Posted on 06/06/2011 6:41:51 AM PDT by SeekAndFind
Last week, I noted that various forms of the word “unexpected” almost inevitably appeared in news stories about unfavorable economic developments.
You can find them again in stories about Friday’s shocking news, that only 54,000 net new jobs were created in the month of May and that unemployment rose to 9.1 percent.
But with news that bad, maybe bad economic numbers will no longer be “unexpected.” You can only expect a robust economic recovery for so long before you figure out, as Herbert Hoover eventually did, that it is not around the corner.
Exogenous factors explain some part of the current economic stagnation. The earthquake and tsunami in Japan caused a slowdown in manufacturing. Horrendous tornados did not help. Nor did bad weather, though only a few still bitterly cling to the theory that it’s caused by manmade global warming.
But poor public policy is surely one reason why the American economy has not rebounded from recession as it has in the past. And political posturing has also played a major role.
Barack Obama and the Democratic congressional supermajorities of 2009–10 raised federal spending from 21 percent to 25 percent of gross domestic product. Their stimulus package stopped layoffs of public employees for a while, even as private sector payrolls plummeted.
And the Obama Democrats piled further burdens on would-be employers in the private sector. Obamacare and the Dodd-Frank financial-regulation bill are scheduled to be followed by thousands of regulations that will impose impossible-to-estimate costs on the economy.
That seems to have led to a hiring freeze. The Obama Democrats can reasonably claim not to be responsible for the huge number of layoffs that occurred in the months following the financial crisis of fall 2008. And Treasury Secretary Timothy Geithner and Federal Reserve Chairman Ben Bernanke did manage to help stabilize financial markets.
But while the number of layoffs is now vastly less than in the first half of 2009, the number of new hires has not increased appreciably. Many more people have been unemployed for longer periods than in previous recessions, and many more have stopped looking for work altogether.
It’s hard to avoid the conclusion that the threat of tax increases and increased regulatory burdens have produced something in the nature of a hiring strike.
And then there is the political posturing. On April 13, Barack Obama delivered a ballyhooed speech at George Washington University. The man who conservatives as well as liberal pundits told us was a combination of Edmund Burke and Reinhold Niebuhr was widely expected to present a serious plan to address the budget deficits and entitlement spending.
Instead, the man who can call on talented career professionals at the Office of Management and Budget to produce detailed blueprints gave us something in the nature of a few numbers scrawled on a paper napkin.
The man depicted as pragmatic and free of ideological cant indulged in cheap political rhetoric, accusing Republicans — including House Budget Committee chairman Paul Ryan, who was in the audience — of pushing old ladies in wheelchairs down the hill and starving autistic children.
The signal was clear. Obama had already ignored his own deficit-reduction commission in preparing his annual budget, which was later rejected 97–0 in the Senate. Now he was signaling that the time for governing was over and that he was entering campaign mode 19 months before the November 2012 election.
People took notice, especially those people who decide whether to hire or not. Goldman Sachs’s Current Activity Indicator stood at 4.2 percent in March. In April — in the middle of which came Obama’s GW speech — it was 1.6 percent. For May, it is 1.0 percent.
“That is a major drop in no time at all,” wrote Business Insider’s Joe Weisenthal.
After April 13, Obama Democrats went into campaign mode. They staged a poll-driven Senate vote to increase taxes on oil companies.
They launched a Medi-scare campaign against Ryan’s budget resolution that all but four House Republicans had voted for. That seemed to pay off with a special election victory in the New York 26th congressional district.
The message to job creators was clear. Hire at your own risk. Higher taxes, more burdensome regulation and crony capitalism may be here for some time to come.
One possible upside is that economic bad news may no longer be “unexpected.” Another is that voters may figure out what is going on.
— Michael Barone, senior political analyst for the Washington Examiner, is a resident fellow at the American Enterprise Institute, a Fox News Channel contributor, and a co-author of The Almanac of American Politics.
MSM strategy: ignore the continuing recession—made worse and dragged out by Obama policies—and hope there are some signs of life by next year at this time to claim that Obama got the economy moving again after Bush’s horrible recession.
“big” businesses rarely hire back people they let go in recessions. It is small business that does nearly all of the hiring in any economic recovery.
Big businesses take advantage of “green credits” and tax incentives and the like. They can game the system to make more momey, but they won’t hire more people. Small business depend entirely on the business climate. Credits and one-off incentives mean little to them.
The socialist apparatchiks in Washington of course have no clue about this.
Look for the rampant demonization of Grrrrrreedy Corporations just “sitting” on piles of cash to commence.
It’s about the only move Obummer has left.
The outcome of the special election in the 26 had nothing to do with this. It was more the people running and the appalling campaign tactics of the GOP.
Companies are still laying off here, school districts are laying off, local governments are laying off... we see no end in sight.
“Corporations have (to some extent) gone Galt.”
Corps started going Galt when it became clear that Obama would win, and that Dems would have complete control, in late 2007/2008.
Dems think their anti-biz rhetoric, and job-killing policies had nothing to do with the collapse.
Just as the attacked Oil Companies.
>> Last week, I noted that various forms of the word “unexpected” almost inevitably appeared in news stories about unfavorable economic developments.
Well now, *that* would explain why I’ve been stumbling through the days in a drunken stupor... :-)
o.O
The only things growing in this economy are the various types of "Kentucky Windage" used to make things look rosy.
Sheeeyit. The word "unexpected" inevitably appears in news stories about favorable economic developments as well.
The most surprised people on the planet are economists.
And yet we hang on their every word.
Well, by "we" I mean you jerkwads in the media.
Traitorous corporations are hiring all the time. They just aren’t hiring Americans.
RE: Traitorous corporations are hiring all the time. They just aren’t hiring Americans.
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Well, it looks like EXXON is one of our biggest “traitors” (your word, not mine ).
See here :
http://online.wsj.com/article/SB10001424052702303654804576347672499196238.html
Exxon Fuels a Chemicals Drive
Project Is One of Largest in 141 Years; Feeding Asia’s Need for Diapers, Polyester Clothes.
EXCERPT :
Exxon Mobil Corp. is nearing completion of one of the biggest projects in its corporate history—a giant expansion of a petrochemical facility in Singapore—in a big bet that Asian consumers will have a long-term demand for diapers and dent-resistant auto bumpers.
The Texas-based oil giant is best known for supplying the world with crude, natural gas and gasoline. But it is increasingly focused on expanding its chemical production, most recently with the multibillion-dollar expansion in Singapore. The company won’t disclose the precise amount it is spending on the project.
Often forgotten inside the gargantuan company, Exxon’s chemical division is enormous. It generated a division-record $1.52 billion in operating income during the first quarter. If it were a stand-alone company, it would be the second-largest chemical company in the world, by profit, trailing only BASF AG of Germany.
It is about to get even bigger. The Singapore expansion—which an Exxon executive earlier this year called “one of the largest projects ever executed” by the 141-year-old company—will boost Exxon’s output of chemicals used to make plastics and other staples of modern life by more than 11%. Singapore will become Exxon’s largest refining-and-petrochemical complex, bigger even than Baytown, Texas, which held that distinction for decades.
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Doesn’t it make sense for Exxon to build their Petrochemical plant NEAR WHERE THE BOOMING MARKETS ARE (i.e. Southeast Asia and China)?
Its a ugly catch 22. Worse than that, which came first? the chicken or the egg?
The current leadership and Obamanomics does not inspire business conditions for the businessman, nor does it inspire confidence in the people to participate in the economy. Consequently we suffer a stall. Both sides have too little confidence in Obama and his policies.
The Obama risk factor is too high and has to be removed.
Yeah, they figured out they are screwed with Obamacare and are going to pay through the nose for it. Many are wondering whether they will survive the debacle in its wake.
I live in Baytown and the Exxon refinery is huge. A refinery bigger than that is hard to comprehend.
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