A President Whose Assurances Have Come Back to Haunt Him
By PETER BAKERSEPT. 8, 2014
WASHINGTON — When President Obama addresses the nation on Wednesday to explain his plan to defeat Islamic extremists in Iraq and Syria, it is a fair bet he will not call them the “JV team.”
Nor does he seem likely to describe Iraq as “sovereign, stable and self-reliant” with a “representative government.” And presumably he will not assert after more than a decade of conflict that “the tide of war is receding.”
As he seeks to rally Americans behind a new military campaign in the Middle East, Mr. Obama finds his own past statements coming back to haunt him. Time and again, he has expressed assessments of the world that in the harsh glare of hindsight look out of kilter with the changed reality he now confronts.
In making his speech, Mr. Obama faces the challenge of reconciling those views with the new mission he is presenting to the American public to recommit the armed forces of the United States to the region he tried to leave. Rather than a junior varsity nuisance, he will try to convince Americans that the Islamic State in Iraq and Syria represents a clear threat to national security in a state that is hardly stable. And he will seek to win patience for more war from a public that wishes it really was receding.
To Mr. Obama’s critics, the disparity between the president’s previous statements and today’s reality reflects not simply poorly chosen words but a fundamentally misguided view of the world. Rather than clearly see the persistent dangers as the United States approaches the 13th anniversary of the Sept. 11, 2001, terrorist attacks, they said, Mr. Obama perpetually imagines a world as he wishes it were.
Fed: Under Obama, only the richest 10 percent saw incomes rise
By Jennifer Pompi – The Washington Times – Thursday, September 4, 2014
Under President Obama, the richest 10 percent were the only income group of Americans to see their median incomes rise, according to a survey released this week by the Federal Reserve.
The Fed data covered the years 2010-2013, during which period Mr. Obama constantly campaigned against income inequality and won re-election by painting his Republican rival as a tool of Wall Street plutocrats.
“Data from the 2013 [Survey of Consumer Finances] confirm that the shares of income and wealth held by affluent families are at modern historically high levels,” the report said in noting that the median income fell for every 10-percent grouping except the most affluent 10 percent.
Democrats are running out of time for an economic savior.
They have long predicted that an economic turnaround would be the elixir that helps them retain control of the Senate in November.
But with just a handful of big economic reports left before Election Day, the economic picture is largely in place. And while the outlook is bright, voters continue to hold a dim view of their own financial prospects.
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“There are still a lot of families playing catch-up,” said Jared Bernstein at the Center for Budget and Policy Priorities. “It’s got to be awfully hard for the typical voter to figure out what Congress had done to help the economy move forward. It’s a lot easier to figure out what they’ve done to screw things up.”
Broadly speaking, the economy has made gains in the last several months. The unemployment rate has held steady or dropped every month for over a year, and new data shows the economy grew this spring at its fastest rate in more than 12 months.
But the good news isn’t resonating with the public.
A Wall Street Journal/NBC News poll released earlier this month found 71 percent of people blamed Washington for the economy’s woes, and dissatisfaction mainly fell on incumbents overall, rather than on a particular party.
That poll found roughly half of voters believe the economy is still in a recession, even though the economic decline ended in June 2009.
Similarly, Gallup’s index of economic confidence has remained unchanged for all of 2014. People are actually less confident about the economy now than they were in January, when the unemployment rate was nearly half a percentage point higher.
With just two months to go before the midterm elections, there are just a handful of major economic indicators due before ballots are cast, including a pair of jobs reports.
With so little time left, it appears increasingly unlikely that views will change enough to boost the chances of Democrats, who are trying to escape the gravity of President Obama’s flagging poll numbers.
Some researchers argue the economic recovery has not been felt widely, with the majority of the gains going to people on the top of the income scale.
Report: Many Americans’ Paychecks Have Shrunk Since Recession
Philip Wegmann / @PhilipWegmann / August 12, 2014
Today many Americans are taking home a smaller paycheck than they used to, according to a study released Monday by the United States Conference of Mayors.
According to the report, people who worked in job sectors particularly hard hit by the recession had an average salary of $61,637 before the recession. But when it comes to jobs gained after the downturn, the average wage was $47,171 dollars.
“The wage gap has nearly doubled from one recession to the next.” – United States Conference of Mayors.
Conditions have become worse since the last recession, when the internet bubble burst. At that time, the Conference of Mayors measured the wage gap at 12 percent, about half of today’s 23 percent.
“While the economy is picking up steam,” said Conference president and Sacramento mayor Kevin Johnson, “wage gaps are an alarming trend that must be addressed.”
Fed survey: 40% of households show signs of financial stress
Four out of 10 American households were straining financially five years after the Great Recession — many struggling with tight credit, education debt and retirement issues, according to a new Federal Reserve survey of consumers.
The Fed study shows that the economy has made progress to the point where a majority of U.S. households said they were “living comfortably” or doing OK financially.
But almost 40% reported that their families were “just getting by” or struggling to do so. And more people reported that their financial situation was worse rather than better off compared to five years earlier. The survey was taken in September 2013.
Overall, the Fed’s findings, reported Thursday, are consistent with many other studies and data depicting the deep and lingering effects of the 2007-09 recession. The recovery has been slow and uneven, skewed toward the wealthy.
“It just shows that the recovery is not delivering for a huge chunk of Americans,” said Heidi Shierholz, an economist at the liberal-leaning Economic Policy Institute.
Because the Fed report captured a snapshot of households last fall, no comparable data from previous years was available to assess changes over time. The central bank conducts a far more extensive survey of consumer finances every three years, but the results of the most recent one, for 2013, won’t be released until early next year.
Barney Frank ‘Appalled’ By Obama Administration: ‘They Just Lied To People’
WASHINGTON — President Barack Obama made a major political mistake by lying about the details of his health care plan, according to former House Financial Services Committee Chairman Barney Frank (D-Mass.).
“The rollout was so bad, and I was appalled — I don’t understand how the president could have sat there and not been checking on that on a weekly basis,” Frank told HuffPost during a July interview. “But frankly, he should never have said as much as he did, that if you like your current health care plan, you can keep it. That wasn’t true. And you shouldn’t lie to people. And they just lied to people.”
Obama has taken significant flak in conservative circles for claiming that his health care overhaul would allow all existing health care plans to continue, when, in fact, new consumer protection standards would require some people to sign up for more comprehensive insurance. The law provides government subsidies to help people of modest means pay for the more robust plans. Frank is a strong supporter of the law, and he has repeatedly defended Obama and his legislative agenda.
“He should have said, ‘Look, in some cases the health care plans that you’ve got are really inadequate, and in your own interests, we’re going to change them,'” Frank said. “But that’s not what he said.”
Obama’s Self-Made Border Crisis Mike Needham / @MikeNeedham / July 30, 2014
“You didn’t build that. Somebody else made that happen.” In the case of the ongoing crisis along America’s southwest border, that someone is President Obama. When the president used his pen to sign the Deferred Action for Childhood Arrivals, or DACA, memorandum on June 15, 2012, he effectively rolled out the welcome mat to those abroad seeking to immigrate illegally.
The numbers are undeniable. From 2011 to 2013, the number of minors crossing the border illegally increased threefold, from roughly 8,000 to 24,668. Officials initially estimated that number would soar to 60,000 this year, though it is now expected to be close to 90,000.
Some have attempted to attribute the sudden wave of migration to factors other than the actions taken by the Obama administration. Most frequently cited is the stunning violence plaguing Central America, but according to United Nations data the region’s dramatic increase in violence began in 2007.
The other frequently cited cause is a little-known anti-trafficking law that gave additional protections to certain immigrant minors, but that law passed in 2008. While those two factors may intensify the crisis, there was no greater pull factor than the president’s executive decreeforbidding immigration officials from enforcing the law.
Accounts from those who have been encouraged to undertake the perilous journey from Central America to the United States confirm that the Obama Administration’s actions were their driving force. According to an internal Border Patrol memo leaked last month, the main reason minors and women from Central America had entered the U.S. was “to take advantage of the ‘new’ U.S. law that grants a free pass or permit” to stay in the country.
Some officials have defended lax enforcement, suggesting these so-called “permisos” are simply the notices to appear at a future immigration hearing issued to minors who enter the country illegally. It is important to understand, however, how the president’s DACA program works. It is not merely “deferred action,” as the name suggests, but rather a program that issues papers, identification and work permits for two years to those illegal immigrants under 30 who qualify.
What’s more, many minors believed June 2014 — two years after Obama’s DACA memo — was the cutoff for the program. In this light, one would be hard pressed to deny that the DACA initiative has been seen by minors and young adults as a “free pass” incentive program.
Earlier this month, Honduran President Juan Orlando Hernández seemed to confirm the notion, telling Time what we “shouldn’t forget” about “is the lack of clarity of U.S. immigration policy.” Hernández said “my call to the United States is that it defines these rules with clarity” to prevent smugglers from taking advantage of the ambiguity.
Report reveals ‘disturbing trend’ of brazen attacks against border security by gangs, drug and human traffickers
A game warden hit in the head with a rock while trying to seize a raft. Police officers wounded in an hours-long standoff with a gang member wanted for murder. Criminals spewing obscenities and death threats at local cops before asking for – and receiving – medical treatment.
And that was just last week.
A weekly report distributed by a Texas state agency to senior law enforcement officials paints a grim picture of the Mexican border, where authorities regularly confront illegal immigrant gang members and draw automatic gunfire from across the Rio Grande, and where local, state and federal authorities fight a never-ending battle against drug smugglers.
The most recent Border Operations Sector Assessment report compiled by the Texas Department of Public Safety’s Border Security Operations Center, dated July 25 and obtained by FoxNews.com, details local and federal authorities encountering smugglers carrying millions of dollars’ worth of marijuana, cocaine and methamphetamine, some of which was found in vehicles filled with biblical passages and religious items; federal agents being assaulted and shot at; gang members brazenly approaching people in their homes; and ranch workers witnessing men crossing into the U.S. wearing camouflage and carrying long guns and automatic weapons.
Average Price of Electricity Climbs to All-Time Record
July 29, 2014 – 2:20 PM
(CNSNews.com) – For the first time ever, the average price for a kilowatthour (KWH) of electricity in the United States has broken through the 14-cent mark, climbing to a record 14.3 cents in June, according to data released last week by the Bureau of Labor Statistics.
Before this June, the highest the average price for a KWH had ever gone was 13.7 cents, the level it hit in June, July, August and September of last year.
The 14.3-cents average price for a KWH recorded this June is about 4.4 percent higher than that previous record.
The degree to which Barack Obama is now phoning it in – sleepwalking perfunctorily through his second term, amid golf rounds and dinner parties – is astonishing
By Matt K Lewis
12:04PM BST 26 Jul 2014
President Obama has emotionally checked out of his job a couple of years early, it seems. How can one tell?
Candidates for president who brazenly assume they are the inevitable victor are sometimes accused of “measuring the drapes” for the White House.
Obama, conversely, seems to be prematurely packing his bags in hopes for an early departure.
Just last week, for example, the Los Angeles Times reported that “The First Family is believed to be in escrow on a contemporary home in a gated community where entertainers Frank Sinatra, Bob Hope and Bing Crosby once maintained estates”.
The Fed Can’t Fix What Ails the Economy
By Gerald P. O’Driscoll Jr.
This article appeared in Real Clear Markets on July 21, 2014.
In Congressional testimony this week, Federal Reserve Chair Janet Yellen pointed to several economic maladies warranting continued activism by the central bank. But what ails the U.S. economy cannot be fixed by monetary policy.
This has been an exceptionally weak recovery when gauged by the labor market. About half of the decline in the unemployment rate can be accounted for by “discouraged workers,” who have dropped out of the labor force and are no longer actively seeking jobs. For that reason, the unemployment rate is increasingly becoming a misleading gauge of the labor market.
In Monday’s Wall Street Journal, Mortimer Zuckerman wrote cogently of “The Full-Time Scandal of Part-Time America.” As he put it, “Way too many adults now depend on the low-wage, part-time jobs that teenagers would normally fill.”
Low economic growth is one reason that job growth has been weak. Growth in full-time jobs has also been slowed by Obamacare. The act mandates that employers provide health insurance for those working 30 hours a week or more. The predictable consequence is that employers are reluctant to hire full-time workers. Better two half-time workers than one full-time employee.
There are many other forces at work in labor markets, few of which are influenced by anything the Fed does. Until recently, there were extended unemployment benefits. These discouraged workers from actively seeking jobs. That effect combines with benefits, like food stamps, to act as a tax on taking a job. Casey Mulligan, an economics professor at the University of Chicago, has written extensively on the employment tax. If people don’t take jobs, employment cannot grow.
Some of what occurred in the recession is a continuation or acceleration of trends long in place. The male labor force participation rate has been declining since 1950. It was about 87% then, and is 69.2% today. The overall labor force participation increased for a long time because of rising participation by women. That has flattened now.
The fact that men increasingly do not work has profound social consequences. But, again, this is not a problem that monetary policy can address.
Janet Yellen has long been associated with the belief that the central bank can influence employment. She has also commented on the weakness in current labor markets, and the fact that the numbers overstate strength there.
Yet yesterday she observed that the labor market is improving more quickly than expected, and therefore the Fed might raise interest rates sooner than expected. Perhaps the Yellen Fed has decided to declare victory, and extricate itself from the trap of its own making. But that does not change the fact that labor markets remain weak.
It is hubris to claim the Federal Reserve can control variables, like the unemployment rate and labor market weakness, over which they have no systematic influence. But Fed policy is not just ineffective; it is malignant.
The main effect of Fed policy has been to create asset bubbles in financial markets, decoupling these from the underlying economy. As we learned painfully in the recent financial crisis, overheated asset markets are not a source of strength – they the source of future problems.
The Trouble with Pop Economics
By Matt McCaffrey
Friday, July 18th, 2014
John Lott writes in Barron’s that we should be sceptical of the populist economics trend that’s been prevalent in the past few years. Specifically, Lott criticizes Steven Levitt and Stephen Dubner, authors of Freakonomics, for peddling a kind of “naïve economics” that fascinates readers, but doesn’t hold up to serious scrutiny (rather than “naïve economics,” maybe “economics for the naïve” would be better).
I’ve been working through some similar ideas myself, especially in a new paper criticizing aspects of the pop econ literature. I should point out that these books—including Freakonomics and its many imitators—do have a reasonable goal, namely, to bring the economic point of view to the general public. Now, the fact that economics needs a special literature to explain its ideas to the public is telling, and to some extent an indictment of how the profession has developed (e.g. into an abstract and often excessively technical discipline). Still, as writers like Hazlitt show, it’s a great advantage to be able to communicate economic ideas simply and powerfully. But while in general we should welcome economic writing for non-economists, too often pop econ forgets to stop when descending the ivory tower, and ends up on the intellectual parking sublevel.
Of course, there is a lot that could be said for and against pop writings, which come in all shapes and sizes. But there are a few common threads in the literature that I think give a misleading view of what economics is fundamentally about. One of these is the tendency of pop writers to define economics as the study of incentives. This idea goes back at least to Steve Landsburg’s book The Armchair Economist (1993), which was basically the founding document of pop economics. As he puts it, “Most of economics can be summarized in four words: ‘People respond to incentives.’ The rest is commentary” (p. 3).
The same idea is repeated in other books in the pop genre. Freakonomics, for instance, states that “Incentives are the cornerstone of modern life. And understanding them—or, often, ferreting them out—is the key to solving just about any riddle” (p. 13; emphasis in original). The hyperbole about incentives is impressive: “An incentive is a bullet, a lever, a key: an often tiny object with astonishing power to change a situation” (p. 20).
The trouble with the incentive-based view of economics is that it is far too narrow. An incentive is just something an individual finds valuable, so when economists speak of the importance of incentives, they’re really just saying that people pursue things that will make them better off. This is an important fact, but it’s only one of many insights at the core of economic science. The proclamations “people respond to incentives,” and “incentives matter” are certainly true, but they’re so true that they’re trivial.
Furthermore, there are important problems in economics that cannot be solved with reference to incentives. A good example is the socialist calculation debate. Many economists believe the major problem with socialism is that it doesn’t properly incentivize people to organize production efficiently. Of course, socialism certainly does offer poor incentives, but as Mises and others demonstrated, the central problem of socialism is that without private ownership of the means of production, it is impossible for entrepreneurs to use monetary calculation to appraise the prices of the factors of production, and hence, to allocate them. This problem does not hinge on the presence of “good” incentives for socialist managers. If anything, struggling to arrange incentives for effective production is an alternative that central planners try in the absence of calculation.
In any case, economics—even at the introductory level—is about a lot more than the carrot-and-stick logic of incentives. As Austrians in particular have emphasized, economic laws exist that trump the preferences of individuals, especially those seeking to impose their will on other members of society. Mises puts it nicely in Human Action:
Despots and democratic majorities are drunk with power. They must reluctantly admit that they are subject to the laws of nature. But they reject the very notion of economic law… economic history is a long record of government policies that failed because they were designed with a bold disregard for the laws of economics. (p. 67)
Such was the case with socialist economies as well as many other small-scale experiments in economic planning. Now, pop econ writers are not despots, but I do think there are definite traces of the “planning mentality” in books like Freakonomics, which always seem to hint that if we pay enough attention to incentives, we can use them to tweak economic policy by “urging people to do more of a good thing and less of a bad thing” (p. 5). These kinds of value judgments are usually only implied in the pop literature, but for that very reason readers should take care not to fall prey to the “fatal conceit” of focusing too much on incentives and how to engineer them.
By the way, the paper I refer to above was published in The Review of Social and Economic Issues, which has just launched its inaugural issue. The journal welcomes research in Austrian economics and related topics, and the editorial board features several prominent Austrian scholars, including Joe Salerno, Guido Hülsmann, Peter Klein, Jesús Huerta de Soto, and (not so prominent) yours truly.
Cupcake shop Crumbs shuttering all its stores including its Ridgewood Location
JULY 8, 2014, 6:39 AM LAST UPDATED: TUESDAY, JULY 8, 2014, 12:40 PM ASSOCIATED PRESS Print
NEW YORK (AP) — Crumbs says it is shuttering all its stores, a week after the struggling cupcake shop operator was delisted from the Nasdaq.
CARMINE GALASSO/RECORD FILE PHOTO Crumbs Bake Shop in Ridgewood. The chain is closing all its stores, it announced Monday.
The New York City-based company, which had stores in Ridgewood and at the Garden State Plaza, said all employees were notified of the closures Monday. A representative for Crumbs could not immediately say how many workers were affected or how many stores it had remaining on its last day.
“Regrettably Crumbs has been forced to cease operations and is immediately attending to the dislocation of its employees while it evaluates its limited remaining options,” the company said in an emailed statement. That will include filing for Chapter 7 bankruptcy liquidation.
A press release from its website in March listed 65 locations in 12 states and Washington, D.C. The website had not been updated with notification of the closures late Monday.
Garden State in dismal state GREG DAVID JULY 6, 2014 12:01 A.M.
Chris Christie certainly has his troubles these days. A decline in tax revenue left him with a big hole in the budget for the just-ended fiscal year, which he closed by not making a big payment to the state’s beleaguered pension fund. His transportation-improvement fund is depleted, forcing him into maneuvers to grab Port Authority money to fix the Pulaski Skyway.
The list could go on, but the cause of all these woes is the same: a very poor economy. It’s why the governor doesn’t talk about the New Jersey miracle anymore.
The best way to compare economies these days is by their performance during the long and mostly painful recovery from the Great Recession. That’s what I have done for New Jersey, New York state and New York City in the chart accompanying this column. (The story would be the same if I compared Mr. Christie’s state with the country as a whole.)
New JerseyNew YorkNew York City Jobs lost in recession257,900330,200140,800 As percentage of all jobs6.3%3.7%3.7% Jobs regained100,300524,600374,900 Percentage of lost jobs regained39%159%266% Jobless rate peak9.7%8.9%10.0% Jobless rate now6.8%6.7%7.9% GDP 2010$493.2 billion$1,182.9 billion$509.1 billion GDP in 2013$509.1 billion$1,226.7 billion$626.1 billion Gain in GDP3.2%3.7%7.0% Personal income growth14.2%15.3%12.7% Change in home price from peak-20.1%0.0%Not available
Jobs and unemployment numbers are from peak month to lowest month to May and are seasonally adjusted. State jobs and unemployment numbers are from the U.S. Bureau of Labor Statistics. New York City jobs numbers are from independent economist Barbara Byrne Denham; unemployment rates from state Labor Department regional data. State GDP and personal income numbers are from Bureau of Economic Analysis. NYC GDP from city comptroller’s office. City personal income numbers from Office of Management and Budget February financial plan. Housing index from Corelogic from peak prices to April.
It isn’t a pretty picture. New Jersey has regained only a little more than a third of the jobs lost in the recession, and its GDP and personal-income growth is subpar. Housing prices are a particular problem. Only the decline in unemployment is a positive sign.
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