The Twilight Zone World Of Joe Biden

The Vice President has always been good for a quote, or in many cases, a misquote, when it comes to explaining the reality of our world. However, many times you wonder if he and the rest of us are living in the same world and reality or we are stuck in some sort of twilight zone world where reality takes on a distorted sense of truth. This twilight zone image came to mind earlier this week when the Vice president acknowledged that while the recovery from the recession was proceeding slower than expected, there is "no doubt we are moving in the right direction."

If he thinks we are moving in the right economic direction, than he and I are stuck in some sort of distorted reality, given what is happening in my economic world:

• The Commerce Department reduced its estimate of the nation's second quarter GDP growth from 2.4% to 1.6%, a 33% decrease.
• Unemployment continues to linger between 9.5% and 10.0% even though Joe's administration predicted that unemployment would go to 8% unless the President's economic stimulus package was passed. It was passed and we did not go to 8% unemployment, we went 15-20% higher.
• The stock market is down about 10% from its recent 2010 peak in April and does not appear to be ready to rise any time soon.
• This week we heard that the sale of existing houses dropped 27% in July vs. June, the biggest monthly drop in the four decades that the statistic had been kept. Guess the administration's housing incentive program for first time buyers did not have much staying power.
• Also this week in the housing market, we found out that the sale of new homes was down over 12% in July vs. June and was down over 32% vs. the same time period in 2009. The annual sales rate of 276,000 new housing units is one of the lowest levels ever measured.
• This week we also found out that almost half of the people enrolled in the administration's mortgage recovery program had dropped out of the program for various reasons, not the least of which was inefficient and and ineffective paperwork processing procedures. The number of home foreclosures in 2010 could be as high as one million with several credible sources estimating that the foreclosure number could increase 50% in 2011.
• On Thursday we heard that new weekly unemployment claims continue to linger between the 450,000 to 500,000, i.e. about half a million people a week are now filing for unemployment benefits for the first time. Hardly sounds like the economic turnaround we are told is coming even though the Vice President told the Washington Post on April 23, 2010, over four months ago, that the economy would soon be creating 500,000 jobs a month. Not quite there yet.
• The Vice President did not mention that the Federal government has incurred unbelievably high, record setting government spending deficits over the almost four years that the Democrats have had control of both houses of Congress and the almost two years they also controlled the White House.

So, in Joe's world or twilight zone, shrinking economic growth rates, housing industry woes not seen in a long time, high unemployment, feeble private sector job creation, sky high national debt and mortgage foreclosures, and a falling stock market leave "no doubt we are moving in the right direction."

Seriously, this administration has no clue on how to turn around the economy, resulting in one of the longest and weakest recoveries of all time. Their reaction? Spend more money on dismal, failed incentive programs (Cash For Clunkers, first time home buyer incentive, Cash For Caulkers, Cash For New Energy Efficient Appliances, mortgage rescue, etc.), spend hundreds of billions of dollars on bailouts of financial institutions that either did not need to be bailed out (since most have already returned their TARP payments) or who deserved to fail due to their bad management (Citigroup, Bank Of America), spend hundreds of billions of dollars via an economic stimulus program which stimulated nothing (it has gotten so bad with this program that the administration has evolved from estimating how many jobs the stimulus created to how many jobs the stimulus created AND saved to how jobs created, jobs saved AND lives touched by the stimulus program), and the old favorite, blame Bush.

Bush has been gone for almost two years, the Republicans have been in the minority for almost four years in Congress and during part of that time, the Democrats had a filibuster proof majority in the Senate while also controlling the House Of Representatives. The result of this recent history? We are stuck in an economic ditch and to those of us in the real world, we have no doubt we are NOT moving in the right direction.

What is the root cause of our economic distress? Could it be that consumers and business are uncertain of the future and as a result, have hunkered down in the face of that uncertainty? What are we are uncertain about:

• Could it be we are uncertain how much more in health care taxes and health care costs we are actually going to have to spend on employees and ourselves since the majority of America feels that the recently passed health care reform legislation will not solve our health care cost problem but will certainly increase what we pay for our health care?
• Could it be we are uncertain what this administration will do tax wise, with the expiration of the so-called Bush tax cuts being just one area where the tax bite on American businesses and consumers could rise significantly?
• Could it be we are uncertain how much more we will have to pay in energy costs with the proposed onerous and ineffective cap and trade carbon program that could be passed?
• Could it be that we are uncertain if Social Security and Medicare will be saved from insolvency and how much that might cost?
• Could it be that we are uncertain when Washington politicians will actually get down to tackling the major issues of the country as opposed to just calling each other names and worrying only about their own re-election?
• Could it be we are uncertain that Washington politicians are actually able to solve a real problem (especially since they have never really solved a major problem) when one of the leading members of the Federal political class thinks everything is fine and moving in the right direction despite every indication it is not?

This administrating has introduced so much uncertainly into the market and economy that people and businesses have decided to hunker down and protect their assets rather than go out and invest or spend their assets. And given this mind set, interest rates cannot go low enough stupid sales incentive programs cannot be rolled out to failure fast enough, and no amount of stimulus spending, especially the ridiculous programs from the first stimulus program, will solve the credibility, faith, and uncertainty problems we all currently have with Washington. That is why these incumbents need to be sent home in November and hopefully we can replace them with people that have the skills to remove the uncertainty in the country today.

Until November, consider the words of Rod Sterling, the creator of the TV show, "The Twilight Zone" in light of Joe Biden's view of his world:

You are about to enter another dimension. A dimension not only of sight and sound but of mind. A journey into a wondrous land of imagination, next stop, the twilight zone.
http://www.youtube.com/watch?v=nEBN30I5Voc&feature=related

Joe, indeed, must live in a wondrous land of imagination in another dimension where good is bad, dark is light, and we are all moving in the right direction despite all economic indicators.




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