Monday, July 6, 2015

July, 2015, Part 2, Political Class Insanity: Presidential Hypocrisy On Slavery, Ineptness at the SocialSecurity Administration, and More

At the beginning of each month we take a week or so to review the latest insanity from the American political class. Insanity from them includes a wide range of very depressing actions which can include wasteful spending, idiotic quotes, an inefficient and ineffective government bureaucracy, failed economic policies, etc. Every month we continue to prove that we are being served by the worst set of politicians ever.

And as you will see, this month’s review and discussions do nothing to prove that this thesis is wrong in any way:

1) As we have shown and proven many times, the current set of Washington politicians have a very low grasp of economics and economic theory, saddling us with economic policies and idiocy that inhibit economic growth and job creation. This was easily proven when after the Great Recession we have suffered through the worst economic recovery in ages despite spending over $800 billion on a failed economic stimulus program, living through an energy revolution, and having the Fed print TRILLIONS of dollars in fake money.

Despite those economic tailwinds and being many years removed from the recession, the latest economic statistics are still not good, according to a recent Reuters report:
  • Last month, nonfarm payrolls rose by only 223,000.
  • At the same time these June results were announced by the Labor Department, the Department revised downward its May and April estimates of job creation by 60,000 jobs.
  • While the outmoded U3 unemployment rate dropped to 5.3%, it was not because of economic growth but because a whopping 432,000 people left the labor force last month, wiping out any significance of the 223,000 increase in nonfarm jobs.
  • The more accurate U6 unemployment measure, while down, is still a depressing 10.5%.
  • This job weakness situation means that the Fed is still unlikely to raise interest rates soon: "While we've been seeing positive signs of the economy picking up moving into the second half, this report certainly isn't pushing the Fed to accelerate the liftoff timeline," said Ted Wieseman, an economist at Morgan Stanley in New York.
  • The labor force participation rate fell again, this time to anemic 62.6%, the lowest level since October, 1977.
  • Overall wage growth was zero for the month.
  • The only good economic news is that construction is getting stronger with construction spending hitting a six and a half year high.
Discouraged workers, low wage growth, poor job creation, just horrendous stewardship of the economy by the worst set of Washington politicians ever. 

2) Desperation in any walk of life is usually pretty evident. And desperation seems to be the way of life for the city of Chicago these days. In what smacks of a desperate grab for tax revenue from any source imaginable, Fortune magazine reports that: "Chicago officials are taking an aggressive new tax approach. Consumers will now have to pay 9% on Netflix, Amazon Web Services and more.

Chicago is marking Independence Day this year with fireworks, hot dogs – and sweeping new tax rules that require companies to collect a 9% levy every time consumers use streaming and cloud services such as Netflix or Amazon Web Services.

The rules, which went into effect today, came about after city officials expanded the interpretation of existing amusement and property lease taxes to encompass cloud-based technologies."

So if you are Netflix fan in Chicago, the cost of enjoying a desired movie just got 9% more expensive because the local political class 1) “expanded the interpretation” of existing laws, 2) decided to target just a small sample of Internet access, and 3) desperately needs the money since the city of Chicago’s bonds are now rated at junk bond level.

But we have known that Chicago and the entire state of Illinois is heading quickly down a bankruptcy path, given the corrupt and irresponsible historical management of taxpayer wealth. I think that the bigger issue that Chicago citizens should worry about is since it is highly unlikely that desperate, local politicians will suddenly develop political will and economic sense, might they decide that taxing Internet activity is a good thing? Might we see taxing every Facebook post, a fee for every Tweet, etc.? I would not put it below the political class to do so.

3) It is always a close call each month to decide which is the most incompetent Federal entity. The finalists usually include the IRS, the TSA, or the Social Security Administration (SSA). This month it looks like the SSA has taken the early lead in ineptness. 

According to a recent report from the SSA inspector general, the SSA actually spends more money than it collects when trying to recover mistaken, illegal or fraudulent payments from people who received benefits they were not entitled to. Somehow, between 2008 and 2013, the SSA gave out $128.3 million in so-called “low dollar” overpayments, spent $323 million trying to recover the $128.3 million, and ended up collecting only $109.4 million. Thus, they spent $213.6 more money than what they collected.

4) A lot has been made about slavery in the past few weeks after the horrendous and terrible attack on a South Carolina church that left nine people dead. The President has weighed in many times with statements identifying the Confederate flag as a “symbol of slavery.” Such a statement does carry some moral weight given the ethnic background of the President.

But he then turns around and his actions are the exact opposite of what he says. The TPP is a treaty under consideration that would theoretically lower trade barriers across the Pacific basin including the U.S. Originally, the treaty had an anti-slavery provision in it that was written by U.S.Senator Bob Menendez, as reported by the Huffington Post: “The provision, which bars countries that engage in slavery from being part of major trade deals with the U.S., was written by Sen. Bob Menendez (D-N.J.). At the insistence of the White House, Menendez agreed to modify his language to say that as long as a country is taking ‘concrete’ steps toward reducing human trafficking and forced labor, it can be part of a trade deal.”

“Under the original language, the country that would be excluded from the pending Trans-Pacific Partnership pact is Malaysia.”

“Why, in the year 2015, is the White House teaming up with Republican leaders essentially to defend the practice of slavery?” 

Again, greed wins out over principle in Washington. Obama often talks a good show, most transparent administration ever, we will reduce your annual healthcare costs up to $2,500, we will reduce the annual spending deficit by 50%, etc. but his actions almost always belittle and contradict his words. 

Slavery symbols from 150 years ago tick him off but slavery TODAY, with living breathing human beings, is okay as long as some nebulous meaningless steps, steps to be defined, are being taken sometime in the future to get rid of it. And he sacrifices his words and integrity for the country of Malaysia, a nit in the world economy. As always with this president, love his words, ignore his hypocrisy.

That will do it for today’s insanity. Hypocrisy on slavery from the first African American President, an inept Social Security Administration, Netflix desperation in Chicago, and continued tepid economic results. All in a day’s work for the American political class.

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