Tag Archives: Economy

Stimulus by Fed Is Disappointing, Economists Say – NYTimes.com

The Federal Reserve’s experimental effort to spur a recovery by purchasing vast quantities of federal debt has pumped up the stock market, reduced the cost of American exports and allowed companies to borrow money at lower interest rates.But most Americans are not feeling the difference, in part because those benefits have been surprisingly small. The latest estimates from economists, in fact, suggest that the pace of recovery from the global financial crisis has flagged since November, when the Fed started buying $600 billion in Treasury securities to push private dollars into investments that create jobs.

via Stimulus by Fed Is Disappointing, Economists Say – NYTimes.com.

ROI: Is a Crash Coming? Ten Reasons to Be Cautious – WSJ.com

Is a Crash Coming? Ten Reasons to Be Cautious

By BRETT ARENDS

Could Wall Street be about to crash again?

This week’s bone-rattlers may be making you wonder.

I don’t make predictions. That’s a sucker’s game. And I’m certainly not doing so now.

But way too many people are way too complacent this summer. Here are 10 reasons to watch out.

1. The market is already expensive.

2. The Fed is getting nervous.

3. Too many people are too bullish.

4. Deflation is already here.

5. People still owe way too much money.

6. The jobs picture is much worse than they’re telling you. 7. Housing remains a disaster.

8. Labor Day is approaching.

9. We’re looking at gridlock in Washington.

10. All sorts of other indicators are flashing amber.

Read the details via ROI: Is a Crash Coming? Ten Reasons to Be Cautious – WSJ.com.

The American Spectator : The Timeless Principles of American Prosperity

A primer on supply-side economics:

We know, based on economic experience, theory, and logic, how to create another economic boom that will last 25 years, or a generation into the future. We achieved that in America from the end of 1982 to the end of 2007, with only two, short, shallow recessions that barely interrupted sustained, robust, economic growth. But that was not the only instance of success. Several times in the last 100 years, whenever the nation’s economic policies adhered to the timeless principles of economic growth and prosperity, our economy has boomed. When it has departed from those policies, it has fallen into stagnation, or worse.

via The American Spectator : The Timeless Principles of American Prosperity.

Government Control Decision Adds To Unemployment Rate!

Govt watchdog criticizes handling of car dealers

http://www.google.com/hostednews/ap/article/ALeqM5hJnwMBE7xMJZVNt_R997OWO3fIVQD9H1O0JG3

Senate Passes The Biggest Expansion of Government Since The Great Depression!!

Senate Passes Sweeping Finance Overhaul – WSJ.com.

The same people that got us into this mess are the architects of this new “financial reform”.

Law Remakes U.S. Financial Landscape

Senate Passes Overhaul That Will Touch Most Americans; Bankers Gird for Fight Over Fine Print

By DAMIAN PALETTA And AARON LUCCHETTI

[FinRegNew] Associated PressKey legislators celebrate passing of the bill Thursday.

WASHINGTON—Congress approved a rewrite of rules touching every corner of finance, from ATM cards to Wall Street traders, in the biggest expansion of government power over banking and markets since the Depression.

The bill, to be signed into law soon by President Barack Obama, marks a potential sea change for the financial-services industry. Financial titans such as J.P. Morgan Chase & Co., Goldman Sachs Group Inc. and Bank of America Corp. may be forced to make changes in most parts of their business, from debit cards to the ability to invest in hedge funds.

Congress approved a sweeping rewrite of rules that touch every corner of finance in the biggest expansion of government power over banking and markets since the Great Depression. David Wessel, David Reilly and Al Lewis discuss the likely impact of Dodd-Frank.

The Senate passed the bill 60-39 Thursday, following House passage last month. Earlier in the day, three northeastern Republicans joined with Democrats to block a filibuster, allowing the bill to squeak through.

Now, the legislation hands off to 10 regulatory agencies the discretion to write hundreds of new rules governing finance. Rather than the bill itself, it will be this process—accompanied by a lobbying blitz from banks—that will determine the precise contours of this new landscape, how strict the new regulations will be and whether they succeed in their purpose. The decisions will be made by officials from new agencies, obscure agencies and, in some cases, agencies like the Federal Reserve that faced criticism in the run-up to the crisis.

The Commodity Futures Trading Commission has designated 30 “team leaders” to begin implementing its expansive new authority over derivatives, and has asked for $45 million for new staff. The Federal Reserve, Federal Deposit Insurance Corp. and Securities and Exchange Commission are also in the thick of the implementation.

Finance bill favors interests of unions, activists – Washington Times

Finance bill favors interests of unions, activists – Washington Times.

Republicans propose cutting Obama budget – Yahoo! News

Republicans propose cutting Obama budget – Yahoo! News.

The Associated Press: Analysis: Dems show signs of battle fatigue

The Associated Press: Analysis: Dems show signs of battle fatigue.

Mort Zuckerman: Obama Is Barely Treading Water

The president’s problem is simple: the economy and jobs

By Mortimer B. Zuckerman

Posted: July 2, 2010

The hope that fired up the election of Barack Obama has flickered out, leaving a national mood of despair and disappointment. Americans are dispirited over how wrong things are and uncertain they can be made right again. Hope may have been a quick breakfast, but it has proved a poor supper. A year and a half ago Obama was walking on water. Today he is barely treading water. Then, his soaring rhetoric enraptured the nation. Today, his speeches cannot lift him past a 45 percent approval rating.

There is a widespread feeling that the government doesn’t work, that it is incapable of solving America’s problems. Americans are fed up with Washington, fed up with Wall Street, fed up with the necessary but ill-conceived stimulus program, fed up with the misdirected healthcare program, and with pretty much everything else. They are outraged and feel that the system is not a level playing field, but is tilted against them. The millions of unemployed feel abandoned by the president, by the Democratic Congress, and by the Republicans.

The American people wanted change, and who could blame them? But now there is no change they can believe in. Sixty-two percent believe we are headed in the wrong direction­—a record during this administration. All the polls indicate that anti-Washington, anti-incumbent sentiment is greater than it has been in many years. For the first time, Obama’s disapproval rating has topped his approval rating. In a recent CBS News poll, there is a meager 15 percent approval rating for Congress. In all polls, voters who call themselves independents have swung against the administration and against incumbents.

Even some in Obama’s base have turned, with 17 percent of Democrats disapproving of his job performance. Even more telling is the excitement gap. Only 44 percent of those who voted for him express high interest in this year’s elections. That’s a 38-point drop from 2008. By contrast, 71 percent of those who voted Republican last time express high interest in the midterm elections, above the level at this stage in 2008. And these are the people who vote.

Republicans are benefiting not because they have a credible or popular program—they don’t—but because they are not Democrats. In a recent Wall Street Journal/NBC poll, nearly two thirds of those who favor Republican control of Congress say they are motivated primarily by opposition to Obama and Democratic policy. Disapproval of Congress is so widespread, a recent Gallup poll suggests, that by a margin of almost two to one, Americans would rather vote for a candidate with no experience than for an incumbent. Throw the bums out is the mood. How could this have happened so quickly?

The fundamental problem is starkly simple: jobs and the deepening fear among the public that the American dream is vanishing before their eyes. The economy’s erratic improvement has helped Wall Street but has brought little support to Main Street. Some 6.8 million people have been unemployed in the last year for six months or longer. Their valuable skills are at risk, affecting their economic productivity for years to come. Add to this despairing army the large number of those only partially employed and those who have given up their search for work, and we have cumulative totals in the tens of millions.

Many people who joined the middle class, especially those who joined in the last few years, have now fallen back. It’s not over yet. Millions cannot make minimum payments on their credit cards, or are in default or foreclosure on their mortgages, or are on food stamps. Well over 100,000 people file for bankruptcy every month. Some 3 million homeowners are estimated to face foreclosure this year, on top of 2.8 million last year. Millions of homes are located next to or near a foreclosed home, and it is the latter that may determine the price of all the homes on the street. There have been dramatically sharp declines in home equity, representing cumulative losses in the trillions of dollars in what has long been the largest asset on the average American family’s balance sheet. Most of those who lost their homes are hard-working, middle-class Americans who had lost their jobs. Now many have to use credit cards to pay for essentials and make ends meet, and they are running out of credit. Another $5 trillion has been lost from pensions and savings.

But it is jobs that have long represented the stairway to upward mobility in America. For a long time, it was feared they were vulnerable to offshore competition (and indeed still are), but now the erosion is from economic decline at home. What happens as those domestic opportunities recede? Middle-class families fear they have become downwardly mobile and have not hit the bottom yet. The financial security that was once based on home equity and a pension has been swept away.

In a survey just released, the Pew Research Center explored the recession’s impact on households and how they are changing their spending and saving behavior. Nearly half the adults polled intend to boost their savings, cut their discretionary budgets, and cut their debt loads. The report concludes that the present enforced frugality will outlast the recession and its overhang. Fully 60 percent of those ages 50 to 61 say they may delay retirement. What does that mean for the young would-be employees entering the labor force over the next few years?

The administration’s stimulus program, because of the way Congress put it together, has created far fewer jobs than anyone expected given the huge price tag of almost $800 billion. It was supposed to constrain unemployment at 8 percent, but the recession took the rate way above that and in the process humbled the Obama presidency. Some 25 million jobless or underemployed people now wish to work full time, but few companies are ready to hire. No speech is going to change that.

Little wonder there has been a gradual public disillusionment. Little wonder people have come alive to the issue of excess spending with entitlements out of control as far as the eye can see. The hope was that Obama would focus on the economy and jobs. That was the number one issue for the public—not healthcare. Yet the president spent almost a year on a healthcare bill. Eighty-five percent in one poll thought the great healthcare crisis was about cost. It was and is, but the president’s bill was about extending coverage. It did nothing about the first concern and focused mostly on the second. Even worse, to win its approval he accepted the kind of scratch-my-back deal-making that suggests corruption in the political process. And as a result, Obama’s promise to change “politics as usual” disappeared.

The president failed to communicate the value of what he wants to communicate. To a significant number of Americans, what came across was a new president trying to do too much in a hurry and, at the same time, radically change the equation of American life in favor of too much government. This feeling is intensified by Obama’s emotional distance from the public. He conveys a coolness and detachment that limits the number of people who feel connected to him.

Americans today strongly support a pro-growth economic agenda that includes fiscal discipline, limited government, and deficit reduction. They fear the country is coming apart, while the novelty of Obama has worn off, along with the power of his position as the non-Bush. His decline in popularity has emboldened the opposition to try to block him at every turn.

Historically, presidents with approval ratings below 50 percent—Obama is at 45—lose an average of 41 House seats in midterm elections. This year, that would return the House of Representatives to Republican control. The Democrats will suffer disproportionately from a climate in which so many Americans are either dissatisfied or angry with the government, for Democrats are in the large majority in both houses and have to defend many more districts than Republicans. In any election year, voters’ feelings typically settle in by June. But now they are being further hardened by the loose regulation that preceded the poisonous oil spill—and the tardy government response.

The promise of economic health that might salvage industries and jobs, and provide a safety net, has proved illusory. The support for cutting spending and cutting the deficit reflects in part the fact that the American public feels the Obama-Congress spending program has not worked. As for the healthcare reform bill, the most recent Rasmussen survey indicates that 52 percent of the electorate supports repeal of the measure—42 percent of them strongly.

It is clear that the magical moment of Obama’s campaign conveyed a spell that is now broken in the context of the growing public disillusionment. Obama’s rise has been spectacular, but so too has been his fall.

WAYNE ALLYN ROOT: Barack Obama: The great jobs killer

Jul. 04, 2010

As former President Ronald Reagan might have said, “Obama, there you go again.”

The current occupant of the White House claims to know how to create jobs. He claims jobs have been created. But so far the score is Great Obama Depression 2.2 million lost jobs, Obama 0 — a blowout.

Obama is as hopeless, helpless, clueless and bankrupt of good ideas as the manager of the Chicago Cubs in late September. This “community organizer” knows as much about private-sector jobs as Pamela Anderson knows about nuclear physics.

It’s time to call Obama what he is: The Great Jobs Killer. With his massive spending and tax hikes — rewarding big government and big unions, while punishing taxpayers and business owners — Obama has killed jobs, he has killed motivation to create new jobs, he has killed the motivation to invest in new businesses, or expand old ones. With all this killing, Obama should be given the top spot on the FBI’s Most Wanted List.

Meanwhile, he has kept the union workers of GM and Chrysler employed (with taxpayer money). He has made sure that most government employee union members got their annual raises for sleeping on the job (with taxpayer money). He made sure that his voters got handouts mislabeled as “tax cuts” even though they never paid taxes (with taxpayer money). And he made sure that major campaign contributors collected billions off government stimulus (with taxpayer money).

As far as the taxpayers — the people who actually take risks with our own money to create small businesses and jobs and pay most of the taxes — we require protection under the Endangered Species Act.

You won’t find proof of the damage Obama is doing on Wall Street, but rather on Main Street. My friends are all part of the economic engine of America: Small business. Small business creates 75 percent of new jobs (and a majority of all jobs). I called one friend who was a wealthy restaurant owner. He says business is off by 60 percent. He’s drowning in debt. He won’t last much longer. His wealth is gone.

I called another friend in the business of home improvement. He says business is off 90 percent from two years ago. My contractor just filed personal bankruptcy. She won’t be building any more homes. The hair salon where I’ve had my hair cut for years closed earlier this year. Bankrupt. But here’s the clincher — ESPN Zone just closed all their restaurants across the country. If they can’t make it selling cheap food and overpriced beer with 100 big screens blaring every sporting event on the planet to a sports-crazed society, we are all in deep, deep trouble.

I’ve polled all my friends who own small businesses — many of them in the Internet and high-tech fields. They all agree that in this new Obama world of high business taxes, income taxes, payroll taxes, capital gains taxes, and workers compensation taxes, the key to success is to avoid employees. The only way to survive as a business owner today is by keeping the payroll very low and by hiring only independent contractors or part-time employees provided by temp agencies.

The days of jobs in the private sector with big salaries, full benefits, and pensions are over. We’ve all seen where those kinds of jobs get you as a business owner — in Bankruptcy Court or surviving on government welfare like GM and Chrysler. Or in the case of government itself — completely insolvent, but surviving by ripping off taxpayers and fraudulently running printing presses at the Fed all day and night to print money by the trillions.

Unfortunately, small businesses don’t have the power to impose taxes or print money. So unlike government, we’ll just have to cut employees and run lean and mean.

It has now become clear that, outside of the burgeoning field of Census takers, there will be no major increase in new jobs for years to come. Outside government, Obama has created a wasteland of economic ruin and depression that looks much like the landscape of Mel Gibson’s first movie “Mad Max.” Without a printing press in Obama’s world, you’re just plain out of luck.

The days of believing the Obama propaganda about a jobs recovery are over. The trillion-dollar corporate handouts (neatly named “stimulus”) may have kept big business in the money for the past 18 months, and artificially propped up the stock market, but small business is the real canary in the coal mine.

My small business-owning friends aren’t creating one job. Not one. They are shedding jobs. They are learning to do more with fewer employees. They are creating high-tech businesses that don’t need employees. And many business owners are making plans to leave the country. In a high-tech world where businesses can be run from anywhere, Obama has a problem. His one-trick pony — raise taxes, raise taxes, raising taxes — is chasing away the business owners he desperately needs to pay his bills.

So who is going to pay Obama’s taxes? Not his voters. They want government to pay them. Who is going to create Obama’s jobs? Not his voters — they’ve never created a job in their lives.

So what is Obama going to do? Maybe he can get Pamela Anderson on the line.

Wayne Allyn Root, a former vice presidential nominee for the Libertarian Party, writes from Henderson. His column appears every other week.