Tuesday, January 10, 2017

January, 2017, Part 5, Political Class Insanity: Creepy Joe Biden, A Botched Ecomomic Recovery, and More

It is the beginning of another month which means it is again time to review the latest political class insanity from Washington and around the world. Political class insanity takes many forms including the wasting of taxpayer wealth, criminal fraud within government programs, inane and stupid political quotes and actions, the inability to create and implement effective and efficient government programs, stupid and ill performing economic policies and strategies, and other forms of insanity that continue to evolve and surprise and shock us. 

Today and for all of the insanity posts this month, let’s start off with a welcome piece of honest political dialog. It comes from a State Department spokesperson. Mark Toner, who is about to start the daily State Department press briefing. In a joking matter, he makes the following quote: "Welcome to the State Department. I think we have some interns in the back. Welcome. Good to see you in this exercise in transparency and democracy." 

He then burst out laughing at his own quote, indicating he also knew what a joke the Obama administration has been, especially Mr. Toner’s State Department, when it comes to cover ups, lack of transparency, denial of Freedom of Information Act requests, the prosecution of whistleblowers, etc. But at least it was a little refreshing to finally hear some actual honesty out of Washington as we see from the actual clip of the news conference:


With that context of honesty, let’s see what other insanity has been going down:

1) One of the truisms we have always talked about is the reality that government jobs do not incrementally add to the economy. Why? Well, the salaries and the resultant wealth that government workers receive are the result of taking wealth from non-government workers via taxes. If there were no taxes, those tax funds would have been spent in the economy anyway. Now that wealth may been spent differently but having government employees drawing a salary and spending those salary dollars in the economy do not incrementally build a bigger economy.

All of which makes a recent article by Terence P. Jeffrey, writing for the CNS News site on January 6, 2017, very distressing:

  • According to the latest government reports, U.S.manufacturing jobs declined by 45,000 positions in 2016 while government jobs increased by 183,000.
  • There are now 9,948,000 more government jobs than manufacturing jobs in this country.
  • There are currently 12,275,000 manufacturing jobs in this country and a whopping 22,223,000 government jobs in this country.
  • So one of the biggest wealth creation segments of the country, manufacturing, is decreasing in size where the biggest non-wealth creation segments of the economy, government workers, is increasing in size, not a go trend.
  • This unhealthy economic trend has been going on for quite a while:

  • To get a perspective on how bad this trend is, the Bureau of Labor Statistics points out that there are now more government workers in the country today than there EVER were manufacturing jobs.
It is obvious what is happening here. As the number of Americans employed as government workers increases over time and the number of Americans employed in non-government jobs grows less quickly or actually decreases like the manufacturing sector, the economy starts to fold in ionto tself as fewer and fewer wealth generators have to support more and more non-wealth generators (government employees.) 

This trend is also feeding the ever increasing national debt, currently at about an atrocious $20 TRILLION. With fewer and fewer jobs creating new wealth, there are less taxes available to keep the debt load under control. And while this trend has been going on for while, the Obama Presidency did nothing to stop it, adding tons of employees to the Federal payroll, employees that have to be paid because non-government workers have to pay an ever increasing amount of taxes.

2) A lot of non-Trump supporters were turned off by his statements that denigrated women. Fair enough, but if you are a Democrat and liberal you cannot convince me that Joe Biden is not just as bad or creepy when it comes to women, as evidenced by the following video montage:


Creepy is too mild a word to address this politician’s actions as it relates to women. Icky and insane.

3) We have another update on the gun violence in Chicago, our third update this week. The previous updates covered the carnage that occurred over the Christmas and New Year’s weekends. Many killed, dozens wounded as Chicago wrapped up a year in which over 700 citizens were killed and over 4,000 were wounded as a result of gang related violence, despite living in a city with likely the most stringent gun control laws in the country.

Unfortunately, the first week in 2017 brought no relief to the citizens of Chicago, as explained in a recent Breitbart article:

  • In the first four days of 2017, 54 people in Chicago had already been shot.
  • Seven of those 54 shot had died.
  • At this daily rate, over 600 people will die from gun violence in 2017.
  • And these shootings do not take place only under the cover of darkness since16 year old and 17 year old boys were shot around noon.
And still no politician, local, state, or Federal has any clue on how to fix this insanity and start protecting the citizens of Chicago.

4) One last piece of insanity for today, something we have covered many times already in this blog but it cannot be said enough, the failure of Obama’s economic strategies and policies over the past eight years. Granted, Obama did inherit an economy in very sad shape. 

But it was not the first time that an incoming President had to deal with a bad economy. When Reagan took office, he was dealing with a very bad economy, one that was saddled with both high unemployment and high inflation (stagflation), an economic situation that economists had previously felt was impossible.

But Reagan dealt with it, much like every other President dealt with thewir recession, and their recoveries were robust and strong. And the same should have happened with Obama, a strong and robust economy, since he had three strong economic tailwinds that other President did not have: 

  1. Obama implemented a (failed), $800 billion massive economic stimulus plan that he claimed would keep unemployment below 8% (it did not, unemployment sailed to over 10%).
  2. The country enjoyed a surprise and substantial dip in energy prices that should have pumped billions and billions of dollars into the economy, spiking it significantly.
  3. The Federal Reserve flooded the economy with trillions of dollars that should have spurred economic growth.
Despite these strong tailwinds, somehow Obama managed meager economic growth with stagnant wages and incomes, as summarized in a recent article from Investors Business Daily:

  • A recent jobs report from the Bureau of Labor Statistics showed that the economy added 156,000 new jobs in December and the outdated but still official U3 unemployment rate dropped to 4.7%, somewhat good news on both fronts.
  • This was the 75th straight month of job growth, also good news.
  • But not good enough if you look under the hood of the economy.
  • In 2016, the Obama recovery created 2 million jobs but the working age population increased by 2.8 million in the same time frame so the Obama economic policies could not even keep up with the growth of the population, not even close.
  • But this should not be a surprise since the Obama recovery has averaged 2.2 million jobs a year while the increase in the country’s working age population has averaged 2.5 million new potential workers a year.
  • Thus, unlike just about every previous President’s economic recoveries, Obama could not even keep up with normal population growth despite the unique tailwinds we listed above.
  • And the really bad news is that this gap between population growth and job creation growth has gotten WIDER over time, not better.
  • The only reason why the “official” unemployment rate is low is that a whopping 14 million working age Americans have given up looking for work, dropping them out of the U3 unemployment rate calculation.
  • This reduced labor participation rate from 65.7% when Obama took office in the midst of the recession to an almost historical low of 62.7% six years into his recovery, a previously unheard of possibility.
  • If these discouraged 14 million workers were taken into account in the unemployment rate calculation like the U6 rate does, then the true unemployment rate in America is close to 9%, hardly a level of a healthy economy.
  • While some of the 14 million are Baby Boomer retirements, that does not account for a majority of the discouraged workers, especially when you consider the reality that there is a higher percentage of senior citizens in the labor force today than ever before.
  • The article summarizes the poor economic policy results of Obama as follows: “The lackluster growth since 2010 explains a lot of things. It explains why incomes have been largely stagnant. It explains why so many people jumped onto the Social Security Disability Insurance program. It explains why the public has been so pessimistic about the economy. And it explains why the working class largely abandoned Obama and his chosen successor in November in favor of Donald Trump.”
So many reasons (economic stimulus spending, low energy prices, Federal Reserve actions) why the economic recovery should have been excellent but was so badly botched by an administration that raised taxes, added tens of thousands of regulations to the economic via Obama Care, Dodd-Frank, and a myriad of other avenues, doubled the national debt, and allowed government bureaucracies and employment to grow without the resulting societal benefit. Insane.

That will do it for today’s insanity: a botched economic recovery, more Chicago violence, a creepy Joe Biden, and out of control government growth. More insanity tomorrow.

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