Many have argued that poor President Obama inherited this economic mess from President Bush which is why the market is still dropping faster than Obama’s approval rating. However, one has to examine what has happened since September of 2008 to realize that we were already on the socialist course.
We wasted taxpayer money last year in September when we did TARP 1 and allocated $700 billion for failing financial institutions, many of which are still failing and will continue to fail. The greatest example is AIG which blew through taxpayer money faster than congress normally does, which is an accomplishment.
The bailouts proved fruitless since the bad business practices remain in these companies. However, President Obama was an ardent bailout support and shoved billions more down our throats in bailouts which have also proved completely fruitless. His “stimulus” bill hasn’t stimulated a single thing nor has it saved or created a single job, it was a sham, which is no surprise. It stimulates the size of government, nothing more.
When something doesn’t work the first time (bailouts), doing it again and expecting a different result is the definition of insanity.
First, FOX News reports on the new unemployment numbers:
WASHINGTON — The nation’s unemployment rate bolted to 8.1 percent in February, the highest since late 1983, as cost-cutting employers slashed 651,000 jobs amid a deepening recession.
Both figures were worse than analysts expected and the Labor Department’s report shows America’s workers being clobbered by a wave of layoffs unlikely to ease in the coming months.
“There is no light at the end of the tunnel with these numbers,” said Nigel Gault, economist at IHS Global Insight. “Job losses were everywhere and there’s no hope for a turnaround any time soon.”
Since the recession began in December 2007, just two months after the Dow Jones industrial average hit a record high of 14,000 and the unemployment rate stood at 4.7 percent, the economy has lost 4.4 million jobs, more than half of which occurred in the past four months.
The net loss of 651,000 jobs in February came after even deeper payroll reductions in the prior two months, according to revised figures released Friday. The economy lost 681,000 jobs in December and another 655,000 in January.
Employers are shrinking their work forces and turning to other ways to slash costs — including trimming workers’ hours, freezing wages or cutting pay — because the recession has eaten into their sales and profits. Customers at home and abroad are cutting back as other countries cope with their own economic problems.
With employers showing no appetite to hire, the unemployment jumped to 8.1 percent from 7.6 percent in January. That was the highest since December 1983, when the jobless rate was 8.3 percent.
So what genius plan does Obama have to help businesses cut costs and retain workers? Raising taxes on them, of course. Yes, in this time of high unemployment and worsening recession, President Obama has decided to begin taking more money from your wallet and more money from businesses making over $250k, which is every major business. Thus, these businesses will now have to contend with a slowing economy and a higher tax burden, what genius thinking on the part of the administration. There is no greater incompetence on the part of government, which is indisputable.
Now come the numbers on the stock market which can no longer be said is still reeling from whatever President Bush may or may not have done.
Report from FOX News on the Dow downer:
The Dow Jones Industrial Average has fallen faster under President Obama than under any new president in at least 90 years, according to a review conducted by Bloomberg.
Bloomberg reports that since Inauguration Day, the Dow has fallen 20 percent, leading at least one investor to dub this the “Obama bear market.” The Dow has also dropped 31 percent since Election Day.
Despite a string of government bailout offers and Obama’s advice earlier this week that Americans should be buying stock while shares are low, the Dow has continued to freefall.
Bloomberg reported that Obama is at risk of breaking a historical trend — in which the Dow soars an average of close to 10 percent in the first year after a Democrat wins the presidency.
Perhaps Obama will break the trend because this is the year after a Socialist won the presidency, not a run of the mill Democrat.
Next, CNBC’s Jim Cramer isn’t going down without a fight:
I am a fight-not-flight guy, so I was on my hackles when I heard White House Press Secretary Robert Gibbs’ answer to a question about my pointed criticism of the president on multiple venues, including the Today Show.
“I’m not entirely sure what he’s pointing to to make some of the statements,” Gibbs said about my point that President Obama’s budget may be one of the great wealth destroyers of all time. “And you can go back and look at any number of statements he’s made in the past about the economy and wonder where some of the backup for those are, too.”
Huh? Backup? Look at the incredible decline in the stock market, in all indices, since the inauguration of the president, with the drop accelerating when the budget plan came to light because of the massive fear and indecision the document sowed: Raising taxes on the eve of what could be a second Great Depression, destroying the profits in healthcare companies (one of the few areas still robust in the economy), tinkering with the mortgage deduction at a time when U.S. house price depreciation is behind much of the world’s morass and certainly the devastation affecting our banks, and pushing an aggressive cap and trade program that could raise the price of energy for millions of people.
The market’s the effect; much of what the president is fighting for is the cause. The market’s signal can’t be ignored. It’s too palpable, too predictive to be ignored, despite the prattle that the market’s predicted far more recessions than we have.
One by one, everyone is realizing that Obama’s socialism is abysmal for our capitalist system and the arguments are coming in tenfold now.
Michael Boskin at the Wall-Street Journal sounds off:
It’s hard not to see the continued sell-off on Wall Street and the growing fear on Main Street as a product, at least in part, of the realization that our new president’s policies are designed to radically re-engineer the market-based U.S. economy, not just mitigate the recession and financial crisis.
The illusion that Barack Obama will lead from the economic center has quickly come to an end. Instead of combining the best policies of past Democratic presidents — John Kennedy on taxes, Bill Clinton on welfare reform and a balanced budget, for instance — President Obama is returning to Jimmy Carter’s higher taxes and Mr. Clinton’s draconian defense drawdown.
Mr. Obama’s $3.6 trillion budget blueprint, by his own admission, redefines the role of government in our economy and society. The budget more than doubles the national debt held by the public, adding more to the debt than all previous presidents — from George Washington to George W. Bush — combined. It reduces defense spending to a level not sustained since the dangerous days before World War II, while increasing nondefense spending (relative to GDP) to the highest level in U.S. history. And it would raise taxes to historically high levels (again, relative to GDP). And all of this before addressing the impending explosion in Social Security and Medicare costs.
To be fair, specific parts of the president’s budget are admirable and deserve support: increased means-testing in agriculture and medical payments; permanent indexing of the alternative minimum tax and other tax reductions; recognizing the need for further financial rescue and likely losses thereon; and bringing spending into the budget that was previously in supplemental appropriations, such as funding for the wars in Iraq and Afghanistan.
The specific problems, however, far outweigh the positives. First are the quite optimistic forecasts, despite the higher taxes and government micromanagement that will harm the economy. The budget projects a much shallower recession and stronger recovery than private forecasters or the nonpartisan Congressional Budget Office are projecting. It implies a vast amount of additional spending and higher taxes, above and beyond even these record levels. For example, it calls for a down payment on universal health care, with the additional “resources” needed “TBD” (to be determined).
Mr. Obama has bravely said he will deal with the projected deficits in Medicare and Social Security. While reform of these programs is vital, the president has shown little interest in reining in the growth of real spending per beneficiary, and he has rejected increasing the retirement age. Instead, he’s proposed additional taxes on earnings above the current payroll tax cap of $106,800 — a bad policy that would raise marginal tax rates still further and barely dent the long-run deficit.
Increasing the top tax rates on earnings to 39.6% and on capital gains and dividends to 20% will reduce incentives for our most productive citizens and small businesses to work, save and invest — with effective rates higher still because of restrictions on itemized deductions and raising the Social Security cap. As every economics student learns, high marginal rates distort economic decisions, the damage from which rises with the square of the rates (doubling the rates quadruples the harm). The president claims he is only hitting 2% of the population, but many more will at some point be in these brackets.
Boskin goes on further with more evidence here.
The bottom line is that Obama is clueless when it comes to spurring growth in the economy, he’s a financial dunce who doesn’t know a investor from a trader.
Thanks for your “help” President Obama, but please stop. We can’t afford it any longer.