainstream media do with that?

They create the propaganda that somehow Obama is a new Reagan, despite the fact that Obama reviles everything Reagan stood for, just as Reagan would have reviled everything Obama stands for.

Then there’s the enemployment beast.  How’s THAT hope and change working out for you?

Here’s some new news about hopey changey from the Wall Street Journal:

 MAY 16, 2011
Why the Job Market Feels So Dismal
The number of hires is the same today as it was when we were shedding jobs at record rates.
By EDWARD P. LAZEAR

Why don’t American workers feel that the labor market is on the mend? After all, the May 6 jobs report could suggest that the labor market is improving. Nonfarm employment rose by 244,000 and employment growth over the last three months is averaging over 200,000 per month. With unemployment at 9%, employment is still down many millions from where it should be, but up from its recession lows.

The fact is the jobs numbers that create so much anticipation from the business press and so many pundit pronouncements do not give a clear picture of the labor market’s health.  A better understanding requires an examination of hires and separations, or what the Bureau of Labor Statistics calls Job Openings and Labor Turnover Survey (JOLTS) data. Here are some surprising facts:

First, the increase in job growth that occurred over the past two years results from a decline in the number of layoffs, not from increased hiring. In February 2009, a month during which the labor market lost more than 700,000 jobs, employers hired four million workers. In March 2011, employers hired four million workers. The number of hires is the same today as it was when we were shedding jobs at record rates.

We added jobs because hires exceeded separations, not because hiring increased. There were 4.7 million separations in February 2009. In March 2011 that number had fallen to 3.8 million. The fall in separations reflects a decline in layoffs, which went from 2.5 million per month in February 2009 to 1.6 million per month in March 2011. One small piece of good news is that the just-released April data showed hires up about 2% over last year’s average and 12% above the low reached in January 2010.

The decline in layoffs is not unexpected and does not necessarily reflect labor-market health. Layoffs tend to occur early in a recession. When an economy has reached bottom and has already shed much of its labor, layoffs slow. But that doesn’t mean that the labor force is recovering. We could have high unemployment and a stagnant labor force even when layoffs are low. Isn’t the fact that hires exceed separations indicative of a healthy labor market? Unfortunately, no.

At any point in the business cycle, even during a recession, American firms still hire a huge number of workers. That’s because most of the action in the labor market reflects “churn,” the continual process of replacing workers, not net expansion or contraction of employment. The lowest number hired in any month of the current recession was 3.6 million workers. Even during the dismal year of 2009 there were more than 45 million hires.

Bear in mind that the U.S. labor force has more than 150 million workers or job seekers. In a typical year, about one-third or more of the work force turns over, leaving their old jobs to take new ones. When the labor market creates 200,000 jobs, it is because five million are hired and 4.8 million are separated, not because there were 200,000 hires and no job losses. When we’re talking about numbers as large as five million, the net of 200,000 is small and may reflect minor, month-to-month variations in the number of hires or separations.

The third fact puts this in perspective. In a healthy labor market like the one that prevailed in 2006 and early 2007, American firms hire about 5.5 million workers per month. Recall that the current number of hires is four million and it has not moved much from where it was two years ago. The labor market does not feel like it is expanding if hiring is not occurring at a recovery-level pace—and that means at least a half million more hires per month than we are seeing now.

The combination of low hiring and a large stock of unemployed workers, now 13.7 million, means that the competition for jobs is fierce. Because there are now many more unemployed workers, and because hiring is only about 70% of 2006 levels, a worker is about one-third as likely to find a job today as he or she was in 2006. It is no wonder that workers do not feel that the labor market has recovered.

One final fact is worth noting. Healthy labor markets are characterized not only by high levels of hiring, but also by high levels of separations. Although it is true that the importance of quits relative to layoffs rises during good times, even the number of layoffs was greater in the strong labor market of 2006-07 than it is now. No one would suggest that layoffs are good for workers, but what is good is a fluid labor market, where workers and firms constantly seek to produce better products and to find more efficient ways to produce them. High labor market churn is a characteristic of a strong economy. It generally means that workers are moving to better jobs in growing sectors that pay higher wages and away from declining sectors that pay lower wages.

Allowing maximum flexibility encourages fluidity and means that employers are willing to hire workers who lose their jobs elsewhere. Many European countries have restricted mobility by imposing severance pay penalties on employers that lay workers off. More than reducing layoffs, these rigidities make employers reluctant to hire because of the penalties that they will later incur if a layoff is necessary. Such restrictions are in large part responsible for the chronically high rates of unemployment that have been prevalent in many European countries.

The prescription for the American labor market is simple: low taxes on capital investment, avoidance of excessively burdensome regulation, and open markets here and abroad. We must create a climate in which investment is profitable, productivity is rising, and employers find it profitable to increase their hiring rate. These are the mantras that economists have chanted in the past. But they are our best bet for ensuring a dynamic and growing labor market.

Mr. Lazear, chairman of the President’s Council of Economic Advisers from 2006-2009, is a professor at Stanford University’s Graduate School of Business and a Hoover Institution fellow

Wait a minute.  What was that one sentence again?

Because there are now many more unemployed workers, and because hiring is only about 70% of 2006 levels, a worker is about one-third as likely to find a job today as he or she was in 2006.

Yeah, but George Bush was bad by mainstream media propagandist definition, and Obama is good by the same standard.

If you want welfare, vote for Obama.  You’ll get it until United States of America implodes into a failed banana republic.  And then you’ll get the Marxist-fascist hybrid the left has been dreaming of for the last fifty years.  You want a job?  Vote for a conservative Republican.

Obama Keeps Lying About The Economy

“Fish story.”  “Such statements hurt his credibility.”  Let’s just call it what it is: a pile of lies from a profoundly dishonest man.

JULY 21, 2010
Obama’s Economic Fish Stories
On unemployment, the president claims that the stimulus bill was several times more potent than his chief economic adviser estimates. Such statements hurt his credibility.
By MICHAEL J. BOSKIN

A president’s most valuable asset—with voters, Congress, allies and enemies—is credibility. So it is unfortunate when extreme exaggeration emanates from the White House.

All presidents wind up saying some things that make even their own economists cringe (often the brainchild of political advisers unconstrained by economic principles, facts or arithmetic). Usually, economic advisers manage to correct these problematic statements before delivery. Sometimes they get channeled into relatively harmless nonsense, such as President Gerald Ford’s “Whip Inflation Now” buttons. Other times they produce damaging policies, such as President Richard Nixon’s wage and price controls. The most illiterate statement was President Jimmy Carter’s late-1970s plea to the Federal Reserve to lower interest rates to combat high inflation, the exact opposite of what it should do. Not surprisingly, the value of the dollar collapsed.

Martin Kozlowski

President Obama says “every economist who’s looked at it says that the Recovery Act has done its job”—i.e., the stimulus bill has turned the economy around. That’s nonsense. Opinions differ widely and many leading economists believe that its impact has been small. Why? The expectation of future spending and future tax hikes to pay for the stimulus and Mr. Obama’s vast expansion of government are offsetting the direct short-run expansionary effect. That is standard in all macroeconomic theories.

So, as I and others warned in 2008, the permanent government expansion and higher tax rate agenda is a classic example of what not to do during bad economic times. Worse yet, all the subsidies, bailouts, regulations and mandates are forcing noncommercial decisions on the economy, which now awaits literally thousands of new diktats as a result of things like ObamaCare and the financial reform bill. The uncertainty is impeding investment and hiring.

The president does not say that economists agree that the high future taxes to finance the stimulus will hurt the economy. (The University of Chicago’s Harald Uhlig estimates $3.40 of lost output for every dollar of government spending.) Either the president is not being told of serious alternative viewpoints, or serious viewpoints are defined as only those that support his position. In either case, he is being ill-served by his staff.

Mr. Obama’s economic statements are increasingly divorced not only from competing viewpoints but from those of his own economic advisers. It is surprising how many numerically challenged pronouncements come from this most scripted and political of White Houses. One slip is eventually forgiven, but when a pattern emerges, no one believes it is an accident.

For example, on the anniversary of the stimulus bill, Mr. Obama declared, “It is largely thanks to the Recovery Act that a second Depression is no longer a possibility.” Yet his Council of Economic Advisers just estimated the stimulus bill’s effect on GDP at its trough was 1%-2%.

The most common definition of a depression is a long period in which GDP or consumption declines at least 10%. The decline in GDP in the recent recession was 3.8%, in consumption 2%. No one disputes the recession was severe, but to reach a 10% GDP decline requires tripling the administration’s estimate (three times their 2% effect) added to the actual 3.8% decline. On the alternative consumption standard, the math is even more absurd. The depression statement isn’t credible. The stimulus bill has assumed certain mystic powers in administration discourse, but revoking the laws of arithmetic shouldn’t be one of them.

The recession would have been worse if not for the Fed’s monetary policy and quantitative easing. Also important were the unmentioned automatic stabilizers—taxes falling more than income, cushioning declines in after-tax incomes and consumption—which were far larger than the spending and tax rebates in the stimulus bill. Arguing that all these policies (including injecting capital into banks, which was necessary but done poorly) may have prevented a depression is perhaps still an exaggeration but at least is within hailing distance of plausibility. On that scale, the effect of the stimulus was puny.

On his recent “Recovery Tour,” Mr. Obama boasted, “The stimulus bill prevented the unemployment rate from “getting up to . . . 15%.” But the president’s own chief economic adviser, Christina Romer, has estimated that the stimulus bill reduced peak unemployment by one percentage point—i.e., since the unemployment rate peaked at 10.1%, it prevented the unemployment rate from rising to just over 11%. So Mr. Obama claims that the stimulus bill was several times more potent than his chief economic adviser estimates.

Perhaps the most serious disconnect concerns the impending expiration of the 2001 and 2003 tax cuts, which will raise the top two income tax rates and the rates on dividends and capital gains. If these growth inhibiting tax increases occur—about $75 billion in tax increases next year, $1.4 trillion over 10 years—there will be serious economic damage.

In the most recent issue of the American Economic Review, Ms. Romer (and her husband David H. Romer) conclude that “tax increases are highly contractionary . . . tax cuts have very large and persistent positive output effects.” Their estimates imply the tax increases would depress GDP by roughly half the growth rate in this so-far-anemic recovery.

If Mr. Obama is really serious about a second stimulus, by far the best thing he can do is have Congress quickly extend the expiring Bush tax cuts, combined with real spending cuts set to take effect as the economy improves.

The president badly needs to make more realistic pronouncements. No one expects him to say his policies have failed (although most have delivered far less than claimed at large cost). A little candor about the results of experimentation in uncharted waters would go a long way. But at the very least, his staff needs to avoid putting these exaggerations on the teleprompter. It undermines confidence and raises concerns about competence. It’s doing nobody any good—not the economy and certainly not Mr. Obama.

Mr. Boskin is a professor of economics at Stanford University and a senior fellow at the Hoover Institution. He chaired the Council of Economic Advisers under President George H.W. Bush.

Day after day after day, Obama touts slivers of good news as magnificent, while ignoring pile on top of pile of bad news.  We keep getting these tortured numbers, cherry-picked out of a a rotten mess.  And we’re constantly told the increasingly laughable narrative that Obama’s incredible leadership is what kept everything from being even worse than it is.

The funniest aspect of all is when Obama and his mouthpiece Robert Gibbs keep assuring us that no economist disagrees with their policies when their very own chief economist is on record disagreeing with Obama’s policies.

Obama mouthpiece Gibbs declares:

I’ll let Congressman Boehner unwind his eloquent argument for preserving the tax cuts for those that are quite wealthy.  I don’t think the President believes — I don’t think there’s an economist that believes there’s a stimulative effect to — or a good reason in terms of economic growth to extend those tax cuts, particularly given the choice that one has to make about the budget deficit.

Forbes Magazine demonstrates how fallacious and even dishonest Obama’s and Gibbs’ statements have been in pointing out that the:

chairman of the Council of Economic Advisers, Christina Romer, herself a Keynesian, has done research that undercuts the Keynesian view of good fiscal policy.  Some of this research is in a March 2007 paper, “The Macroeconomic Effects of Tax Changes: Estimates Based on a New Measure of Fiscal Shocks,” co-authored with her husband, fellow University of California, Berkeley, economist David Romer.

In their article, they find that “tax increases are highly contractionary” and that tax cuts are highly expansionary.

And Forbes goes on to conclude:

“In other words, if she believes her own research, Christina Romer should be a strong critic of her new boss’s policies.”

So maybe you guys should stop making flagrantly false statements that all the economists agree with you, when in point of fact even your own economist doesn’t agree with you.  Or, at least only agrees with you by denying her own academic research for the sake of appearances.

That may be why she’s leaving the White House.  She can finally tell the truth – something that the Obama White House would never even dream of allowing her to do.

‘The Forgotten Man’ Demands Unfavorable Comparison Between Obama And FDR

From Wise and Frugal Government:

History Repeating Itself and Not in a Good Way

Do yourself a favor and get a copy of Amity Shlaes’ The Forgotten Man, A New History of the Great Depression. Barack Obama’s presidency and his economic policies are placed in context once you read Shlaes’ account of FDR and his policies. Written in 2007, there is no way Shlaes could have manipulated the similarities.

Consider this account of the Roosevelt Administration in 1937, four and a half years after the New Deal was introduced and the economy refused to budge. She refers to this time as “a depression within the Depression. “

“…the Economist would conclude…that the United States “seemed to have forgotten, for the moment, how to grow.”

Yet Washington was doing all the wrong things. Officials in the capital seemed arrogant, obsessed with numbers, and oblivious to the pain the nation was suffering. People were angry that Congress and the president had recently raised taxes. With business so hard, why make it harder?” (2)

Sound familiar? Shlaes continues with a story of the treasury secretary giving a speech before the Academy of Political Science during this time:

“There had been a national emergency in the past, the secretary told listeners. But now it no longer existed. The secretary then went on to conclude that the country must now “continue progress toward a balance of the federal budget.”

A member of the audience laughed out loud in shock. The remark seemed so much at odds with the painful reality of that November.

…Washington had already made thousands of efforts to help the economy, yet those efforts had not brought prosperity.” (3)

Policy is not where the similarities end. “Roosevelt offered rhetorical optimism, but pessimism underlay his policies. …Roosevelt cared little for constitutional niceties and believed they blocked progress. His remedies were on a greater scale and often inspired by socialist or fascist models abroad.” (6)

And finally: “The problem was their naivete about the economic value of Soviet-style or European-style collectivism–and the fact that they forced such collectivism upon their own country.” (7)

Arm yourself with historical fact. Read The Forgotten Man. For as Jefferson said, “If a nation expects to be ignorant and free in a state of civilization, it expects what never was and never will be.”

Sure sounds familiar to me.

I mean, “rhetorical optimism” sounds a lot like “hope and change.”

The basic premise of Amity Schlaes’ The Forgotten Man is one shared by economist Robert Higgs, namely, that the paralyzing uncertainty over the FDR administration’s strategy actively discouraged business from investing or hiring as they struggled to respond to the government’s numerous and simultaneous counterproductive policies.

This is something that has been going on since Obama took office.

Some recent articles I’ve written on this area (all having numerous supporting resources):

Obama’s Backdoor Taxation And The Coming Consequences Of Obamanomics

Obama Bank Restructure Attacks Market, Terrifies Investors, Hamstrings Economy

VIA CNBC: ‘Many Firms Reluctant To Hire Because Of [Democrats’] Taxes, Rules’

Obama Job Summit Deliberately Snubs Primary Job Creators

Liberals Say Recession Behind Us While Small Businesses Go Belly Up

Obama Continues Rampant Dishonesty With Stimulus ‘Jobs ‘

Why Is American Unemployment Under Obama Rising Faster Than In Other Countries?

Even Liberals Realizing Obama Has Been Total Bust At Creating Jobs

China Alarmed By Obama’s Deficits, Shocking Irresponsibility

Miniumum Wage Increase Means Maximum Employment Decrease

Tax Increases on ‘Rich’ People Planned by Democrats Would Hit Over A Million Small Businesses

An important article for consideration is this one:

Obama Administration Admits It Will Leave Unemployment Higher Than It Found It

because it jives so well with what history told us about the result of FDR’s policies as told by his very own treasury secretary:

“We have tried spending money. We are spending more than we have ever spent before and it does not work. And I have just one interest, and if I am wrong… somebody else can have my job. I want to see this country prosperous. I want to see people get a job. I want to see people get enough to eat. We have never made good on our promises… I say after eight years of this Administration we have just as much unemployment as when we started… And an enormous debt to boot!” – Henry Morganthau, FDR’s Treasury Secretary, May 1939

In April 1939, for the record – a full six years and change after FDR assumed office – unemployment was still at 20.7%